EXHIBIT 4-A-26
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LOAN AGREEMENT
between
THE COUNTY OF BOONE, KENTUCKY
and
THE CINCINNATI GAS & ELECTRIC COMPANY
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$48,000,000
County of Boone, Kentucky
5-1/2% Collateralized Pollution Control
Revenue Refunding Bonds, 1994 Series A
(The Cincinnati Gas & Electric Company Project)
Dated
as of
January 1, 1994
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INDEX
(This Index is not a part of the Agreement
but rather is for convenience of reference only.)
Page
----
Preambles ............................................... 1
ARTICLE I
DEFINITIONS
Section 1.1 Use of Defined Terms ...................... 1
Section 1.2 Definitions ............................... 1
Section 1.3 Interpretation ............................ 6
Section 1.4 Captions and Headings ..................... 7
ARTICLE II
REPRESENTIONS
Section 2.1 Representations of the Issuer ............. 8
Section 2.2 No Warranty by Issuer of Condition or
Suitability of the Project .............. 8
Section 2.3 Representations, Warranties and Covenants of
the Company.............................. 8
ARTICLE III
COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS
Section 3.1 Acquisition, Construction and
Installation ............................ 13
Section 3.2 Issuance of the Bonds; Application of
Proceeds ................................ 13
Section 3.3 Investment of Fund Moneys ................. 14
Section 3.4 Rebate Fund ............................... 15
ARTICLE IV
LOAN BY ISSUER; LOAN PAYMENTS;
ADDITIONAL PAYMENTS; AND FIRST MORTGAGE BONDS
Section 4.1 Loan Repayment; Delivery of First Mortgage
Bonds ................................... 16
Section 4.2 Additional Payments ....................... 16
Section 4.3 Place of Payments ......................... 17
Section 4.4 Obligations Unconditional ................. 17
Section 4.5 Assignment of Revenues, Agreement and
First Mortgage Bonds ...................... 17
Section 4.6 First Mortgage Bonds ...................... 17
Page
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ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1 Maintenance ............................... 19
Section 5.2 Removal of Portions of the Project
Facilities .............................. 19
Section 5.3 Operation of Project Facilities ........... 20
Section 5.4 Insurance ................................. 20
Section 5.5 Damage; Destruction and Eminent Domain .... 20
Section 5.6 Company to Maintain its Corporate
Existence; Conditions Under Which
Exceptions Permitted .................... 21
Section 5.7 Indemnification ........................... 21
Section 5.8 Company Not to Adversely Affect
Exclusion of Interest on 1994 Bonds From
Gross Income For Federal Income Tax
Purposes ................................ 22
Section 5.9 Use of Project Facilities ................. 22
Section 5.10 Assignment by Company ..................... 23
Section 5.11 Agreements with Bond Insurer............... 23
ARTICLE VI
REDEMPTION
Section 6.1 Optional Redemption ....................... 24
Section 6.2 Extraordinary Optional Redemption ......... 24
Section 6.3 Mandatory Redemption ...................... 26
Section 6.4 Notice of Redemption ...................... 26
Section 6.5 Actions by Issuer ......................... 26
Section 6.6 Concurrent Discharging of First
Mortgage Bonds .......................... 26
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default ......................... 27
Section 7.2 Remedies on Default ....................... 28
Section 7.3 No Remedy Exclusive ....................... 29
Section 7.4 Agreement to Pay Attorneys' Fees and
Expenses ................................ 29
Section 7.5 No Waiver ................................. 29
Section 7.6 Notice of Default ......................... 29
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Term of Agreement ......................... 30
Section 8.2 Amounts Remaining in Funds ................ 30
Section 8.3 Notices ................................... 30
Section 8.4 Extent of Covenants of the Issuer;
No Personal Liability ................... 30
Section 8.5 Binding Effect ............................ 31
Section 8.6 Amendments and Supplements ................ 31
Section 8.7 Execution Counterparts .................... 31
Section 8.8 Severability .............................. 31
Section 8.9 Governing Law ............................. 31
Signatures .............................................. 32
Exhibit A .................................Project Description
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of
January 1, 1994 between the COUNTY OF BOONE, KENTUCKY (the
"Issuer"), a de jure county and a political subdivision of the
Commonwealth of Kentucky, and THE CINCINNATI GAS & ELECTRIC
COMPANY (the "Company"), a public utility and corporation duly
organized and validly existing under the laws of the State of
Ohio and duly qualified to do business in Kentucky. Capitalized
terms used in the following recitals are used as defined in
Article I of this Agreement.
Pursuant to the Act, the Issuer has determined to issue,
sell and deliver the Bonds and to lend the proceeds derived from
the sale thereof to the Company to assist in the refunding of the
Refunded Bonds. The Refunded Bonds were originally issued to
provide funds to make a loan to the Company to assist in the
financing of its portion of the costs of the Project.
The Company and the Issuer each have full right and
lawful authority to enter into this Agreement and to perform and
observe the provisions hereof on their respective parts to be
performed and observed.
NOW THEREFORE, in consideration of the premises and the
mutual representations and agreements hereinafter contained, the
Issuer and the Company agree as follows (provided that any
obligation of the Issuer created by or arising out of this
Agreement shall never constitute a general debt of the Issuer or
give rise to any pecuniary liability of the Issuer or a charge
upon its general credit or taxing powers but shall be payable
solely and only from and out of the Revenues, including Loan
Payments made pursuant to the First Mortgage Bonds):
ARTICLE I
DEFINITIONS
Section 1.1. Use of Defined Terms. In addition to the
words and terms defined elsewhere in this Agreement or by
reference to another document, the words and terms set forth in
Section 1.2 hereof shall have the meanings set forth therein
unless the context or use clearly indicates another meaning or
intent. Such definitions shall be equally applicable to both the
singular and plural forms of any of the words and terms defined
therein.
Section 1.2. Definitions. As used herein:
"Act" means Sections 103.200 to 103.285, inclusive, of
the Kentucky Revised Statutes.
"Additional Payments" means the amounts required to be
paid by the Company pursuant to the provisions of Section 4.2
hereof.
"Administration Expenses" means the compensation (which
compensation shall not be greater than that typically charged in
similar circumstances) and reimbursement of reasonable expenses
and advances payable to the Trustee, the Registrar, any Paying
Agent and any Authenticating Agent.
"Agreement" means this Loan Agreement, as amended or
supplemented from time to time.
"Authenticating Agent" means the Authenticating Agent as
defined in the Indenture.
"Bond Insurance Policy" means the municipal bond
insurance policy issued by the Bond Insurer that guarantees
payment when due of principal and interest on the Bonds.
"Bond Insurer" means Municipal Bond Investors Assurance
Corporation, a stock insurance company incorporated under the
laws of the State of New York, or its successor.
"Bond Fund" means the Bond Fund created in the
Indenture.
"Bond Ordinance" means the ordinance of the Issuer
providing for the issuance of the Bonds and approving this
Agreement, the Indenture and related matters, as amended or
supplemented from time to time.
"Bond Service Charges" means, for any period or time,
the principal of, premium, if any, and interest due on the Bonds
for that period or payable at that time whether due at maturity
or upon acceleration or redemption or otherwise.
"Bonds" means the $48,000,000 Collateralized Pollution
Control Revenue Refunding Bonds, 1994 Series A (The Cincinnati
Gas & Electric Company Project), issued by the Issuer pursuant to
the Bond Ordinance and the Indenture.
"Bonds Outstanding" or "Outstanding Bonds" means
Outstanding Bonds as defined in the Indenture.
"1994 Bonds" means collectively, the Bonds and the Ohio
Bonds.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time. References to the Code and Sections
of the Code include re1evant applicable regulations and proposed
regulations thereunder and under the Interna1 Revenue Code of
1954, as amended,
and any successor provisions to those Sections, regulations or
proposed regulations and, in addition, all applicable official
rulings and judicial determinations under the foregoing
applicable to the Bonds.
"Company Mortgage" means the First Mortgage, dated as of
August 1, 1936, between the Company and the Company Mortgage
Trustee, as amended, modified or supplemented from time to time.
"Company Mortgage Trustee" means The Bank of New York
(formerly Irving Trust Company), as trustee under the Company
Mortgage, and its successors and assigns.
"Eligible Investments" means Eligible Investments as
defined in the Indenture.
"Engineer" means an engineer (who may be an employee of
the Company) or engineering firm qualified to practice the
profession of engineering under the laws of the State and who or
which is acceptable to the Trustee.
"Event of Default" means any of the events described as
an Event of Default in Section 7.1 hereof.
"First Mortgage Bonds" means the $48,000,000 aggregate
principal amount of First Mortgage Bonds, 5-1/2% Series C Due
2024, issued under the Company Mortgage pursuant to the
Supplemental Mortgage Indenture.
"Force Majeure" means any of the causes, circumstances
or events described as constituting Force Majeure in Section 7.1
hereof.
"Government Ob1igations" means Government Obligations as
defined in the Indenture.
"Holder" or "Holder of a Bond" means the Person in whose
name a Bond is registered on the Register.
"Indenture" means the Trust Indenture, dated as of the
same date as this Agreement, between the Issuer and the Trustee,
as amended or supplemented from time to time.
"Interest Rate for Advances" means the interest rate per
year payable on the Bonds.
"Loan" means the loan by the Issuer to the Company of
the proceeds received from the sale of the Bonds.
"Loan Payment Date" means any date on which any Bond
Service Charges are due and payable.
"Loan Payments" means the amounts required to be paid by
the Company on the First Mortgage Bonds in repayment of the Loan
pursuant to Section 4.1 hereof.
"1954 Code" means the Internal Revenue Code of 1954, as
amended from time to time through the date of enactment of the
Code. References to the 1954 Code and Sections of the 1954 Code
include relevant applicable regulations (including temporary
regulations) and proposed regulations thereunder and any
successor provisions to those Sections, regulations or proposed
regulations.
"Notice Address" means:
(a) As to the Issuer: County of Boone, Kentucky
Boone County Courthouse
Burlington, Kentucky 41005
Attention: County
Judge/Executive
(b) As to the Company: The Cincinnati Gas & ELectric
Company
139 East Fourth Street
Cincinnati, Ohio 45202
Attention: Treasurer
(c) As to the Trustee: The Bank of New York
101 Barclay Street, 21st Floor
New York, New York 10286
Attention: Corporate Trust
Administration
or such additional or different address, notice of which is given
under Section 8.3 hereof.
"Ohio Bonds" means, collectively: (i) $21,400,000
principal amount of State of Ohio 5.45% Collateralized Water
Development Revenue Refunding Bonds, 1994 Series A (The
Cincinnati Gas & Electric Company Project), dated January 1, 1994
and (ii) $25,300,000 principal amount of State of Ohio 5.45%
Collateralized Air Quality Development Revenue Refunding Bonds,
1994 Series B (The Cincinnati Gas & Electric Company Project),
dated January 1, 1994.
"Opinion of Bond Counsel" means a written opinion of
nationally recognized bond counse1 selected by the Company and
acceptable to the Trustee who is experienced in matters relating
to the exclusion from gross income for federal income tax
purposes of interest on obligations issued by states and their
political subdivisions. Bond Counsel may be counsel to the
Trustee or the Company.
"Original Purchasers" means the Original Purchasers as
defined in the Indenture.
"Paying Agent" means the Paying Agent as defined in the
Indenture.
"Person" or words importing persons mean firms,
associations, partnerships (including without limitation,
general
and limited partnerships), joint ventures, societies, estates,
trusts, corporations, public or governmental bodies, other legal
entities and natural persons.
"Pollution Control Facilities" means pollution control
facilities as that term is defined in KRS 103.246.
"Project" or "Project Facilities" means the real,
personal or real and personal property, including undivided or
other interests therein, identified in the Project Description.
"Project Description" means the description of the
Project Facilities attached hereto as Part 1 of Exhibit A.
"Project Purposes" means the purposes of Pollution
Control Facilities as described in the Act and as particularly
described in Part 1 of Exhibit A hereto.
"Project Site" means the East Bend Generating Station,
owned as tenants in common by the Company and The Dayton Power
and Light Company, located within the corporate boundaries of the
Issuer, within the State.
"Rebate Fund" means the Rebate Fund created in the
Indenture.
"Refunded Bonds" means the $48,000,000 principal amount
of "County of Boone, Kentucky, Pollution Control Revenue Bonds
(The Cincinnati Gas & Electric Company Project), 1979 Series A,"
dated October 1, 1979.
"Refunded Bonds Indenture" means the Indenture of Trust
dated as of October 1, 1979, by and between the Issuer and The
Fifth Third Bank, in respect of the Refunded Bonds.
"Refunded Bonds Loan Agreement" means the Loan Agreement
in connection with Pollution Control Facilities dated as of
October 1, 1979, by and between the Issuer and the Company, in
respect of the Refunded Bonds.
"Refunded Bonds Trustee" means The Fifth Third Bank, as
Trustee under the Refunded Bonds Indenture.
"Refunding Fund" means the Refunding Fund created in the
Indenture.
"Register" means the books kept and maintained for the
registration and transfer of Bonds pursuant to Section 3.05 of
the Indenture.
"Registrar" means the Registrar as defined in the
Indenture.
"Revenues" means (a) the Loan Payments, (b) all other
moneys received or to be received by the Issuer or the Trustee in
respect of repayment of the Loan, including without limitation,
all moneys and investments in the Bond Fund, (c) any moneys and
investments in the Refunding Fund (until applied to the
redemption of the Refunded Bonds), and (d) all income and profit
from the investment of the foregoing moneys. The term "Revenues"
does not include any moneys or investments in the Rebate Fund.
"State" means the Commonwealth of Kentucky.
"Station Unit" means the East Bend Generating Station
Unit 2.
"Supplemental Mortgage Indenture" means the Thirty-fifth
Supplemental Indenture, dated as of January 1, 1994, between the
Company and the Company Mortgage Trustee, as amended or
supplemented from time to time.
"Trustee" means The Bank of New York, New York, New
York, a corporation duly organized and validly existing under the
laws of the State of New York, until a successor Trustee shall
have become such pursuant to the applicable provisions of the
Indenture, and thereafter "Trustee" shall mean the successor
Trustee. "Principal Office" of the Trustee shall mean the
principal corporate trust office of the Trustee, which office at
the date of issuance of the Bonds is 1ocated at its Notice
Address.
"Unassigned Issuer's Rights" means all of the rights of
the Issuer to receive Additional Payments under Section 4.2
hereof, to be held harmless and indemnified under Section 5.9
hereof, to be reimbursed for attorney's fees and expenses under
Section 7.4 hereof and to give or withhold consent to amendments,
changes, modifications, alterations and termination of this
Agreement under Section 8.6 hereof and its right to enforce such
rights.
Section 1.3. Interpretation. Any reference herein to
the State, to the Issuer or to any member or officer of either
includes entities or officials succeeding to their respective
functions, duties or responsibilities pursuant to or by operation
of law or lawfully performing their functions.
Any reference to a section or provision of the
Constitution of the State or the Act, or to a section, provision
or chapter of the Kentucky Revised Statutes, or to any statute of
the United States of America, includes that section, provision or
chapter as amended, modified, revised, supplemented or superseded
from time to time; provided, that no amendment, modification,
revision, supplement or superseding section, provision or chapter
shall be
applicable solely by reason of this provision, if it constitutes
in any way an impairment of the rights or obligations of the
Issuer, the Holders, the Trustee, the Registrar, an
Authenticating Agent, a Paying Agent or the Company under this
Agreement, the Indenture, the Bonds, the Company Mortgage, the
Supplemental Mortgage Indenture or the First Mortgage Bonds.
Unless the context indicates otherwise, words importing
the singular number include the plural number, and vice versa;
the terms "hereof", "hereby", "herein", "hereto", "hereunder" and
similar terms refer to this Agreement; and the term "hereafter"
means after, and the term "heretofore" means before, the date of
delivery of the Bonds. Words of any gender include the
correlative words of the other genders, unless the sense
indicates otherwise.
Section 1.4. Captions and Headings. The captions and
headings in this Agreement are used solely for convenience of
reference and in no way define, limit or describe the scope or
intent of any Articles, Sections, subsections, paragraphs or
subparagraphs or clauses hereof.
(End of Article I)
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations of the Issuer. The Issuer
represents that: (a) it is a de jure county and a political
subdivision of the State duly organized and validly existing
under the laws of the State; (b) it has duly accomplished all
conditions necessary to be accomplished by it prior to the
issuance and delivery of the Bonds and the execution and delivery
of this Agreement and the Indenture; (c) it is not in violation
of or in conflict with any provisions of the laws of the State
which would impair its ability to carry out its obligations
contained in this Agreement or the Indenture; (d) it is empowered
to enter into the transactions contemplated by this Agreement and
the Indenture; (e) it has duly authorized the execution, delivery
and performance of this Agreement and the Indenture; and (f) it
will do all things in its power in order to maintain its
existence or assure the assumption of its obligations under this
Agreement and the Indenture by any successor public body.
Section 2.2. No Warranty by Issuer of Condition or
Suitability of the Project. The Issuer makes no warranty, either
express or implied, as to the suitability or utilization of the
Project for the Project Purposes, or as to the condition of the
Project Facilities or that the Project Facilities are or will be
suitable for the Company's purposes or needs.
Section 2.3. Representations, Warranties and Covenants
of the Company. The Company represents, warrants and covenants
that:
(a) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Ohio, and is duly qualified to do business in the
State, with power and authority (corporate and other) to own its
properties and conduct its business, to execute and deliver this
Agreement, the Supplemental Mortgage Indenture and the First
Mortgage Bonds, and to perform its obligations under this
Agreement, the Company Mortgage, the Supplemental Mortgage
Indenture and the First Mortgage Bonds.
(b) This Agreement, the Supplemental Mortgage Indenture
and the Company Mortgage have been duly authorized, executed and
delivered by the Company; the First Mortgage Bonds have been duly
authorized, executed, issued and delivered; and this Agreement,
the Supplemental Mortgage Indenture, the Company Mortgage and the
First Mortgage Bonds constitute valid and 1egally binding
obligations of the Company, enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other
laws of general applicability relating to or affecting
creditors' rights, to laws relating to or affecting the
enforcement of the security provided by the Company Mortgage and
to general equity principles.
(c) The execution, delivery and performance by the
Company of this Agreement and the Supplemental Mortgage Indenture
and the consummation of the transactions contemplated hereby and
thereby will not violate any provision of law or regulation
applicable to the Company, or any writ or decree of any court or
governmental instrumentality, or of the Articles of
Incorporation, as amended, or Code of Regulations, as amended, of
the Company, or any mortgage, indenture, contract, agreement or
other undertaking to which the Company is a party or which
purports to be binding upon the Company or upon any of its
assets.
(d) Substantially all (at least 90%) of the proceeds of
the Refunded Bonds were used to provide air and water pollution
control facilities and solid waste disposal facilities as
provided in and within the meaning of Sections 103(b)(4)(E) and
(F) of the 1954 Code, the original use of which facilities
commenced with the Company and all of the proceeds of the
Refunded Bonds have been spent for the Project or to pay costs of
issuance of the Refunded Bonds. All of such air and water
pollution control facilities and solid waste disposal facilities
consist either of land or of property of a character subject to
the allowance for depreciation provided in Section l67 of the
Code. The proceeds of the Bonds (other than any accrued interest
thereon) will be used exclusively to refund the principal of the
Refunded Bonds and none of the proceeds of the Bonds wil1 be used
to pay for any costs of issuance of the Bonds. The Refunded
Bonds were issued prior to August 16, 1986. The principal amount
of the Bonds does not exceed the outstanding principal amount of
the Refunded Bonds. The proceeds of the Bonds will be used to
retire, pay and discharge the Refunded Bonds not later than 90
days after the date of issuance of the Bonds.
(e) The acquisition and construction of the Project
financed by application of the proceeds of the Refunded Bonds was
not commenced (within the meaning of Treasury Regulations
Section 1.103-8(a)(5)) as applicable to the Refunded Bonds prior to the
adoption of the resolution of the Issuer evidencing the intent of
the Issuer to issue the Refunded Bonds (being February 17, 1976).
(f) It has caused the Project to be substantially
completed. The Project constitutes Pollution Control Facilities
under the Act and is consistent with the purposes of the Act.
The Project is being, and the Company will operate or cause the
Project to be, operated and maintained in such manner to
conform
with applicable zoning, planning, building, environmental
and other applicable governmental regulations and all permits,
variances and orders issued or granted pursuant thereto, which
permits, variances and orders have not been withdrawn or
otherwise suspended, and to be consistent with the Act.
(g) It has used or operated, and presently intends to
use and operate the Project Facilities in a manner consistent
with the Project Purposes until the date on which the Bonds have
been fully paid and knows of no reason why the Project Facilities
will not be so operated. The Company has not sold and does not
intend to sell or otherwise dispose of the Project or any portion
thereof.
(h) None of the proceeds of the Refunded Bonds were
used and none of the proceeds of the Bonds will be used to
provide any private or commercial golf course, country club,
massage parlor, tennis club, skating facility (including roller
skating, skateboard and ice skating), racquet sports facility
(including handball or racquetball court), hot tub facility,
suntan facility, racetrack, airplane, skybox or other private
luxury box, or health club facility; any facility primarily used
for gambling; any store the principal business of which is the
sale of alcoholic beverages for consumption off premises; or any
facilities for retail food and beverage services, automobile
sales or service, or the provision of recreation or
entertainment.
(i) Less than 25% of the proceeds of the Refunded Bonds
have been used and 1ess than 25% of the proceeds of the Bonds
will be used directly or indirectly to acquire land or any
interest therein, and none of such proceeds has been or will be
used to provide land which is to be used for farming purposes.
(j) No portion of the proceeds of the Refunded Bonds
has been used and no portion of the proceeds of the Bonds will be
used to acquire existing property or any interest therein unless
the first use of such property was by the Company and was
pursuant to and followed such acquisition.
(k) After the expiration of any applicable temporary
period under Section 148(d)(3) of the Code, at no time during any
bond year will the aggregate amount of gross proceeds of the 1994
Bonds invested in higher yielding investments (within the meaning
of Section 148(b) of the Code) exceed 150 percent of the debt
service on the 1994 Bonds for such bond year and the aggregate
amount of gross proceeds of the 1994 Bonds invested in higher
yielding investments, if any, will be promptly and appropriately
reduced as the outstanding amount of the 1994
Bonds is reduced, provided however that the foregoing shall
not require the sale or disposition of any investments in higher
yielding investments if such sale or disposition would result in
a loss which exceeds the amount which would be paid to the United
States (but for such sale or disposition) at the time of such
sale or disposition if a payment were due at such time. At no
time will any funds constituting gross proceeds of the 1994 Bonds
be used in a manner as would constitute failure of compliance
with Section 148 of the Code.
The terms "bond year", "gross proceeds", "higher
yielding investments", "yield", and "debt service" have the
meanings assigned to them for purposes of Section 148 of the
Code.
(1) The Refunded Bonds were not, and the Bonds will not
be, "federally guaranteed" within the meaning of Section 149(b)
of the Code.
(m) It is not anticipated that as of the date hereof,
there will be created any replacement proceeds, within the
meaning of Section 1.148-1(c) of the Treasury Regulations, with
respect to the 1994 Bonds; however, in the event that any such
replacement proceeds are deemed to have been created, such
amounts will be invested in compliance with Section 148 of the
Code.
(n) On the date of issuance and delivery of the
Refunded Bonds, the Company reasonably expected that all of the
proceeds of such Refunded Bonds would be used to carry out the
governmental purposes of such issue within the 3-year period
beginning on the date such issue was issued and none of the
proceeds of such issue, if any, were invested in nonpurpose
investments having a substantially guaranteed yield for 3 years
or more.
(o) The average maturity of the 1994 Bonds does not
exceed 120% of the average reasonably expected economic life of
the facilities refinanced by the 1994 Bonds (determined under
Section 147(b) of the Code).
(p) The information furnished by the Company and used
by the Issuer in preparing the certifications and statements
pursuant to Sections 148 and 149(e) of the Code or their
statutory predecessors with respect to the Refunded Bonds was
accurate and complete as of the date of issuance of the Refunded
Bonds, and the information furnished by the Company and used by
the Issuer in preparing the certification pursuant to Section 148
of the Code and in preparing the information statement pursuant
to Section 149(e) of the Code, both referred to in the Bond
Ordinance, will be accurate and complete as of the date of
issuance of the Bonds.
(q) The Project Facilities do not include any office
except for offices (i) located on the Project Site and (ii) not
more than a de minimis amount of the functions to be performed at
which is not directly related to the day-to-day operations of the
Project Facilities.
(r) The Department of Natural Resources and
Environmental Protection of Kentucky (now the Natural Resources
and Environmental Protection Cabinet of Kentucky), having
jurisdiction in the premises, has previously certified that the
Project, as designed, is in furtherance of the purposes of
abating and controlling atmospheric pollutants and contaminants
and water pollution.
(s) The Company will, but only to the extent required
by law, cause the Indenture and/or any related instruments or
documents relating to the assignments made by the Issuer under
the Indenture to secure the Bonds, to be recorded and/or filed in
the manner and in the places required by law in order to preserve
and protect fully the security of the Holders and the rights of
the Trustee under the Indenture.
(End of Article II)
ARTICLE III
COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS
Section 3.1. Acquisition, Construction and
Installation. The Company represents that it and the other
public utility company which owns an undivided interest in the
Project Facilities with the Company as tenants-in-common have
caused the Project Facilities to be acquired, constructed and
installed on the Project Site, substantially in accordance with
the Project Description and in conformance with the Plans and
Specifications, as defined in the Refunded Bonds Loan Agreement
and in conformance with all applicable zoning, planning, building
and other similar regulations of all governmental authorities
having jurisdiction over the Project and all permits, variances
and orders issued in respect of the Project by EPA, and that the
proceeds derived from the Refunded Bonds, including any
investment thereof, were expended in accordance with the Refunded
Bonds Indenture and the Refunded Bonds Loan Agreement.
Section 3.2. Issuance of the Bonds; Application of
Proceeds. To provide funds to make the Loan to the Company to
assist the Company in the refunding of the Refunded Bonds,
concurrently with the delivery to the Trustee of the First
Mortgage Bonds as provided in Section 4.1 hereof, the Issuer will
issue, sell and deliver the Bonds to the Original Purchaser. The
Bonds will be issued pursuant to the Indenture in the aggregate
principal amount, will bear interest, will mature and will be
subject to redemption as set forth therein. The Company hereby
approves the terms and conditions of the Indenture and the Bonds,
and the terms and conditions under which the Bonds will be
issued, sold and delivered.
The proceeds from the sale of the Bonds (other than any
accrued interest) shall be loaned to the Company to assist the
Company in refunding the Refunded Bonds in order to reduce the
interest cost payable by the Company and shall be deposited in
whole in the Refunding Fund. On or before February 15, 1994, all
moneys on deposit in the Refunding Fund shall be transferred to
and deposited in the bond fund created by the Refunded Bonds
Indenture and applied by the Refunded Bonds Trustee, with other
adequate moneys to be furnished by the Company, to the payment of
principal
of, redemption premium and interest on the Refunded Bonds on
February 15, 1994.
Pending disbursement pursuant to this Section and
Section 5.02 of the Indenture, the proceeds of the Bonds so
deposited in the Refunding Fund, together with any investment
earnings thereon, shall constitute a part of the Revenues
assigned by the Issuer to the Trustee for the payment of Bond
Service Charges. Any accrued interest received from the sale of
the Bonds shall be deposited in the Bond Fund.
The Company hereby requests that the Issuer notify the
Refunded Bonds Trustee that the entire outstanding principal
amount of the Refunded Bonds is to be redeemed on February 15,
1994 at a redemption price of 101% of the principal amount hereof
plus accrued interest to the redemption date.
Section 3.3. Investment of Fund Moneys. At the oral
(confirmed promptly in writing) or written request of the
Company, any moneys held as part of the Bond Fund, the Refunding
Fund or the Rebate Fund shall be invested or reinvested by the
Trustee in Eligible Investments; provided, that such moneys shall
be invested or reinvested by the Trustee only in Eligible
Investments which shall mature, or which shall be subject to
redemption by the holder thereof at the option of such holder,
not later than the date upon which the moneys so invested are
needed to make payments from those Funds. The Issuer (to the
extent it retained or retains direction or control) and the
Company each hereby represents that the investment and
reinvestment and the use of the proceeds of the Refunded Bonds
were restricted in such manner and to such extent, if any, as may
be necessary so that the Bonds will not constitute arbitrage
bonds under Section 148 of the Code and each hereby covenants
that it will restrict that investment and reinvestment and the
use of the proceeds of the Bonds in such manner and to such
extent, if any, as may be necessary so that the Bonds will not
constitute arbitrage bonds under Section 148 of the Code.
The Company shall provide the Issuer with, and the
Issuer may base its certificate and statement, each as authorized
by the Bond Ordinance, on a certificate of an appropriate
officer, employee or agent of or consultant to the Company for
inclusion in the transcript of proceedings for the Bonds, setting
forth the reasonable expectations of the Company on the date of
delivery of and payment for the Bonds regarding the amount and
use of the proceeds of the Bonds and the facts, estimates and
circumstances on which those expectations are based.
Section 3.4. Rebate Fund. To the extent required by
Section 5.09 of the Indenture, within five days after the end of
the fifth Bond Year (as defined in the Indenture) and every fifth
Bond Year thereafter, and within five days after payment in full
of all outstanding Bonds, the Company shall calculate or cause to
be
calculated the amount of Excess Earnings (as defined in the
Indenture) as of the end of that Bond Year or the date of such
payment and shall notify the Trustee of that amount. If the
amount then on deposit in the Rebate Fund created under the
Indenture is less than the amount of Excess Earnings (computed by
taking into account the amount or amounts, if any, previously
paid to the United States pursuant to Section 5.09 of the
Indenture and this Section), the Company shall, within five days
after the date of the aforesaid calculation, pay to the Trustee
for deposit in the Rebate Fund an amount sufficient to cause the
Rebate Fund to contain an amount equal to the Excess Earnings.
The obligation of the Company to make such payments shall remain
in effect and be binding upon the Company notwithstanding the
release and discharge of the Indenture. The Company shall obtain
and keep such records of the computations made pursuant to this
Section as are required under Section 148(f) of the Code.
(End of Article III)
ARTICLE IV
LOAN BY ISSUER; LOAN PAYMENTS;
ADDITIONAL PAYMENTS; AND FIRST MORTGAGE BONDS
Section 4.1. Loan Repayment; Delivery of First
Mortgage Bonds. Upon the terms and conditions of this Agreement,
the Issuer agrees to make the Loan to the Company. The proceeds
of the Loan shall be deposited with the Trustee pursuant to
Section 3.2 hereof. As evidence of its obligation hereunder to
repay the Loan, the Company agrees to execute and deliver the
First Mortgage Bonds to the Issuer, in the manner provided in
Section 4.6 hereof. In consideration of and in repayment of the
Loan, the Company shall make, as Loan Payments, to the Trustee
for the account of the Issuer, payments on the First Mortgage
Bonds which correspond, as to time, and are equal in amount, to
the Bond Service Charges payable on the Bonds. All Loan Payments
received by the Trustee shall be held and disbursed in accordance
with the provisions of the Indenture and this Agreement for
application to the payment of Bond Service Charges.
The Company shall be entitled to a credit against the
Loan Payments required to be made on any Loan Payment Date to the
extent that the balance of the Bond Fund is then in excess of
amounts required (a) for the payment of Bonds theretofore matured
or theretofore called for redemption, or to be called for
redemption pursuant to Section 6.1 hereof (b) for the payment of
interest for which checks or drafts have been drawn and mailed by
the Trustee or Paying Agent, and (c) to be deposited in the Bond
Fund by the Indenture for use other than for the payment of Bond
Service Charges due on that Loan Payment Date.
Except for such interest of the Company as may
hereafter arise pursuant to Section 8.2 hereof or Sections 5.07
or 5.08 of the Indenture, the Company and the Issuer each
acknowledge that neither the Company nor the Issuer has any
interest in the Bond Fund, and any moneys deposited therein shall
be in the custody of and held by the Trustee in trust for the
benefit of the Holders.
Section 4.2. Additional Payments. The Company shall
pay to the Issuer, as Additional Payments hereunder, any and all
costs and expenses incurred or to be paid by the Issuer in
connection with the issuance and delivery of the Bonds or
otherwise related to actions taken by the Issuer under this
Agreement or the Indenture.
The Company shall pay the Administration Expenses to
the Trustee, the Registrar, and any Paying Agent or
Authenticating Agent, as appropriate, as Additional Payments
hereunder.
The Company may, without creating a default hereunder,
contest in good faith the reasonableness of any such cost or
expense incurred or to be paid by the Issuer and any
Administration Expenses claimed to be due to the Trustee, the
Registrar, any Paying Agent or any Authenticating Agent.
In the event the Company should fail to pay any Loan
Payments, Additional Payments (including Administration Expenses)
when due, the payment in default shall continue as an obligation
of the Company until the amount in default shall have been fully
paid together with interest thereon during the default period at
the Interest Rate for Advances.
Section 4.3. Place of Payments. The Company shall
make all Loan Payments directly to the Trustee at its Principal
Office. Additional Payments shall be made directly to the person
or entity to whom or to which they are due.
Section 4.4. Obligations Unconditional. The
obligations of the Company to make Loan Payments, Additional
Payments (including Administration Expenses) and any payments
required of the Company under Section 5.09 of the Indenture shall
be absolute and unconditional, and the Company shall make such
payments without abatement, diminution or deduction regardless of
any cause or circumstances whatsoever including, without
limitation, any defense, set-off, recoupment or counterclaim
which the Company may have or assert against the Issuer, the
Trustee, the Registrar or any other Person.
Section 4.5. Assignment of Revenues, Agreement and
First Mortgage Bonds. To secure the payment of Bond Service
Charges, the Issuer shall absolutely assign to the Trustee, its
successors in trust and its and their assigns forever, by the
Indenture, all right, title and interest of the Issuer in and to
(a) the Revenues, including, without limitation, all Loan
Payments and other amounts receivable by or on behalf of the
Issuer under the Agreement in respect of repayment of the Loan,
(b) the Agreement except for the Unassigned Issuer's Rights, and
(c) the First Mortgage Bonds. The Company hereby agrees and
consents to those assignments.
Section 4.6. First Mortgage Bonds. To evidence and
secure the obligations of the Company to make the Loan Payments
and repay the Loan, the Company will, concurrently with the
issuance of the Bonds, execute and deliver First Mortgage Bonds
to the Issuer in an aggregrate principal amount equal to the
aggregate principal amount of the Bonds. The Company agrees that
First Mortgage Bonds authorized pursuant to the Company Mortgage
will be issued containing the terms and conditions and in
substantially the form set forth in the Supplemental Mortgage
Indenture. The First Mortgage Bonds shall:
(a) provide for payments of interest equal to the
payments of interest on the Bonds;
(b) provide for payments of principal and any
premium equal to the payments of principal (whether at maturity
or by call for mandatory or optional redemption or pursuant to
acceleration or otherwise) and any premium on the Bonds;
(c) require all such payments on such First
Mortgage Bonds to be made on or prior to the due date for the
corresponding payments to be made on the Bonds; and
(d) contain redemption provisions corresponding
with such provisions of the Bonds.
Unless the Company is entitled to a credit under this Agreement
or the Indenture, all payments on the First Mortgage Bonds shall
be in the full amount required thereunder. The First Mortgage
Bonds shall be registered in the name of the Trustee and shall
not be transferred by the Trustee, except to effect transfers to
any successor trustee under the Indenture.
(End of Article IV)
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. Maintenance. The Company shall use its
best efforts to cause the Project Facilities to be kept and
maintained in good repair and good operating condition so that
the Project Facilities will continue to constitute Pollution
Control Facilities, for the purposes of the operation thereof as
required by Section 5.3 hereof.
So long as such shall not be in violation of the Act or
impair the character of the Project Facilities as Pollution
Control Facilities, and provided there is continued compliance
with applicable laws and regulations of governmental entities
having jurisdiction thereof, the Company shall have the right to
remodel the Project Facilities or make additions, modifications
and improvements thereto, from time to time as it, in its
discretion, may deem to be desirable for its uses and purposes,
the cost of which remodeling, additions, modifications and
improvements shall be paid by the Company and the same shall,
when made, become a part of the Project Facilities.
Section 5.2. Removal of Portions of the Project
Facilities. The Company shall not be under any obligation to
renew, repair or replace any inadequate, obsolete, worn out,
unsuitable, undesirable or unnecessary portions of the Project
Facilities, except that, subject to Section 5.3 hereof, it will
use its best efforts to cause to be continued the character of
the Project Facilities as Pollution Control Facilities. The
Company shall have the right from time to time to substitute
personal or other property or fixtures for any portions of the
Project Facilities, provided that the personal or other property
or fixtures so substituted shall not impair the character of the
Project Facilities as Pollution Control Facilities. Any such
substituted property or fixtures shall, when so substituted,
become a part of the Project Facilities. The Company shall also
have the right to remove any portion of the Project Facilities,
without substitution therefor; provided, that the Company shall
deliver to the Trustee a certificate signed by an Engineer
describing such portion of the Project Facilities and stating
that the removal of such property or fixtures will not impair the
character of the Project Facilities as Pollution Control
Facilities.
Section 5.3. Operation of Project Facilities. The
Company will use its best efforts to continue operation of the
Project Facilities so long as and to the extent that operation
thereof is required to comply with laws or regulations of
governmental entities having jurisdiction thereof or unless the
Issuer shall have approved the discontinuance of such operation
(which approval shall not be unreasonably withheld). The Company
agrees that it will, within the design capacities thereof, use
its best efforts to operate and maintain the Project Facilities
in accordance with all applicable, valid and enforceable rules
and regulations of governmental entities having jurisdiction
thereof; provided, that the Company reserves the right to contest
in good faith any such laws or regulations.
Nothing in this Agreement shall prevent or restrict the
Company, in its sole discretion, at any time, from discontinuing
or suspending either permanently or temporarily its use of any
facility of the Company served by the Project Facilities and in
the event such discontinuance or suspension shall render
unnecessary the continued operation of the Project Facilities,
the Company shall have the right to discontinue the operation of
the Project Facilities during the period of any such
discontinuance or suspension.
Section 5.4. Insurance. The Company agrees to insure
its interest in the Project Facilities in the amount and with the
coverage required by the Company Mortgage.
Section 5.5. Damage; Destruction and Eminent Domain.
If, prior to full payment of all 1994 Bonds outstanding (or
provision for payment thereof having been made in accordance with
the provisions of the Indenture), the Project Facilities or any
portion thereof is destroyed or damaged in whole or in part by
fire or other casualty, or title to, or the temporary use of, the
Project Facilities or any portion thereof shall have been taken
by the exercise of the power of eminent domain, and the Company
or the Company Mortgage Trustee receive net proceeds from
insurance or any condemnation award in connection therewith, the
Company (unless it shall have exercised its option to prepay the
Loan pursuant to provisions of Section 6.2 hereof) shall either
(i) cause such Net Proceeds to be used to repair, reconstruct,
restore or improve the Project, or (ii) take any other action,
including the redemption of Bonds, in whole or in part, on any
date, which, in the Opinion of Bond Counsel reasonably acceptable
to the Company and the Trustee, will not adversely affect the
exclusion of interest on any of the 1994 Bonds from gross income
for federal income tax purposes under Section 103(a) of the Code
and will not conflict with any provision of this Agreement or the
Indenture.
It is hereby acknowledged and agreed that any net
proceeds from insurance or any condemnation award relating to the
Project Facilities are subject to the lien of the Company
Mortgage and shall be disposed of in accordance with the terms
and provisions of the Company Mortgage and that any obligations
of the Company under this Section 5.5 not satisfied by
application of such net proceeds shall
be limited to the general credit of the Company and does not
require disposition of such net proceeds contrary to the
requirements of the Company Mortgage.
Section 5.6. Company to Maintain its Corporate
Existence; Conditions Under Which Exceptions Permitted. The
Company agrees that during the term of this Agreement it will
maintain its corporate existence and, will not sell its electric
properties as an entirety or substantially as an entirety or
consolidate with or merge into another corporation or permit one
or more other corporations to consolidate with or merge into it,
except to the extent permitted under the provisions of the
Company Mortgage, provided that any successor corporation
resulting from any such sale, consolidation or merger shall
assume all obligations of the Company arising under or
contemplated by the provisions of this Agreement.
If consolidation, merger or sale or other transfer is
made as provided in this Section, the provisions of this Section
shall continue in full force and effect and no further
consolidation, merger or sale or other transfer shall be made
except in compliance with the provisions of this Section.
Section 5.7. Indemnification. The Company releases
the Issuer from, agrees that the Issuer shall not be liable for,
and indemnifies the Issuer against, all liabilities, claims,
costs and expenses imposed upon or asserted against the Issuer on
account of: (a) any loss or damage to property or injury to or
death of or loss by any person that may be occasioned by any
cause whatsoever pertaining to the construction, maintenance,
operation and use of the Project Facilities; (b) any breach or
default on the part of the Company in the performance of any
covenant or agreement of the Company under this Agreement or any
related document, or arising from any act or failure to act by
the Company, or any of its agents, contractors, servants,
employees or licensees; (c) the authorization, issuance and sale
of the Bonds, and the provision of any information furnished in
connection therewith concerning the Project Facilities or the
Company (including, without limitation, any information furnished
by the Company for inclusion in any certifications made by the
Issuer under Section 3.4 hereof or for inclusion in, or as a
basis for preparation of, the information statements filed by the
Issuer pursuant to the Bond Ordinance); and (d) any claim or
action or proceeding with respect to the matters set forth in
(a), (b) and (c) above brought thereon.
The Company agrees to indemnify the Trustee, the Paying
Agent and the Registrar (each hereinafter referred to in this
section as an "indemnified party") for and to hold each of them
harmless against all liabilities, claims, costs and expenses
incurred without negligence or willful misconduct on the part of
the indemnified party, on account of any action taken or omitted
to be taken by the indemnified party in accordance with the terms
of this Agreement, the Bonds or the Indenture or any action taken
at the
request of or with the consent of the Company, including the
costs and expenses of the indemnified party in defending itself
against any such claim, action or proceeding brought in
connection with the exercise or performance of any of its powers
or duties under this Agreement, the Bonds or the Indenture or any
action taken at the request of or with the consent of the
Company.
In case any action or proceeding is brought against the
Issuer or an indemnified party in respect of which indemnity may
be sought hereunder, the party seeking indemnity promptly shall
give notice of that action or proceeding to the Company, and the
Company upon receipt of that notice shall have the obligation and
the right to assume the defense of the action or proceeding;
provided, that failure of a party to give that notice shall not
relieve the Company from any of its obligations under this
Section unless that failure prejudices the defense of the action
or proceeding by the Company. At its own expense, an idemnified
party may employ separate counsel and participate in the defense;
provided, however, where it is ethically inappropriate for one
firm to represent the interests of the Issuer and any other
indemnified party or parties, the Company shall pay the Issuer's
legal expenses in connection with the Issuer's retention of
separate counsel. The Company shall not be liable for any
settlement made without its consent.
The indemnification set forth above is intended to and
shall include the indemnification of all affected officials,
directors, officers and employees of the Issuer, the Trustee, the
Paying Agent and the Registrar, respectively. That
indemnification is intended to and shall be enforceable by the
Issuer, the Trustee, the Paying Agent and the Registrar,
respectively, to the full extent permitted by law.
Section 5.8. Company Not to Adversely Affect Exclusion
of Interest on 1994 Bonds from Gross Income for Federal Income
Tax Purposes. The Company hereby covenants and represents that
it has taken and caused to be taken and shall take and cause to
be taken all actions that may be required of it for the interest
on the 1994 Bonds to be and remain excluded from the gross income
of the Holders for federal income tax purposes, and that it has
not taken or permitted to be taken on its behalf, and covenants
that it will not take, or permit to be taken on its behalf, any
action which, if taken, would adversely affect that exclusion
under the provisions of the Code.
The Company covenants and agrees with Issuer that it
will cause the outstanding principal amount of the Refunded Bonds
to be paid and discharged in accordance with the Refunded Bonds
Indenture on or prior to the 90th day after the date of issuance
of the Bonds.
Section 5.9. Use of Project Facilities. The Issuer
agrees that it will not take any action, or cause any action to
be taken on its behalf, to interfere with the Company's ownership
interest in the Project or to prevent the Company from having
possession, custody, use and enjoyment of the Project other than
pursuant to Article VII of this Agreement or Article VII of the
Indenture.
Section 5.10. Assignment by Company. This Agreement
may be assigned in whole or in part by the Company without the
necessity of obtaining the consent of either the Issuer or the
Trustee, subject, however, to each of the following conditions:
(a) No assignment (other than pursuant to Section 5.6
hereof) shall relieve the Company from primary liability for any
of its obligations hereunder, and in the event of any such
assignment the Company shall continue to remain primarily liable
for the payment of the Loan Payments and Additional Payments and
for performance and observance of the agreements on its part
herein provided to be performed and observed by it.
(b) Any assignment by the Company must retain for the
Company such rights and interests as will permit it to perform
its obligations under this Agreement, and any assignee from the
Company shall assume the obligations of the Company hereunder to
the extent of the interest assigned.
(c) The Company shall, within 30 days after execution
thereof, furnish or cause to be furnished to the Issuer and the
Trustee a true and complete copy of each such assignment together
with any instrument of assumption.
(d) Any assignment from the Company shall not
materially impair fulfillment of the Project Purposes to be
accomplished by operation of the Project as herein provided.
Section 5.11. Agreements with Bond Insurer. So long
as the Bond Insurance Policy is in full force and effect with
respect to the Bonds and the Bond Insurer is not in default
thereunder as defined in Section 7.10 of the Indenture, the
following provisions shall apply:
(a) Any action requiring the approval or consent of
the Holders, the Issuer, the Trustee or the Company under the
Agreement shall also require the prior written consent of the
Bond Insurer.
(b) The Company shall provide the Bond Insurer
annually with copies of the Company's audited financial
statements.
(c) Upon the occurrence and continuance of an Event of
Default hereunder, the Bond Insurer shall have the same right as
the Authority and the Trustee to pursue the remedies provided in
Sections 7.2 and 7.3 hereof; and
(d) The Company shall give notice to the Bond Insurer,
not less than two days prior to any Loan Payment Date, if the
Company does not intend or will be unable to make the Loan
Payment on that Loan Payment Date.
(End of Article V)
ARTICLE VI
REDEMPTION
Section 6.1. Optional Redemption. Provided no Event
of Default shall have occurred and be subsisting, at any time and
from time to time, the Company may deliver moneys to the Trustee
in addition to Loan Payments or Additional Payments required to
be made and direct the Trustee to use the moneys so delivered for
the purpose of calling Bonds for optional redemption in
accordance with the applicable provisions of the Indenture
providing for optional redemption at the redemption price stated
in the Indenture. Pending application for those purposes, any
moneys so delivered shall be held by the Trustee in a special
account in the Bond Fund and delivery of those moneys shall not,
except as set forth in Section 4.1 hereof, operate to abate or
postpone Loan Payments or Additional Payments otherwise becoming
due or to alter or suspend any other obligations of the Company
under this Agreement.
Section 6.2. Extraordinary Optional Redemption. The
Company shall have, subject to the conditions hereinafter
imposed, the option to direct the redemption of the Bonds in
whole in accordance with the applicable provisions of the
Indenture upon the occurrence of any of the following events:
(a) The Project or the Station Unit shall have been
damaged or destroyed to such an extent that (1) it cannot
reasonably be expected to be restored, within a period of six
consecutive months, to the condition thereof immediately
preceding such damage or destruction or (2) the Company is
reasonably expected to be prevented from carrying on its normal
operations in connection therewith for a period of six
consecutive months.
(b) Title to, or the temporary use of, all or a
significant part of the Project or the Station Unit shall have
been taken under the exercise of the power of eminent domain (1)
to such extent that it cannot reasonably be expected to be
restored within a period of six consecutive months to a condition
of usefulness comparable to that existing prior to the taking or
(2) to such an extent that the Company is reasonably expected to
be prevented from carrying on its normal operations in connection
therewith for a period of six consecutive months.
(c) As a result of any changes in the Constitution of
the State, the Constitution of the United States of America or
any state or federal laws or as a result of legislative or
administrative action (whether state or federal) or by final
decree, judgment or order of any court or administrative body
(whether state or federal) entered after any contest thereof by
the Issuer or the Company in good faith, this Agreement shall
have become void or unenforceable or impossible of performance in
accordance with the intent and purpose of the parties as
expressed in this Agreement.
(d) Unreasonable burdens or excessive liabilities
shall have been imposed upon the Issuer or the Company with
respect to the Project or the Station Unit or the operation
thereof, including, without limitation, the imposition of
federal, state or other ad valorem, property, income or other
taxes other than ad valorem taxes at the rates presently levied
upon privately owned property used for the same general purpose
as the Project or the Station Unit.
(e) Changes in the economic availability of raw
materials, operating supplies, energy sources or supplies or
facilities (including, but not limited to, facilities in
connection with the disposal of industrial wastes) necessary for
the operation of the Project or the Station Unit for the Project
Purposes occur or technological or other changes occur which the
Company cannot reasonably overcome or control and which in the
Company's reasonable judgment render the Project or the Station
Unit uneconomic or obsolete for the Project Purposes.
(f) Any court or administrative body shall enter a
judgment, order or decree, or shall take administrative action,
requiring the Company to cease all or any substantial part of its
operations served by the Project or the Station Unit to such
extent that the Company is or will be prevented from carrying on
its normal operations at the Project or a Station Unit for a
period of six consecutive months.
(g) The termination by the Company of operations at
the Station Unit.
The amount payable by the Company in the event of its
exercise of the option granted in this Section shall be the sum
of the following:
(i) An amount of money which, when added to the moneys
and investments held to the credit of the Bond Fund, will be
sufficient pursuant to the provisions of the Indenture to pay, at
100% of the principal amount thereof plus accrued interest to the
redemption date, and discharge, all Outstanding Bonds on the
earliest applicable redemption date, that amount to be paid to
the Trustee, plus
(ii) An amount of money equal to the Additional
Payments relating to those Bonds accrued and to accrue until
actual final payment and redemption of those Bonds, that amount
or applicable portions thereof to be paid to the Trustee or to
the Persons to whom those Additional Payments are or will be due.
The requirement of (ii) above with respect to Additional Payments
to accrue may be met if provisions satisfactory to the Trustee
and the Issuer are made for paying those amounts as they accrue.
The rights and options granted to the Company in this
Section may be exercised whether or not the Company is in default
hereunder; provided, that such default will not relieve the
Company from performing those actions which are necessary to
exercise any such right or option granted hereunder.
Section 6.3. Mandatory Redemption. The Company shall
deliver to the Trustee the moneys needed to redeem the Bonds in
accordance with any mandatory redemption provisions relating
thereto as may be set forth in Section 4.01(b) of the Indenture.
Section 6.4. Notice of Redemption. In order to
exercise an option granted in, or to consummate a redemption
required by, this Article VI, the Company shall, (i) within 180
days following the event authorizing the exercise of such option
or at any time during the continuation of the condition referred
to in paragraphs (c), (d) or (e) of Section 6.2 hereof or (ii)
promptly upon the occurrence of a Determination of Taxability (as
defined in the Indenture), give written notice to the Issuer, the
Trustee and the Company Mortgage Trustee that it is exercising
its option to direct the redemption of Bonds, or that the
redemption thereof is required by Section 4.01(b) of the
Indenture due to the occurrence of a Determination of Taxability,
as the case may be, in accordance with the Agreement and the
Indenture, and shall specify therein the date on which such
redemption is to be made, which date shall not be more than 180
days from the date such notice is mailed. The Company shall make
arrangements satisfactory to the Trustee for the giving of the
required notice of redemption to the Holders of the Bonds, in
which arrangements the Issuer shall cooperate. The Company shall
make arrangements satisfactory to the Company Mortgage Trustee to
effect a concurrent redemption of an equivalent principal amount
of corresponding First Mortgage Bonds under the Supplemental
Mortgage Indenture.
Section 6.5. Actions by Issuer. At the request of the
Company or the Trustee, the Issuer shall take all steps required
of it under the applicable provisions of the Indenture or the
Bonds to effect the redemption of all or a portion of the Bonds
pursuant to this Article VI.
Section 6.6. Concurrent Discharging of First Mortgage
Bonds. In the event any of the Bonds shall be paid and
discharged, or deemed to be paid and discharged, pursuant to any
provisions of this Agreement and the Indenture, so that such
Bonds are not thereafter outstanding within the meaning of the
Indenture, a like principal amount of corresponding First
Mortgage Bonds shall be deemed fully paid for purposes of this
Agreement and to such extent the obligations of the Company
hereunder shall be deemed terminated.
(End of Article VI)
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Each of the following
shall be an Event of Default:
(a) The occurrence of an event of default as
defined in Section 7.01 (a) or (b) of the Indenture;
(b) The Company shall fail to observe and perform
any other agreement, term or condition contained in this
Agreement, other than such failure as will have resulted in an
event of default described in (a) above and the continuation of
that failure for a period of 90 days after notice thereof shall
have been given to the Company by the Issuer or the Trustee, or
for such longer period as the Issuer and the Trustee may agree to
in writing; provided, that failure shall not constitute an Event
of Default so long as the Company institutes curative action
within the applicable period and diligently pursues that action
to completion; and
(c) The occurrence of a "completed default" as
defined in Section 1 of Article Twelve of the Company Mortgage.
Notwithstanding the foregoing, if, by reason of Force
Majeure, the Company is unable to perform or observe any
agreement, term or condition hereof which would give rise to an
Event of Default under subsection (b) hereof, the Company shall
not be deemed in default during the continuance of such
inability. However, the Company shall promptly give notice to
the Trustee and the Issuer of the existence of an event of Force
Majeure and shall use its best efforts to remove the effects
thereof; provided that the settlement of strikes or other
industrial disturbances shall be entirely within its discretion.
The term Force Majeure shall mean the following:
(i) acts of God; strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or
restraints of any kind of the government of the United States of
America or of the State or any of their departments, agencies,
political subdivisions or officials, or any civil or military
authority; insurrections; civil disturbances; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; tornados;
storms; droughts; floods; arrests; restraint of government and
people; explosions; breakage, nuclear accidents or other
malfunction or accident to facilities, machinery, transmission
pipes or canals;
partial or entire failure of a utility serving the
Project; shortages of labor, materials, supplies or
transportation; or
(ii) any cause, circumstance or event not
reasonably within the control of the Company.
The exercise of remedies hereunder shall be subject to
any applicable limitations of federal bankruptcy law affecting or
precluding that declaration or exercise during the pendency of or
immediately following any bankruptcy, liquidation or
reorganization proceedings.
Section 7.2. Remedies on Default. Whenever an Event
of Default shall have happened and be subsisting, either or both
of the following remedial steps may be taken:
(a) The Issuer or the Trustee may have access to,
inspect, examine and make copies of the books, records, accounts
and financial data of the Company, only, however, insofar as they
pertain to the Project; and
(b) The Issuer or the Trustee may pursue all
remedies now or hereafter existing at law or in equity to recover
all amounts, including a11 Loan Payments and Additional Payments,
then due and thereafter to become due under this Agreement, or to
enforce the performance and observance of any other obligation or
agreement of the Company under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated
to take any step which in its opinion will or might cause it to
expend time or money or otherwise incur liability unless and
until a satisfactory indemnity bond has been furnished to the
Issuer at no cost or expense to the Issuer. Any amounts
collected as Loan Payments or applicable to Loan Payments and any
other amounts which would be applicable to payment of Bond
Service Charges collected pursuant to action taken under this
Section shall be paid into the Bond Fund and applied in
accordance with the provisions of the Indenture or, if the
outstanding Bonds have been paid and discharged in accordance
with the provisions of the Indenture, shall be paid as provided
in Section 5.08 of the Indenture for transfers of remaining
amounts in the Bond Fund.
The provisions of this Section are subject to the
further limitation that the rescission and annulment by the
Trustee of its declaration that all of the Bonds are immediately
due and payable also shall constitute a rescission and annulment
of the consequences
of that declaration and of the Event of Default with respect to
which that declaration has been made, provided that no such
rescission and annulment shall extend to or affect any subsequent
or other default or impair any right consequent thereon.
Section 7.3. No Remedy Exclusive. No remedy conferred
upon or reserved to the Issuer or the Trustee by this Agreement
is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this
Agreement, or now or hereafter existing at law, in equity or by
statute. No delay or omission to exercise any right or power
accruing upon any default shall impair that right or power or
shall be construed to be a waiver thereof, but any such right or
power may be exercised from time to time and as often as may be
deemed expedient. In order to entitle the Issuer or the Trustee
to exercise any remedy reserved to it in this Article, it shall
not be necessary to give any notice, other than any notice
required by law or for which express provision is made herein.
Section 7.4. Agreement to Pay Attorneys' Fees and
Expenses. If an Event of Default should occur and the Issuer or
the Trustee should incur expenses, including attorneys' fees, in
connection with the enforcement of this Agreement or the
collection of sums due hereunder, the Company shall be required,
to the extent permitted by law, to reimburse the Issuer and the
Trustee, as applicable, for the expenses so incurred upon demand.
Section 7.5. No Waiver. No failure by the Issuer or
the Trustee to insist upon the strict performance by the Company
of any provision hereof shall constitute a waiver of their right
to strict performance and no express waiver shall be deemed to
apply to any other existing or subsequent right to remedy the
failure by the Company to observe or comply with any provision
hereof.
Section 7.6. Notice of Default. The Company shall
notify the Trustee immediately if it becomes aware of the
occurrence of any Event of Default hereunder or of any fact,
condition or event which, with the giving of notice or passage of
time or both, would become an Event of Default.
(End of Article VII)
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Term of Agreement. This Agreement shall
be and remain in full force and effect from the date of delivery
of the Bonds to the Original Purchaser until such time as all of
the Bonds shall have been fully paid (or provision made for such
payment) pursuant to the Indenture and all other sums payable by
the Company under this Agreement shall have been paid.
Section 8.2. Amounts Remaining in Funds. Any amounts
in the Bond Fund remaining unclaimed by the Holders of Bonds for
four years after the due date thereof (whether at stated
maturity, by redemption, upon acceleration or otherwise), at the
option of the Company, shall be deemed to belong to and shall be
paid, subject to Section 5.07 of the Indenture, at the written
request of the Company, to the Company by the Trustee. With
respect to the principal of and any premium and interest on the
Bonds to be paid from moneys paid to the Company pursuant to the
preceding sentence, the Holders of the Bonds entitled to those
moneys shall look solely to the Company for the payment of those
moneys. Further, any amounts remaining in the Bond Fund and any
other special funds or accounts created under this Agreement or
the Indenture, except the Rebate Fund, after all of the Bonds
shall be deemed to have been paid and discharged under the
provisions of the Indenture and all other amounts required to be
paid under this Agreement and the Indenture have been paid, shall
be paid to the Company to the extent that those moneys are in
excess of the amounts necessary to effect the payment and
discharge of the Outstanding Bonds.
Section 8.3. Notices. All notices, certificates,
requests or other communications hereunder shall be in writing,
except as provided in Section 3.3 hereof, and shall be deemed to
be sufficiently given when mailed by registered or certified
mail, postage prepaid, and addressed to the appropriate Notice
Address. A duplicate copy of each notice, certificate, request
or other communication given hereunder to the Issuer, the Company
or the Trustee shall also be given to the others. The Company,
the Issuer and the Trustee, by notice given hereunder, may
designate any further or different addresses to which subsequent
notices, certificates, requests or other communications shall be
sent.
The Bond Insurer shall receive copies of all notices
required to be given by the Trustee, the Issuer or the Company
under the Agreement, including all notices to Holders. All
notices required to be given to the Bond Insurer under this
Agreement shall be in writing and shall be sent by registered or
certified mail addressed to Municipal Bond Investors Assurance
Corporation, 113 King Street, Armonk, New York 10504, Attention:
Surveillance.
Section 8.4. Extent of Covenants of the Issuer; No
Personal Liability. All covenants, obligations and agreements of
the Issuer contained in this Agreement or the Indenture shall be
effective to the extent authorized and permitted by applicable
law.
No such covenant, obligation or agreement shall be deemed to be a
covenant, obligation or agreement of any present or future
officer, agent or employee of the Issuer in other than his
official capacity, and neither the elected or appointed officers,
agents and employees of the Issuer nor any official executing the
Bonds shall be liable personally on the Bonds or be subject to
any personal liability or accountability by reason of the
issuance thereof or by reason of the covenants, obligations or
agreements of the Issuer contained in this Agreement or in the
Indenture.
Section 8.5. Binding Effect. This Agreement shall
inure to the benefit of the Issuer, the Company, the Trustee, any
Paying Agent and any Registrar, and their respective permitted
successors and assigns and shall be binding in accordance with
its terms upon the Issuer, the Company and their respective
permitted successors and assigns provided that this Agreement may
not be assigned by the Company (except as permitted under
Sections 5.8 or 5.12 hereof) and may not be assigned by the
Issuer except to (i) the Trustee pursuant to the Indenture or as
otherwise may be necessary to enforce or secure payment of Bond
Service Charges or (ii) any successor public body to the Issuer.
Section 8.6. Amendments and Supplements. Except as
otherwise expressly provided in this Agreement or the Indenture,
subsequent to the issuance of the Bonds and prior to all
conditions provided for in the Indenture for release of the
Indenture having been met, this Agreement may not be effectively
amended, changed, modified, altered or terminated by the parties
hereto except with the consents and notices required by, and in
accordance with, the provisions of Article XI of the Indenture,
as applicable.
Section 8.7. Execution Counterparts. This Agreement
may be executed in any number of counterparts, each of which
shall be regarded as an original and all of which shall
constitute but one and the same instrument.
Section 8.8. Severability. If any provision of this
Agreement, or any covenant, obligation or agreement contained
herein is determined by a judicial or administrative authority to
be invalid or unenforceable, that determination shall not affect
any other provision, covenant, obligation or agreement, each of
which shall be construed and enforced as if the invalid or
unenforceable portion were not contained herein. That invalidity
or unenforceability shall not affect any valid and enforceable
application thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective,
operative, made, entered into or taken in the manner and to the
full extent permitted by law.
Section 8.9. Governing Law. This Agreement shall be
deemed to be a contract made under the laws of the State and for
all purposes shall be governed by and construed in accordance
with the laws of the State.
(End of Article VIII)
IN WITNESS WHEREOF, the Issuer and the Company have
caused this Agreement to be duly executed in their respective
names, all as of the date hereinbefore written.
COUNTY OF BOONE, KENTUCKY
(Seal)
By: /S/ KENNETH R. LUCAS
--------------------------
KENNETH R. LUCAS
County Judge/Executive
Attest: /S/ CAROL RUDICILL
----------------------
CAROL RUDICILL
Fiscal Court Clerk
THE CINCINNATI GAS & ELECTRIC
COMPANY
By: /S/ WILLIAM L. SHEAFER
--------------------------
WILLIAM L. SHEAFER
Treasurer
EXHIBIT A
TO
LOAN AGREEMENT
DATED AS OF OCTOBER 1, 1979
BETWEEN
THE COUNTY OF BOONE, KENTUCKY, AND
THE CINCINNATI GAS & ELECTRIC COMPANY
---------------
PART I
---------------
THE PROJECT
---------------
Facilities to be Acquired, Constructed and Installed at the East Bend
Generating Station, Unit 2, and financed in part (51%) by Application of
the Proceeds of the 1979 Series A Bonds in Accordance with this Agreement
and the Indenture
---------------
EAST BEND GENERATING STATION
UNIT 2
---------------
ELECTROSTATIC PRECIPITATORS
Electrostatic precipitators will be installed to serve Unit 2 of the
East Bend Generating Station. Unit 2 of the East Bend Generating Station
is a new coal-fired steam electric generating unit, and the precipitators
are and will be installed simultaneously with construction and installation
of the generating unit itself. The electrostatic precipitators, together
with functionally related and associated structural supports and ductwork
are solely designed and intended to reduce particulate loading of flue
gases by removal of flyash and particulates from flue gases exiting the
Unit 2 steam boiler. The precipitators are designed to remove 99.6% of
particulate emissions and flyash when the steam boiler is being operated.
The precipitators operate upon the principle of creation of an
electromagnetic field which attracts and captures particulate
matter (flyash) from the flue gases. The flyash is then removed and
conveyed to silos. Thereafter, the flyash is conveyed by pneumatic systems
to a sludge and flyash processing facility or to an ash pond for ultimate
disposal.
SULPHUR DIOXIDE REMOVAL SYSTEM
A complete sulphur dioxide removal system (scrubbers) will be provided
for the East Bend Generating Station, Unit 2. Following electrostatic
precipitation, flue gases will be transmitted from the precipitators to the
scrubber, where they will be reacted with a liquefied calcium hydroxide
solution utilized in the scrubbing process as a reactive agent. Sulphur
dioxide contained in flue gases undergoes chemical reaction upon contact
with calcium hydroxide, with resultant formation of non-commercial calcium
sulfite and calcium sulfate sludges. The sulphur dioxide scrubber is
designed to remove 87% of airborne sulphur dioxide and will also remove a
portion of any particulate matter remaining after electrostatic
precipitation, before emission of the cleansed gases to the atmosphere.
The sulphur dioxide scrubber system will be composed of the scrubber
itself, associated ductwork, structural supports and piping, electric
elements, reactive tanks for holding the reactive agents and recycling and
thickening tanks from which the resulting calcium sulfite and calcium
sulfate is withdrawn for final disposal. There will also be acquired and
installed certain functionally related facilities to prepare reactant
materials for use in scrubbers, together with pumps, mixers and holding
tanks and conveyors and other transport mechanisms situated at or near
reactant reception facilities in close proximity to the generating station
for the receipt of reactants and transmission thereof to storage facilities
or directly to the sulphur dioxide removal system.
SOLID WASTE DISPOSAL FACILITIES
Sludge produced by the sulphur dioxide removal system will be
conveyed, together with flyash collected by the electrostatic
precipitators, to the sludge and flyash processing facility, where sludge
and flyash will be mixed with lime, dewatered and prepared for ultimate
disposal. The system consists of receptacles for the storage and handling
of flyash, lime and sludge, mixers, sludge pits, pumps, dewatering and
solids-formation pads for receipt of the final waste product together with
functionally related and subordinate facilities.
COOLING TOWER
A mechanical draft cooling tower with a closed-loop water
system will be provided for the East Bend Generating Station, Unit 2. The
purpose of the cooling tower is to transfer to the atmosphere the heat
absorbed by waters circulated through the
condenser, which condenses low pressure steam discharged from the steam
driven electric turbine. The closed-loop system with cooling tower is
designed to minimize the release of heated water (thermal pollution) to the
Ohio River and is required in order to conform to applicable water
pollution control regulations. The described water pollution control and
abatement facility consists of a mechanical draft cooling tower, pumps,
circulating water pipes, structural supports and associated and related
equipment. Because a portion of the cost of the closed-loop cooling tower
is allocable to cost savings resulting because an alternate facility need
not be constructed which would, without any pollution control restrictions,
be an adequate facility to cycle water to and from the generating unit,
only an incremental portion of the closed-loop cooling tower is deemed to
be a Project facility.
WASTEWATER DISPOSAL FACILITIES
Sumps, piping, a sewage treatment plant, a neutralization basin and an
ash pond will be acquired and constructed to provide for the disposal of
various liquid wastes, including oil, chemicals, contaminated water and
flow-off from coal piles.
ENGINEERING FEES, RESIDENT INSPECTION,
CAPITALIZED INTEREST AND TEST COSTS
Sargent & Lundy, Consulting Engineers of Chicago, Illinois, and other
firms have acted as Engineers to the Company in designing the Project
facilities and have performed and will perform resident inspection services
with respect thereto. Such costs, together with Company costs directly
attributable to design and construction of the Protect, capitalized
interest and the testing of Project facilities are a part of the Project.
---------------
PART II
---------------
ADDITIONAL POLLUTION CONTROL FACILITIES
The pollution control facilities constituting the Project
as described in Part I of this Exhibit A represent a portion of all of the
pollution control facilities intended to be acquired, constructed and
installed at the East Bend Generating Station, Units 1 and 2, which
complete pollution control facilities are described in that certain
Memorandum of Agreement dated as of February 17, 1976, by and between the
County of Boone, Kentucky, The Cincinnati Gas & Electric Company and The
Dayton Power and Light Company, as follows:
DESCRIPTION OF POLLUTION CONTROL FACILITIES
TO BE CONSTRUCTED IN CONNECTION WITH UNIT 1 AND
UNIT 2 OF THE EAST BEND GENERATING STATION
(BOONE COUNTY, KENTUCKY
THE CINCINNATI GAS & ELECTRIC COMPANY
AND
TEE DAYTON POWER AND LIGHT COMPANY
The Project will consist of air, solid waste and water pollution
control and abatement facilities and systems. The Project will be
installed in conjunction with the construction of Unit 1 and Unit 2 of an
electric generation facility now known as the East Bend Generating Station,
being constructed by The Cincinnati Gas & Electric Company and The Dayton
Power and Light Company, to be situated near the community of Rabbit Rash,
in Boone County, Kentucky, on the Ohio River.
The Project facilities and systems hereafter described are designed
and are to be installed and utilized solely and only for the collection,
removal, abatement, alteration, control, containment and disposition of
atmospheric, solid waste and water pollutants so that gaseous and liquid
emissions and sanitary effluent from Unit 1 and Unit 2 of the East Bend
Generating Station meet applicable governmental air and water quality
standards or limitations.
The following, together with necessary appurtenant and incidental
facilities, constitute the major components of the Project:
ELECTROSTATIC PRECIPITATORS
Electrostatic precipitators or other comparable particulate control devices
will be constructed in connection with Unit 1 and Unit 2, together with
associated structural supports, power modules and electrical substations,
and necessary and incidental ductwork. The electrostatic precipitators or
other particulate control devices will be designed and intended solely and
only to remove flyash and particulate matter from flue gases exiting the
coal-fired steam boilers. Such air pollution control devices will be
designed to at least meet or exceed applicable governmental air quality
standards or limitations.
FLUE GAS DUCT SYSTEMS
Proposed flue gas duct systems will be designed to convey untreated
boiler flue gases emitted from the steam boilers to the electrostatic
precipitators or comparable particulate control devices where particulate
emissions and flyash will be removed.
Induced draft fans and booster fans, as appropriate, will form an integral
part of the flue gas duct systems. The system will convey partiallY
cleansed flue gases to the sulphur dioxide removal systems following
particulate removal.
FLYASH STORAGE SILOS AND ASSOCIATES FACILITIES
Flyash and particulate loadings removed from boiler flue gases by
electrostatic precipitators or other particulate removal devices and
collected from economizer hoppers and air heater hoppers will be conveyed
either to storage silos for removal from the site in dry form or to
proposed waste retention basin or basins, or central storage and removal
facilities. Incorporated into all flyash storage silos will be bag-house
filter systems for the control of dust.
ASH HANDLING AND TRANSPORT SYSTEMS
Proposed ash handling and transport systems will be either air or
water pressure motivated. If water pressure motivated, the systems will
utilize blowdown from proposed water cooling towers. If air pressure
motivated, the systems will utilize compressors, fans or hydraulic
facilities. In either case, the ash handling and transport systems will be
designed to convey ash from collection hoppers at various generating
station facilities to either (i) storage silos, (ii) ash retention basins,
or (iii) other ash disposal facilities. Certain roadways solely for
transportation of wastes will be constructed.
WASTE RETENTION BASINS
Proposed waste retention basins, involving substantial land, will be
situated at the generating station and will serve no other purpose but to
receive, contain and neutralize (i) flyash and particulate matter captured
by operation of the electrostatic precipitators or by the dust control
systems, (ii) bottom ash produced by operation of the coal-fired steam
generators, (iii) liquid wastes produced by coal pile runoffs, chemical
spills, oil spills and other causes (with exception of sanitary wastes
which are treated by a separate sanitary sewer facility), and (iv) acid and
caustic liquid wastes produced by boiler operations. The waste retention
basins will allow neutralization of wastes collected therein, will function
on the gravity-settling principle and will incorporate barriers and
skimmers as appropriate to prevent floating flyash and floating liquid
wastes, including waste oils, from being transmitted to the water source
(Ohio Rivers).
OIL ELIMINATION SYSTEM
An oil elimination and control system will be incorporated in each
generating unit, which will collect oil runoffs, exudations
and spills and convey them to a central oil waste receptacle for skimming
and separation of oils from watery effluent.
COAL DUST CONTROL SYSTEM
The proposed coal dust control system will provide facilities to
prevent atmospheric pollution while coal is being conveyed from the coal
storage and/or coal unloading facilities to the boilers. Coal is proposed
to be transported from river barges by means of a mechanical unloader and
conveyed to transfer houses where it will be crushed and thence delivered
to coal storage bunkers by belt conveyors. The coal conveyor systems will
be covered as required, and additional coal dust control devices will be
employed at each transfer point and at the coal storage bunkers.
WATER COOLING TOWERS AND ASSOCIATED EQUIPMENT
Water cooling towers, complete with all necessary associated
equipment, will be provided to remove heat (thermal pollution) from the
steam turbine exhausts. The heat will be dissipated to the atmosphere and
cooling tower blowdown streams will be utilized as required, to provide
motive power for transporting bottom ash, flyash and other wastes to the
waste retention basins or other waste disposal facilities.
SANITARY SEWAGE TREATMENT PLANT
A sanitary sewage treatment plant and necessary appurtenances will be
constructed upon the generating station site to nest appropriate federal,
state and local requirements. Such treatment plant will be adequate to
serve all personnel permanently assigned to the generating station as well
as all members of construction crews on the premises during construction of
the East Bend Generating Station.
SULPHUR DIOXIDE REMOVAL SYSTEMS
Sulphur dioxide removal systems will be installed as appropriate,
dependent upon the sulphur content of coal utilized in the generating
process and regulatory requirements. Such facilities will be designed to
reduce sulphur dioxide emissions to such level as will meet or exceed
applicable governmental air quality standards or limitations. The sulphur
dioxide removal facilities may utilize either the "wet scrubber" system, or
such other system as at the time of design represents the most appropriate
technology for the site and will meet or exceed applicable governmental air
quality standards or limitations.
SLUDGE RETENTION BASINS
Sulphur dioxide removal systems may produce substantial solid or
liquid waste byproducts. Dependent upon the sulphur dioxide removal
process used, sludge retention basins will be provided to receive and hold
such liquid and/or solid waste products for ultimate disposition.
AUXILIARY FACILITIES ASSOCIATED WITH
SULPHUR DIOXIDE REMOVAL EQUIPMENT
Dependent upon the technology to be utilized, the sulphur dioxide
removal systems will require facilities for reception of reactant material,
together with holding vats or ponds, transmission lines, reactant tanks,
pumps, sprays, transmission facilities and other associated structures and
facilities.
ELEVATED FLUE GAS DIFFUSER
Proposed elevated flue gas diffusers (chimneys) will be constructed to
maximize diffusion of stack gases produced by operation of the generating
station.
MONITORING EQUIPMENT
Monitoring equipment, as required by appropriate laws and regulations,
will be installed to monitor liquid discharges, solid waste discharges,
stack gas discharges and ambient air quality.
ENGINEERING COSTS, RESIDENT INSPECTIONS,
TEST COSTS AND ISSUANCE COSTS
Amounts representing engineering costs, resident inspection and
testing of Project facilities, together with actual costs of Project
facilities and bond issuance costs, will form a part of the Project.