LOAN AGREEMENT
between
OHIO AIR QUALITY DEVELOPMENT AUTHORITY
and
THE CINCINNATI GAS & ELECTRIC COMPANY
_______________________________
$42,000,000
State of Ohio
Air Quality Development
Revenue Refunding Bonds, 1995 Series B
(The Cincinnati Gas & Electric Company Project)
_______________________________
Dated
as of
September 1, 1995
INDEX
(This Index is not a part of the Agreement
but rather is for convenience of reference only.)
Preambles
ARTICLE I
DEFINITIONS
Section 1.1 Use of Defined Terms
Section 1.2 Definitions
Section 1.3 Interpretation
Section 1.4 Captions and Headings
ARTICLE II
REPRESENTATIONS
Section 2.1 Representations of the Authority
Section 2.2 No Warranty by Authority of Condition or
Suitability of the Project
Section 2.3 Representations and Covenants of the Company
ARTICLE III
COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS
Section 3.1 Acquisition, Construction and Installation
Section 3.2 Project Description
Section 3.3 Issuance of the Bonds; Application of
Proceeds
Section 3.4 Investment of Fund Moneys
Section 3.5 Rebate Fund
ARTICLE IV
LOAN BY AUTHORITY; LOAN PAYMENTS;
ADDITIONAL PAYMENTS; AND CREDIT FACILITY
Section 4.1 Loan Repayment
Section 4.2 Additional Payments
Section 4.3 Place of Payments
Section 4.4 Obligations Unconditional
Section 4.5 Assignment of Revenues and Agreement
Section 4.6 Credit Facility; Alternate Credit Facility; Cancellation
Section 4.7 Company's Option to Elect Rate Periods
Section 4.8 Company's Obligation to Purchase Bonds
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1 Right of Inspection
Section 5.2 Maintenance
Section 5.3 Removal of Portions of the Project Facilities
Section 5.4 Operation of Project Facilities
Section 5.5 Insurance
Section 5.6 Workers' Compensation Coverage
Section 5.7 Damage; Destruction and Eminent Domain
Section 5.8 Company to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted
Section 5.9 Indemnification
Section 5.10 Company Not to Adversely Affect Exclusion of
Interest on Bonds From Gross Income For Federal
Income Tax Purposes
Section 5.11 Use of Project Facilities
Section 5.12 Assignment by Company
ARTICLE VI
REDEMPTION
Section 6.1 Optional Redemption
Section 6.2 Extraordinary Optional Redemption
Section 6.3 Mandatory Redemption
Section 6.4 Notice of Redemption
Section 6.5 Actions by Authority
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default
Section 7.2 Remedies on Default
Section 7.3 No Remedy Exclusive
Section 7.4 Agreement to Pay Attorneys' Fees and Expenses
Section 7.5 No Waiver
Section 7.6 Notice of Default
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Term of Agreement
Section 8.2 Amounts Remaining in Funds
Section 8.3 Notices
Section 8.4 Extent of Covenants of the Authority; No Personal
Liability
Section 8.5 Binding Effect
Section 8.6 Amendments and Supplements
Section 8.7 References to Credit Facility
Section 8.8 Execution Counterparts
Section 8.9 Severability
Section 8.10 Governing Law
Signatures
Exhibit A - DESCRIPTION OF AIR QUALITY FACILITIES AT WILLIAM H. ZIMMER
ELECTRIC GENERATING STATION
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of September 1, 1995
between the OHIO AIR QUALITY DEVELOPMENT AUTHORITY (the "Authority"), a body
politic and corporate organized and existing under the laws of the State of
Ohio, 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. Capitalized terms used in the following recitals are used
as defined in Article I of this Agreement.
Pursuant to Section 13 of Article VIII of the Ohio Constitution and the
Act, the Authority has determined to issue, sell and deliver the Bonds,
together with another issue of bonds in the amount of $42,000,000 to be issued
and secured under a separate loan agreement and a separate trust indenture,
each dated the same date as this Agreement, and to lend the proceeds derived
from the sale thereof to the Company to assist in the refunding of the
Refunded Bonds as defined below. The Refunded Bonds were originally issued to
provide funds to make loans to the Company to assist in the financing of its
portion of the costs of the Project as defined below.
The Company and the Authority 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 Authority and the
Company agree as follows (provided that any obligation of the Authority or the
State created by or arising out of this Agreement shall never constitute a
general debt of the Authority or the State or give rise to any pecuniary
liability of the Authority or the State but shall be payable solely out of
Revenues, including the Loan Payments made pursuant hereto and moneys drawn
under any Credit Facility):
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 Chapter 3706, Ohio Revised Code, as enacted and amended from
time to time pursuant to Section 13 of Article VIII of the Ohio Constitution.
"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, the Remarketing Agent, any Paying Agent and any Authenticating
Agent.
"Agreement" means this Loan Agreement, as amended or supplemented from
time to time.
"Air Quality Facility" or "Air Quality Facilities" means those facilities
which are air quality facilities as defined in Section 3706.01, Ohio Revised
Code.
"Alternate Credit Facility" means an Alternate Credit Facility as defined
in the Indenture.
"Authenticating Agent" means the Authenticating Agent as defined in the
Indenture.
"Authority Fee" means the aggregate fee of $131,250 due to the Authority
from the Company in connection with the issuance of the Bonds hereunder and
the $42,000,000 of bonds to be issued and sold on the same date as the Bonds
by the Authority under a separate loan agreement and a separate trust
indenture, each dated the same date as this Agreement, all for the same
purpose as set forth in Section 3.3 hereof for the Bonds.
"Bank" means the Bank as defined in the Indenture.
"Bond Fund" means the Bond Fund created in the Indenture.
"Bond Purchase Fund" means the Bond Purchase Fund as defined in the
Indenture.
"Bond Resolution" means the resolution of the Authority 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 $42,000,000 Air Quality Development Revenue Refunding
Bonds, 1995 Series B (The Cincinnati Gas & Electric Company Project), issued
by the Authority pursuant to the Bond Resolution and the Indenture.
"Bonds Outstanding" or "Outstanding Bonds" means Outstanding Bonds as
defined in the Indenture.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder and under the
Internal 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.
"Conversion Date" means the Conversion Date as defined in the Indenture.
"Credit Facility" means a Credit Facility as defined in the Indenture.
"Credit Facility Account" means the Credit Facility Account as defined in
the Indenture.
"Credit Facility Issuer" means a Credit Facility Issuer as defined in the
Indenture.
"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.
"EPA" means the Environmental Protection Agency of the State and any
successor body, agency, commission or department.
"Event of Default" means any of the events described as an Event of
Default in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or events
described as constituting Force Majeure in Section 7.1 hereof.
"Government Obligations" 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 Authority 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.
"Letter of Credit" means the Letter of Credit as defined in the
Indenture.
"Loan" means the loan by the Authority 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 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 Authority: Ohio Air Quality Development Authority
1901 LeVeque Tower
50 West Broad Street
Columbus, Ohio 43215
Attention: Executive Director
(b) As to the Company: The Cincinnati Gas & Electric Company
P. O. Box 960
Cincinnati, Ohio 45201
Attention: Treasurer
(c) As to the Trustee: The Fifth Third Bank
Fifth Third Center
38 Fountain Square
Cincinnati, Ohio 45263
Attention: Corporate Trust Administration
or such additional or different address, notice of which is given under
Section 8.3 hereof.
"Opinion of Bond Counsel" means a written opinion of nationally
recognized bond counsel 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 Purchaser" means the Original Purchaser 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),
limited liability entities, joint ventures, societies, estates, trusts,
corporations, public or governmental bodies, other legal entities and natural
persons.
"Plant" means the William H. Zimmer Electric Generating Station.
"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 Exhibit A, as the same may be amended in accordance with
this Agreement.
"Project Purposes" means the purposes of Air Quality Facilities as
described in the Act and as particularly described in Exhibit A hereto.
"Project Site" means the William H. Zimmer Electric Generating Station in
Clermont County, Ohio.
"Rate Period" means a Rate Period as defined in the Indenture.
"Rebate Fund" means the Rebate Fund created in the Indenture.
"Refunded Bonds" means the $84,000,000 State of Ohio 10-1/8% Pollution
Control Revenue Bonds, 1985 Series (The Cincinnati Gas & Electric Company
Project) dated as of December 1, 1985.
"Refunded Bonds Indenture" means the Trust Indenture for the Refunded
Bonds between the Authority and the Refunded Bonds Trustee dated as of
December 1, 1985.
"Refunded Bonds Loan Agreement" means the Loan Agreement between the
Authority and the Company dated as of December 1, 1985 entered into in
connection with the Refunded Bonds.
"Refunded Bonds Trustee" means The Bank of New York (formerly Irving
Trust Company), New York, New York, 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.
"Reimbursement Agreement" means the Reimbursement Agreement as defined in
the Indenture.
"Remarketing Agent" means the Remarketing Agent as defined in the
Indenture.
"Revenues" means (a) the Loan Payments, (b) all other moneys received or
to be received by the Authority (excluding the Authority Fee) 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, 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 or the Bond Purchase Fund.
"State" means the State of Ohio.
"Term Rate Period" means a Term Rate Period as defined in the Indenture.
"Trustee" means The Fifth Third Bank, Cincinnati, Ohio, a corporation
duly organized and validly existing under the laws of the State, 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
located at its Notice Address.
"Unassigned Authority Rights" means all of the rights of the Authority to
receive Additional Payments under Section 4.2 hereof, to inspection pursuant
to Section 5.1 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.
"Variable Rate" means a Variable Rate as defined in the Indenture.
Section 1.3. Interpretation. Any reference herein to the State, to the
Authority 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 Ohio Revised Code, 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 Authority, the State, the Holders, the
Trustee, the Registrar, an Authenticating Agent, a Paying Agent, the Credit
Facility Issuer, the Remarketing Agent, or the Company under this Agreement,
the Indenture or the 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 Authority. The Authority
represents that: (a) it is a body politic and corporate 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; (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; and (g)
following reasonable notice, a public hearing was held on August 8, 1995 with
respect to the issuance of the Bonds as required by Section 147(f) of the
Code.
Section 2.2. No Warranty by Authority of Condition or Suitability of
the Project. The Authority 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 and Covenants of the Company. The Company
represents that:
(a) The Company has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of the State, with power and authority (corporate
and other) to own its properties and conduct its business,
to execute and deliver this Agreement and to perform its
obligations under this Agreement.
(b) This Agreement has been duly authorized,
executed and delivered by the Company and this Agreement
constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles.
(c) The execution, delivery and performance by the
Company of this Agreement and the consummation of the
transactions contemplated hereby will not violate any
provision of law or regulation applicable to the Company,
or of any writ or decree of any court or governmental
instrumentality, or of the Articles of Incorporation, as
amended, or the Regulations of the Company, or of 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 "pollution
control facilities" within the meaning of Sections
103(b)(4)(F) of the 1954 Code, the original use of which
facilities commenced with the Company, the construction of
which facilities began before September 26, 1985 and was
completed on or after such date, and which facilities were
described in an inducement resolution adopted by the
Authority before September 26, 1985, and all of the
proceeds of the Refunded Bonds have been spent for the
Project pursuant to the Refunded Bonds Loan Agreement or
to pay costs of issuance of the Refunded Bonds. The
proceeds of the Bonds (other than any accrued interest
thereon) will be used exclusively to refund the Refunded
Bonds, any investment earnings thereon will be used to pay
principal, premium or interest on the Refunded Bonds, and
none of the proceeds of the Bonds will 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 the Refunded Bonds not
later than 90 days after the date of issuance of the
Bonds.
(e) It has caused the Project to be substantially
completed. The Project constitutes Air Quality Facilities
under the Act and is consistent with the purposes of
Section 13 of Article VIII of the Ohio Constitution and of
the Act. The Project is being, and the Company will cause
the Project to be, operated and maintained in such manner
to conform with all applicable zoning, planning, building,
environmental and other applicable governmental
regulations and all permits, variances and orders issued
or granted pursuant thereto, including the
permit-to-install for the Project, which permits,
variances and orders have not been withdrawn or otherwise
suspended, and to be consistent with the Act.
(f) It has used or operated or has caused to be used
or operated, and presently intends to use or operate or
cause to be used or operated 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 does not intend to sell or otherwise dispose
of the Project or any portion thereof.
(g) 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 (except
grocery stores), automobile sales or service, or the
provision of recreation or entertainment.
(h) Less than 25% of the proceeds of the Refunded
Bonds have been used and less 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.
(i) 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.
(j) 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 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 Bonds
for such bond year and the aggregate amount of gross
proceeds of the Bonds invested in higher yielding
investments, if any, will be promptly and appropriately
reduced as the outstanding amount of the 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 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.
(k) The Refunded Bonds were not, and the Bonds will
not be, "federally guaranteed" within the meaning of
Section 149(b) of the Code.
(l) 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 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.
(m) On the date of issuance and delivery of the
Refunded Bonds, the Company reasonably expected that at
least 85% of the spendable proceeds of such Refunded Bonds
would be expended to carry out the governmental purposes
of such issue within the 5-year period beginning on the
date such issue was issued but did not reasonably expect
that 85% of such spendable proceeds would be so expended
within the 3-year period beginning on such date. All of
the spendable proceeds of the Refunded Bonds have been
expended as of the date of issuance of the Bonds. None of
the proceeds of such issue, if any, were invested in
nonpurpose investments having a substantially guaranteed
yield for 4 years or more.
(n) The respective average maturities of the
Refunded Bonds and the Bonds do not exceed 120% of the
respective average reasonably expected economic life of
the Project Facilities financed by the proceeds of the
Refunded Bonds and the Bonds (determined under Section
147(b) of the Code).
(o) The information furnished by the Company and
used by the Authority 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 Authority 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 Resolution, will be accurate and complete as of the
date of issuance of the Bonds.
(p) 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.
(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 companies which own undivided
interests 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 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. Project Description. The Project Description may be
changed from time to time by, or with the consent of, the Company provided
that any such change shall also be filed with the Authority and provided
further that no change in the Project Description shall materially change the
function of the Project Facilities unless the Trustee shall have received (i)
an Engineer's certificate that such changes will not impair the significance
or character of the Project Facilities as Air Quality Facilities and (ii) an
Opinion of Bond Counsel or ruling of the Internal Revenue Service to the
effect that such amendment will not adversely affect the exclusion of interest
on the Bonds from gross income for federal income tax purposes.
Section 3.3. 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, the Authority 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 Company hereby requests that the Authority notify the Refunded Bonds
Trustee (unless the Refunded Bonds Trustee has already received such notice),
pursuant to Section 4.03 of the Refunded Bonds Indenture, that the entire
outstanding principal amount of the Refunded Bonds is to be redeemed on
December 1, 1995 at a redemption price of 102-1/2% of the principal amount
thereof plus accrued interest to that redemption date.
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; those
proceeds shall be deposited in the Refunding Fund. On November 30, 1995 all
moneys on deposit in the Refunding Fund shall be disbursed by the Trustee as
provided in Section 5.02 of the Indenture to the Refunded Bonds Trustee for
deposit in the Bond Fund created in the Refunded Bonds Indenture and applied
by the Refunded Bonds Trustee to the payment of principal of and interest on
the Refunded Bonds on their redemption on December 1, 1995.
Pending disbursement pursuant to this Section, the proceeds so deposited
in the Refunding Fund, together with any investment earnings thereon, shall
constitute a part of the Revenues assigned by the Authority to the Trustee for
the payment of Bond Service Charges. Any accrued interest shall be deposited
in the Bond Fund.
Section 3.4. 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 Authority (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 as was necessary so that the Refunded Bonds would not
constitute arbitrage bonds under the statutory predecessor 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 Authority with, and the Authority may base
its certificate and statement, each as authorized by the Bond Resolution, 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 3.5. 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 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 AUTHORITY; LOAN PAYMENTS;
ADDITIONAL PAYMENTS; AND CREDIT FACILITY
Section 4.1. Loan Repayment. Upon the terms and conditions of this
Agreement, the Authority agrees to make the Loan to the Company. The proceeds
of the Loan shall be deposited with the Trustee pursuant to Section 3.3
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 Authority,
payments 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.
The Company's obligation to make Loan Payments shall be reduced to the
extent of any payments made by any Credit Facility Issuer to the Trustee in
respect of the principal of, premium, if any, or interest on the Bonds when
due pursuant to any Credit Facility, provided, that the Credit Facility Issuer
has been reimbursed for such payments in accordance with the terms of the
Reimbursement Agreement.
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 Authority each acknowledge that neither the Company, the State nor the
Authority has any interest in the Bond Fund or the Bond Purchase 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
Authority, the Authority Fee and, as Additional Payments hereunder, any and
all costs and expenses incurred or to be paid by the Authority in connection
with the issuance and delivery of the Bonds or otherwise related to actions
taken by the Authority under this Agreement or the Indenture.
The Company shall pay the Administration Expenses to the Trustee, the
Registrar, the Remarketing Agent, 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 Authority and any Administration Expenses claimed to be due to the
Trustee, the Registrar, the Remarketing Agent, any Paying Agent or any
Authenticating Agent.
In the event the Company should fail to pay any Loan Payments, Additional
Payments or 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 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 Authority, the
Trustee, the Registrar, the Remarketing Agent or any other Person.
Section 4.5. Assignment of Revenues and Agreement. To secure the
payment of Bond Service Charges, the Authority shall, by the Indenture, (a)
absolutely and irrevocably assign to the Trustee, its successors in trust and
its and their assigns forever, (1) all right, title and interest of the
Authority in and to all moneys and investments (including, without limitation,
the proceeds of the Credit Facility) in the Bond Fund and (2) all of the
Authority's rights and remedies under this Agreement (except for the
Unassigned Authority Rights), and (b) grant a security interest to the
Trustee, its successors in trust and its and their assigns forever, in all of
its rights to and interest in the Revenues including, without limitation, all
Loan Payments and other amounts receivable by or on behalf of the Authority
under the Agreement in respect of repayment of the Loan (other than the Credit
Facility Account, all moneys and investments therein and the proceeds of the
Credit Facility). The Company hereby agrees and consents to those assignments
and that grant of a security interest.
Section 4.6. Credit Facility; Alternate Credit Facility; Cancellation.
(a) The Company agrees to provide for the payment of the principal of and
interest on the Bonds and for payment of the purchase price of Bonds delivered
to the Trustee or Paying Agent pursuant to the Indenture by causing the Letter
of Credit to be delivered to the Trustee on the date of the delivery of the
Bonds. The Company hereby authorizes and directs the Trustee to draw moneys
under the Letter of Credit, in accordance with its terms and the terms of the
Indenture, to the extent necessary to pay the principal of and interest on the
Bonds when due and to pay the purchase price of Bonds as provided in the
Indenture. The Company may, at its election and with the consent of the Bank,
provide for one or more extensions of the Letter of Credit beyond its then
stated date of expiration.
(b) Upon satisfaction of the requirements contained in Section 14.03 of
the Indenture, the Company may provide for the delivery of an Alternate
Credit Facility.
(c) Upon satisfaction of the conditions contained in Section 14.02 of
the Indenture, the Company may cancel any Credit Facility in effect at such
time and direct the Trustee in writing to surrender such Credit Facility to
the Credit Facility Issuer by which it was issued in accordance with the
Indenture; provided, that no such cancellation shall become effective and no
such surrender shall take place until all Bonds subject to purchase pursuant
to Section 4.07(d) of the Indenture have been so purchased or redeemed with
the proceeds of such Credit Facility.
Section 4.8. Company's Option to Elect Rate Period. The Company shall
have, and is hereby granted, the option to elect to convert on any Conversion
Date the interest rate borne by the Bonds to another Variable Rate to be
effective for a Rate Period pursuant to the provisions of Article II of the
Indenture and subject to the terms and conditions set forth therein. To
exercise such options, the Company shall give the written notice required by
the Indenture.
Section 4.9. Company's Obligation to Purchase Bonds. The Company hereby
agrees to pay or cause to be paid to the Trustee or the Paying Agent, on or
before each day on which Bonds may be or are required to be tendered for
purchase, amounts equal to the amounts to be paid by the Trustee or the Paying
Agent with respect to the Bonds tendered for purchase on such dates pursuant
to Article IV of the Indenture; provided, however, that the obligation of the
Company to make any such payment under this Section shall be reduced by the
amount of (A) moneys paid by the Remarketing Agent as proceeds of the
remarketing of such Bonds by the Remarketing Agent, (B) moneys drawn under any
Credit Facility, for the purpose of paying such purchase price and (C) other
moneys made available by the Company, as set forth in Section 4.08(b)(ii) of
the Indenture.
(End of Article IV)
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. Right of Inspection. The Company agrees that, subject to
reasonable security and safety regulations and to reasonable requirements as
to notice, the Authority and the Trustee and their or any of their respective
duly authorized agents shall have the right at all reasonable times to enter
upon the Project Site to examine and inspect the Projects.
Section 5.2. Maintenance. The Company shall use its best efforts to
keep and maintain the Project Facilities, including all appurtenances thereto
and any personal property therein or thereon, in good repair and good
operating condition so that the Project Facilities will continue to constitute
Air Quality Facilities, for the purposes of the operation thereof as required
by Section 5.4 hereof.
So long as such shall not be in violation of the Act or impair the
character of the Project Facilities as Air Quality 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 5.3. 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 5.4
hereof, it will use its best efforts to ensure the continued character of the
Project Facilities as Air Quality Facilities. The Company shall have the
right from time to time to substitute personal property or fixtures for any
portions of the Project Facilities, provided that the personal property or
fixtures so substituted shall not impair the character of the Project
Facilities as Air Quality 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 said
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 Air Quality Facilities.
Section 5.4. Operation of Project Facilities. The Company will,
subject to its obligations and rights to maintain, repair or remove portions
of the Project Facilities, as provided in Sections 5.2 and 5.3 hereof, 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
Authority 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 5.5. Insurance. The Company shall cause the Project Facilities
to be kept insured against fire or other casualty to the extent that property
of similar character is usually so insured by companies similarly situated and
operating like properties, to a reasonable amount by reputable insurance
companies or, in lieu of or supplementing such insurance in whole or in part,
adopt some other method or plan of protection against loss by fire or other
casualty at least equal in protection to the method or plan of protection
against loss by fire or other casualty of companies similarly situated and
operating properties subject to similar or greater fire or other hazards or on
which properties an equal or higher primary fire or other casualty insurance
rate has been set by reputable insurance companies.
Section 5.6. Workers' Compensation Coverage. Throughout the term of
this Agreement, the Company shall comply, or cause compliance, with applicable
workers' compensation laws of the State.
Section 5.7. Damage; Destruction and Eminent Domain. If, during the
term of this Agreement, 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, the
Company (unless it shall have exercised its option to prepay the Loan Payments
pursuant to Section 6.2 hereof) shall promptly repair, rebuild or restore the
portion of the Project Facilities so damaged, destroyed or taken with such
changes, alterations and modifications (including the substitution and
addition of other property) as may be necessary or desirable for the
administration and operation of the Project Facilities as Air Quality
Facilities and as shall not impair the character or significance of the
Project Facilities as furthering the purposes of the Act.
Section 5.8. 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, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another corporation or permit one or more other
corporations to consolidate with or merge into it; provided that the Company
may, without violating its agreement contained in this Section, consolidate
with or merge into another corporation, or permit one or more other
corporations to consolidate with or merge into it, or sell or otherwise
transfer to another corporation all or substantially all of its assets as an
entirety and thereafter dissolve, provided the surviving, resulting or
transferee corporation, as the case may be (if other than the Company), is a
corporation organized and existing under the laws of one of the states of the
United States, and assumes in writing all of the obligations of the Company
herein, and, if not an Ohio corporation, is qualified to do business in the
State.
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 5.9. Indemnification. The Company releases the Authority from,
agrees that the Authority shall not be liable for, and indemnifies the
Authority against, all liabilities, claims, costs and expenses imposed upon or
asserted against the Authority 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 Authority under Section 3.4 hereof or for inclusion
in, or as a basis for preparation of, the information statements filed by the
Authority pursuant to Section 8(a)(ii) of the Bond Resolution); 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, the
Remarketing 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.
In case any action or proceeding is brought against the Authority 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 indemnified 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 Authority and any
other indemnified party or parties, the Company shall pay the Authority's
legal expenses in connection with the Authority'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 Authority, the Trustee, the Paying Agent, the Remarketing Agent and the
Registrar, respectively. That indemnification is intended to and shall be
enforceable by the Authority, the Trustee, the Paying Agent, the Remarketing
Agent and the Registrar, respectively, to the full extent permitted by law.
Section 5.10. Company Not to Adversely Affect Exclusion of Interest on
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 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.
Section 5.11. Use of Project Facilities. The Authority 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 5.12. 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 Authority or the Trustee, subject, however, to each of the
following conditions:
(a) No assignment (other than pursuant to Section
5.8 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
Authority 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.
(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 during a Term
Rate Period 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 Plant shall have been damaged
or destroyed to such an extent that (1) the Project or the
Plant 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 use and operation of the
Project or the Plant 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 Plant shall have
been taken under the exercise of the power of eminent
domain to such an extent (1) that the Project or the Plant
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) the Company is reasonably expected to be prevented
from carrying on its normal use and operation of the
Project or the Plant 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 Authority 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 Authority or the Company
with respect to the Project or the Plant 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 Plant.
(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 Plant
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 Plant 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 Plant to such extent that the Company is or will be
prevented from carrying on its normal operations at the
Project or the Plant for a period of six consecutive
months.
(g) The termination by the Company of operations at
the Plant.
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 Authority 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, 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 at any time that
optional redemption of the Bonds is permitted under the Indenture as provided
in Section 6.1 hereof, or promptly upon the occurrence of a Determination of
Taxability (as defined in the Indenture), give written notice to the Authority
and the 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
Authority shall cooperate.
Section 6.5. Actions by Authority. At the request of the Company or
the Trustee, the Authority 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.
(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), (b), (c) or (d) 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
Authority or the Trustee, or for such longer period as the
Authority 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 within 150 days after the expiration
of initial cure period as determined above, or within such
longer period as the Authority and the Trustee may agree
to in writing; and
(c) By decree of a court of competent jurisdiction
the Company shall be adjudicated a bankrupt, or an order
shall be made approving a petition or answer filed seeking
reorganization or readjustment of the Company under the
federal bankruptcy laws or other law or statute of the
United States of America or of the state of incorporation
of the Company or of any other state, or, by order of such
a court, a trustee in bankruptcy, a receiver or receivers
shall be appointed of all or substantially all of the
property of the Company, and any such decree or order
shall have continued unstayed on appeal or otherwise and
in effect for a period of sixty (60) days; and
(d) The Company shall file a petition in voluntary
bankruptcy or shall make an assignment for the benefit of
creditors or shall consent to the appointment of a
receiver or receivers of all or any part of its property,
or shall file a petition seeking reorganization or
readjustment under the Federal bankruptcy laws or other
law or statute of the United States of America or any
state thereof, or shall file a petition to take advantage
of any debtors' act.
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 Authority 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 Authority 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; or
(b) The Authority or the Trustee may pursue all
remedies now or hereafter existing at law or in equity to
recover all amounts, including all Loan Payments and
Additional Payments and under Section 4.9 hereof the
purchase price of Bonds tendered for purchase, 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 this
Agreement.
Notwithstanding the foregoing, the Authority 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 Authority at no cost or expense to the Authority.
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 any corresponding declaration made pursuant to this Section and 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 Authority 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 Authority 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 Authority 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 Authority and the
Trustee, as applicable, for the expenses so incurred upon demand.
Section 7.5. No Waiver. No failure by the Authority 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 (i) all of the Bonds shall have been fully paid
(or provision made for such payment) and the Indenture has been released
pursuant to Section 9.01 thereof and (ii) 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 that
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
3.4 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 Authority, the Company,
any Credit Facility Issuer or the Trustee shall also be given to the others.
The Company, the Authority, any Credit Facility 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.
Section 8.4. Extent of Covenants of the Authority; No Personal
Liability. All covenants, obligations and agreements of the Authority
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 member, officer, agent or employee of the Authority in other
than his official capacity, and neither the members of the Authority 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
Authority contained in this Agreement or in the Indenture.
Section 8.5. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding in accordance with its terms upon the Authority, 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 Authority 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 Authority.
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 required by, and in accordance with, the provisions of Article XI of
the Indenture, as applicable.
Section 8.7. References to Credit Facility. During such time or times
as no Credit Facility is in effect, and during the continuation of any event
of default under the Indenture due to a failure by the Credit Facility Issuer
to honor a drawing by the Trustee under the Credit Facility then in effect in
accordance with the terms thereof, references herein to the Credit Facility
Issuer shall be ineffective.
Section 8.8. 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 8.9. 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 8.10. 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 Authority and the Company have caused this
Agreement to be duly executed in their respective names, all as of the date
hereinbefore written.
OHIO AIR QUALITY DEVELOPMENT
AUTHORITY
By:
Executive Director
THE CINCINNATI GAS & ELECTRIC
COMPANY
By:
Treasurer
Exhibit A
DESCRIPTION OF AIR QUALITY FACILITIES
AT
WILLIAM H. ZIMMER ELECTRIC
GENERATING STATION
The Project consists of:
(A) a high efficiency electrostatic
precipitator system designed to remove
particulates from the flue gas,
(B) a flue gas desulfurization ("scrubber")
system designed to remove sulfur dioxide from
the flue gas,
(C) a stack,
(D) a coal dust control system,
(E) a nitrous oxide control system, and
(F) a cooling tower and circulating water
system.
The precipitator system includes electrostatic precipitators and a fly
ash handling system, as well as all other necessary earthwork, piling,
foundations, structural and miscellaneous steel, supports, siding, enclosures,
electrical equipment, instrumentation and controls, mechanical equipment,
related pumps and tanks, hoppers and storage silos, and associated equipment
required for the foregoing and used exclusively in connection therewith. The
precipitator system includes related drains, sumps and piping necessary to
transmit collected waste waters to the waste water pond. The Project also
includes precipitator inlet and outlet ductwork.
The scrubber system includes an inlet plenum, six induced draft fans,
ductwork to and including six absorber modules, ductwork to the stack, FGD
reagent and lime unloading and handling system including required river cells,
FGD reagent and lime silos, an FGD reagent and lime preparation facility,
slurry tanks, scrubber sludge handling facilities which include thickener
tanks, a sludge pond underflow and overflow tanks, a sludge handling building,
stockpile facilities and auxiliary facilities. The scrubber system includes
all earthwork including stream relocation, piling, foundations, structural and
miscellaneous steel, siding, painting, electrical and mechanical components
and associated equipment required for the scrubber system and used exclusively
in connection therewith. The scrubber system includes related drains, sumps
and piping necessary to transmit collected waste waters to the waste water
pond, and also includes all pipes, pumps and associated mechanical and
electrical components to supply and recycle water for the scrubber system
operation. The scrubber system also includes a disposal area and the roads
and bridges used exclusively for the transportation of scrubber sludge, bottom
ash and other solid waste along with truck wash facilities and truck scales.
The stack includes the stack shell and brick liner, as well as earthwork,
piling, foundation and associated components.
The coal dust control systems include a coal dust collection system, a
coal dust suppression system and a coal wetting system.
The cooling tower and circulating water system includes a natural draft
cooling tower, a cooling tower basin, a cooling water flume, three circulating
water pumps, circulating water pipes and valves, the make-up water subsystem,
the blowdown subsystem, the cooling water chemical conditioning subsystem,
mechanical and electrical auxiliaries, and related controls and
instrumentation. The cooling water system also includes all related site
development and earthwork, piling, foundations, structural and miscellaneous
steel, siding, painting, electrical and mechanical components and associated
equipment required for the cooling tower and circulating water system and used
exclusively in connection therewith.