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LOAN AGREEMENT
Dated as of September 1, 1998
between
STATE ENVIRONMENTAL IMPROVEMENT AND
ENERGY RESOURCES AUTHORITY
and
UNION ELECTRIC COMPANY, dba AMERENUE
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$50,000,000
Environmental Improvement Revenue Refunding Bonds
(Union Electric Company Project)
Series 1998B
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ILLINOIS COMMERCE COMMISSION
Identification No. 6097
LOAN AGREEMENT
PAGE
ARTICLE I DEFINITIONS.............................................1
ARTICLE II REPRESENTATIONS.........................................2
Section 2.1. Representations of Issuer...........................2
Section 2.2. Representations of Company..........................3
ARTICLE III COMPLETION OF PROJECT...................................4
Section 3.1. Completion of Project...............................4
Section 3.2. Project Description.................................4
Section 3.3. Operation of Project................................4
Section 3.4. Company Representative..............................4
Section 3.5. Maintenance of Project..............................5
ARTICLE IV ISSUANCE OF BONDS; LOAN TO COMPANY......................5
Section 4.1. Issuance of Bonds; Loan to Company..................5
ARTICLE V REPAYMENT OF LOAN.......................................5
Section 5.1. Repayment of Loan...................................5
Section 5.2. Additional Payments.................................6
Section 5.3. Prepayments.........................................6
Section 5.4. Obligations of Company Unconditional................7
ARTICLE VI OTHER COMPANY AGREEMENTS................................7
Section 6.1. Maintenance of Existence............................7
Section 6.2. Financial Reports...................................7
Section 6.3. Payment of Taxes....................................8
Section 6.4. Arbitrage...........................................8
Section 6.5. Company's Obligation with Respect to Exclusion
of Interest Paid on the Bonds.....................8
Section 6.6. Notices Under the Indenture.........................9
Section 6.7. Letter of Credit....................................9
Section 6.8. Credit Ratings......................................9
Section 6.9. Purchases of Bonds..................................9
ARTICLE VII NO RECOURSE TO ISSUER; INDEMNIFICATION.................10
Section 7.1. No Recourse to Issuer..............................10
Section 7.2. Indemnification....................................10
ARTICLE VIII ASSIGNMENT.............................................10
Section 8.1. Assignment by Company..............................10
Section 8.2. Assignment by Issuer...............................10
ARTICLE IX DEFAULTS AND REMEDIES.................................11
Section 9.1. Remedies on Default................................11
Section 9.2. Delay Not Waiver; Remedies.........................11
Section 9.3. Attorneys' Fees and Expenses.......................11
ARTICLE X MISCELLANEOUS.........................................11
Section 10.1. Notices............................................11
Section 10.2. Binding Effect.....................................11
Section 10.3. Severability.......................................12
Section 10.4. Amendments.........................................12
Section 10.5. Right of Company To Perform Issuer's Agreements....12
Section 10.6. Applicable Law.....................................12
Section 10.7. Captions; References to Sections...................12
Section 10.8. Complete Agreement.................................12
Section 10.9. Termination........................................12
Section 10.10. Counterparts.......................................13
Signature.....................................................................13
LOAN AGREEMENT dated as of September 1, 1998, between STATE
ENVIRONMENTAL IMPROVEMENT AND ENERGY RESOURCES AUTHORITY of
the State of Missouri, a body corporate and politic and a
governmental instrumentality of the State of Missouri (the
"Issuer"), and UNION ELECTRIC COMPANY, a Missouri corporation
doing business as AMERENUE (the "Company").
Section 260.005 through Section 260.125, inclusive, R.S. Mo., as
amended, and Appendix B(1) thereto empowers the Issuer to issue its bonds for
any of its purposes, including the refunding of bonds previously issued by it.
On June 1, 1984, the Issuer issued its (i) Adjustable - Fixed Rate Pollution
Control Revenue Bonds, Series 1984 A (Union Electric Company Project) in the
aggregate principal amount of $80,000,000 (all of which are currently
outstanding) (the "Series 1984 A Bonds") and (ii) Adjustable - Fixed Rate
Pollution Control Revenue Bonds, Series 1984 B (Union Electric Company Project)
in the aggregate principal amount of $80,000,000 (all of which are currently
outstanding) (the "Series 1984 B Bonds") (the Series 1984 A Bonds and the Series
1984 B Bonds are referred to collectively as the "Prior Bonds") for the purpose
of constructing, acquiring, and installing certain pollution control and solid
waste disposal facilities (the "Project").
The Issuer proposes to issue (a)(i) $60,000,000 Environmental
Improvement Revenue Refunding Bonds (Union Electric Company Project) Series
1998A pursuant to the Series A Indenture (as defined in the Indenture referred
to below) and (ii) $50,000,000 Environmental Improvement Revenue Refunding Bonds
(Union Electric Company Project) Series 1998B pursuant to the Indenture in order
to provide the funds for the refunding of a portion of the Series 1984 A Bonds
and (b) to loan the proceeds of the Bonds to the Company. The Company desires to
use the proceeds of the Bonds to pay a portion of the cost of refunding a
portion of the Series 1984 A Bonds and a portion of the Series 1984 B Bonds, all
on the terms and conditions set forth in this Loan Agreement.
Accordingly, the Issuer and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Loan Agreement, unless the context clearly
requires otherwise, all terms defined in Article I of the Indenture have the
same meanings in this Loan Agreement.
"Indenture" means the Indenture of Trust relating to the Bonds, dated
as of the date of this Loan Agreement, between the Issuer and State Street Bank
and Trust Company of Missouri, N.A., as trustee, as such Indenture of Trust may
be amended or supplemented from time to time in accordance with its terms.
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations of Issuer. The Issuer represents as follows:
(a) The Issuer (1) is a body corporate and politic and a
governmental instrumentality duly organized and existing under the laws
of the State, (2) has full power and authority to enter into the
transactions contemplated by this Loan Agreement and by the Indenture
and to carry out its obligations under this Loan Agreement and the
Indenture, including the issuance of the Bonds and (3) by proper
corporate action has duly authorized the execution and delivery of this
Loan Agreement, the Bonds and the Indenture.
(b) Under existing statutes and decisions, no taxes on income
or profits are imposed on the Issuer. The Issuer will not knowingly
take or omit to take any action reasonably within its control which
action or omission would impair the exclusion of interest paid on the
Bonds from the federal gross income of the owners of the Bonds.
(c) Neither the execution and delivery by the Issuer of this
Loan Agreement nor the consummation by the Issuer of the transactions
contemplated by this Loan Agreement conflicts with, will result in a
breach of or default under or will (except with respect to the lien of
the Indenture) result in the imposition of any lien on any property of
the Issuer pursuant to the terms, conditions or provisions of any
statute, order, rule, regulation, agreement or instrument to which the
Issuer is a party or by which it is bound.
(d) Each of this Loan Agreement and the Indenture has been
duly authorized, executed and delivered by the Issuer and each
constitutes the legal, valid and binding obligation of the Issuer
enforceable against the Issuer in accordance with its terms, except to
the extent that the enforcement thereof may be limited by laws relating
to bankruptcy, insolvency, reorganization, moratorium or other similar
laws and equitable principles of general application affecting the
rights and remedies of creditors and secured parties.
(e) There is no litigation or proceeding pending, or to the
knowledge of the Issuer after due inquiry threatened, against the
Issuer, or affecting it, which could adversely affect the validity of
this Loan Agreement, the Indenture or the Bonds or the ability of the
Issuer to comply with its obligations under this Loan Agreement, the
Indenture or the Bonds.
(f) The Issuer is not in default under any of the provisions
of the laws of the State which would affect its existence or its powers
referred to in the preceding subsection (a).
(g) The Issuer hereby finds and determines that, based on
representations of the Company, all requirements of the Act have been
complied with and that the refinancing of the Project and the refunding
of a portion of the Series 1984 A Bonds and a portion of the Series
1984 B Bonds through the issuance of the Bonds will further the public
purposes of the Act.
(h) No member, director, officer or official of the Issuer
has any interest (financial, employment or other) in the Company or the
transactions contemplated by this Loan Agreement which is prohibited by
law.
(i) The Issuer will apply the proceeds from the sale of the
Bonds as specified in the Indenture and this Loan Agreement. So long as
any of the Bonds remain outstanding and except as may be authorized by
the Indenture, the Issuer will not issue or sell any bonds or
obligations, other than the Bonds, the principal of or interest on
which will be payable from the property described in the granting
clause of the Indenture.
Section 2.2. Representations of Company. The Company represents as follows:
(a) The Company (1) is a corporation duly incorporated and in
good standing in the State and in all other states in which it owns
property, (2) is duly qualified to transact business and is in good
standing in the State, (3) is not in violation of any provision of its
Articles of Incorporation or its By-laws, (4) has full corporate power
to own its properties and conduct its business, (5) has full legal
right, power and authority to enter into this Loan Agreement and
consummate all transactions contemplated by this Loan Agreement and (6)
by proper corporate action has duly authorized the execution and
delivery of this Loan Agreement.
(b) Neither the execution and delivery by the Company of this
Loan Agreement nor the consummation by the Company of the transactions
contemplated by this Loan Agreement conflicts with or will result in a
breach of or default under the Articles of Incorporation or By-laws of
the Company or the terms, conditions or provisions of any corporate
restriction or any statute, order, rule, regulation, agreement or
instrument to which the Company is a party or by which it is bound.
(c) This Loan Agreement has been duly authorized, executed
and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company in accordance with its terms, except
to the extent that the enforcement thereof may be limited by laws
relating to bankruptcy, insolvency, reorganization, moratorium or other
similar laws and equitable principles of general application affecting
the rights and remedies of creditors and secured parties.
(d) There is no litigation or proceeding pending, or to the
knowledge of the Company after due inquiry threatened, against the
Company, or affecting it, which could adversely affect the validity of
this Loan Agreement or the ability of the Company to comply with its
obligations under this Loan Agreement.
(e) The information contained in the Tax Agreement and all
other written information relating to the Project and the Prior Bonds
provided by the Company to the Issuer and bond counsel for the Bonds is
true and correct in all material respects.
(f) Neither the Prior Indentures nor the Prior Agreements
have been supplemented or amended.
ARTICLE III
COMPLETION OF PROJECT
Section 3.1. Completion of Project. The Company has completed the
acquisition, construction, installation and equipping of the Project in
accordance with the Prior Indenture and the Prior Agreement.
Section 3.2. Project Description. The Company will not make any
material changes in the Project description contained in Exhibit A unless the
Trustee and the Issuer receive a Favorable Opinion of Tax Counsel with respect
to such change.
Section 3.3. Operation of Project. So long as the Company operates
the Project, it will operate it as facilities for preventing or reducing
pollution and/or the disposal of solid waste as contemplated by the Act and as
solid waste disposal facilities and/or air or water pollution control facilities
as contemplated by Sections 103(b)(4)(E) and/or (F) of the 1954 Code.
Section 3.4. Company Representative. Prior to the initial sale of
the Bonds, the Company shall appoint a Company Representative for the purpose of
acting on behalf of the Company and taking all actions and making all
certificates required to be taken and made by a Company Representative under the
provisions of this Loan Agreement and the Indenture, and shall appoint
alternative Company Representatives to take any such action or make any such
certificate if the same is not taken or made by the Company Representative. In
the event any of said persons, or any successor appointed pursuant to the
provisions of this Section, should resign or become unavailable or unable to
take any action or make any certificate provided for in this Loan Agreement or
the Indenture, another Company Representative or alternate Company
Representative shall thereupon be appointed by the Company. If the Company fails
to make such designation within 10 days following the date when the then
incumbent resigns or becomes unavailable or unable to take any of the said
actions, the Treasurer of the Company shall serve as the Company Representative.
Whenever under the provisions of this Loan Agreement or the Indenture
the approval of the Company is required or the Issuer is required to take some
action at the request of the Company, such approval or such request shall be
made by the Company Representative or alternate Company Representative unless
otherwise specified in this Loan Agreement or the Indenture, and the Issuer or
the Trustee shall be authorized to act on any such approval or request.
Section 3.5. Maintenance of Project. The Company will at all times
make or cause to be made such expenditures by means of renewals, replacements,
repairs, maintenance, or otherwise as shall be necessary to maintain, preserve
and keep the Project in good repair, physical condition, working order and
condition and in a state of good operating efficiency, except that the Company
may abandon any portion of the Project if in its opinion the abandonment of such
portion is desirable in the proper conduct of its business and in the operation
of its properties or is otherwise in its best interests, provided that the
Trustee receives a Favorable Opinion of Tax Counsel prior to such abandonment.
ARTICLE IV
ISSUANCE OF BONDS; LOAN TO COMPANY
Section 4.1. Issuance of Bonds; Loan to Company. In order to refund
a portion of the Series 1984 A Bonds and a portion of the Series 1984 B Bonds,
the Issuer will issue, sell and deliver the Bonds to the initial purchasers
thereof and deposit the proceeds of the Bonds with the Trustee as provided in
Article IV of the Indenture. Such deposit shall constitute a loan to the Company
under this Loan Agreement. The Issuer authorizes the Trustee to disburse the
proceeds of the Bonds in accordance with Sectiona4.01 of the Indenture. If the
proceeds of the Bonds are not sufficient to accomplish the refunding of such
portion of the Series 1984 A Bonds and such portion of the Series 1984 B Bonds
on Decembera1, 1998, the Company shall at its own expense and without any right
of reimbursement in respect thereof immediately pay all amounts necessary to
accomplish such refunding. The Company hereby approves the Indenture and the
issuance by the Issuer of the Bonds.
ARTICLE V
REPAYMENT OF LOAN
Section 5.1. Repayment of Loan. (a) The Company will repay the loan
made to it under Section 4.1 as follows: Before 11:00 a.m. (local time at the
principal corporate office of the Registrar) on each day on which any payment of
either principal of or interest on the Bonds, or both, shall become due (whether
at maturity, or upon redemption or acceleration or otherwise), the Company will
pay, in immediately available funds, an amount which, together with other moneys
held by the Tender Agent or by the Trustee under the Indenture and available
therefor, will enable the Registrar to make such payment in full in a timely
manner. If such day on which any payment shall become due is not a Business Day,
then the payment required by this Section shall be made on or before the
succeeding Business Day. If the Company defaults in any payment required by this
Section, the Company will pay interest (to the extent allowed by law) on such
amount until paid at the rate provided for in the Bonds.
(b) The Company will pay to the Tender Agent, on each day on which a
payment of purchase price of a Bond which has been tendered shall become due, an
amount which, together with other moneys held by the Tender Agent or the Trustee
under the Indenture
and available therefor, will enable the Tender Agent to make such payment in
full in a timely manner.
In furtherance of the foregoing, so long as any Bonds are outstanding
the Company will pay all amounts required to prevent any deficiency or default
in any payment of the Bonds, including any deficiency caused by an act or
failure to act by the Trustee, the Company, the Issuer, the Remarketing Agent,
the Auction Agent, the Tender Agent or any other person.
All amounts payable under this Section by the Company are assigned by
the Issuer to the Trustee pursuant to the Indenture for the benefit of the
Bondholders. The Company consents to such assignment. Accordingly, the Company
will pay directly to the Registrar at its principal corporate trust office all
payments payable by the Company pursuant to this Section. The Company need not
pay any amount paid to Bondholders by a draw on the Letter of Credit, if any.
Section 5.2. Additional Payments. The Company will pay the issuance
fee of the Issuer of $42,187.50 upon the issuance of the Bonds. The Company will
also pay the following within 30 days after receipt of a bill therefor:
(a) The reasonable fees and expenses of the Issuer in
connection with this Loan Agreement and the Bonds, such fees and
expenses to be paid directly to the Issuer; provided that the Company
Representative shall have approved such expenses in writing prior to
their incurrence.
(b) (i) The fees and expenses of the Trustee, the Remarketing
Agent, the Tender Agent, the Auction Agent, the Broker Dealers, the
Securities Depository and all other fiduciaries and agents serving
under the Indenture (including any expenses in connection with any
redemption of the Bonds), and (ii) all fees and expenses, including
attorneys' fees, of the Trustee for any extraordinary services rendered
by it under the Indenture; provided that the Company may, without
creating an Event of Default, delay making any payment under clause
(ii) while it contests in good faith the necessity for, reasonableness
of, or reasonableness of amount of, such extraordinary services and
expenses. All such fees and expenses are to be paid directly to the
Trustee, the Remarketing Agent, the Tender Agent, the Auction Agent,
the Securities Depository or other fiduciary or agent for its own
account as and when such fees and expenses become due and payable.
(c) All other reasonable fees and expenses incurred in
connection with the issuance of the Bonds, including but not limited to
all costs associated with any discontinuance of the book-entry only
system.
Section 5.3. Prepayments. The Company may at any time prepay to the
Registrar all or any part of the amounts payable under Section 5.1. A prepayment
will not relieve the Company of its obligations under this Loan Agreement until
all the Bonds have been paid or provision for the payment of all the Bonds has
been made in accordance with the Indenture.
In the event of a mandatory redemption of the Bonds, the Company will prepay all
amounts necessary for such redemption.
Section 5.4. Obligations of Company Unconditional. The Company
agrees that the obligations of the Company to make the payments required by
Sections 5.1 and 5.3 and to perform its other agreements contained in this Loan
Agreement shall be absolute and unconditional. Until the principal of and
interest on the Bonds shall have been fully paid or provision for the payment of
the Bonds made in accordance with the Indenture, the Company (a) will not
suspend or discontinue any payments provided for in Section 5.1, (b) will
perform all its other agreements in this Loan Agreement and (c) will not
terminate this Loan Agreement for any cause including any acts or circumstances
that may constitute failure of consideration, destruction of or damage to the
Project, commercial frustration of purpose, any change in the laws of the United
States or of the State or any political subdivision of either or any failure of
the Issuer to perform any of its agreements, whether express or implied, or any
duty, liability or obligation arising from or connected with this Loan
Agreement.
ARTICLE VI
OTHER COMPANY AGREEMENTS
Section 6.1. Maintenance of Existence. The Company agrees that
during the term of this Loan Agreement and so long as any Bond is outstanding,
it will maintain its corporate existence, will continue to be a corporation in
good standing under the laws of the State, will not dissolve or otherwise
dispose of all or substantially all of its assets and will not consolidate with
or merge into another legal entity or permit one or more other legal entities
(other than one or more subsidiaries of the Company) to consolidate with or
merge into it, or sell or otherwise transfer to another legal entity all or
substantially all its assets as an entirety and dissolve, unless (a) in the case
of any merger or consolidation, the Company is the surviving corporation, or
(b)(i) the surviving, resulting or transferee legal entity is organized and
existing under the laws of the United States, a state thereof or the District of
Columbia, and (if not the Company) assumes in writing all the obligations of the
Company under this Loan Agreement and (ii) no event which constitutes, or which
with the giving of notice or the lapse of time or both would constitute an Event
of Default shall have occurred and be continuing immediately after such merger,
consolidation or transfer.
Section 6.2. Financial Reports. The Company agrees to have an
annual audit made by its regular independent certified public accountants and,
upon request, to furnish the Trustee (within 90 days after receipt by the
Company) with a balance sheet, statement of income and statement of cash flows
showing the financial condition of the Company and its consolidated
subsidiaries, if any, at the close of each fiscal year, the results of
operations and the cash flows of the Company and its consolidated subsidiaries,
if any, for each fiscal year, accompanied by the opinion of said accountants.
The Trustee will hold such reports solely for the purpose of making them
available at its principal corporate trust office for examination by the
Bondholders, and is not required to notify the Bondholders of the contents of
any such report. The Company may fulfill its obligation under this Section by
furnishing the Trustee a copy of its Annual Report on Form 10-K, as filed with
the Securities and Exchange Commission, if such report shall contain the above
described financial statements.
Section 6.3. Payment of Taxes. The Company will pay and discharge
promptly all lawful taxes, assessments and other governmental charges or levies
imposed upon the Project, or upon any part thereof, as well as all claims of any
kind (including claims for labor, materials and supplies) which, if unpaid,
might by law become a lien or charge upon the Project; provided that the Company
shall not be required to pay any such tax, assessment, charge, levy or claim (i)
if the amount, applicability or validity thereof shall currently be contested in
good faith by appropriate proceedings promptly initiated and diligently
conducted; (ii) if the Company shall have set aside on its books reserves
(segregated to the extent required by generally accepted accounting principles)
with respect thereto deemed adequate by the Company; and (iii) if failure to
make such payment will not impair the use of the Project by the Company.
Section 6.4. Arbitrage. The Company covenants with the Issuer and
for and on behalf of the purchasers and owners of the Bonds from time to time
outstanding that so long as any of the Bonds remain outstanding, moneys on
deposit in any fund in connection with the Bonds, whether or not such moneys
were derived from the proceeds of the sale of the Bonds or from any other
sources, will not be used in a manner which will cause the Bonds to be
"arbitrage bonds" within the meaning of Sectiona148 of the Code, and any lawful
regulations promulgated thereunder, as the same exist on this date, or may from
time to time hereafter be amended, supplemented or revised. The Company also
covenants for the benefit of the Bondholders to comply with all of the
provisions of the Tax Agreement. The Company reserves the right, however, to
make any investment of such moneys as may be permitted by State law at such
time, if, when and to the extent that said Sectiona148 or regulations
promulgated thereunder shall be repealed or relaxed or shall be held void by
final judgment of a court of competent jurisdiction, but only if any investment
made by virtue of such repeal, relaxation or decision would not, in the written
Opinion of Tax Counsel, result in making the interest on the Bonds includible in
the federal gross income of the owners of the Bonds.
Section 6.5. Company's Obligation with Respect to Exclusion of
Interest Paid on the Bonds. Notwithstanding any other provision hereof, the
Company covenants and agrees that it will not knowingly take or authorize or
permit, to the extent such action is within the control of the Company, any
action to be taken with respect to the Project or the Prior Bonds, or the
proceeds of the Bonds (including investment earnings thereon), or any other
proceeds derived directly or indirectly in connection with the Project or the
Prior Bonds, which will result in the loss of the exclusion of interest on the
Bonds from the federal gross income of the owners of the Bonds under Sectiona103
of the Code to the extent that such interest on the Bonds was excludable when
such Bonds were issued (except for any Bond during any period while any such
Bond is held by a person referred to in Section 103(b)(13) of the 1954 Code);
and the Company also will not knowingly omit to take any action in its power
which, if omitted, would cause the above result. This provision
shall control in case of conflict or ambiguity with any other provision of this
Loan Agreement.
The Company covenants and agrees to notify the Trustee and the Issuer
of the occurrence of any event of which the Company has notice and which event
would require the Company to prepay the amounts due hereunder because of a
redemption upon a determination of taxability.
Section 6.6. Notices Under the Indenture. The Company shall give
timely written notice to the persons noted in Section 2.02(b) of the Indenture
as required by such section, prior to any change in the method of determining
interest on the Bonds. Notwithstanding the foregoing, the Company shall use its
best efforts to notify the Issuer as early as possible prior to electing a
Long-Term Interest Rate Period of three years or longer duration. In addition,
if the Company shall elect to change the method of determining interest on the
Bonds, the Company shall deliver to the persons noted in Section 2.02(b) of the
Indenture concurrently with the giving of notice with respect thereto, and no
such change shall be effective without, a Favorable Opinion of Tax Counsel, if
required by the Indenture. The Company shall use its best efforts to provide the
Tender Agent and the Auction Agent with notice of any change in the maximum rate
permitted by law on the Auction Rate Bonds.
If the Company determines that a Payment Default has occurred the
Company shall promptly notify the Tender Agent thereof.
Section 6.7. Letter of Credit. Any Letter of Credit delivered by
the Company pursuant to the Indenture must comply with the provisions of the
Indenture, including but not limited to, Article V thereof.
Section 6.8. Credit Ratings. The Company shall take all reasonable
action necessary to enable at least one nationally recognized statistical rating
organization (as that term is used in the rules and regulations of the SEC under
the Securities Exchange Act) to provide credit ratings for the Auction Rate
Bonds.
Section 6.9. Purchases of Bonds. (a) The Company shall not
purchase or otherwise acquire Auction Rate Bonds unless the Company redeems or
cancels such Auction Rate Bonds on the day of any purchase.
(b) So long as a Letter of Credit is in effect, the Company will not,
and will not permit any "insider" (as defined in the Bankruptcy Code) of the
Company, to purchase, directly or indirectly, any Bonds with any funds that do
not constitute moneys described in clauses first, second, third or fourth in the
second paragraph of Section 4.02 of the Indenture, except as required by Section
5.2(b).
ARTICLE VII
NO RECOURSE TO ISSUER; INDEMNIFICATION
Section 7.1. No Recourse to Issuer. The Issuer will not be
obligated to pay the Bonds or any fees or expenses incurred in connection
therewith except from revenues provided by the Company. The issuance of the
Bonds will not directly or indirectly or contingently obligate the Issuer or the
State to levy or pledge any form of taxation whatever or to make any
appropriation for their payment. Neither the Issuer nor any member, director,
employee, agent or officer of the Issuer nor any person executing the Bonds
shall be liable personally for the Bonds or be subject to any personal liability
or accountability by reason of the issuance of the Bonds.
Section 7.2. Indemnification. The Company during the term of this
Loan Agreement releases the Issuer, its members, officers, directors, employees
and agents from and covenants and agrees that the Issuer, its members, officers,
directors, employees and agents shall not be liable for, and agrees to indemnify
and hold the Issuer, its members, directors, officers, employees and agents
harmless against, any loss or damage to property or any injury to or death of
any person occurring on or about or resulting from any defect in the Project,
provided that the indemnity shall not be effective for damages that result from
the negligence or intentional acts on the part of the Issuer, its members,
officers, directors, employees or agents. The Company will also indemnify and
save harmless the Issuer, its members, officers, directors, employees or agents
from and against any and all losses, costs, charges, expenses, judgments and
liabilities imposed upon or asserted against it or them with respect to the
Project on account of any failure on the part of the Company to perform or
comply with any of the provisions of this Loan Agreement.
ARTICLE VIII
ASSIGNMENT
Section 8.1. Assignment by Company. The Company may assign its
rights and obligations under this Loan Agreement with the prior written consent
of the Issuer, but no assignment will relieve the Company from primary liability
for any obligations under this Loan Agreement.
Section 8.2. Assignment by Issuer. The Issuer will assign its
rights under and interest in this Loan Agreement (except for the Unassigned
Rights) to the Trustee pursuant to the Indenture as security for the payment of
the Bonds, and the Company assents to this assignment. Otherwise, the Issuer
will not sell, assign or otherwise dispose of its rights under or interest in
this Loan Agreement nor create or permit to exist any lien, encumbrance or other
security interest in or on such rights or interest.
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.1. Remedies on Default. Whenever any Event of Default
under the Indenture has occurred and is continuing, the Trustee may take
whatever action may appear necessary or desirable to collect the payments then
due and to become due or to enforce performance of any agreement of the Company
in this Loan Agreement.
In addition, if an Event of Default is continuing with respect to any
of the Unassigned Rights, the Issuer may take whatever action may appear
necessary or desirable to it to enforce performance by the Company of such
Unassigned Rights.
Any amounts collected pursuant to action taken under this Section
(except for amounts payable directly to the Issuer or the Trustee pursuant to
Sections 5.2, 7.2 and 9.3) shall be applied in accordance with the Indenture.
Nothing in this Loan Agreement shall be construed to permit the Issuer,
the Trustee, any Bondholder or any receiver in any proceeding brought under the
Indenture to take possession of or exclude the Company from possession of the
Project by reason of the occurrence of an Event of Default.
Section 9.2. Delay Not Waiver; Remedies. A delay or omission by the
Issuer or the Trustee in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 9.3. Attorneys' Fees and Expenses. If the Company should
default under any provision of this Loan Agreement and the Issuer should employ
attorneys or incur other expenses for the collection of the payments due under
this Loan Agreement, the Company will on demand pay to the Issuer the reasonable
fees of such attorneys and such other reasonable expenses so incurred by the
Issuer.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed as provided in the Indenture.
Section 10.2. Binding Effect. This Loan Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns, subject, however, to the limitations
contained in Section 6.1.
Section 10.3. Severability. If any provision of this Loan Agreement
shall be determined to be unenforceable at any time, that shall not affect any
other provision of this Loan Agreement or the enforceability of that provision
at any other time
Section 10.4. Amendments. After the issuance of the Bonds, this Loan
Agreement may not be effectively amended or terminated without the written
consent of the Trustee and the Tender Agent and in accordance with the
provisions of the Indenture.
Section 10.5. Right of Company To Perform Issuer's Agreements. The
Issuer irrevocably authorizes and empowers the Company to perform in the name
and on behalf of the Issuer any agreement made by the Issuer in this Loan
Agreement or in the Indenture which the Issuer fails to perform in a timely
fashion if the continuance of such failure could result in an Event of Default.
This Section will not require the Company to perform any agreement of the
Issuer.
Section 10.6. Applicable Law. This Loan Agreement shall be governed
by and construed in accordance with the laws of the State.
Section 10.7. Captions; References to Sections. The captions in this
Loan Agreement are for convenience only and do not define or limit the scope or
intent of any provisions or Sections of this Loan Agreement. References to
Articles and Sections are to the Articles and Sections of this Loan Agreement,
unless the context otherwise requires.
Section 10.8. Complete Agreement. This Loan Agreement represents
the entire agreement between the Issuer and the Company with respect to its
subject matter.
Section 10.9. Termination. When no Bonds are Outstanding under the
Indenture, the Company and the Issuer shall not have any further obligations
under this Loan Agreement; provided that the Company's covenants in Sections 6.4
and 6.5, and the provisions of Section 5.3 with respect to mandatory redemption
of the Bonds, shall survive so long as any Bond remains unpaid.
Section 10.10. Counterparts. This Loan Agreement may be signed in
several counterparts. Each will be an original, but all of them together
constitute the same instrument.
STATE ENVIRONMENTAL IMPROVEMENT AND
ENERGY RESOURCES AUTHORITY
By /S/ Avis Parman
---------------------------------
Chairman
[SEAL]
Attest:
By /S/ Charles D. Banks
--------------------------
Secretary
UNION ELECTRIC COMPANY, dba AMERENUE
By /S/ Donald E. Brandt
-----------------------------
Senior Vice President
EXHIBIT A
THE PROJECT
The Project consists of the portion of the following facilities
previously financed by the Issuer with the Prior Bonds. The facilities are
located at Union Electric Company's Callaway Nuclear Plant in Callaway County,
Missouri.
A. WATER POLLUTION CONTROL FACILITIES:
1. Oily Waste Treatment System. The oily waste treatment system is
designed to remove oily waste from contaminated water in compliance with the
Federal Clean Water Act. The oily waste treatment system collects, for
processing and disposal, nonradioactive waste from areas where oil may be
present, and waste that may contain oil and/or trace amounts of radioactive
contaminants. Areas where oily waste is collected by the system include the
turbine building, control building, communications corridor, diesel generator
building, and the auxiliary feedwater pump room.
2. Steam Generator Blowdown System. The function of the steam
generator blowdown system is to treat blowdown to the extent required to meet
chemical composition limits for release to the environment. This system consists
of heat exchangers, mixed bed demineralizers, filters and associated hardware.
3 Liquid Radwaste System. The function of the liquid radwaste system
is to collect, segregate and treat both the reactor grade and nonreactor grade
liquid wastes during plant power, refueling and maintenance operations.
Specifically, it handles potentially radioactive floor and equipment drains,
laundry, and chemical waste. After processing to remove low-level and other
pollutants, a substantial amount of the treated liquid is expected to be
recycled for use in the plant, while the remainder will be piped to the river
for release there. The liquid radwaste system consists of several tanks and
pumps, an evaporator, heat exchanger, demineralizers, charcoal adsorbers,
filters, and a reverse osmosis unit.
4. Boron Recycle System. In order to keep the reactor functioning
properly, the percentage of boron in the reactor coolant is adjusted by the
addition of reactor makeup water, blending boric acid as needed. As discussed
below, this operation occurs as part of the function of the chemical and volume
control system ("CVCS").
Waste streams from the CVCS are let down from time to time to the boron
recycle system ("BRS"). Waste streams containing boron and other minerals are
treated in the BRS by demineralization, filtration and evaporation. After
treatment, some of the liquid waste will be discharged to the Missouri River in
compliance with discharge limits imposed by the Clean Water Act. Liquid waste
meeting the chemical requirements for reactor makeup water will be pumped to the
makeup water storage tank for reuse in the reactor coolant water system. The
system evaporator that treats the waste streams concentrates boric acid to 4
percent weight. The concentrated solution is then pumped to the evaporator
bottoms tank (primary) for processing and disposal or, if reusable, is sent to
the boric acid tanks. Absent
pollution control requirements, these wastes would have been discharged directly
to the environment.
5. Secondary Liquid Waste. The function of the secondary liquid
waste system is to treat waste liquids collected in the turbine building floor
and equipment drains. The turbine building drains are segregated into drains
where turbine cycle leakage is likely. This system also treats condensate
polisher regeneration wastes. This treatment is to achieve compliance within the
discharge limits imposed by the Clean Water Act. Absent pollution control
requirements, these wastes would have been discharged directly to the
environment. The system consists of several tanks and pumps, an evaporator, a
demineralizer, a charcoal bed, an oil interceptor, and three filters. It also
includes associated piping, valves, electrical and control equipment.
6. Facilities For Discharge of Wastes. After treatment in the liquid
radwaste system, boron recovery, steam generator blowdown, and secondary liquid
waste systems, the liquids that will be discharged to the river are transferred
to either of two discharge holdup tanks and then pumped through about five miles
of buried piping to the Missouri River. The discharge holdup tanks will provide
further holding, monitoring and treatment of liquids before they are released to
the river. The tanks are sized to provide holdup for primary liquid radwaste and
secondary liquid waste that will eventually be discharged. The tanks are
necessary to provide the sampling required in order to ensure that all
discharges are within pollution control limits. Each tank holds approximately
100,000 gallons and will have related equipment to provide necessary adjustments
to obtain the required pH levels. Piping is installed to provide for
reprocessing the tank contents if monitoring shows that the contents fail to
meet the environmental requirements for discharge.
7. Chemical Waste Treatment System. The chemical waste treatment
system collects waste chemicals and detergent wastes for treatment and disposal.
Waste is collected from the chemical and volume control system sample room sink,
the hot laboratory sample sinks, the recycle evaporator and recycle evaporator
reagent tank, the waste evaporator and waste evaporator reagent tank, the
secondary liquid waste evaporator and secondary liquid waste evaporator reagent
tank, the radwaste building sample laboratory sink, evaporator bottoms tank
overflow (primary and secondary), decontamination tanks in hot machine shop and
turbine building sample laboratory sinks. Except as described below, all
effluents in this system flow by gravity directly to the chemical drain tank
located in the basement of the radwaste building. The effluents from hot
laboratory sample sinks flow by gravity to the chemical equipment drain sump
located in the basement of the control building. This sump is vented to the
access control exhaust system to prevent diffusion of vapors to the atmosphere.
The same is true of the vent for the detergent drain tank, which collects waste
from the laundry, hot laboratory, and the men's and women's disrobe areas
located in the control building. The turbine building sample laboratory sinks
are tied to a common drain line. This line can be routed through demineralizers
and discharged to the oil waste system or discharged into a portable container
outside the laboratory.
8. Floor and Equipment Drain System. One of three subsystems within
the floor and equipment drains is designed to collect liquid waste and pump it
to the floor drain tank.
The pollution control equipment processes effluent originating in the hot
machine shop decontamination area prior to releasing it to the floor drain tank.
9-10. Sewage Collection and Treatment System. The power block drainage
system collects wastes from service facilities, pantry facilities, electric
water coolers, clean shower, plumbing fixtures and toilet drains in the control
building, and from electric water coolers, electric water heaters, plumbing
fixtures and toilet room floor drains in the turbine building.
The collection facilities drain to a lift station and the wastes are
then pumped to the sewage treatment plant. After treatment the wastes are
discharged to the river. (The qualifying facilities do not include field
facilities used during construction.)
This system is not in regular operation at substantially the level of
treatment for which it was intended. The Company will therefore improve its
maintenance and inspection program and make necessary changes to the system.
When this is completed, the system will be capable of meeting or exceeding
applicable federal, state and local requirements for the control of water
pollution.
11. Chemical and Volume Control Letdown Waste Processing System
(CVCS). During plant operation, this maintains the reactor coolant system
equilibrium fission and corrosion product activities within specified limits.
The letdown waste effluent from the system is processed and treated. Mixed-bed
demineralizers are provided in the letdown system to provide cleanup of the
letdown flow. The demineralizers remove ionic corrosion products, certain
fission products, and act as filters. One demineralizer is usually in continuous
service for normal letdown flow and can be supplemented intermittently by the
cation bed demineralizer for additional purification as required.
B. AIR POLLUTION CONTROL FACILITIES:
1. Gaseous Radwaste System. The function of this system is to remove
polluting gases produced by the fission process from the reactor coolant system
and to collect other gaseous waste pollutants from sources having appreciable
amounts of fission product gases and hydrogen. The system has the capacity for
achieving decay of such waste gases through long-term storage, thus complying
with air pollution control requirements by eliminating regularly scheduled
discharges of radioactive gases into the atmosphere. This system consists
principally of the hydrogen recombiner and a series of eight waste gas decay
tanks. The hydrogen recombiner provides a means of drawing off the waste gases
through combination with hydrogen. The hydrogen is then catalytically recombined
to form water, and the remaining waste gases are then processed and allowed to
decay in waste gas decay tanks.
2. Control Building Ventilation Exhaust System. The access control
exhaust system takes suction from the potentially contaminated areas of the
access control floor and the basement beneath. This system filters exhaust prior
to discharge to the environment.
3. Auxiliary Building Ventilation Exhaust System. All exhaust air
from the auxiliary building is processed through the auxiliary/fuel building
normal exhaust system filter train for cleanup prior to radiation monitoring and
discharge to the environment.
4. Condenser Air Removal System. The condenser air removal system
exhausts potentially radioactive gases and other gases from the condenser and
processes them through a charcoal adsorber unit prior to discharge to the
environment.
5. Containment Atmospheric Control System. The containment
atmospheric control system has two functions-to reduce the containment airborne
concentrations of radioiodine and particulates to acceptable levels prior to and
during occupancy of the containment and to reduce the amount of airborne
radioiodine and particulates released to the environment prior to containment
purges. The system operates, as needed, prior to and during purging to provide
internal cleanup of the containment atmosphere by recirculation through charcoal
adsorbers and particulate filters.
6. Containment Purge System. During operation of the containment
shutdown purge supply system, the containment shutdown purge exhaust fan takes
suction from the containment through the containment purge exhaust system and
containment purge filtration unit and discharges it to the environment.
7. Radiation Monitoring System (primarily air pollution control
related). A portion of the process and effluent radiation monitoring system is
necessary to monitor, record, and control the release to the environment of
radioactive materials that may be generated under normal conditions. The process
and effluent radioactivity monitors operate continuously during both
intermittent and continuous discharges of potentially radioactive plant
effluents.
C. SOLID WASTE DISPOSAL FACILITIES:
1. Solid Radwaste Processing System.(*) The solid radwaste
processing system includes facilities for solidification, compaction, and
temporary storage of solid wastes. It collects spent resins, evaporator bottoms,
spent charcoal and miscellaneous dry wastes. The system is designed to provide
adequate handling, processing and drumming up of the wastes, and temporarily
storing them until shipment offsite for disposal at a licensed burial site. The
wastes are generated during normal plant operation and during anticipated
operational occurrences, such as refueling and high maintenance periods.
Filter Handling System. The filter handling system provides a means of
removing and transferring spent filter cartridges from the filter
vessels for processing and disposal.
Resin Sluicing System. The resin sluicing system provides a means for
transferring spent resins from the demineralizers to the spent resin
storage tank. From there these resins are processed for disposal. The
system is designed to minimize the amount of waste liquid generated
during sluicing.
2. Temporary Storage.(**) A consulting engineering firm was retained
to determine a location for storage of solidified secondary radwaste. The
consultants determined that it would be best to store this low-level waste on a
temporary basis pending disposal in what is now called the fabrication shop (or
similar structure).
D. MISCELLANEOUS:
1. Radwaste Building and Radwaste Pipe Tunnel. The radwaste building
contains only facilities performing a solid waste disposal function or
facilities performing a pollution control function. As discussed below, the
radwaste building and the radwaste pipe tunnel are necessary to the proper
functioning of those systems described above which are located in the building.
Radwaste Building. The radwaste building is a rectangular, multistory,
structural steel and reinforced concrete structure which houses
facilities for treatment and disposal of radioactive liquid, gaseous
and solid wastes.
Radwaste Pipe Tunnel. The radwaste pipe tunnel is a below-grade,
reinforced concrete structure connecting the auxiliary building and the
radwaste building. The tunnel provides access and carries electrical
cable trays and piping between the auxiliary building and the radwaste
building. It functions only in support of the radwaste building and
equipment therein.
- ----------
(*) Certain portions of the Solid Radwaste Processing System are no longer
in use. Since the plant became operational, the equipment associated
with solidifying radioactive resins and bottoms has been retired. In
addition, the equipment processing contaminated laundry wastewater
(reverse osmosis) has been retired. Equipment associated with the
solidification of radwastes is being replaced with a new Radwaste
Volume Reduction system. The total estimated costs of the retired
equipment is $14,283,360, a portion of which was financed with the
Prior Bonds.
(**) The temporary storage facilities were not constructed. The total
estimated cost of the temporary storage facilities which was to be
financed with the Prior Bonds was $198,681.