UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From to
Commission file number 1-2967.
UNION ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Missouri 43-0559760
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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1901 Chouteau Avenue, St. Louis, Missouri 63103
(Address of principal executive offices and Zip Code)
Registrant's telephone number,
including area code: (314) 621-3222
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Shares outstanding of each of registrant's classes of common stock as of October
31, 1998:
Common Stock, $5 par value, held by Ameren Corporation (parent
company of Registrant) - 102,123,834
Union Electric Company
Index
Page No.
Part I Financial Information (Unaudited)
Management's Discussion and Analysis 2
Balance Sheet
- September 30, 1998 and December 31, 1997 8
Statement of Income
- Three months, nine months and 12 months ended
September 30, 1998 and 1997 9
Statement of Cash Flows
- Nine months ended September 30, 1998 and 1997 10
Notes to Financial Statements 11
Part II Other Information 12
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PART I. FINANCIAL INFORMATION (UNAUDITED)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Union Electric Company (AmerenUE or the Registrant) is a subsidiary of Ameren Corporation (Ameren), a holding company which is registered under the Public Utility Holding Company Act of 1935 (PUHCA). In December 1997, AmerenUE and CIPSCO Incorporated (CIPSCO) combined to form Ameren, with AmerenUE and CIPSCO's subsidiaries, Central Illinois Public Service Company (AmerenCIPS) and CIPSCO Investment Company (CIC), becoming wholly-owned subsidiaries of Ameren (the Merger).
The following discussion and analysis should be read in conjunction with the Notes to Financial Statements beginning on page 10, and the Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A), the Audited Financial Statements and the Notes to Financial Statements appearing in the Registrant's 1997 Form 10-K.
RESULTS OF OPERATIONS
Earnings
Third quarter 1998 earnings of $204 million increased $23 million compared to
1997 third quarter earnings. Earnings for the nine months ended September 30,
1998 increased $18 million from the year-ago period to $296 million. Earnings
for the twelve months ended September 30, 1998, were $311 million, a $20 million
increase from the preceding 12-month period. Excluding the extraordinary charge
recorded in the fourth quarter of 1997 to write off the generation-related
regulatory assets and liabilities of the Registrant's Illinois retail electric
business, earnings for the 12-month period ended September 30, 1998, were $338
million.
Earnings fluctuated due to many conditions, the primary ones being: weather variations, credits to electric customers, sales growth, fluctuating operating costs, the write-off of certain generation-related regulatory assets and liabilities, merger-related costs, and targeted separation plan expense. The significant items affecting revenues, costs and earnings during the three-month, nine-month and 12-month periods ended September 30, 1998, and 1997 are detailed below.
Electric Operations
Electric Operating Revenues Variations for periods ended September 30, 1998
from comparable prior-year periods
--------------------------------------------- ---------------- --------------- ------------------
(Millions of Dollars) Three Months Nine Months Twelve Months
--------------------------------------------- ---------------- --------------- ------------------
Credit to customers $ - $ (24) $ (22)
Effect of abnormal weather 42 64 66
Growth and other (6) 41 50
Interchange sales 35 23 9
--------------------------------------------- ------------------- ------------ ------------------
$ 71 $ 104 $ 103
--------------------------------------------- ------------------- ------------ ------------------
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The $71 million increase in third quarter electric revenues compared to the year-ago quarter was primarily due to warmer summer weather and increased interchange sales. Weather-sensitive residential and commercial sales increased 15 percent and 7 percent, respectively, while industrial sales increased 3 percent, due to the strong regional economy.
Electric revenues for the first nine months of 1998 increased $104 million over the same period in 1997 primarily due to warmer summer weather, growth in the service territory and increased interchange revenues, partially offset by increased credits to customers (see Note 5 under Notes to Financial Statements for further information). Residential, commercial, and industrial sales increased 10 percent, 5 percent, and 2 percent, respectively.
The $103 million increase in electric revenues for the 12 months ended September 30, 1998, compared to the prior 12-month period was primarily due to favorable weather and growth in the service territory, partially offset by a higher estimated Missouri customer credit recorded during the period (see Note 5 under Notes to Financial Statements for further information). Residential, commercial and industrial sales increased 9 percent, 4 percent, and 2 percent, respectively.
Fuel and Purchased Power Variations for periods ended September 30, 1998
from comparable prior-year periods
--------------------------------------------- ---------------- --------------- -----------------
(Millions of Dollars) Three Months Nine Months Twelve Months
--------------------------------------------- ---------------- --------------- -----------------
Fuel:
Variation in generation $ 15 $ 7 $ 6
Price (6) 1 (5)
Generation efficiencies and other - 3 2
Purchased power variation 14 29 29
--------------------------------------------- ---------------- --------------- ----------------
$ 23 $ 40 $ 32
--------------------------------------------- ---------------- --------------- ----------------
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The increase in fuel and purchased power costs for the three, nine, and twelve months ended September 30, 1998, versus the comparable prior year periods was primarily due to increased sales volumes and higher purchased power prices.
While unprecedented prices for power purchases occurred in the marketplace during the last week of June 1998, the Registrant was able to effectively manage its power costs in the face of soaring wholesale electricity prices. Overall, the abnormally high prices for power purchases in June had little impact on the Registrant's financial results for the periods presented.
Gas Operations
Gas revenues were relatively flat compared to prior year due to lower sales
resulting from milder winter weather, which were offset in part by the annual
$11.5 million Missouri gas rate increase effective February 1998. Gas costs for
the nine and twelve months ended September 30, 1998, decreased $9 million and
$12 million, respectively, compared to the same year-ago periods primarily due
to lower gas prices and a decline in sales.
Other Operating Expenses
Other operating expense variations reflected recurring factors such as growth,
inflation, labor and benefit increases, in addition to a one-time charge for the
targeted separation plan, as discussed below.
In March 1998, Ameren announced plans to reduce its other operating expenses, including plans to eliminate approximately 400 employee positions by mid-1999 through a hiring freeze and a targeted separation plan (the TSP). In July 1998, Ameren offered separation packages to employees whose positions were to be eliminated through the TSP. In the third quarter of 1998, the Registrant recorded a one-time charge of $18 million (which reduced earnings $11 million) representing its share of costs incurred to implement the TSP. The Registrant expects that the hiring freeze and TSP will reduce its operating expenses by approximately $7 - $11 million in 1998 and $14 - $18 million annually thereafter.
Other operations expenses for the three months ended September 30, 1998, increased $20 million compared to the three months ended September 30, 1997, primarily due to the $18 million charge for the TSP.
Other operations expenses for the nine and twelve months ended September 30, 1998, increased $46 million and $53 million, respectively, compared to the same year-ago periods primarily due to the $18 million charge for the targeted separation plan and increases in injuries and damages expense, information system-related costs and professional services expenses.
Maintenance expenses for the three and 12-month periods ended September 30, 1998, decreased $3 million and $4 million, respectively, compared to the year-ago periods due to decreased scheduled fossil power plant maintenance. Maintenance expenses for the nine months ended September 30, 1998 were comparable to the same year-ago period as costs incurred to complete the refueling of the Callaway Nuclear Plant in 1998 were offset by higher scheduled fossil power plant maintenance in 1997.
Depreciation and amortization expense for the three, nine, and twelve-month periods ended September 30, 1998, increased $3 million, $9 million, and $11 million, respectively, versus the comparable 1997 periods, primarily due to increased depreciable property and amortization of the Missouri portion of merger-related costs which were recorded as a regulatory asset upon Merger close under the conditions of the Missouri Public Service Commission (MoPSC) order approving the Merger.
Taxes
Income taxes charged to operating expenses for the three, nine, and twelve
months ended September 30, 1998 increased $14 million, $15 million, and $13
million, respectively, compared to the same year-ago periods due to higher
pretax income.
Other Income and Deductions
Miscellaneous, net for the three months and nine months ended September 30,
1998, increased $6 million and $10 million, respectively, versus the comparable
1997 periods, primarily due to reduced merger-related costs. Miscellaneous, net
increased $27 million for the 12-month period ended September 30, 1998, compared
to the year-ago period primarily due to the reversal of the Missouri portion of
merger-related costs which were recorded as a regulatory asset upon Merger close
under conditions of the MoPSC order approving the Merger.
Balance Sheet
The $97 million increase in trade accounts receivable and unbilled revenues was
due primarily to higher revenues in August and September 1998 compared to
November and December 1997.
Changes in accounts and wages payable, other taxes accrued, and other current assets result from the timing of various payments to taxing authorities and suppliers.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities totaled $477 million for the nine months ended September 30, 1998, compared to $538 million during the same 1997 period.
Cash flows used in investing activities totaled $155 million and $209 million for the nine months ended September 30, 1998 and 1997, respectively. Construction expenditures for the nine months ended September 30, 1998 for constructing new or improving existing facilities, and complying with the Clean Air Act were $156 million. In addition, the Registrant expended $8 million for the acquisition of nuclear fuel. Capital requirements for the remainder of 1998 are expected to be principally for construction expenditures and the acquisition of nuclear fuel.
Cash flows used in financing activities were $298 million for the nine months ended September 30, 1998, compared to $307 million during the same 1997 period. The Registrant's principal financing activities for the nine months ended September 30, 1998, included the redemption of debt and the nuclear fuel lease of $56 million and $54 million, respectively, and the payment of dividends.
On September 4, 1998, the Registrant issued $160 million in long-term debt due 2033. The initial interest rates on the debt were determined by an auction procedure. The method for determining the interest rate may be changed from an auction rate to a daily rate, weekly rate, commercial paper rate or a long-term interest rate. The Registrant plans to use the proceeds to redeem existing long-term debt in December 1998.
The Registrant plans to continue utilizing short-term debt to support normal operations and other temporary requirements. The Registrant is authorized by the Securities and Exchange Commission under PUHCA to have up to $1.1 billion of short-term unsecured debt instruments outstanding at any one time. Short-term borrowings consist of bank loans (maturities generally on an overnight basis) and commercial paper (maturities generally within 10 to 45 days). At September 30, 1998, the Registrant had committed bank lines of credit aggregating $154 million (all of which were unused at such date) which make available interim financing at various rates of interest based on LIBOR, the bank certificate of deposit rate or other options. The lines of credit are renewable annually at various dates throughout the year. At September 30, 1998, the Registrant had no outstanding short-term borrowings.
The Registrant also has a bank credit agreement due 2000 which permits the borrowing of up to $300 million on a long-term basis, all of which was unused and available at September 30, 1998.
Additionally, the Registrant has a lease agreement that provides for the financing of nuclear fuel. At September 30, 1998, the maximum amount that could be financed under the agreement was $120 million. Cash provided from financing for the first nine months of 1998 included redemptions under the lease for nuclear fuel of $54 million, offset in part by $10 million of issuances. At September 30, 1998, $74 million was financed under the lease.
RATE MATTERS
As a result of the Electric Service Customer Choice and Rate Relief Law of 1997 (the Law) providing for electric utility restructuring in Illinois, AmerenUE filed a proposal with the Illinois Commerce Commission to eliminate the electric fuel
adjustment clause for Illinois retail customers, thereby including a historical level of fuel costs in base rates. The ICC approved AmerenUE's filing on April 28, 1998.
In June 1998, the Registrant filed a residential rate reduction tariff with the ICC to comply with the requirements of the Law. Under provisions of the Law, a rate decrease of 5 percent became effective for Illinois residential electric customers beginning August 1, 1998.
See Note 5 under Notes to Financial Statements for further discussion of Rate Matters.
ENVIRONMENTAL ISSUES
In July 1997, the United States Environmental Protection Agency (EPA) issued final regulations revising the National Ambient Air Quality Standards for ozone and particulate matter. At that time, specific emission control requirements were still being developed. In September 1998, the EPA issued a final rule pertaining to nitrogen oxide emissions, which will require significant additional reductions in emissions from coal-fired boilers. Missouri (where all of the Registrant's coal-fired power plant boilers are located) is included in the area targeted for nitrogen oxide emissions reductions as part of the EPA's regional control program. Reduction requirements in nitrogen oxide emissions from the Registrant's coal-fired boilers will exceed 75 percent from 1990 levels by the year 2003. Because of the magnitude of these additional reductions, the Registrant will be required to incur significantly higher capital costs to meet future compliance obligations for its coal-fired boilers or to purchase power from other sources, either of which could have significantly higher operating expenses associated with compliance. The significant nitrogen oxide emissions reductions already achieved on several of the Registrant's coal-fired power plants will help to reduce the costs of compliance with this regulation.
It is not yet possible to determine the exact magnitude of the nitrogen oxide emission reductions required on the Registrant's power plants because each State has up to one year to develop a plan to comply with the EPA rule. However, preliminary analysis of the regulations indicate that selective catalytic reduction technology will be required for some of the Registrant's units, as well as other additional controls.
The full details of these requirements are under study by the Registrant. Currently, the Registrant estimates that its additional capital expenditures to comply with these regulations could range from $125-$175 million over the period from 1999 to 2002. Associated operations and maintenance expenditures could increase $5-$8 million annually, beginning in 2003. The Registrant will explore alternatives to comply with these new regulations in order to minimize, to the extent possible, its capital costs and operating expenses. At this time, the Registrant is unable to predict the ultimate impact of these revised air quality standards on its future financial condition, results of operations or liquidity.
YEAR 2000 ISSUE
The Year 2000 Issue relates to how dates are stored and used in computer systems, applications, and embedded systems. As the century date change occurs, certain date-sensitive systems need to be able to recognize the year as 2000 and not as 1900. This inability to recognize or properly treat the year as 2000 may cause these systems to process critical financial and operational information incorrectly. The Registrant's primary concern is the potential for any interruption in providing electric and gas service to customers, as well as the potential to be unable to process critical financial and operational information on a timely basis, including billing its customers, if appropriate steps are not taken to address this issue.
Management has developed a Year 2000 plan (Plan) covering Ameren, including AmerenUE, and Ameren's Board of Directors has been briefed about the Year 2000 Issue and how it may affect the Registrant.
Ameren's Plan to resolve the Year 2000 Issue involves three phases: assessment, planning, and implementation/testing. Implementation of the Plan is directly supervised by each area's responsible Vice President. A Year 2000 Project Director coordinates the implementation of the Plan among functional teams who are addressing issues specific to a particular area, such as nuclear and non-nuclear generation facilities, energy management systems, etc. Ameren has also engaged certain outside consultants, technicians and other external resources to aid in formulating and implementing the Plan.
Ameren is approximately 95 percent complete with its assessment phase, which included analyzing date-sensitive electronic hardware, software applications and embedded systems and has developed a compliance plan to address issues that were identified. Many of the major corporate computer systems at Ameren are relatively new and therefore are either Year 2000 compliant or only require minor modifications. Also, several of the operating hardware and embedded systems (i.e. microprocessor chips) use analog technology instead of digital and thus are unaffected by the two-digit date issue. In
addition, Ameren has contacted hundreds of vendors and suppliers to verify compliance. The assessment phase is expected to be completed by the end of the first quarter 1999.
Ameren is also approximately 95 percent complete with its planning phase. Items which have been identified for remediation have been prioritized into groups based on their significance to company operations. The implementation/testing phase for all components/applications is approximately 40 percent complete as of September 30, 1998. Ameren expects to complete remediation of its significant components/applications by the end of the third quarter 1999.
With respect to third parties, for areas that interface directly with significant vendors, Ameren has inventoried vendors and major suppliers and is currently assessing their Year 2000 readiness through surveys, websites and personal contact. Ameren plans to follow up with major suppliers and verify Year 2000 compliance where appropriate. Ameren has queried its important suppliers and health insurance providers. To date, Ameren is not aware of any problems that would materially impact financial condition, results of operations or liquidity. Neither Ameren or the Registrant has the means of ensuring that these parties will be Year 2000 compliant. The inability of those parties to complete their Year 2000 resolution process could materially impact Ameren and the Registrant.
Ameren is also addressing the impact of electric power grid problems that may occur outside of its own electric system. Ameren has started year 2000 electric power grid impact planning through the system's various electric interconnection affiliations, and is working with the Mid-American Interchange Network (MAIN) to begin planning year 2000 operational preparedness and restoration scenarios. In addition, Ameren provides monthly status reports to the North American Electric Reliability Council (NERC) to assist them in assessing year 2000 readiness of the regional electric grid. Through the Electric Power Research Institute (EPRI), an industry-wide effort has been established to deal with year 2000 problems affecting digital systems and equipment used by the nation's electric power companies. Under this effort, participating utilities are working together to assess specific vendors' system problems and test plans. The assessment will be shared by the industry as a whole to facilitate year 2000 problem solving.
In addressing the Year 2000 Issue, Ameren will incur internal labor costs as well as external consulting and other expenses related to infrastructure enhancements necessary to prepare for the new century. Ameren estimates that its external costs (consulting fees and related costs) for addressing the Year 2000 Issue will range from $10 million to $15 million. As of September 30, 1998, Ameren has expended approximately $2 million. Ameren's plans to complete Year 2000 modifications are based on management's best estimates, which are derived utilizing numerous assumptions of future events including the continued availability of certain resources, and other factors. However, there can be no guarantee that these estimates will be achieved and actual results could differ materially from those plans. Specific factors that might cause such material differences include, but are not limited to, the availability and cost of personnel trained in this area, the ability to locate and correct all relevant computer codes, and similar uncertainties.
Ameren believes that, with appropriate modifications to existing computer systems/components, updates by vendors and trading partners, and conversion to new software and hardware in the ordinary course of business, the Year 2000 Issue will not pose significant operational problems for the Registrant. However, if such conversions are not completed in a proper and timely manner by all affected parties, the Year 2000 Issue could result in material adverse operational and financial consequences to the Registrant, and there can be no assurance that Ameren's efforts, or those of vendors and trading partners, interconnection affiliates, NERC or EPRI, to address the Year 2000 Issue will be successful. Ameren is in the process of developing contingency plans to address potential risks, including risks of vendor/trading partners noncompliance, as well as noncompliance of any of the Registrant's material operations. The first operational contingency plan is expected to be completed by year-end. At this time, the Registrant is unable to predict the ultimate impact of the Year 2000 Issue on the Registrant's financial condition, results of operations or liquidity; however, the impact could be material.
ACCOUNTING MATTERS
In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 establishes accounting and reporting standards for derivative instruments and for hedging activities and requires recognition of all derivatives on the balance sheet measured at fair value. SFAS 133 is effective for fiscal years beginning after June 15, 1999. Earlier application is encouraged, but permitted only as of the beginning of any fiscal quarter that begins after issuance of the standard. At this time, the Registrant is unable to determine the impact of SFAS 133 on its financial position or results of operations upon adoption.
In February 1998, the Financial Accounting Standards Board issued SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits." SFAS 132 revises employers' disclosures about pension and other postretirement benefit plans. SFAS 132 is effective for fiscal years beginning after December 15, 1998, although earlier application is encouraged. SFAS 132 is not expected to have a material impact on the Registrant's financial position or results of operations upon adoption.
In March 1998, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." SOP 98-1 provides guidance on accounting for the costs of computer software developed or obtained for internal use. Under SOP 98-1, certain costs, which are currently expensed by the Registrant, may be capitalized and amortized over some future period. SOP 98-1 is effective for fiscal years beginning after December 15, 1998, although earlier application is encouraged. SOP 98-1 is not expected to have a material impact on the Registrant's financial position or results of operations upon adoption.
SAFE HARBOR STATEMENT
Statements made in this Form 10-Q which are not based on historical facts, are forward-looking and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, financial performance, and "Year 2000" issues. In connection with the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Registrant is providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. Factors include, but are not limited to, the effects of regulatory actions; changes in laws and other governmental actions; competition; future market prices for electricity; average rates for electricity in the Midwest; business and economic conditions; weather conditions; fuel prices and availability; generation plant performance; monetary and fiscal policies; and legal and administrative proceedings.
UNION ELECTRIC COMPANY
BALANCE SHEET
UNAUDITED
(Thousands of Dollars, Except Shares)
September 30, December 31,
ASSETS 1998 1997
------ ---- ----
Property and plant, at original cost:
Electric $8,952,272 $8,832,039
Gas 206,217 197,959
Other 36,023 36,023
9,194,512 9,066,021
Less accumulated depreciation and amortization 4,052,035 3,866,925
---------- ----------
5,142,477 5,199,096
Construction work in progress:
Nuclear fuel in process 95,330 134,804
Other 100,915 68,074
---------- ----------
Total property and plant, net 5,338,722 5,401,974
---------- ----------
Investments and other assets:
Nuclear decommissioning trust fund 141,084 122,438
Other 43,216 33,315
---------- ----------
Total investments and other assets 184,300 155,753
---------- ----------
Current assets:
Cash and cash equivalents 26,949 3,232
Accounts receivable - trade (less allowance for doubtful
accounts of $6,641 and $3,645, respectively) 273,465 179,708
Unbilled revenue 74,193 71,156
Other accounts and notes receivable 62,631 41,028
Materials and supplies, at average cost -
Fossil fuel 53,325 49,574
Other 96,168 97,375
Environmental bond redemption fund 160,000 --
Other 72,204 11,040
---------- ----------
Total current assets 818,935 453,113
---------- ----------
Regulatory assets:
Deferred income taxes 609,201 611,740
Other 167,467 179,705
---------- ----------
Total regulatory assets 776,668 791,445
---------- ----------
Total Assets $7,118,625 $6,802,285
========== ==========
CAPITAL AND LIABILITIES
-----------------------
Capitalization:
Common stock, $5 par value, authorized 150,000,000 shares -
Outstanding 102,123,834 shares $ 510,619 $ 510,619
Other paid-in capital, principally premium on
common stock 701,896 716,879
Retained earnings 1,265,067 1,159,956
---------- ----------
Total common stockholders' equity 2,477,582 2,387,454
Preferred stock not subject to mandatory redemption 155,197 155,197
Long-term debt 1,782,873 1,846,482
---------- ----------
Total capitalization 4,415,652 4,389,133
---------- ----------
Current liabilities:
Current maturity of long-term debt 174,102 28,797
Short-term debt -- 21,300
Accounts and wages payable 176,529 188,014
Accumulated deferred income taxes 44,288 35,809
Taxes accrued 245,240 94,167
Other 155,858 142,859
---------- ----------
Total current liabilities 796,017 510,946
---------- ----------
Accumulated deferred income taxes 1,259,980 1,264,800
Accumulated deferred investment tax credits 145,605 149,891
Regulatory liability 162,715 175,638
Other deferred credits and liabilities 338,656 311,877
---------- ----------
Total Capital and Liabilities $7,118,625 $6,802,285
========== ==========
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UNION ELECTRIC COMPANY
STATEMENT OF INCOME
UNAUDITED
(Thousands of Dollars)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
-------------------------- -------------------------- ---------------------------
1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ----
OPERATING REVENUES:
Electric $ 836,898 $ 766,027 $ 1,848,177 $ 1,744,488 $ 2,292,260 $ 2,189,241
Gas 9,464 8,256 65,179 66,725 96,713 97,512
Other 75 71 342 353 492 498
----------- ----------- ----------- ----------- ----------- -----------
Total operating revenues 846,437 774,354 1,913,698 1,811,566 2,389,465 2,287,251
OPERATING EXPENSES:
Operations
Fuel and purchased power 174,610 151,752 422,234 382,272 539,957 508,066
Gas 6,476 7,006 34,911 43,968 54,396 66,061
Other 125,321 104,835 345,618 299,278 451,296 398,670
----------- ----------- ----------- ----------- ----------- ----------
306,407 263,593 802,763 725,518 1,045,649 972,797
Maintenance 44,685 47,957 159,560 158,877 218,109 222,521
Depreciation and amortization 65,338 62,487 194,113 185,151 256,923 246,348
Income taxes 131,454 117,395 201,717 187,023 207,460 194,846
Other taxes 64,815 64,276 166,860 166,680 212,129 213,483
----------- ----------- ----------- ----------- ----------- ----------
Total operating expenses 612,699 555,708 1,525,013 1,423,249 1,940,270 1,849,995
OPERATING INCOME 233,738 218,646 388,685 388,317 449,195 437,256
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used
during construction 1,152 1,184 3,370 3,014 4,817 4,546
Miscellaneous, net 3,152 (3,109) 4,042 (5,950) 17,326 (9,882)
----------- ----------- ----------- ----------- ----------- -----------
Total other income and deductions 4,304 (1,925) 7,412 (2,936) 22,143 (5,336)
INCOME BEFORE
INTEREST CHARGES 238,042 216,721 396,097 385,381 471,338 431,920
INTEREST CHARGES:
Interest 32,739 34,656 97,559 105,289 130,946 137,345
Allowance for borrowed funds
used during construction (1,248) (1,714) (4,566) (4,959) (6,283) (6,298)
----------- ----------- ----------- ----------- ----------- -----------
Net interest charges 31,491 32,942 92,993 100,330 124,663 131,047
INCOME BEFORE
EXTRAORDINARY CHARGE 206,551 183,779 303,104 285,051 346,675 300,873
----------- ----------- ----------- ----------- ----------- -----------
EXTRAORDINARY CHARGE
(NET OF INCOME TAXES) -- -- -- -- (26,967) --
----------- ----------- ----------- ----------- ----------- -----------
NET INCOME 206,551 183,779 303,104 285,051 319,708 300,873
----------- ----------- ----------- ----------- ----------- -----------
PREFERRED STOCK DIVIDENDS 2,204 2,204 6,613 6,613 8,817 9,925
----------- ----------- ----------- ----------- ----------- -----------
NET INCOME AFTER PREFERRED
STOCK DIVIDENDS $ 204,347 $ 181,575 $ 296,491 $ 278,438 $ 310,891 $ 290,948
=========== =========== =========== =========== =========== ===========
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UNION ELECTRIC COMPANY
STATEMENT OF CASH FLOWS
UNAUDITED
(Thousands of Dollars)
Nine Months Ended
September 30,
-------------------
1998 1997
---- ----
Cash Flows From Operating:
Net income $ 303,104 $ 285,051
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 186,984 178,315
Amortization of nuclear fuel 26,837 28,737
Allowance for funds used during construction (7,936) (7,973)
Deferred income taxes, net (6,804) (6,336)
Deferred investment tax credits, net (4,286) (4,627)
Changes in assets and liabilities:
Receivables, net (118,397) (36,180)
Materials and supplies (2,544) 8,081
Accounts and wages payable (11,485) (98,149)
Taxes accrued 151,073 175,664
Other, net (39,670) 15,793
--------- ---------
Net cash provided by operating activities 476,876 538,376
Cash Flows From Investing:
Construction expenditures (155,526) (204,028)
Allowance for funds used during construction 7,936 7,973
Nuclear fuel expenditures (7,523) (12,594)
--------- ---------
Net cash used in investing activities (155,113) (208,649)
Cash Flows From Financing:
Dividends on common stock (191,380) (194,546)
Dividends on preferred stock (6,613) (6,613)
Environmental bond redemption fund (160,000) --
Redemptions -
Nuclear fuel lease (53,670) (21,011)
Short-term debt (21,300) (4,300)
Long-term debt (35,000) (45,000)
Preferred stock -- (63,924)
Issuances -
Nuclear fuel lease 9,917 28,427
Long-term debt 160,000 --
--------- ---------
Net cash used in financing activities (298,046) (306,967)
Net increase in cash and cash equivalents 23,717 22,760
Cash and cash equivalents at beginning of year 3,232 4,897
--------- ---------
Cash and cash equivalents at end of period $ 26,949 $ 27,657
========= =========
Cash paid during the periods:
Interest (net of amount capitalized) $ 83,606 $ 79,047
Income taxes, net $ 122,738 $ 91,115
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UNION ELECTRIC COMPANY
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1998
Note 1 - Effective December 31, 1997, following the receipt of all required
state and federal regulatory approvals, Union Electric Company (AmerenUE or the
Registrant) and CIPSCO Incorporated (CIPSCO) combined to form Ameren Corporation
(Ameren)(the Merger).
Note 2 - Financial statement note disclosures, normally included in financial
statements prepared in conformity with generally accepted accounting principles,
have been omitted in this Form 10-Q pursuant to the Rules and Regulations of the
Securities and Exchange Commission. However, in the opinion of the Registrant,
the disclosures contained in this Form 10-Q are adequate to make the information
presented not misleading. See Notes to Financial Statements included in the 1997
Form 10-K for information relevant to the financial statements contained in this
Form 10-Q, including information as to the significant accounting policies of
the Registrant.
Note 3 - In the opinion of the Registrant the interim financial statements filed
as part of this Form 10-Q reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results for the
periods presented. Registrant's financial statements were prepared to permit the
information required in the Financial Data Schedule (FDS), Exhibit 27, to be
directly extracted from the filed statements. The FDS amounts correspond to or
are calculable from the amounts reported in the financial statements or notes
thereto.
Note 4 - Due to the effect of weather on sales and other factors which are
characteristic of public utility operations, financial results for the periods
ended September 30, 1998 and 1997, are not necessarily indicative of trends for
any three-month, nine-month, or twelve-month period.
Note 5 - On July 21, 1995, the Missouri Public Service Commission (MoPSC)
approved an agreement involving the Registrant's Missouri electric rates. The
Agreement included a three-year experimental alternative regulation plan that
provides that earnings in excess of a 12.61 percent regulatory return on equity
(ROE) be shared equally between customers and shareholders and earnings above
14 percent ROE be credited to customers. The formula for computing the credit
uses twelve-month results ending June 30, rather than calendar year earnings.
During the nine months ended September 30, 1998, the Registrant recorded an
estimated $43 million credit for the final year of this plan compared to a
$20 million credit recorded for 1997. This credit, which the Registrant expects
to pay to Missouri customers later this year, was reflected as a reduction in
electric revenues.
A new three-year experimental alternative regulation plan was included in the joint agreement approved by the MoPSC in its February 1997 order approving the Merger. Like the original plan, the new plan requires that earnings over a 12.61 percent ROE up to a 14 percent ROE will be shared equally between customers and stockholders. The new three-year plan will also return to customers 90 percent of all earnings above a 14 percent ROE up to a 16 percent ROE. Earnings above 16 percent ROE will be credited entirely to customers. The joint agreement also provides for a Missouri electric rate decrease, effective September 1, 1998, based on the weather-adjusted average annual credits to customers under the original experimental alternative regulation plan. The final rate reduction has not been determined at this time pending the outcome of regulatory proceedings.
Note 6 - In July 1998, Ameren offered separation plan packages to employees
whose positions were eliminated through a targeted separation plan. During the
third quarter of 1998, a one-time, pretax charge of $18 million was recorded,
which reduced earnings $11 million, representing the Registrant's share of costs
incurred to implement the targeted separation plan.
Note 7 - Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income" became effective on January 1, 1998. SFAS 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in the financial statements with
the same prominence as other financial statement components. Adoption of SFAS
130 did not have a material effect on the financial position, results of
operations, liquidity or presentation of financial information of the
Registrant.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 3(ii)-By-Laws of Union Electric Company, as amended as of June 11, 1998.
Exhibit 4.28 - Series 1998A Loan Agreement dated as of September 1, 1998 between The State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Registrant.
Exhibit 4.29 - Series 1998B Loan Agreement dated as of September 1, 1998 between The State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Registrant.
Exhibit 4.30 - Series 1998C Loan Agreement dated as of September 1, 1998 between The State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Registrant.
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements, 12 Months Ended September 30, 1998.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K. The Registrant filed a report on Form 8-K dated September 24, 1998 reporting on the impact of Ameren Corporation's (parent company of the Registrant) employee separation plan and on the effect of the final rule issued in September 1998 by the United States Environmental Protection Agency pertaining to nitrogen oxide emissions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UNION ELECTRIC COMPANY
(Registrant)
By /s/ Donald E. Brandt
-----------------------------
Donald E. Brandt
Senior Vice President
Finance and Corporate Services
Date: November 13, 1998
|
UNION ELECTRIC COMPANY
B Y - L A W S
As Amended to June 11, 1998
ARTICLE I.
Stockholders
Section 1. The annual meeting of the stockholders of the Company shall be held on the third Thursday of April in each year (or if said day be a legal holiday, then on the next succeeding day not a legal holiday), at the registered office of the Company in the City of St. Louis, State of Missouri, or at such other place within or without the State of Missouri as may be stated in the notice of meeting, for the purpose of electing directors and of transacting such other business as may properly be brought before the meeting.
Section 2. Special meetings of the stockholders may be called by the Chief Executive Officer or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which the Company would have if there were no vacancies.
Section 3. Written or printed notice of each meeting of stockholders stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered or given not less than ten nor more than seventy days before the date of the meeting, either personally or by mail, to each stockholder of record entitled to vote thereat, at his address as it appears, if at all, on the records of the Company. Such further notice shall be given by mail, publication or otherwise as may be required by law. Meetings may be held without notice if all the stockholders entitled to vote thereat are present or represented at the meeting, or if notice is waived by those not present or represented.
Section 4. The holders of record of a majority of the shares of the capital stock of the Company issued and outstanding, entitled to vote thereat, present in person or represented by proxy, shall, except as otherwise provided by law, constitute a quorum at all meetings of the stockholders. If at any meeting there be no such quorum, such holders of a majority of the shares so present or represented may successively adjourn the meeting to a specified date not longer than ninety days after such adjournment, without notice other than announcement at the meeting, until such quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as originally notified. The chairman of the meeting or a majority of shares so represented may adjourn the meeting from time to time, whether or not there is such a quorum.
Section 5. Meetings of the stockholders shall be presided over by the Chief Executive Officer or, if he is not present, by the Chairman of the Board of Directors or by the President or, if neither the Chairman nor the President is present, by such other officer of the Company as shall be selected for such purpose by the Board of Directors. The Secretary of the Company or, if he is not present, an Assistant Secretary of the Company or, if neither the Secretary nor an Assistant Secretary is present, a secretary pro tem to be designated by the presiding officer shall act as secretary of the meeting.
Section 6. At all meetings of the stockholders every holder of record of the shares of the capital stock of the Company, entitled to vote thereat, may vote either in person or by proxy.
Section 7. At all elections for directors the voting shall be by written ballot. If the object of any meeting be to elect directors or to take a vote of the stockholders on any proposition of which notice shall have been given in the notice of the meeting, the person presiding at such meeting shall appoint not less than two persons, who are not directors, inspectors to receive and canvass the votes given at such meeting. Any inspector, before he shall enter on the duties of his office, shall take and subscribe an oath, in the manner provided by law, that he will execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall take charge of the polls and after the balloting shall make a certificate of the result of the vote taken.
Section 8: (a) (1) Nominations of persons for election to the Board of Directors of the Company and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Company's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Company who was a stockholder of record at the time of giving of notice provided for in this By-Law, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this By-Law.
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of paragraph
(a) (1) of this By-Law, the stockholder must have given timely notice thereof in
writing to the Secretary of the Company and such other business must otherwise
be a proper matter for stockholder action.
To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Company not later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Company's books, and of such beneficial owner and (ii) the class and number of shares of the Company which are owned beneficially and of record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a) (2) of this By-Law to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Company is increased
and there is no public announcement by the Company naming all of the nominees
for director or specifying the size of the increased Board of Directors at least
70 days prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this By-Law shall also be considered timely,
but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the Company not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Company.
(b) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Company's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Company's notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Company who is a stockholder of record at the time of giving of notice provided for in this By-Law, who shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this By-Law. In the event the Company calls a special
meeting of stockholders for the purpose of electing one or more directors to the
Board of Directors, any such stockholder may nominate a person or persons (as
the case may be), for election to such position(s) as specified in the
Company's notice of meeting, if the stockholder's notice required by paragraph
(a) (2) of this By-Law shall be delivered to the Secretary at the principal
executive offices of the Company not earlier than the close of business on the
90th day prior to such special meeting and not later than the close of business
on the later of the 60th day prior to such special meeting or the 10th day
following the day on which public announcement is first made of the date
of the special meeting and of the nominees proposed by the Board of Directors
to be elected at such meeting. In no event shall the public announcement of an
adjournment of a special meeting commence a new time period for the giving of a
stockholder's notice as described above.
(c) (1) Only such persons who are nominated in accordance with the procedures set forth in this By-Law shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this By-Law. Except as otherwise provided by law, the Articles of Incorporation or these By-Laws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this By-Law and, if any proposed nomination or business is not in compliance with this By-Law, to declare that such defective proposal or nomination shall be disregarded.
(2) For purposes of this By-Law, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Company with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this By-Law, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this By-Law. Nothing in this By-Law shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals in the Company's proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) of the holders of any series of Preferred Stock to elect directors under specified circumstances.
ARTICLE II.
Directors
Section 1. The property and business of the Company shall be controlled and managed by its Board of Directors. The number of directors to constitute the Board of Directors shall be eleven; provided, however, that such number may be fixed by the Board of
Directors, from time to time, at not less than a minimum of three nor more than a maximum of fourteen (subject to the rights of the holders of Preferred Stock as set forth in the Articles of Incorporation of the Company, as amended). Any such change shall be reported to the Secretary of State of the State of Missouri within thirty (30) calendar days of such change. The members of the Board of Directors shall be stockholders in the Company, not less than one of whom shall be a bona fide citizen of the State of Missouri. Except as otherwise provided in the Articles of Incorporation of the Company, as amended, the directors shall hold office until the next annual election and until their successors shall be elected and qualified. A majority of the members of the Board of Directors shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such quorum shall have been obtained, when any business may be transacted which might have been transacted at the original meeting had a quorum been present.
Section 2. Vacancies in the Board of Directors, including vacancies created by newly created directorships, shall be filled in the manner provided in the Articles of Incorporation of the Company, as amended, and, except as otherwise provided therein, the directors so elected shall hold office until their successors shall be elected and qualified.
Section 3. Meetings of the Board of Directors shall be held at such time and place within or without the State of Missouri as may from time to time be fixed by resolution of the Board, or as may be stated in the notice of any meeting. Regular meetings of the Board shall be held at such time as may from time to time be fixed by resolution of the Board, and notice of such meetings need not be given. Special meetings of the Board may be held at any time upon call of the Chief Executive Officer or the Executive Committee, by oral, telegraphic or written notice, duly given or sent or mailed to each director not less than two (2) days before any such meeting. The notice of any meeting of the Board need not specify the purposes thereof except as may be otherwise required by law. Meetings may be held at any time without notice if all of the directors are present or if those not present waive notice of the meeting, in writing.
Section 4. The Board of Directors, by the affirmative vote of a majority of the whole Board may appoint an Executive Committee, to consist of two or more directors, one of whom shall be a bona fide citizen of the State of Missouri, as the Board may from time to time determine. The Executive Committee shall have and may exercise to the extent permitted by law, when the Board is not in session, all of the powers vested in the Board, except the power to fill vacancies in the Board, the power to fill vacancies in or to change the membership of said Committee, and the power to make or amend By-Laws of the Company. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, the Executive Committee. The Executive Committee may make rules for the conduct of its business and may appoint such committees and assistants as it shall from time to time deem necessary. A majority of the members of the Executive Committee shall constitute a quorum.
Section 5. The Board of Directors may also appoint one or more other committees to consist of such number of the directors and to have such powers as the Board may from time to time determine. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority of any such committee may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide.
ARTICLE III.
Officers
Section 1. As soon as is practicable after the election of directors at the annual meeting of stockholders, the Board of Directors shall elect one of its members President of the Company, and shall elect a Secretary. The Board may also elect from its members a Chairman of the Board of Directors (which office may be held by the President) and one or more Vice Chairman of the Board of Directors. The Board shall designate either the Chairman, if any, or the President as the Chief Executive Officer of the Company. In addition, the Board may elect one or more Vice Presidents (any one or more of whom may be designated as Senior or Executive Vice Presidents), and a Treasurer, and from time to time may appoint such Assistant Secretaries, Assistant Treasurers and other officers, agents, and employees as it may deem proper. The offices of Secretary and Treasurer may be held by the same person, and a Vice President of the Company may also be either the Secretary or the Treasurer.
Section 2. Between annual elections of officers, the Board of Directors may effect such changes in Company offices as it deems necessary or proper.
Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Company shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors or the Executive Committee. The Treasurer and the Assistant Treasurers may be required to give bond for the faithful discharge of their duties, in such sum and of such character as the Board of Directors may from time to time prescribe.
ARTICLE IV.
Indemnification
Each person who now is or hereafter becomes a director (which term as used in this Article shall include an advisor to the Board of Directors), officer, employee or agent of the Company, or who now is or hereafter becomes a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise at the request of the
Company, shall be entitled to indemnification as provided by law. Such right of indemnification shall include, but not be limited to, the following:
Section 1. (a) The Company may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the Company, by reason of the fact that he is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Company may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, and amounts paid in settlement actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Company unless and only to the extent that the court in which the action or suit was brought determines upon application that, despite the adjudication of liability and in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the Company has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in subsections (a) and (b) above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the action, suit, or proceeding.
(d) Any indemnification under subsections (a) and (b) above, unless ordered by a court, shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in this Section. The determination shall be made by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the action, suit, or proceeding, or if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or by the stockholders.
Section 2. (a) In addition to the indemnity authorized or contemplated under other Sections of this Article, the Company shall further indemnify to the maximum extent permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, or proceeding (including appeals), whether civil, criminal, investigative (including private Company investigations), or administrative, including an action by or in the right of the Company, by reason of the fact that the person is or was a director, officer, or employee of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, for and against any and all expenses incurred by such person, including, but not limited to, attorneys' fees, judgments, fines (including any excise taxes or penalties assessed on a person with respect to an employee benefit plan), and amounts paid in settlement actually or reasonably incurred by him in connection with such action, suit or proceeding, provided that the Company shall not indemnify any person from or on account of such person's conduct which was finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct.
(b) Where full and complete indemnification is prohibited by law or public policy, any person referred to in subsection (a) above who would otherwise be entitled to indemnification nevertheless shall be entitled to partial indemnification to the extent permitted by law and public policy. Furthermore, where full and complete indemnification is prohibited by law or public policy, any person referred to in subsection (a) above who would otherwise be entitled to indemnification nevertheless shall have a right of contribution to the extent permitted by law and public policy in cases where said party is held jointly liable with the Company.
Section 3. The indemnification provided by Sections 1 and 2 shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the articles of incorporation or bylaws or any agreement, vote of stockholders or disinterested directors or otherwise both as to action in his official capacity and as to action in another capacity while holding such office, and the Company is hereby specifically authorized to provide such indemnification by any agreement, vote of stockholders or disinterested directors or otherwise. The indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
Section 4. The Company is authorized to purchase and maintain insurance on behalf of, or provide another method or methods of assuring payment to, any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any capacity, or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under the provisions of this Article.
Section 5. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Company in advance of the final disposition of the action, suit, or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Company as authorized in this Article.
Section 6. This Article may be hereafter amended or repealed; provided, however, that no amendment or repeal shall reduce, terminate or otherwise adversely affect the right of a person who is or was a director, officer, employee or agent to obtain indemnification with respect to an action, suit, or proceeding that pertains to or arises out of actions or omissions that occur prior to the effective date of such amendment or repeal.
ARTICLE V.
Certificates of Stock
Section 1. The interest of each stockholder shall be evidenced by certificates for shares of stock of the Company, in such form as the Board of Directors may from time to time prescribe. The certificates for shares of stock of the Company shall be signed by the Chairman, if any, or the President or a Vice President (including Senior or Executive Vice Presidents) and by the Secretary or Treasurer or an Assistant Secretary or an Assistant Treasurer of the Company and sealed with the seal of the Company and shall be countersigned and registered in such manner, if any, as the Board of Directors may from time to time prescribe. Any or all the signatures on the certificate may be facsimile and the seal may be facsimile, engraved or printed. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, the certificate may nevertheless be issued by the Company with the same effect as if the person were an officer, transfer agent or registrar at the date of issue.
Section 2. The shares of stock of the Company shall be transferable only on the books of the Company by the holders thereof in person or by duly authorized attorney, upon surrender for cancellation of certificates for the same number of shares of the same class of stock, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, and with such proof of the authenticity of the signatures as the Company or its agents may reasonably require.
Section 3. No certificate for shares of stock of the Company shall be issued in place of any certificate alleged to have been lost, stolen or destroyed, except upon production of such evidence of such loss, theft or destruction, and upon the Company being indemnified to such extent and in such manner as the Board of Directors in its discretion may require.
ARTICLE VI.
Closing of Stock Transfer Books or
Fixing Record Date
The Board of Directors shall have power to close the stock transfer books of the Company for a period not exceeding seventy days preceding the date of any meeting of stockholders or the date of payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of shares shall go into effect; provided, however, that in lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding seventy days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares shall go into effect, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting, and any adjournment thereof, or entitled to receive payment of any such dividend, or entitled to any such allotment of rights, or entitled to exercise the rights in respect of any such change, conversion or exchange of shares. In such case such stockholders and only such stockholders as shall be stockholders of record on the date of closing the stock transfer books or on the record date so fixed shall be entitled to notice of, and to vote at, such meeting, and any adjournments thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Company after such date of closing of the transfer books or such record date fixed as aforesaid.
ARTICLE VII.
Checks, Notes, etc.
All checks and drafts on the Company's bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers or agent or agents as shall be thereunto authorized from time to time by the Board of Directors. The Board of Directors may authorize any such officer or agent to sign and, when the Company's seal is on the instrument, to attest any of the foregoing instruments by the use of a facsimile signature, engraved or printed or otherwise affixed thereto. In case any officer or agent who has signed or whose facsimile signature has been placed upon any such instrument for the payment of money shall have ceased to be such officer or agent before such instrument is issued, such instrument may
nevertheless be issued by the Company with the same effect as if such officer or agent had not ceased to be such officer or agent at the date of its issue.
ARTICLE VIII.
Fiscal Year
The fiscal year of the Company shall begin on the first day of January in each year and shall end on the thirty-first day of December following until otherwise changed by resolution of the Board, and the Board is authorized at any time by resolution to adopt and fix a different fiscal year for the Company.
ARTICLE IX.
Corporate Seal
The corporate seal shall have inscribed thereon the name of the Company and the words "Corporate Seal, Missouri".
ARTICLE X.
Amendments
The By-Laws of the Company may be made, altered, amended, or repealed by the Board of Directors.
LOAN AGREEMENT
Dated as of September 1, 1998
between
STATE ENVIRONMENTAL IMPROVEMENT AND
ENERGY RESOURCES AUTHORITY
and
UNION ELECTRIC COMPANY, dba AMERENUE
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............................4
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
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................9
Section 7.1. No Recourse to Issuer.............................9
Section 7.2. Indemnification..................................10
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ARTICLE VIII ASSIGNMENT...........................................10
Section 8.1. Assignment by Company............................10
Section 8.2. Assignment by Issuer.............................10
ARTICLE IX DEFAULTS AND REMEDIES...............................10
Section 9.1. Remedies on Default..............................10
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.....................................11
Section 10.4. Amendments.......................................11
Section 10.5. Right of Company To Perform Issuer's Agreements..11
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
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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 Junea21, 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) $60,000,000 Environmental Improvement Revenue Refunding Bonds (Union Electric Company Project) Series 1998A pursuant to the Indenture (defined below) 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, 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 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, 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
Section 4.01 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 on
December 1, 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 Sectiona5.1. 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 Section 148 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 Section 148 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 Section 103 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 Sectiona4.02 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
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UNION ELECTRIC COMPANY, dba AMERENUE
By /S/ Donald E. Brandt
--------------------------------
Senior Vice President
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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 functionsuto 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 o ffsite 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.
(**) 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.
LOAN AGREEMENT
Dated as of September 1, 1998
between
STATE ENVIRONMENTAL IMPROVEMENT AND
ENERGY RESOURCES AUTHORITY
and
UNION ELECTRIC COMPANY, dba AMERENUE
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
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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
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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
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UNION ELECTRIC COMPANY, dba AMERENUE
By /S/ Donald E. Brandt
-----------------------------
Senior Vice President
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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.
(**) 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.
LOAN AGREEMENT
Dated as of September 1, 1998
between
STATE ENVIRONMENTAL IMPROVEMENT AND
ENERGY RESOURCES AUTHORITY
and
UNION ELECTRIC COMPANY, dba AMERENUE
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
Sectiona5.1. Repayment of Loan...................................5
Sectiona5.2. Additional Payments.................................6
Sectiona5.3. Prepayments.........................................6
Sectiona5.4. Obligations of Company Unconditional................7
ARTICLEAVI 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
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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
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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 Junea21, 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) $50,000,000 Environmental Improvement Revenue Refunding Bonds (Union Electric Company Project) Series 1998C pursuant to the Indenture (defined below) in order to provide the funds for the refunding of a portion of the Series 1984 B 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 1984aB 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 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 1984aB 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
Section 4.01 of the Indenture. If the proceeds of the Bonds are not sufficient
to accomplish the refunding of such portion of the Series 1984 B Bonds on
December 1, 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 Sectiona5.1, (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 Section 148 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 Section 148 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 Section 103 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 Sectiona103(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, ArticleaV 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 Sectiona4.02 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.
** 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.
UNION ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
12 Months
Year Ended December 31, Ended
-------------------------------------------------------------- September 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Thousands of Dollars Except Ratios
Net Income $297,160 $320,757 $314,107 $304,876 $301,655 $319,708
Add- Extraordinary items net of tax - - - - 26,967 26,967
---------- ---------- --------- ---------- ----------- -----------
Net Income from continuing operations $297,160 $320,757 $314,107 $304,876 $328,622 $346,675
Add- Federal and state income taxes:
Current 146,900 232,497 222,072 198,405 234,846 248,827
Deferred (net) 40,039 (20,208) (6,770) 4,160 (33,926) (34,284)
Deferred investment tax credits, net (7,626) (6,182) (6,181) (6,182) (10,451) (9,949)
Income tax applicable to
nonoperating income 3,403 (2,280) (1,387) (173) 9,294 5,673
---------- ---------- --------- ---------- ----------- -----------
182,716 203,827 207,734 196,210 199,763 210,267
---------- ---------- --------- ---------- ----------- -----------
Net income before income taxes 479,876 524,584 521,841 501,086 528,385 556,942
---------- ---------- --------- ---------- ----------- -----------
Add- fixed charges:
Interest on long term debt 124,430 135,608 129,239 128,375 135,004 127,390
Rentals 1,314 1,299 3,330 3,458 3,727 3,406
Amortization of net debt premium,
discount, expenses and losses 5,170 5,504 5,502 4,269 3,672 3,556
---------- ---------- --------- ---------- ----------- -----------
130,914 142,411 138,071 136,102 142,403 134,352
---------- ---------- --------- ---------- ----------- -----------
Earnings as defined 610,790 666,995 659,912 637,188 670,788 691,294
========== ========== ========= ========== =========== ===========
Ratio of earnings to fixed charges 4.66 4.68 4.78 4.68 4.71 5.14
Earnings required for preferred dividends:
Preferred stock dividends 14,087 13,252 13,250 13,249 8,817 8,817
Adjustment to pre-tax basis 7,450 7,262 7,558 7,363 4,509 4,250
---------- ---------- --------- ---------- ----------- -----------
21,537 20,514 20,808 20,612 13,326 13,067
Fixed charges plus preferred stock dividend
requirements 152,451 162,925 158,879 156,714 155,729 147,419
========== ========== ========= ========== =========== ===========
Ratio of earnings to fixed charges plus
preferred stock dividend requirements 4.00 4.09 4.15 4.06 4.30 4.68
========== ========== ========= ========== =========== ===========
|
| ARTICLE UT |
| Exhibit 27 UNION ELECTRIC COMPANY 10-Q SEPTEMBER 30, 1998 FINANCIAL DATA SCHEDULE UT PUBLIC UTILITY COMPANIES AND PUBLIC UTILITY HOLDING COMPANIES APPENDIX E TO ITEM 601 (C) OF REGULATION S-K (Thousands of Dollars) |
| PERIOD TYPE | 9 MOS | |
| FISCAL YEAR END | DEC 31 1998 | |
| PERIOD END | SEP 30 1998 | |
| BOOK VALUE | PER BOOK | |
| TOTAL NET UTILITY PLANT | 5,338,722 | |
| OTHER PROPERTY AND INVEST | 141,084 | |
| TOTAL CURRENT ASSETS | 818,935 | |
| TOTAL DEFERRED CHARGES | 43,216 | |
| OTHER ASSETS | 776,668 | |
| TOTAL ASSETS | 7,118,625 | |
| COMMON | 510,619 | |
| CAPITAL SURPLUS PAID IN | 701,896 | |
| RETAINED EARNINGS | 1,265,067 | |
| TOTAL COMMON STOCKHOLDERS EQ | 2,477,582 | |
| PREFERRED MANDATORY | 0 | |
| PREFERRED | 155,197 | |
| LONG TERM DEBT NET | 1,722,550 | |
| SHORT TERM NOTES | 0 | |
| LONG TERM NOTES PAYABLE | 0 | |
| COMMERCIAL PAPER OBLIGATIONS | 0 | |
| LONG TERM DEBT CURRENT PORT | 160,000 | |
| PREFERRED STOCK CURRENT | 0 | |
| CAPITAL LEASE OBLIGATIONS | 60,323 | |
| LEASES CURRENT | 14,102 | |
| OTHER ITEMS CAPITAL AND LIAB | 2,528,871 | |
| TOT CAPITALIZATION AND LIAB | 7,118,625 | |
| GROSS OPERATING REVENUE | 1,913,698 | |
| INCOME TAX EXPENSE | 201,717 | |
| OTHER OPERATING EXPENSES | 1,323,296 | |
| TOTAL OPERATING EXPENSES | 1,525,013 | |
| OPERATING INCOME LOSS | 388,685 | |
| OTHER INCOME NET | 7,412 | |
| INCOME BEFORE INTEREST EXPEN | 396,097 | |
| TOTAL INTEREST EXPENSE | 92,993 | |
| NET INCOME | 303,104 | |
| PREFERRED STOCK DIVIDENDS | 6,613 | |
| EARNINGS AVAILABLE FOR COMM | 296,491 | |
| COMMON STOCK DIVIDENDS | 191,380 | |
| TOTAL INTEREST ON BONDS | 0 | 1 |
| CASH FLOW OPERATIONS | 476,876 | |
| EPS PRIMARY | 0.00 | 2 |
| EPS DILUTED | 0.00 | 2 |
| 1 | Required in fiscal year end only. |
| 2 | Information not normally disclose in financial statements and notes. |