HomeMy WebLinkAboutAEA Board Meeting Sep 3 2010ey]2 ALASKAAIDEN.ENERGY AUTHORITY
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AGENDA
Alaska Energy Authority
Board Meeting
Friday,September 3,2010 at 1:00 p.m.
Anchorage,Alaska
CALL TO ORDER
ROLL CALL:BOARD MEMBERS
AGENDA APPROVAL
ROLL CALL:STAFF,PUBLIC
PUBLIC COMMENTS (please limit comments to 3 minutes per person)
OLD BUSINESS
NEW BUSINESS
A.AEA Resolution 2010-03 Sale of certain Power Project Fund Loans
DIRECTOR COMMENTS
A.Director's Status Report
B.Next scheduled meeting Wed.September 22,2010
BOARD COMMENTS
ADJOURNMENT
813 West Northern Lights Boulevard e Anchorage,Alaska 99503www.aidea.org e 907/771-3000 e FAX 907/771-3044 «Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org
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Alaska Energy Authority
BOARD MEETING MINUTES
September 3,2010
Anchorage,Juneau and Petersburg,Alaska;Houston,Texas
1.CALL TO ORDER
Chairman Patrick Galvin called the meeting of the Alaska Energy Authority to order on September
3,2010 at 1:04 p.m.
2.ROLL CALL:BOARD
A quorum was established.
Board Members Present in Anchorage:Michael Felix (Public Member)
Board Members Present via Teleconference:John Winther (Public Member)-(Petersburg);
Commissioner Susan Bell (Department of Commerce,Community and Economic Development)-
(Juneau);Chairman Patrick Galvin (Department of Revenue)-(Houston,Texas).
Board Members Absent:Commissioner Leo von Scheben (Department of Transportation and
Public Facilities)
3.AGENDA APPROVAL
The agenda was approved as presented.
4.ROLL CALL:STAFF,PUBLIC
Staff present in Anchorage:Mike Harper,Acting AEA Executive Director (Deputy Director-Rural
Energy);Chris Anderson (Deputy Director-Credit);Sara Fisher-Goad (Deputy Director-
Operations);Valorie Walker (Deputy Director-Finance);James Hemsath (Deputy Director-
Development);Ted Leonard (AIDEA Executive Director);Sherrie Siverson (Executive
Assistant);May Clark (Administrative Assistant)and Carmen Jones (Administrative Assistant).
Others present in Anchorage:Brian Bjorkquist (Department of Law);Heather Williams (MWH
Engineering);Tim Bradner (Alaska Journal of Commerce).
5.PUBLIC COMMENTS
There were no public comments.
6.OLD BUSINESS
There was no old business.
813 West Northern Lights Boulevard *Anchorage,Alaska 99503
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AEA Board Meeting September 3,2010
Meeting Minutes Page 2
7.NEW BUSINESS
7A.AEA Resolution 2010-03 Sale of Certain Power Project Fund Loans
Chairman Galvin stated this Resolution is the execution of a plan that required Legislative
assistance,and asked Sara Fisher-Goad or Valorie Walker to present an overview.
Ms.Fisher-Goad stated it was actually the culmination of SB 301,an initiative that AIDEA and
AEA presented to the Governor's office with respect to authorizing a sale of the Power Project
Fund (PPF)loan portfolio to AIDEA as an investment of AIDEA's revolving fund.The PPF has
been a significant financing tool for renewable energy projects,and with grant funds anticipated
to decline,the PPF will be used even more.HB 306 calls for the PPF to be a primary source for
energy projects in the future -that recently passed legislation brought us here today.
Chairman Galvin stated Board members may recall when we were doing the Legislative
overview ten months ago we discussed strategy for how to increase the catalyst of the PPF
internally and in a sufficient manner.The Legislature endorsed it and now we are actually
executing on that purchase.It's a two part transaction --AEA's portion will be first and then
AIDEA will do its part.
Mr.Bjorkquist stated that the Legislature approved this sale including the approval of the
Memorandum of Understanding that set out the basic terms and conditions of the sale.The
loan sale agreement basically follows the MOU which the Legislature has approved.Chairman
Galvin reiterated that from AIDEA's perspective we are buying these loans but AEA is basically
guaranteeing at the end of the day,that they are going to buy back the ones that are not good.
Mr.Winther asked if AEA would have the funds necessary to purchase them and where would
those funds come from.Mr.Bjorkquist stated that under the Agreement as approved by the
Legislature,the payment back to the repurchase of the loans would be a repurchase out of the
PPF loan fund.If the PPF loan fund had inadequate money to repurchase the loan if the loan
went into default,and it couldn't be done within thirty days,then the repurchase would happen
as soon as the PPF had sufficient funds through other loan repayments from other loans,etc.
Interest would accrue at four percent (4%)and AIDEA would get back the amount -the present
value of the loan at the time of default plus four percent (4%)after thirty days.
Mr.Winther asked if this could become a very large loan program (for hydroelectric projects).
Mr.Harper stated that if the public takes to heart our efforts to put out a State Energy Policy or
Pathway,they in turn can and follow up with applications in seeking funding.Grants are
thinning out;Denali Commission is very limited in what they have.We believe the PPF could
see a lot of activity.
Chairman Galvin asked if this is a one-time transaction with AIDEA,for twenty million dollars is
purchasing the loans,and it isn't an ongoing transaction where AIDEA is continually buying
loans from AEA.Mr.Bjorkquist stated that was correct.Under the Statutes,there is the ability
for future purchases,but each future purchase of loans or a loan portfolio would have to be
approved by the Legislature.This is a one-time deal with the repurchase of defaulted loans by
AEA being a continuing obligation.
AEA Board Meeting September 3,2010
Meeting Minutes Page 3
Mr.Felix asked if by virtue of the Legislature they essentially established the size of the fund
roughly equal to the value of the loans that are to be sold and/or bought --that's the value of the
fund.Mr.Bjorkquist said the Legislature can also affect the size of the fund by making
appropriations,and actually did so this past Legislative session.The Legislature has significant
control over the loan fund in many ways,including seeing how much money goes into the loan
fund.Mr.Felix stated the net effect of this transaction is that AEA packages up its loans,sells
them to AIDEA,takes the cash then and moves forward with other projects out of that fund.Mr.
Bjorkquist stated that was correct.
Chairman Galvin stated the Legislature can supplement that fund with appropriations which
gives AEA the ability to fund additional projects down the line.One answer to an earlier
question from Mr.Winther is that as Ms.Fisher-Goad indicated,the Legislature seems
interested in potentially utilizing the PPF as a funding vehicle for power projects in the future.
This means that it has the potential for being the vehicle through which a significant number of
power projects are funded by the Legislature.Mr.Winther stated AEA is the right vehicle to
use.
MOTION:Mr.Winther moved to approve Resolution 2010-03.Seconded by Mr.Felix.A
roll call vote was taken and the motion passed unanimously.
8.DIRECTOR COMMENTS
8A._Director's Status Report
There was no report.
8B.Next scheduled meeting Wednesday,September 22,2010
Chairman Galvin stated the tentative plan for September 22,2010,is to have a work session
during part of the meeting to familiarize new Board members to AIDEA and AEA,and give them
some sort of orientation and it would benefit for all Board members to participate.He asked Ms.
Fisher-Goad and Mr.Harper if they were aware of any AEA related items that might be up on
the agenda for that meeting.Ms.Fisher-Goad stated Mr.Haagenson would like to perform an
overview of budget issues and performance measures.
9.BOARD COMMENTS
There were no Board comments.
10.ADJOUNMENT
There being no further business of the Board,the meeting was adjourned at 1:19 p.m.
LL
Steve Haagenson,Executive Director/Secretary
Alaska Energy Authority
Wo |B EN ,)ALASKA
x¢Xe Alaska |dustrial Development ENERGY AUTHORITY
and Export Authority
MEMORANDUM
TO:Board of Directors
Alaska Energy Authority
FROM:-Steve Haagenson geExecutiveDirector
DATE:September 3,2010
SUBJECT:Resolution No.2010-03
Sale of certain Power Project Fund Loans
Resolution No.2010-03 approves the sale of loans from Power Project Fund (PPF)to theAlaskaIndustrialDevelopmentandExportAuthority(AIDEA.)This sale of assets willrecapitalizethePPFwithfundsneededforfutureenergyprojectloans.
AEA uses the PPF to make loans to finance energy projects.The PPF is a significant financing
tool used as a matching fund source by Renewable Energy Fund (AS 42.45.045)grantees.In
Chapter 82,SLA 2010 the legislature expressed its intent that the PPF serve as the main
source of state assistance for energy projects.
Chapter 70,SLA 2010 authorizes AEA to sell and AIDEA to purchase certain loans from the
PPF under the memorandum of understanding (MOU)dated February 17,2010.This MOU
outlines the terms and conditions of the sale and purchase of the PPF Loans.
The MOU includes provisions for AEA to repurchase from AIDEA loans which later default.ThisrepurchaseprovisionmaximizestheamountpaidbyAIDEAbysubstantiallyreducingfinancialrisktoAIDEAthusallowingAIDEAtopurchasetheloanswithoutsignificantdiscount.
The sale price of the PPF Loans equals the present value of the PPF Loans,estimated in the
MOU as of July 2010 to be $20.6 million.The present value of the PPF Loans is defined as the
present value of the scheduled loan payments over the remaining life of the PPF Loans at a
discount rate of 6.02%.This discount rate is equivalent to AIDEA's return on its investments for
the 3-year period ending September 30,2009.
lf a PPF Loan defaults AEA agrees to repurchase the loan with available unencumbered and
uncommitted funds in the PPF.If adequate funds are not available for repurchase,AEA will
make payments to AIDEA as funds become available in the PPF,with interest on the unpaid
balance at the annual rate of 4%starting 30 days after AEA is notified of default.
Staff recommends approval of Resolution No.2010-03.
813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495
ALASKA ENERGY AUTHORITY
RESOLUTION NO.2010-03
A RESOLUTION OF THE ALASKA ENERGY AUTHORITY
REGARDING THE SALE OF POWER PROJECT FUND LOANS
BY THE ALASKA ENERGY AUTHORITY TO THE ALASKA
INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY
WHEREAS,the Power Project Fund ("PPF”)is established as a separate fund of the
Alaska Energy Authority ("AEA”)under AS 42.45.010(a);and
WHEREAS,because AEA has no employees,staff of the Alaska Industrial Development
and Export Authority ("AIDEA”)currently services loans made from the PPF on behalf of AEA;
and
WHEREAS,AEA can make loans out of the PPF to finance energy generation and
transmission projects,or to fund the bulk fuel revolving loan fund under AS 42.45.250(l);and
WHEREAS,AEA currently uses loans from the PPF as a significant financing tool to
help developers of renewable energy grant fund projects (AS 42.45.045)finance match
requirements,and the legislature expressed its intent that the PPF serve as the main source of
state assistance for energy projects [See,sec.1 (4),ch.82,SLA 2010];and
WHEREAS,the PPF has inadequate amounts without recapitalization to fund all
reasonable loan needs arising out of the renewable energy grant fund and recommendation
program,and to fulfill other purposes of the PPF;and
WHEREAS,AEA and AIDEA entered a Memorandum of Understanding dated February
17,2010 ("MOU”),and will enter a PPF Loan Sale Agreement anticipated to close on
September 23,2010,with the intent to recapitalize PPF and provide a reasonable investment
for AIDEA's revolving fund;and .
WHEREAS,under the MOU and PPF Loan Sale Agreement,AEA agrees to sell,and
AIDEA agrees to purchase,certain outstanding PPF loans;and
WHEREAS,Exhibit A to the MOU identified PPF loans which could be sold,AEA and
AIDEA agree that the sale should not include any PPF Loan which has a current payment
default on the closing date.Exhibit |to the PPF Loan Sale Agreement will identify the
outstanding PPF loans listed in MOU Exhibit A that are not in payment default on the closing
date.The PPF loans identified in Exhibit |to the PPF Loan Sale Agreement ("PPF Loans”)will
be the PPF loans to be purchased under the PPF Loan Sale Agreement;and
WHEREAS,a copy of the MOU (including Exhibit A)and the PPF Loan Sale Agreement
(excluding Exhibit I)are attached;and
WHEREAS,the PPF Loans will be have a purchase price equal to the present value of
the PPF Loans,with the "present value”of a PPF Loan defined to mean the present value of all
scheduled loan payments on the PPF Loan over the entire remaining life of the PPF Loan,using
a discount rate of 6.02%.The estimated present value of all PPF loans identified in Exhibit A of
the MOU as of July 2010,was $20.6 million;and
WHEREAS,under the MOU and PPF Loan Sale Agreement,in order to maximize the
amount paid that will recapitalize the PPF,AEA agrees to repurchase a PPF Loan if a borrower
defaults in payment.If the PPF has an inadequate amount of unencumbered and uncommitted
funds to repurchase the PPF Loan from AIDEA,AEA agrees to make payments to AIDEA on
the repurchase of the PPF Loan with unencumbered and uncommitted funds as they become
available in the PPF (through repayments from other PPF Loans or otherwise),with interest on
the unpaid balance at the annual rate of four percent (4%)starting 30 days after AIDEA gives
AEA notice of default;and
WHEREAS,in order to minimize confusion to PPF borrowers,staff of AIDEA will
continue to service the PPF Loans,but on behalf of both AEA and AIDEA,and will allow PPF
borrowers to continue to make payments payable to AEA.Any payment received payable to
AEA related to a PPF Loan,including insurance proceeds,will be held in trust on behalf of
AIDEA for deposit into an AIDEA account;and
WHEREAS,AEA may sell PPF Loans under AS 44.83.010(I),and AIDEA may purchase
PPF loans as an investment of the revolving fund under AS 44.88.080(3),if the legislature
approves the sale and purchase;and
WHEREAS,under sec.5,ch.70,SLA 2010,the legislature approved AEA selling,and
AIDEA purchasing,PPF Loans under the MOU dated February 17,2010;and
WHEREAS,AEA and AIDEA each desire to complete the sale and purchase of PPF
Loans to be identified in Exhibit I,as provided in the PPF Loan Purchase Agreement,
anticipated to close on September 23,2010,in order to recapitalize the PPF and provide AIDEA
with a reasonable investment for the revolving fund.
NOW,THEREFORE,BE IT RESOLVED BY THE ALASKA ENERGY
AUTHORITY AS FOLLOWS:
|
Section 1.AEA's sale of PPF Loans to AIDEA under the PPF Loan Sale
Agreement,anticipated to close on September 23,2010,is approved.On the Closing Date,
AEA shall sell and assign to AIDEA,and AIDEA shall purchase and assume from AEA,AEA's
rights and interests in the PPF Loans to be identified in Exhibit |to the PPF Loan Sale
AEA Resolution No.2010-03 Page 2
Agreement,and all notes,deeds of trust,guarantees,and other security documents associated
with the PPF Loans.
Section 2.The purchase price of PPF Loans sold under Section 1 shall equal
the present value as of the closing date of all PPF Loans that are identified in Exhibit 1.Under
the PPF Loan Sale Agreement and the MOU,the "present value”of a PPF Loan is defined to
mean the present value of all scheduled loan payments on the PPF Loan over the entire
remaining life of the PPF Loan,using a discount rate of 6.02%.
Section 3.The Executive Director of the Alaska Energy Authority is authorized to
take such actions as may be necessary or convenient to consummate the sale of the PPF
Loans.The Executive Director is authorized to approve non-material changes in the terms and
conditions of the PPF Loan Sale Agreement,as the Executive Director,in his discretion,
determines appropriate.
DATED at Anchorage,Alaska on this 3rd day of September,2010.
Chair
(SEAL)
ATTEST
Secretary
AEA Resolution No.2010-03 Page 3
Memorandum of Understanding
This Memorandum of Understanding ("MOU”)is entered into this 17th day
of February,2010,between the Alaska Energy Authority ("AEA”)and the Alaska
Industrial Development and Export Authority ("AIDEA").
Recitals
A.The power project fund ("PPF”)is established as a separate fund of AEA
under AS 42.45.010(a).
B.AEA may make PPF loans for financing various activities related to the
development of energy generation and transmission projects,bulk fuel
storage facilities,waste energy,energy conservation,or alternative energy
facilities,or may make loans to the bulk fuel revolving loan fund for the
purposes described in AS 42.45.250(I).
C.The Renewable Energy Grant Fund was established under AS 42.45.045
to finance certain energy projects in Alaska,with an emphasis on feasible
energy projects that provide a cost benefit to Alaska ratepayers,and
projects that will serve areas in which the average cost of energy exceeds
the average cost of energy in other areas of the state.
D.AEA makes PPF loans available to assist project developers meet their
matching fund obligations under the Renewable Energy Fund Grant
Recommendation Program.By doing so,AEA is able to leverage the
funding available from each program to better promote the development of
cost efficient,renewable energy projects for the benefit of Alaska
ratepayers.
E,The PPF currently has less than $5,000,000 available for serving the
purposes of the fund..
F.-AEA desires to sell,and AIDEA desires to purchase,the outstanding PPF
loans identified in the attached Exhibit'A.
G.In this MOU,in order to maximize the amount AIDEA would be willing to
pay for the PPF loans identified in Exhibit A and minimize financial risk to
AIDEA from purchasing the PPF loans,AEA agrees to repurchase from
AIDEA any outstanding loan if the borrower has a payment default after
the sale.
H.The outstanding PPF loans identified in Exhibit A have a combined current
balance as of February 9,2010,of $24,700,732.45,and earn interest at
annual rates that range from 0%to 6.16%.
AEA and AIDEA agree that the outstanding loans identified in Exhibit A
have a projected present value as of the closing date (expected to be in
July 2010)of approximately $20.6 million.This present value is the value
of projected loan payments over the life of the outstanding loans,
discounted at 6.02%,which was AIDEA's return on investments for the
three year period ended September 30,2009.
AEA and AIDEA agree that the sale and purchase of the outstanding PPF
loans identified in Exhibit A at the present value of the loans will both
adequately capitalize the Power Project Fund and provide a reasonable
investment for the revolving fund of AIDEA.
The sale and purchase of the outstanding PPF loans identified in Exhibit A
will require,among other things,the enactment of legislation approving the
sale and purchase.
This MOU is intended to set forth the principal terms and conditions under
which AEA would sell,and AIDEA would purchase,the outstanding PPF
loans identified in Exhibit A.The parties intend that this MOU be
incorporated into legislation to be submitted to the Alaska State
Legislature authorizing the sale and purchase of the loans.
NOW,THEREFORE,in exchange for the mutual promises contained herein and
for other consideration the receipt and adequacy of which is hereby
acknowledged,the parties agree as follows:
1.AEA agrees to sell,and AIDEA agrees to purchase,the outstanding PPF
loans identified in Exhibit A on the closing date,expected to be in July
2010,for a purchase price equal to the present value as of the closing
date of all PPF loans identified in Exhibit A.
In this MOU,the "present value”of a PPF loan means the present value of
all scheduled loan payments on the PPF loan over the entire remaining life
of the PPF loan,using a discount rate of 6.02%.
Based upon the definition of "present value,”AIDEA and AEA estimate
that the purchase price of all PPF loans identified in Exhibit A on the
closing date will be approximately $20.6 million.
AEA shall repurchase from AIDEA any outstanding PPF loan if the
borrower defaults on payment after the sale.The repurchase price shall
equal the present value of the loan determined on the date of the payment
default by the borrower,less any payments received by AIDEA after the
payment default date.AIDEA may exercise the right to have AEA
repurchase a PPF loan by sending notice to AEA of the payment default.
AEA shall pay AIDEA within 30 days of the notice of payment default from
unencumbered and uncommitted funds in the Power Project Fund.If the
'PPF has an inadequate amount of unencumbered and uncommitted funds
to repurchase the PPF loan from AIDEA within 30 days of the notice of
default,AEA shall make payments to AIDEA with unencumbered and
uncommitted funds as they become available in the Power Project Fund
(through repayments from other PPF loans or otherwise),with interest on
the unpaid balance at the annual rate of four percent (4%)from the date
30 days after the notice of default.Nothing in this paragraph precludes
AIDEA from rescinding a notice of default.
WHEREFORE the parties have executed this Agreement as of the
date first written above.
Alaska Energy Authority
by:Steve Haagenson
Executive Director
Alaska Industrial Development and Export Authority
0/<a
by:Ted Leonard
Executive Director
Exhibit A
Alaska Energy Authority
Power Project Loans
as of 2/9/10
Payment Outstanding Next Due Interest Payment Maturity
Period Loan#Loan Name Commitment Current Balance Date Rate Amount Date
Annually
40901044 QINARMIUT CORP $0.00 $84,841.03 10/1/10 0.00 $12,266.17 10/1/16
40901045 CORDOVA ELEC CO OP $0.00 $742,857.13 6/11/10 0.00 $28,571.43 6/11/35
40901047 ST PAUL,CITY OF $0.00 $97,306.42 10/1/10 3.00 $8,614.18 10/1/23
40901048 WRANGELL,CITY OF $0.00 $78,553.50 7/1/10 2.00 $27,238.92 7/1/12
40901050 PELICAN UTILITY DISTRICT $0.00 $15,161.70 7/1/10 5.61 $2,191.43 7/1/19
40901057 ST PAUL,CITY OF $0.00 $1,260,000.00 10/1/10 0.00 $90,000.00 10/1/23
Total for Annually $2,278,719.78 $168,882.13
SemiAnnually
40901009 SITKA,CITY OF $0.00 $9,178,074.93 7/1/10 4.00 $307,037.96 1/1/33
40901049 GWITCHYAA ZHEE UTILITY $0.00 $145,384.29 7/1/10 6.16 $9,844.52 1/1/20
40901051 AP&T TOK DOT LAKE $0.00 $232,837.77 7/1/10 0.00 $12,254.63 7/1/19
40901052 AP&T (TETLIN)$0.00 $172,614.56 7/1/10 4.20 $11,121.71 7/1/19
40901059 AP&T (PRINCE OF WALES PROJECT)$0.00 $893,333.30 7/1/10 0.00 $20,000.00 1/1/37
40901060 ELFIN COVE,COMMUNITY OF $0.00 $550,325.15 7/1/10 0.00 $13,102.98 1/1/31
40901061 SOUTHERN ENERGY $0.00 $517,673.38 7/1/10 5.60 $21,480.18 7/1/30
40901062 YAKUTAT,CITY &BOROUGH OF $0.00 $125,792.95 7/1/10 3.00 $7,325.59 1/1/20
40901065 AVEC NIGHTMUTE $0.00 $205,283.22 7/1/10 0.00 $10,804.38 7/1/19
40901068 AP&T (SKAGWAY)DYEA LINE EXTENSION $0.00 $114,153.48 7/1/10 2.00 $6,052.95 7/1/20
40901071 TUNTUTULIAK COMMUNITY SERVICES A $0.00 $129,509.64 7/1/10 0.00 $5,396.23 1/1/22
40901072 GUSTAVUS ELECTRIC COMPANY $0.00 $118,626.84 7/1/10 5.40 $10,288.01 1/1/17
40901076 NAPASKIAK ELEC UTILITY $0.00 $6,304.97 7/1/10 5.80 $1,669.45 1/1/12
40901079 TDX SAND POINT GENERATING INC $0.00 $203,984.12 7/1/10 4.00 $10,109.49 1/1/23
40901080 AK POWER CO-POW SWITHGEAR PROJ.$0.00 $167,889.70 7/1/10 5.45 $7,639.46 1/1/27
40901081 AK POWER CO-SKAGWAY LINE EXT $0.00 $187,093.47 7/1/10 5.45 $6,660.67 1/1/37
40901084 AK POWER CO-SOUTH FORK HYDRO $0.00 $1,576,590.23 7/1/10 5.45 $57,000.66 1/1/36
40901085 ADAK,CITY OF (DOWNSIZE GEN}$0.00 $85,577.88 7/1/10 5.39 $6,648.22 1/1/18
40901086 TDX NORTH SLOPE GENERATING INC $0.00 $796,539.85 7/1/10 3.00 $34,972.27 1/1/24
40901090 TOX NORTH SLOPE GENERATING INC $0.00 $746,334.45 7/1/10 5.15 $35,901.66 1/1/25
40901091 TDX SAND POINT GENERATING INC $0.00 $120,251.45 7/1/10 5.11 $5,454.25 7/1/26
40901092 AK POWER CO $0.00 $63,010.57 7/1/10 5.11 $2,912.94 1/1/26
40901093 PORT HEIDEN,CITY OF $0.00 $38,730.34 7/1/10 §.09 $2,403.24 7/1/20
40901094 YAKUTAT,CITY &BOROUGH OF $0.00 $224,977.15 7/1/10 4.92 $17,225.39 1/1/18
40901095 TDX NORTH SLOPEGENERATING,INC $0.00 $1,193,582.30 7/1/10 4.92 $53,356.61 7/1/26
40901096 CHENA POWER LLC $0.00 $530,138.84 7/1/10 5.02 $23,729.86 7/1/26
40901097 CRAIG,CITY OF $0.00 $482,653.23 7/1/10 5.05 $19,908.31 1/1/29
40901100 GUSTAVUS ELECTRIC,INC $0.00 $928,029.76 7/1/10 4.69 $29,659.32 7/1/38
40901102 CHIGNIK LAGOON POWER UTILITY $0.00 $30,920.85 7/1/10 4.62 $5,599.19 1/1/13
40901104 ALASKA WIND POWER,LLC $0.00 $143,502.81 7/1/10 4.88 $7,176.84 1/1/14
40901106 NUSHAGAK ELECTRIC &TELEPHONE COC $0.00 $12,010.97 7/1/10 4.99 $4,820.30 1/1/15
40901107 TDX NORTH SLOPE GENERATING,INC.$0.00 $2,500,000.00 7/1/10 5.46 $104,892.75 1/1/30
Total for SemiAnnually $22,421,732.45 $872,450.02
Grand Total $24,700,452.23
Prepared by AEA
PPF LOAN SALE AGREEMENT
THIS PPF LOAN SALE AGREEMENT (the "Agreement")is made and dated as of the___
day of September,2010,by and between the ALASKA ENERGY AUTHORITY ("Seller"or
"AEA'),and the ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY
("Purchaser"or "AIDEA”).
RECITALS
A.AEA is a public corporation of the State of Alaska in the Department of Commerce,
Community and Economic Development of the State of Alaska.AEA has a separate and
independent legal existence under AS 44.83.020 et.seq.
B.AIDEA is a public corporation of the State of Alaska and a body corporate and politic
constituting a political subdivision within the Department of Commerce,Community and
Economic Development of the State of Alaska.AIDEA has a separate and independent
legal existence under AS 44.88.010 ef.seq.
C.The Power Project Fund ("PPF”)is established as a separate fund of AEA under AS
42.45.010(a).Amounts in PPF are available for loans ("PPF Loans”)for certain energy
related purposes.
D.AEA and AIDEA entered a Memorandum of Understanding dated February 17,2010
("MOU”),under which,inter alia:
1.AEA agreed to sell,and AIDEA agreed to purchase,the outstanding PPF
Loans identified in Exhibit A to the MOU on the closing date,for a purchase price equal to
the present value as of the closing date of all PPF Loans identified in Exhibit A to the
MOU.
2.Inthe MOU,the "present value”of a PPF Loan is defined to mean the present
value of all scheduled loan payments on the PPF Loan over the entire remaining life of the
PPF Loan,using a discount rate of 6.02%.
3.AEA agreed to repurchase from AIDEA any outstanding PPF Loan if the
borrower defaults on payment after the sale.The repurchase price shall equal the present
value of the loan determined on the date of the payment default by the borrower,less any
payments received by AIDEA after the payment default date.AIDEA may exercise the
_right to have AEA repurchase a PPF Loan by sending notice to AEA of the payment
default.AEA shall pay AIDEA within 30 days of the notice of payment default from
unencumbered and uncommitted funds in the Power Project Fund.If the PPF has an
inadequate amount of unencumbered and uncommitted funds to repurchase the PPF
Loan from AIDEA within 30 days of the notice of default,AEA shall make payments to
AIDEA with unencumbered and uncommitted funds as they become available in the
Power Project Fund (through repayments from other PPF Loans or otherwise),with
interest on the unpaid balance at the annual rate of four percent (4%)from the date 30
days after the notice of default.Nothing in the MOU precludes AIDEA from rescinding a
notice of default.
E.Under AS 44.83.010(I),with legislative approval,AEA may sell PPF Loans.
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F.Under AS 44.88.080(30),with legislative approval,AIDEA may purchase from AEA
PPF Loans as an investment of the revolving fund (AS 44.88.060).
G.Under sec.5,ch.70,SLA 2010,the legislature approved AEA selling,and AIDEApurchasing,PPF Loans under the MOU dated'February 17,2010.H.AEA and AIDEA each desire to complete the sale and purchase of PPF Loans,as
provided in the MOU dated February 17,2010,and this Agreement.AEA and AIDEA
agree that the sale should not include any PPF Loan identified in Exhibit A to the MOU
which has a current payment default as of the closing date.Exhibit I to this Agreement
identifies the outstanding PPF Loans to be sold and purchased under this Agreement.
NOW,THEREFORE,in consideration of the above Recitals and the mutual
covenants and conditions contained herein,the parties agree as follows:
1.Sale of PPF Loans.On the Closing Date,AEA shall sell and assign to AIDEA,and
AIDEA shall purchase and assume from AEA,AEA's rights and interests in the PPF
Loans identified in Exhibit 1,and all notes,deeds of trust,guarantees,and other security
documents associated with the PPF Loans.
2.Purchase Price.The purchase price of PPF Loans sold under paragraph 1 shall
equal the present value as of the closing date of all PPF Loans identified in Exhibit I.
Under this Agreement and the MOU,the "present value”of a PPF Loan is defined to
mean the present value of all scheduled loan payments on the PPF Loan over the entire
remaining life of the PPF Loan,using a discount rate of 6.02%.
3.Loan Documentation.AEA shall endorse over to AIDEA each PPF Loan and note,
and assign to AIDEA AEA's interests and rights under each deed of trust,guarantee,and
all other documents securing payment of each PPF Loan.AEA shall deliver each PPF
Loan note to AIDEA at closing.AEA shall also assign or endorse to AIDEA,AEA's
interests under each policy of title insurance or private mortgage insurance and each
policy of hazard,casualty or fire insurance and endorsements thereof,as appropriate.
4.Loan Servicing.In order to minimize confusion to PPF borrowers,staff of AIDEA will
continue to service the PPF Loans,but on behalf of both AEA and AIDEA,and will allow
borrowers to continue to make payments payable to AEA.Any payment received payable
to AEA related to a PPF Loan,including insurance proceeds,will be held in trust on behalf
of AIDEA for deposit into an AIDEA account.
5.Payment Terms.The purchase price for the PPF Loans shall be paid by transfer of
funds into the PPF on the closing date.
6.Closing.Closing shall occur at the offices of AEA and AIDEA at 813 West Northern
Lights,Anchorage,Alaska,99503 on September __,2010.
7.Time of Delivery.Delivery of possession of AEA's interests in the PPF Loans
identified in Exhibit |,shall be deemed to have occurred for all purposes at the Close of
Business on the Closing Date,and all risk of loss,whether or not covered by insurance,
shall be on AEA until the Close of Business on the Closing Date.
PPF Loan Sale Agreement Page -2 -
8.Repurchase upon Default.AEA agrees that it shall repurchase from AIDEA any
outstanding PPF Loan if the borrower defaults on payment after the sale,as follows:
a.The repurchase price shall equal the present value of the loan determined on
the date of the payment default by the borrower,less any payments received by AIDEA
after the payment default date.The "present value”of a PPF Loan is defined to mean the
present value of all scheduled loan payments on the PPF Loan over the entire remaining
life of the PPF Loan,including any payments in default,using a discount rate of 6.02%.
b.AIDEA may exercise the right to have AEA repurchase a PPF Loan by sending
notice to AEA of the payment default,and that AEA shall pay AIDEA within 30 days of the
notice of payment default from unencumbered and uncommitted funds in the Power
Project Fund.AEA shall pay AIDEA within 30 days of the notice of payment default from
unencumbered and uncommitted funds in the PPF.
c.If the PPF has an inadequate amount of unencumbered and uncommitted
funds to repurchase the PPF Loan from AIDEA within 30 days of the notice of default,
AEA shall make payments on the repurchase to AIDEA with unencumbered and
uncommitted funds as they become available in the PPF (through repayments from other
PPF Loans or otherwise),with interest on the unpaid balance at the annual rate of four
percent (4%)from the date 30 days after the notice of default.
d.In the case of the repurchase of any PPF Loan under the terms of this
Agreement or the PPF Loan Sale Agreement,AEA shall prepare an endorsement of the
Note and an assignment for execution in recordable form of all security documents and
insurance policies pertaining to the loan.AIDEA agrees to review such documents and,
finding each in good order,to execute them in a timely manner.AEA's obligation to
repurchase any PPF Loan is subject to AIDEA's conveying title to such documents of a
nature at least equivalent to that transferred by AEA to AIDEA originally.Upon payment of
the purchase price for the repurchase,or upon execution by AEA of a promissory note for
the unpaid repurchase price if the PPF lacks sufficient unencumbered and uncommittedfunds,AIDEA shall endorse over to AEA the PPF Loan and note and assign to AEA
AIDEA's interests and rights under any deed of trust and all other documents securing
payment of the PPF Loan.AIDEA shall also assign or endorse to AEA,AIDEA's interests
under any policy of title insurance or private mortgage insurance,or any policy of hazard,
casualty or fire insurance and endorsements thereof,relating to the PPF Loan,as
appropriate.
e.Nothing in this Agreement precludes AIDEA from rescinding a notice of default.
f.The purchase price for the repurchase of any PPF Loans shall be paid by wire
or immediate transfer.
9.Modification,Assignment,Encumbrance_or Transfer.Neither party to this
Agreement shall modify any PPF Loan which is the subject of this Agreement,or assign or
transfer any rights under this Agreement,without the prior express written consent of the
other party,which consent such party shall not be unreasonably withhold.AIDEA shall not
sell or transfer any PPF Loan to a third party unless all the PPF Loans under this
Agreement are transferred to such third party.Upon sale or transfer by AIDEA of all of the
PPF Loans under this Agreement,AEA shall no longer be under any obligation to service
or repurchase the PPF Loans.In the event a PPF Loan is modified or sold without the
PPF Loan Sale Agreement Page -3-|
consent of AEA,or AIDEA is otherwise unable to convey title at least as good as that
which it received under the terms of the original purchase agreement described above,
AEA shall be relieved of any further duty to repurchase such PPF Loan.
10.Warranties of AEA.AEA warrants to AIDEA that:
a.AEA has full power,authority and legal right pursuant to AS 42.45.010(I);sec.
5,ch.70,SLA 2010;and other applicable law to execute and deliver,and to perform and
observe the provisions of this Agreement and to carry out the transactions contemplated
hereby,including,without limitation,to sell and assign the PPF Loans to AIDEA.
b.The execution,delivery and performance of this Agreement by AEA has been
duly authorized by all necessary action.
c.AEA's execution and performance of this agreement are not in violation of any
law or regulation governing AEA.
d.AEA does not have actual knowledge of any fact which would adversely affect
the value of any of the PPF Loans sold to AIDEA under this agreement.
e.All payments made by each borrower identified in Exhibit |to AEA have been
properly applied to the respective PPF Loan.
f.No PPF Loan identified in Exhibit |is in default as of the date of closing.
g.At closing,AEA will deliver a current,accurate schedule of future loan
payments,showing the principal and interest with respect to each PPF Loan identified in
Exhibit I.
11.Warranties of AIDEA.AIDEA warrants to AEA that:
a.AIDEA has full power,authority and legal right pursuant to AS 44.88.080(30);
sec.5,ch.70,SLA 2010;and other applicable law to execute and deliver,and to perform
and observe the provisions of this Agreement and to carry out the transactions
contemplated hereby,including,without limitation,to purchase the PPF Loans from AEA.
b. The execution,delivery and performance of this Agreement by AIDEA has
been duly authorized by all necessary action.
c.AIDEA's execution and performance of this agreement are not in violation of
any law or regulation governing AIDEA.
d.AIDEA is purchasing the PPF Loans as an investment of the revolving fund of
AIDEA.
12.Modification.This agreement shall not be modified except in writing signed by and
on behalf of each party.
13.Construction.Whenever possible,each provision of this agreement shall be
interpreted in such manner as to be valid and effective under applicable law.
PPF Loan Sale Agreement Page -4-
14.Survival.The representations and warranties,covenants and agreements of Seller
and Purchaser contained herein shall survive the Closing Date.
15.Waiver.Any waiver of any term,provision or condition of this Agreement must be in
writing to be effective.No such waiver,whether by conduct or otherwise,in any one or
more instances,shall be construed as a further or continuing waiver of any such term,
provision or condition,or of any other term,provision or condition of this Agreement.
16.Captions.Paragraph or other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
17.Governing Law.This Agreement shall be governed by and construed in accordance
with the laws of the State of Alaska.
18.Assignment.This Agreement and AEA's interest in each PPF Loan,note,deed of
trust or other security document assigned to AIDEA pursuant to this agreement shall not
be assignable by operation of law or otherwise,by AIDEA (or its successors or assigns)to
any person or entity without the prior written consent of AEA.Any purported assignment in
violation of this Section shall be void and of no effect as against AEA.Subject to the
foregoing,this Agreement shall be binding upon and inure to the benefit of AEA,AIDEA
and their respective successors and assigns.
19.Further Assurances.AEA and AIDEA shall each promptly execute and deliver to the
other all further documents or instruments reasonably requested by either of them in order
to effect the intent of this Agreement and to obtain the full benefit of the Agreement.
20.Notices.All notices between the parties shall be in writing and shall be served by
hand delivery.Notice shall be deemed given or made at the time of such service.
All notices to AEA shail be given to it at the following address or such other address as
may be specified by notice given in accordance with the terms hereof:
Alaska Energy Authority
813 West Northern Lights
Anchorage,AK 99503
Attention:Executive Director
All notices to AIDEA shall be given to it at the following address or such other address as
may be specified by notice given in accordance with the terms hereof:
Alaska Industrial Development and Export Authority
813 West Northern Lights
Anchorage,AK 99503
Attention:Executive Director
PPF Loan Sale Agreement Page -5-
IN WITNESS WHEREOF,the parties hereto have executed this Agreement the day
and year first above written.:
SELLER:ALASKA ENERGY AUTHORITY
By:
Steve Haagenson,Executive Director
PURCHASER:ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY
By:
Ted Leonard,Executive Director
LIST OF EXHIBITS
Exhibit |-Listing of PPF Loans
PPF Loan Sale Agreement Page -6 -