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terminating their participation pursuant to these provisions, the
partners would have no obligation to continue making equity
contributions.
The partners’ equity contributions to the partnership
ultimately totaled about $550 million.
The Credit Agreement
Pursuant to the credit agreement dated January 29, 1982, FFB
committed to lend the partnership up to $2.02 billion for the
design, construction, and startup of the project. The credit
agreement provided that if the partnership defaulted on the
payment of principal or interest, FFB should demand payment of
the partnership and provide notice of the default to DOE. If the
partnership or DOE failed to cure the default within 5 days, FFB
could terminate the credit agreement and declare the entire
outstanding debt due and demand payment by DOE pursuant to DOE’s
loan guarantee (discussed below). Pursuant to the credit
agreement, FFB agreed that “any recovery on a claim against
Borrower [the partnership] or any Partner which may arise under
7(...continued)
certain levels; if estimated costs exceeded certain levels; if
the estimated in-service date slipped past June 1, 1986; if there
were no longer “reasonable assurance” that the project would
generate sufficient cash to permit the partnership to service its
debts and repay the partners’ equity contributions; or if DOE
gave the partnership notice that DOE had determined that there
was no longer reasonable assurance that the partnership would be
able to timely pay principal and interest on the guaranteed
indebtedness.
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Last modified: May 25, 2011