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this Agreement * * * shall be limited to the assets of the
Borrower and such Partner’s interests in such assets”.
Loan Guarantee Agreement
Pursuant to a loan guarantee agreement, also dated January
29, 1982, DOE agreed to guarantee the entire amount of principal
and interest on the debt incurred by the partnership under the
credit agreement.8 DOE’s guarantee was based on its
determination that the guarantee was necessary to encourage the
partners’ financial participation in the project.
Pursuant to the loan guarantee agreement, FFB was to make no
disbursements to the partnership until DOE reviewed and
authorized the proposed disbursements. DOE retained the right,
under specified circumstances, to terminate the Government’s
participation in guaranteeing additional disbursements for the
project. Pursuant to the loan guarantee agreement, if the
partnership failed to pay FFB principal or interest on the
indebtedness when due, the Secretary was authorized to cause the
principal amount of all the guaranteed indebtedness, with accrued
interest, to become due and payable from the partnership. If the
partnership failed to cure the default, the Secretary, upon
payment of the indebtedness to FFB, was authorized to take action
8 DOE was granted authority to guarantee the partnership’s
debt pursuant to the Federal Nonnuclear Energy Research and
Development Act of 1974, Pub. L. 93-577, 88 Stat. 1878, as
amended by the Department of Energy Act of 1978, Pub. L. 95-238,
92 Stat. 47.
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Last modified: May 25, 2011