20030919Notice of Default.pdf

IIAEMMERLE & IIAEMMERLE, P.L.C.
Attorneys & Counselors at Law
Fritz X. Haemmerle
Jennifer L. K. Haemmerle
P. O. Box 1800
Hailey, ID 83333
400 South Main Street, Suite 102
Tel: [phone]
Fax: [phone]
September 17, 2003
NOTICE OF DEFAUL T
Case No. A TL-02-
Order No. 29059
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Idaho Public Utilities Commission
O. Box 83720
Boise , 10 83720-0074
CERTIFIED MAIL: 70020860000524653684
Re:::s:.
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To Whom It May Concern:
The purpose of this letter is to advise the Idaho Public Utilities Commission
PUC") that Lynn Stevenson , the Seller under a Purchase and Sale Agreement
Agreement") is in default to the Buyer, Eric Alberdi. Mr. Alberdi is the successor in
interest under a Promissory Note, originally executed between Givens Pursley, LLP.
and Atlanta Power Company, Inc.
The Agreement was secured by the enclosed Lock Box and Security Agreement
("Lock Box Agreement"), the terms of which were approved by the PUC Case No. ATL-
02-, Order No. 29059. Under the default provisions of the Agreement and Lock Box
Agreement and in case of default, Atlanta Power is required to create a segregated
account wherein all payments due Atlanta Power are required to be paid into.
Payments out of the account are controlled by the terms of the Lock Box Agreement.
If the PUC has any questions regarding this matter, please do not hesitate to call.
Thank you for your prompt attention to this matter.
Sincerely,
HAEM MERLE & HAEM MERLE , P.LLC.Rk:~
Fritz X. Haemmerle
FXH: fxh
Encl.
cc: client (w/o encl)
Atlanta Power Company, Inc.
Gary Babbitt, Esq. (w/o encl)
IIAEMMERLE & IIAEMMERLE, P.
Attorneys & Counselors at Law
Fritz X. Haemmerle
Jennifer L. K. Haemmerle
P. O. Box 1800
Hailey, ID 83333
400 South Main Street, Suite 102
Tel: [phone]
Fax: [phone]
September 17 , 2003
Atlanta Power Company, Inc.
O. Box 100
Fairfield , ID 83327
CERTIFIED MAIL: 70020860 0005 2465 3677
Re:NOTICE OF DEFAULT Promissory Note, debt owed Eric Alberdi
To Whom It May Concern:
The purpose of this letter is to advise Atlanta Power Company, Inc., that it is in
default under the enclosed Promissory Note ("Note ). The Note was originally executed
between Atlanta Power and Givens Pursely, LLP. Through a series of transactions
Eric Alberdi purchased the Note from Lynn Stevenson. A copy of the Purchase And
Sale Agreement between Mr. Stevenson and Mr. Alberdi is enclosed.
Due to the most unfortunate and untimely death of Lynn Stevenson, payments
under the Note have not been paid. Because of this default, Atlanta Power, as the
original maker under the Note, is now in default. Under Paragraph 4 of the Note
(Default Provision), Mr. Alberdi is now declaring the remaining principal, accrued
interest, and attorney fees and costs due and payable. The amount dues is as follows:
Principal $13 890.
Interest 164.
Attorney Fees 200.
Total $14 255.
Until the amount due is paid , Mr. Alberdi will secure the payments due under the
Note under the Lock Box and Security Agreement ("Agreement"), enclosed for your
review, as mentioned in Paragraph 9 of the Note. As set forth in Agreement, Atlanta
Power is required to perform as follows: (A) establish a segregated account at a bank
that is acceptable to Mr. Alberdi, (B) execute a control agreement required with Mr.
Alberdi , which shall provide that Mr. Alberdi has control over the funds in the segregated
account, and (C) within one business day of receipt of payments to Atlanta Power by its
customers, all such receipts must be deposited directly into the segregated account.
Mr. Alberdi will send a control agreement to Atlanta Power for its signature, consistent
with the terms of the Lock Box Agreement. After the segregated account is established
Atlanta Power is required to direct payments made out of the account consistent with
the term of Paragraph 4 of the Agreement.
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Atlanta Power Company, Inc.
September 17 , 2003
Page 2
Consistent with these terms, please advise Mr. Alberdi directly as to which bank
you expect to open the segregated account. After receiving approval by Mr. Alberdi
you may then open the account and then advise Mr. Alberdi of the account number.
Once the bank and account number are known , Mr. Alberdi will present Atlanta Power
with a control agreement.
Your prompt attention to this matter would be appreciated.
Sincerely,
HAEMMERLE & HAEMMERLE, P.LLC.
Iv /L---1
Fritz X. Haemmerle
FXH: fxh
Encl
cc: client (w/o encl)
Conley Ward
227 N. 8th St., Suite 200
Boise, 1083702
Gary Babbitt, Esq. (w/o encl)
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copy
PROMISSORY NOTE
Maker:Atlanta Power Company, Inc., an Idaho corporation
Date of Making:June 20, 2002
Place of Making:Boise, Idaho
Principal Amount:$34 000.
$1636.46Monthly Payment Amount:
Interest Rate:Fourteen Percent (14%) per annum
Maturity Date:May 1, 2004
1. Terms. The undersigned (the "Maker ), for value received, jointly and severally
promise to PAY TO THE ORDER OF GIVENS PURSLEY LLP , an Idaho limited liability partnership
(the "Payee or Holder"), at 277 North Sixth Street, Boise, Idaho 83702, or such other place or places
as may be designated by Holder, the principal sum of THIRTY-FOUR THOUSAND AND NO ONE
HUNDREDTHS DOLLARS ($34 000.00), in lawful currency ofthe United States of America together
with interest thereon as provided hereunder, which such principal and interest shall be payable as
follows:
1. Maker shall pay installments of principal and interest in the amount
$1 ,636.46 each month beginning on the first day of June 2002 and continuing on the same day each
month thereafter until the Maturity Date as provided below when the entire balance of principal and
accrued interest, if any, shall be due and payable in full. Each installment payment must be
received by the Holder no later than the fifth day of each month or the Note shall be in default
without notice or further demand;
- 1.2. The remaining principal balance and all accrued but unpaid interest, if any,shall be due and payable in full without demand on May 1 , 2004 (the "Maturity Date ); and
3. The unpaid principal amount hereof from time to time outstanding shall bear
interest from and after the Date of Making at the rate of fourteen percent (14%) per annum. At
Maturity, or if any payment hereunder is not paid within thirty (30) calendar days of the required
payment date, then all sums evidenced hereby shall bear interest at the lesser rate of (i) twenty
percent (20%) per annum or (ii) the highest rate allowed by law, until paid or until the default is
otherwise cured. All payments hereunder shall be applied first to fees, charges, including late
charges attorney s fees and costs, if any, then to interest and then to principal.
Prepayment.Maker shall have the right of prepayment at any time without penalty.
3. Immediately Available Funds . All payments made under this Note, whether on
account of the principal sum or interest, if any, shall be made in immediately available funds without
setoff or counterclaim and free and clear of and without deduction for or on account of all present
and future fees , deductions, withholdings, restrictions or conditions of whatsoever nature, if any, now
or hereafter imposed, levied, calculated, withheld or assessed. "Immediately available funds" shall
mean funds tendered without conditions or restrictions on release and in a medium which is subject
PROMISSORY NOTE - 1
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to immediate deposit andlor creditwithout confirmation, clearance period, waiting or other delay for
or restriction on immediate use, or negotiation. Acceptance of any payment made otherwise than in
immediately available funds shall not constitute a waiver of the right to require payment in
immediately available funds.
4. Default.If default is made in the payment of principal or interest when due , then thewhole sum of principal and accrued interest, shall at the option of the holder hereof, become
immediately due and payable, anything contained herein or in any instrument now or hereafter
relatingto or securing the indebtedness evidenced hereby tothe contrary thereof notwithstanding,
time beingofthe essence ofthis Npte. Such option shall continue until all such defaults have been
cured. Failureto exercise such option, or any other right the holder may have in such event, or be
entitled to, shall not constitute a waiver ofthe right to exercise such option orany other rights in the
event of any subsequent default. In the event of default under this Note, Maker agrees to pay all
costs incurred in collecting the sums due hereunder, including, without limitation, attorney's fees
escrow charges, the costs of any notice of default, whether suit be brought or not, and on appeal
andlor in bankruptcy court.
5. Modifications.The undersigned and any party pledging collateral as security for the
payment hereof agree that the Holder hereof may extend the time of payment or otherwise modify
the terms of payment of any part or the whole of the indebtedness evidenced hereby or releaseand/or subordinate any security for this Note at any time at the request of anyone now or hereafter
liable, and such consent shall not alter nor diminish the liability of any person or the enforceability of
this Note or any security interest pledged as collateral for the payment hereof. Each and every party
now or hereafter signing or endorsing this Note binds himself as a principal and not as a surety. All
of the terms, covenants , provisions and conditions herein contained are made on behalf of, and
shall apply to and bind the undersigned and their respective personal representatives, successors
and assigns, jointly and severally.
6. Transfer and Endorsement.This Note may be transferred or negotiated only with the
endorsement by the Holder hereof, which transfer or negotiation shall be without warranty by, or
recourse against, the said endorser.
7. Attornevs' Fees. The undersigned agree that if any installment of principal and/or
interest or any other amount due under this Note or any agreement securing this Note is not paid
the applicable payment or maturity date (including grace periods), then the undersigned shall pay
Holder all costs, including, without limitation, attorneys' fees , expenses , penalties and other
damages incurred by Holder as a result of such late payment or failure to pay as provided therein.
8. Applicable Law. This Note shall be governed by Idaho law as an agreement between
residents and domiciliaries of said State entered into in said State and to be performed in said State.
9. Security. This Note is secured by a Lock Box and Security Agreement, to be
separately executed by the Maker and Payee. The segregated account and related disbursement
provisions of the Lock Box and Security Agreement shall not become operational except under
default as set forth in Paragraph No.4 above. If a default occurs , the holder shall notify the Maker
and the Idaho Public Utilities Commission in writing. The Idaho Public Utilities Commission s notice
shall be sent to PO Box 83720 , Boise Idaho, 83720-0074. This notice to the Maker and the IdahoPublic Utilities Commission shall be provided at least fourteen (14) days in advance of the
establishment of the segregated account referenced in the Lock Box and Security Agreement terms.
At a minimum, the terms of the Lock Box and Security Agreement shall contain the six (6)
provisions contained in Idaho Public Utilities Commissions Order No. 29059 at p.
PROMISSORY NOTE - 2
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10. Waiver. The Maker, sureties, guarantors and endorsers hereof severally waive
presentment for payment, protest, notice or protest and of non-payment of this Note, and agree that
on default in payment of this Note, or any part, whether principal or interest, when due, the whole
amount remaining unpaid shall , without notice of non-payment or demand of payment, immediately
become due and payable.
EXECUTED effective as of the Date of Making set forth above.
MAKER"
ATLANTA POWER COMPANY, INC., an Idaho corporation
By:
ENDORSEMENT
Endorsement of the Note, in the stated principal amount of $34 000., executed by
ATLANTA POWER COMPANY, INC., an Idaho corporation, payable to the order of GIVENS
PURSEL Y LLP, an Idaho limited liability partnership.
Pay to the order of LYNN STEVENSON without recourse or warranty.
By:
RSLEY LLP , an Idaho limited liability partnership
artner
PROMISSORY NOTE - 3
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LOCK BOX AND SECURITY AGREEMENT
This Lock Box and Security Agreement (the "Aoreement ) is effective June 20, 2002
and is entered into between Atlanta Power Company, Inc., an Idaho Corporation ("Oblioor ) and
Givens Pursley, LLP, an Idaho limited liability partnership (together with its successors and
assigns
, "
Secured Party
RECITALS
A. On June 20 , 2002 in Case No. ATL-02-, the Idaho Public Utilities Commission
entered Order No. 29059, a true and correct copy of which is attached hereto as Exhibit A (the
IPUC Order
B. The IPUC Order, among other things, authorized the execution of a promissory
note in the amount of Thirty-four Thousand and No/10aths Dollars ($34 000.00) payable to the
order of Secured Party that is to be secured by a Lock Box Agreement. This Agreement is the
Lock Box Agreement referenced in the IPUC Order.
C. In connection with this Agreement, and as required by the IPUC Order, the
Obligor executed a Promissory Note in favor of Secured Party dated June 20, 2002, in the
principal amount of Thirty-four Thousand and No/10aths Dollars ($34 000.00) (the "Promissory
Note
AGREEMENT
NOW THEREFORE , for valuable consideration, and in reliance on the recitals above
which the parties acknowledge are true and correct, the parties hereby agree as follows:1. As collateral security for the prompt and complete payment and performance
when due of all of the obligations set forth in the Promissory Note, and subject to the terms of
the IPUC Order, the Obligor hereby pledges and grants to Secured Party a continuing security
interest in and lien on (the Collateral"): all of the Obligor s accounts , whether now owned or
hereinafter acquired, and any and all additions , accessions , replacements, and substitutions
thereto, and all proceeds thereof. The Obligor shall execute any and all UCC-1 Financing
Statements required by Secured Party to allow Secured Party to perfect its lien in the Collateral.
Obligor further represents and warrants that upon the filing of any such financing statement at
the office of the Idaho Secretary of State, the Secured Party shall have a valid lien on and
security interest in the Collateral.2. This Agreement incorporates by reference all of the provisions of the Promissory
Note and the IPUC Order.3. In the event of an occurrence of a default under the Promissory Note (an "Event
of Default") and following the provision of written notice (the "IPUC Notice ) to the Idaho Public
Utilities Commission of such Event of Default as required by Section 9 of the Promissory Note
the Secured Party may exercise all of the rights and remedies of a secured creditor under the
provisions of the Uniform Commercial Code, whether at law, in equity, or otherwise.
Furthermore, fourteen (14) days from the date of the IPUC Notice , the Obligor shall: (A)
establish a segregated account (the "Seqreqated Account") at a bank that is acceptable to the
Secured Party in its sole discretion, (B) execute a control agreement ("Control Aqreement"
required by the Secured Party in its sole discretion, but subject to the IPUC Order, which among
LOCK BOX AND SECURITY AGREEMENT - 1
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other things, provides that the Secured Party has control over the funds in the Segregated
Account for purposes ofperiecting the Secured Party s security interest in and lien on suc~
funds, and (C) within one business day of Obligor s receipt thereof, deposit all of the payments
received from the Obligor s customers directly into the Segregated Account.4. Commencing on the fifteenth (15th) day of the first month following the date of the
IPUC Notice, and ending when all amounts owed and under the Promissory Note are paid in
full, Obligor shall make, or shall direct the bank holding the Segregated Account funds to make
all monthly disbursements from funds held in the Segregated Account as required by the IPUC
Order, as follows:
1. First, a $2000 reserve will be maintained in each and every month for the
purposes of renting and operating a pack-up generator (if needed by the utility);
2. Next, an additional $2000 reserve will be maintained in each and every
month for the purpose of making the payments due (by the due date) for applicable insurance
property taxes, Forest Service special use permits, IPUC fees, and the monthly minimum
income tax payable by Obligor;
Next, pay $100 monthly towards the Water Resources Loan amount
outstanding;
4. Next, pay $555.10 monthly towards the Energy Loan amount outstanding
(loan for water diversion bladder);
5. Next, pay the monthly installment on the Promissory Note by the due date
established. The amount may vary but is estimated to be approximately $1 636.46; and
6. The remaining balance of the Lock Box will be available to Obligor for
payment of other operating expenses.5. This Agreement may be modified only by the express written agreement of the
parties hereto.6. Obligor shall not be allowed to assign this Agreement or delegate its obligations
under the Promissory Note. Secured Party shall be allowed to assign this Agreement, the
Promissory Note and all related documents. Any assignment or endorsement of the Promissory
Note by Secured Party, or its assigns, shall be deemed to also operate as an assignment of this
Agreement in favor of any such assignee or endorsee to the Promissory Note.7. A breach of any of the terms of this Agreement shall be deemed to be a violation
and breach of the IPUC Order.8. This Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original and all of which shall constitute but one and the same instrument.9. This Agreement shall be governed by and interpreted and construed in
accordance with the laws of the sate of Idaho.
LOCK BOX AND SECURITY AGREEMENT - 2
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10. In the event of any dispute arising in connection with, out of, orothel'Vllise relating
to this Agreement-or the Promissory Note, the prevailing party shall be entitled to recover from
the non-prevailing party, all costs , expenses and reasonable attorneys' fees incurred by such
prevailing party, whether incurred at the trial court, appellate court, bankruptcy court, or if
incurred prior to litigation.
11. Should any portion of this Agreement be declared as a matter of law to be
unlaWful, void or otherwise inoperative, the remaining provisions will remain in full force and
effect.
12. ThisAgreement, the Promissory Note and the documents to be executed hereto
contain the entire agreement between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the !i!!!dayof November, 2002.
ATLANTA POWER COMPANY, INC.
an Idaho corporation
GIVENS PURSLEY LLP
an Id limited liability artnership
LOCK BOX AND SECURITY AGREEMENT - 3
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("AQreement ) is effective as of this 20th day of June2002 (the Effective Date ) by and between Givens Pursley LLP, an Idaho limited liability
partnership ("Seller ), and Lynn Stevenson ("Buyer
RECITALS
A. Atlanta Power Company, Inc., an Idaho corporation ("Atlanta Power ), executed a
Promissory Note dated June 20,2002 in the principal amount of Thirty-four Thousand and
No/10aths Dollars ($34 000.00) payable to the order of Seller (the Promissory Note
B. As collateral security for the Promissory Note, Atlanta Power and Seller enteredinto a Lock Box and Security Agreement (the "Lock Box AQreemenf' and together with thePromissory Note and all documents related thereto, the "Loan Documents
Buyer is the president and a shareholder of Atlanta Power.
D. Seller desires to sell, transfer and assign, and Buyer desires to purchase and
assume the Loan Documents.
AGREEMENT
NOW THEREFORE, for valuable consideration , and in reliance on the recitals above
which the parties acknowledge are true and correct, the parties hereby agree as follows:1. Upon Seller receipt of Thirty-four Thousand and No/100ths Dollars($34,000.00) from Buyer, which has already been received by Seller as of the Effective Date
the Seller assigns, transfers and conveys to the Buyer without recourse or warranty, all of
Seller s right, title, and interest in the Loan Documents, and the Buyer purchases and assumes
the Loan Documents from the Seller, without recourse or warranty.2. The Buyer acknowledges and agrees that as the president and shareholder of
Atlanta Power, the Buyer has sufficient experience , sophistication and expertise to assess the
risks related to the purchase of the Loan Documents.3. This Agreement may be executed in counterparts, which taken together shall
constitute one (1) agreement.4. This Agreement shall be governed by and interpreted and construed in
accordance with the laws of the sate of Idaho.5. In the event of any dispute arising in connection with, out of, or otherwise relating
to this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party,
all costs, expenses and reasonable attorneys' fees incurred by such prevailing party, whether
incurred at the trial court, appellate court, bankruptcy court, or if incurred prior to litigation.6. Should any portion of this Agreement be declared as a matter of law to be
unlawful, void or otherwise inoperative , the remaining provisions will remain in full force and
effect.
PURCHASE AND SALE AGREEMENT - 1
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7. This Agreement and the documents to be executed hereto contain the entire
agreement between the parties.
IN WITNESS WHEREOF , the parties have executed this Agreement as of the 'ItA of November, 2002.
GIVENS PURSLEY LLP
an Id 0 limited liability
~-~
Lynn tevens
PURCHASE AND SALE AGREEMENT - 2
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ORIGINAL
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is effective as of this 3rd day
December, 2002 (the "Effective Date ) by and between Lynn Stevenson, an Idaho
resident ("Seller ) and Eric Alberdi ("Buyer
RECITALS
A. Atlanta Power Company, INC., an Idaho corporation
, ("
Atlanta Power
executed a Promissory Note dated June 20, 2002, in the principal amount of Thirty-Four
Thousand and no/lOOth dollars payable to the order of Givens Pursley, LLC, an Idaho
Limited Liability partnership.
B. As collateral security for the Promissory Note, Atlanta Power and Givens
Pursley entered into a Lock Box and Security Agreement (the "Lock Box Agreement"
and together with the Promissory Note and all documents related thereto, the "Loan
Documents
C. On June 20, 2002, Givens Pursley for value received assigned the Promissory
Note referred to in Paragraph A above to Lynn Stevenson
D. Buyer is a private party and has no ownership interest in Atlanta Power.
E. Seller desires to sell, transfer and assign, and Buyer desires to purchase and
assume the loan documents.
AGREEMENT
NOW THEREFORE, for valuable consideration, and in reliance upon the recitals
above, which the parties acknowledge are true and correct, the parties hereby agree as
follows:
1. Upon Seller s receipt of Twenty Two Thousand, Four Hundred Thirty-Nine
dollars and 46 cents ($22,439.46) from Buyer, a check for that sum having already been
received by Seller as of Effective Date, upon clearance of the check the Seller assigns
transfers and conveys to the Buyer, all of Seller s right, title and interest in the Loan
Documents, and the Buyer purchases and assumes the Loan Documents from the Seller.
PROVIDING HOWEVER, that Seller gives his personal warranty that all payments
due and owing will be paid on time. If payments are not made in a timely matter by
Atlanta Power, Seller is obligated to pay any deficiencies.
2. The Buyer acknowledges that as an experienced businessman he has sufficient
experience, sophistication and expertise to assess the risks related to the purchase of the
Loan Documents.
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MCC COpy
BEFORE THE IDAHO PUBLIC UTILITIES COl\1MISSION
U.u.ll,;C: UL un: ;:'CIa"etary
Service Date
June 21, 2002
IN THE MATTER OF THE REQUEST OF
ATLANTA POWER COMPANY TO ISSUE A
PROMISSORY NOTE IN THE AMOUNT
$34 000
CASE NO. ATL-02-
ORDER NO. 29059
On May 23, 2002, Atlanta Power Company requested authority to execute a
Promissory Note in the amount of $34 000 payable to its counsel GiveD's Pursley LLP. The
purpose of the note is to pay Atlanta Power's past due amounts Jar legal services provided by
Givens Pursley. The law:firm maintaip,s that Atlanta Power currently owes it approximately
$69,000 (including interest) for legal services and costs undertaken to acquire a Federal Energy
Regulatory Commission (FERC) license for the utility's hydroelectric facility located at Atlanta..
Idaho. The utility and its counsel assert that the note Will allow immediate payment to Givens
Pursley and represents a discount on the outstanding bill by waiving the accrued interest on the
past due amounts. After reviewing the draft Promissory Note and the Staff's comments, we
approve the Note as conditioned below.
THE PROMISSORY NOTE
- Under the terms of the draft Promissory Note, Atlanta Power shall pay approximately
24 monthly installments of principal and interest in the amount of approximately $1,636.46 until
the Note s maturity date of May 1 , 2004. The interest rate on the Note will be 14%. See Note,.
1.3. The Note also provides that Atlanta Power has the right to make prepayments at any time
without penalty. fd. at ~ 2. All payments made under the Note will first apply to fees and
charges (including late charges, attorneys fees and costs), then to interest, and then to principal.
feZ. at,. 1.3.
The Promissory Note is to be secured by a separate "Lock Box Agreement" to be
executed by the utilitY and the payee. fd at ,. 9. A Lock Box Agreement is an agreement that
generally prescribes the order or priority of expense payments made from the utility's accounts
receivable and makes those payments. - The Lock Box would become effective only upon a
default in making the monthly payment of principal or interest when due. The Lock Box
Agreement would provide that customer paymen~ due Atlanta Powe,~~e t~d lltto~e
lJQ~f ~9x'ri
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ORDER NO. 29059
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All disbursements from the Lock Box would be made pursuant to pre-set provisions of the Lock
Box Agreement. Although the exact terms of the Lock Box have not been reduced to writing,
the Staff, the utility and the broker that will ~ange the resale did agree that the Lock Box (if
necessary) would operate in the following manner.
(1) First, a $2 000 reserve will be maintained in each and every month for the
. purpose of renting and operating a b'ack-up generator (if needed by the
utility);
(2) Next, an additional $2000 reserve will .be maintained in each and every
month for the purpose of making the payments due (by the due date) for
applicable insurance, property taxes, Forest Service special use permits
IPUC .Iees, and the monthly minimum income tax payable by AtlantaPower;
(3) Next, pay $100 monthly toward the Water Resources Loan amountoutstanding;
(4) Next, pay $555.10 monthly toward the Energy Loan amount outstanding
(loan for water diversion bladder);
(5) Next, pay the monthly installment on the Promissory Note by the duedate established. The amount may vary but is estimated to be
approximately $1 636.46; and
(6) The remaining balance of the Lock BQx funds be available t9 AtlantaPower for payment of other operating expenses.
STAFF COMMENTS
After reviewing the Promissory Note and the suggested terms for the Lock Box, Staff
asserted that the estimated monthly payment of $1 636.46 is reasonable if Atlanta Power
appropriately focuses on monthly cash management. Based upon Atlanta Power s monthly cash
flow during calendar year 2001 , Staff determined that the minimum revenues it received in any
one month during the year was approximately $4 700. The Staffs audit showed that the
Company s total annual revenues during calendar year 2001 were $63 794. Consequently, Staff
determined that there was sufficient monthly cash flow to meet the estimated monthly payment
contemplated in the Promissory Note,
Staff also recommended that the 14% interest rate of the Note not be utilized to
establish customer rat~s, The Staff asserted that Atlanta Power s return on equity should be the
maximum rate al1owed for ratemaking purposes. The Staff also recommended that paragraph 9
ORDER NO. 29059
of the Promissory Note be modified to reflect when the Lock Box Agreement would become
effective. Staff recommended that the Lock Box Agreement not be used except when the utility
defaulted on the Note. As previously mentioned, the Staff also agreed to the proposed Lock Box
provisions discussed above. The Staff proposed that the following language be a~ded to
paragraph 9 of the Promissory Note:
At the time of noticing - a default, the Idaho Public Utilities Commission will
be simultaneously notified of the default. This notice must be provided at
least fourteen (14) days in advance of the estab1i~nrnent of the Lock Box
terms. The tenns for payment from the Lock Box shall be approved by the
IPUC prior to implementation.
Finally, the Staff also recommended that copies of all executed versions of the Promissory Note
and any and -all renegotiated or resale contracts for the Note be provided to the Commission.
DISCUSSION
Having reviewed the draft Promissory Note and the comments of the Commission
Staff, we approve Atlanta Power s issuance of a Promissory Note in the amount of $34 000 as
conditioned below. We agree with the Staff's recommendation that the Note s 14% interest rate
will not be utilized to establish the Company s revenue requirement In. addition, the
Commission shall require that copies of all executed versions of the Promissory Note and any
and all renegotiated or resale contracts for the Note be provided to the Commission.
We also agree with the Staff, utility and the broker s recommendations that the Lock
Box not be utilized except upon default of the Note. Although we agree in principle with the six
recommended provisions of the Lock Box, there may be o~er provisions which are warranted
address circumstances that may arise. during the term of the Promissory Note. Consequently, we
cfuect that Paragraph No.9 of the Promissory Note be modified to read as follows:
This Note is secured by a: -Lock Box Agreement, to be -separately executed by
the Maker and Payee. The Lock Box Agreement shall not become
operational except under default as set forth in Paragraph No.4 above. If a
default occurs, the holder shall notify the Maker and the Idaho Public
Utilities Commission in writing. The Commission s notice shall be sent to
PO Box 83720, Boise, Idaho 83720-0074. This notice to the Maker and the
Commission shall be provided at least fourteen (14) days in advance of the
establishment of the Lock Box terms. At a mhrimum, the terms of the Lock
Box shall contain the six (6) provisions contained in Order No. 29059 at p. 2.
ORDER NO. 29059 . .;1
- -- --- - -- --- -- -
In summary, we find it reasonable for Atlanta Power to execute aPromissory Note iD- -
the amount of $34 000 as modified above. Use of the Promissory Note benefits both Atlanta
Power and its counsel. Atlanta Power benefits by not having to pay the interest charge on past
due amounts. Likewise, counsel benefits ~y the immediate paym!IDt of the $34 000 and the
subsequent holder of the Note benefits by receiving payments including interest under the Note.
The Commission further finds that Atlanta Power has sufficient monthly cash flow to meet
estimated Note payments of $1,636.46 per month. Finally, the Commission :finqs it reasonable
to defer implementation of the Lock Box mechanism until a default has been noticed The Lock
Box shall contain at a miTlimum the six terms and conditions proposed by Staff: the utility and
the broker as set out above.
ORDER
IT IS HEREBY ORDERED that Atlanta Power Company s request to execute a
Promissory Note in the amount $34 000 is approved as conditioned in the body of this Order.
This Order shall not be effective until the Company has paid the filing fee of $50.
IT IS FURTIIER ORDERED that the Promissory Note s interest rate of 14% will not
be used to establish the Company s revenue reqIDxement or customer rates.
IT IS FURTHER ORDERED that the Commission s review and approval of this
matter shall not be construed to obligate _the State of Idaho to payor guarantee in any manner
whatsoever any security authorized, issued, assumed or guaranteed under the provisions of Idaho
Code, Title 61 , Chapter 9 (Idaho Code ~g 61-901 et seq.
THIS IS A FINAL ORDER .AI1y person interested- in this Order (or in issues finally
decided by,this Order) or in interlocutory Orders-previously issued in this Case No ATL-02-
may petition for reconsideration within twenty-one (21) days of the service date of this Order
with regard to any matter decided in this Order or in interlocutory Orders previously issued in
this Case No. ATL-02-1. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code 9 61-
626.
ORDER NO. 29059
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UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS/front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER (optional)
Eric R. Alberdi
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
[phone]
IDAHo SECREtARY OF STATE12/06/2002 85"00
CK: 4894 CT: 112388 !H: 649915
l' 6.
&~
JJet1 FILE I 21 In!.. ntl8ber:B 2002~a935682-9
Eric R. Alberdi
Post Office Box 2778
Hailey, Idaho 83333
-.J
1, DEBTOR'S EXACT FULL LEGAL NAME - insert anlYQ!m debtor name (1aor1b) -do not abbreviate or combine names
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1a. ORGANIZATION'S NAME
Atlanta Power Company, Incorporated
1b. INDIVIDUAl'S lAST NAME
FIRST NAME
MIDDLE NAME SUFFIX1c. MAILING ADDRESS
CITY
STATE rOSTAl CODE COUNTRY
Post Office Box 100
Fairfield 10 83327 USA1d. TAX ID #: SSN OR EIN /;ADD'LlNFO RE reo TYPE OF ORGANIZATION
11. JURISDICTION OF ORGANIZATION
19. ORGANIZATIONAL ID #,If anyg~;'b~ZATfON I Corporation State of Idaho
I C78737 nNONE
2, ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME -Insert only Q!m debtor name (2a or 2b) - do not abbreviate or combine names280 ORGANIZATION'S NAME
2b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME SUFFIX
Stevenson
Lynn2c. MAiliNG ADDRESS
CITY STATE /POSTAlCODE COUNTRy
Post Office Box 100
Fairfield 10 83327 USA
2d. TAX ID#:SSN OR EIN /;DD'l INFO RE r2e. TYPE OF ORGANIZATION 2f, JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAlID#, if any
ORGANIZATION
n NONE
DEBTOR I
3 SECURED PARTY'S NAME (or NAME ofTOTAl ASSIGNEE of ASSIGNOR SIP) - insert onlYQ!m secured party name (3a or3b)380 ORGANIZATION'S NAME
3b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME SUFFIX
Alberdi Eric3c. MAILING ADDRESS
CITY
f~TE r;;;~~ODE
COUNTRy
Post Office Box 2778
Hailey
USA4. This FINANCING STATEMENT covers the following collateral:
1) Lock Box and Security Agreement
2) Personal Warranty as stipulated in Purchase and Sale Agreement
5. ALTERNATIVE DESIGNATION (if applicable):6. IstoeleESTATE RECORDS. Attach Addendum8. OPTIONAL FilER REFERENCE DATA
Debtor 2
FILING OFFICE COPY-NATIONAL UCC FINANCING STATEMENT (FORM UCC1) (REV. 07/29/98)
IDAHO FlLl.AELE FORM REY 07!2DO.
ORIGINAL
ENDORSEMENT
Endorsement of the Note, in the principal amount of$25 IO2.58, executed byLynn Stevenson, payable to order of Eric Alberdi.
Pay to the order of Eric Alberdi.
4-~L
STATE OF IDAHO
) ssCounty of Blaine
BEFORE ME, an Idaho Notary Public, appeared on December 3, 2002, thepersons known to me to Lynn Stevenson, and acknowledge that his signature is thatsubscribed above.
;j~
Residing at: Hailey
Comm. Exp.: 9/19/06ROBERT w. BAR'l'LRTT. n
Notary Public
State of Idaho
- ------ -
RECEIPT
Received of Eric Alberdi the sum of $22, 439.46, as follows:
CASH
CHECK
$ 5000.
439.46
In full payment for sale of Note ITom Atlanta Power secured by Lock Box Agreement in
event of default.
DATED December 3, 2002.
~~
s(~.Lynn evenson
(Seller of Note)
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