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ORDINANCE <br /> <br />AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF <br />MARTINSVILLE, VIRGINIA, OF A GUARANTY AGREEMENT IN A MAXIMLrM <br />AMOUNT OF $190,000, FOR THE ACCOUNT OF BLUE RIDGE POWER AGENCY, INC. <br /> <br />WHEREAS, the City of Martinsville, Virginia (the "City"), together with the Cities of Bedford, <br />Danville and Salem and the Town of Richlands, is a member of the Blue Ridge Power Agency, <br />Inc. ("Blue Ridge"); and <br /> <br />WHEREAS, Blue Ridge has advised its constituent members, including the City of Martinsville <br />and the above listed members, that to obtain electric transmission service in the future, the <br />members must either become members of PJM Interconnection, LLC ("PJM"), or have an agent <br />act on their behalf; and <br /> <br />WHEREAS, at the request of its constituent members, Blue Ridge has agreed to act as their <br />agent and itself to become a member of PJM; and <br /> <br />WHEREAS, the credit requirements of PJM require that Blue Ridge obtain an irrevocable stand- <br />by letter of credit to secure payments due from Blue Ridge to PJM; and <br /> <br />WHEREAS, Blue Ridge has obtained a commitment from American National Bank and Trust <br />Company (the "Bank") to provide the necessary irrevocable stand-by letter of credit provided <br />that each constituent member of Blue Ridge secures such letter of credit with a loan guaranty <br />covering such member's respective share of Blue Ridge's total credit commitment to PJM; and <br /> <br />WHEREAS, the City of Martinsville's respective share is an amount not greater than One <br />Hundred Ninety Thousand Dollars ($190,000); and <br /> <br />WHEREAS, there has been presented to this meeting a form of loan guaranty agreement ("the <br />"Guaranty") provided by the Bank. <br /> <br />THEREFORE, BE IT ORDAINED by the Council of the City of Martinsville, Virginia: <br /> <br />1. Authorization of Guaranty. The Council hereby authorizes the City of Martinsville to <br />provide a loan guaranty for the account of Blue Ridge to secure the full and prompt repayment <br />by Blue Ridge for draws made under an irrevocable stand-by letter of credit to be issued by the <br />Bank; provided, however, that the loan guaranty from the City of Martinsville shall not be in <br />excess of One Hundred Ninety Thousand Dollars ($190,000) and shall be for a term extending <br />not longer than December 31, 2006. Such guaranty shall constitute an indebtedness authorized <br />to be issued pursuant to Chapter 1 Section 2-7 of the City Charter for purposes of the City's <br />electric system. To evidence such arrangement, the City Manager, is hereby authorized and <br /> <br /> <br />