POLLUTION CONTROL FACILITIES LOAN AGREEMENT Between PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY and PPL ELECTRIC UTILITIES CORPORATION Dated as of October 1, 2008
Exhibit
4(a)
Between
PENNSYLVANIA
ECONOMIC DEVELOPMENT FINANCING AUTHORITY
and
PPL
ELECTRIC UTILITIES CORPORATION
Dated as
of October 1, 2008
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I.
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Background,
Definitions, Representations and Findings.
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1
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Section
1.1
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Background
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1
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Section
1.2
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Definitions
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2
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Section
1.3
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Company
Representations
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3
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Section
1.4
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Authority
Findings and Representations
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6
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II.
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Refunding
the Prior Bonds.
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6
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Section
2.1
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Issuance
of Bonds; Application of Proceeds
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6
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Section
2.2
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Investment
and Use of Fund Moneys
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7
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Section
2.3
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Rebate
Fund
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7
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III.
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Loan
By Authority; Loan Payments; Other Payments
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8
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Section
3.1
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Loan
by Authority
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8
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Section
3.2
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Loan
Payments
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8
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Section
3.3
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Purchase
Payments
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9
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Section
3.4
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Additional
Payments
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9
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Section
3.5
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Obligations
Unconditional
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10
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Section
3.6
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Assignment
of Authority's Rights
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10
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IV.
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Additional
Covenants of Company
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11
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Section
4.1
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Corporate
Existence
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11
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Section
4.2
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No
Misuse of Bond Proceeds; No Assignment; Maintenance of
Employment
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11
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Section
4.3
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Reserved
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11
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Section
4.4
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Reserved
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11
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Section
4.5
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Financial
Statements; Books and Records
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11
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Section
4.6
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Taxes,
Other Governmental Charges and Utility Charges
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12
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Section
4.7
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Reserved
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||
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Section
4.8
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Reserved
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12
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Section
4.9
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Misuse
of Bond Proceeds; Litigation Notice
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12
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Section
4.10
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Indemnification
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12
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Section
4.11
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Tax
Covenants of Company and Authority
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14
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Section
4.12
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Action
to Maintain Tax Exempt Status
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14
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Section
4.13
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Nondiscrimination/Sexual
Harassment Clause
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14
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V.
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Redemption
of Bonds
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14
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Section
5.1
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Optional
Redemption
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14
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Section
5.2
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Mandatory
Redemption
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15
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Section
5.3
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Actions
by Authority
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15
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VI.
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Events
Of Default And Remedies
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15
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Section
6.1
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Events
of Default
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15
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Section
6.2
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Remedies
on Default.
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16
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Section
6.3
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Remedies
Not Exclusive
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18
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Section
6.4
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Payment
of Legal Fees and Expenses
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18
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Section
6.5
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No
Waiver
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18
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Section
6.6
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Notice
of Default
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18
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VII.
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Miscellaneous
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18
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Section
7.1
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Term
of Agreement
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18
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Section
7.2
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Notices
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19
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Section
7.3
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Limitation
of Liability; No Personal Liability
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19
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Section
7.4
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Binding
Effect
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20
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Section
7.5
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Amendments
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20
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Section
7.6
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Counterparts
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20
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Section
7.7
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Severability
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20
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Section
7.8
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Governing
Law
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21
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Section
7.9
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Assignment
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21
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Section
7.10
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Receipt
of Indenture
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21
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| EXHIBIT A – Description of Project Facilities | A-1 | ||
| EXHIBIT B – Form of Exempt Facilities Note | B-1 | ||
| EXHIBIT C – Nondiscrimination /Sexual Harassment Clause | C-1 | ||
POLLUTION
CONTROL FACILITIES LOAN AGREEMENT dated as of October 1, 2008 (the “Agreement”)
between PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY (the “Authority”)
and PPL ELECTRIC UTILITIES CORPORATION, a Pennsylvania corporation (together
with permitted successors and assigns, the “Company”).
I. Background,
Definitions, Representations and Findings.
Section
1.1 Background. Pursuant
to the Pennsylvania Economic Development Financing Law (Act No. 102, approved
August 23, 1967, P.L. 251, as amended) (the “Act”), the Montour County
Industrial Development Authority has authorized and approved the refunding of
bonds previously issued to provide financing for certain costs of Project
Facilities as described below through the issuance of the Issuer’s Pollution
Control Revenue Refunding Bonds, Series 2008 (PPL Electric Utilities Corporation
Project), in an aggregate principal amount of $90,000,000 (the
“Bonds”). The proceeds of the Bonds will be applied to currently
refund a like principal amount of Pollution Control Revenue Refunding Bonds,
Series 2003 (PPL Electric Utilities Corporation Project) (the “Prior Bonds”),
issued by the Lehigh County Industrial Development Authority for the purpose of
refunding certain prior bonds issued to finance the cost of certain air or water
pollution control facilities or sewage or solid waste disposal facilities
(collectively, the “Project Facilities”), as more particularly described on
Exhibit A attached to this Agreement (defined below), on behalf of the Company,
which was formerly known as Pennsylvania Power & Light Company.
In order to pay a portion of the costs
of refunding the Prior Bonds, the Authority has agreed to issue $90,000,000
aggregate principal amount of Pennsylvania Economic Development Financing
Authority Pollution Control Revenue Refunding Bonds, Series 2008 (PPL Electric
Utilities Corporation Project) (the “Bonds”) on the terms and conditions set
forth in the Trust Indenture (the “Indenture”) dated as of the date hereof made
between the Authority and The Bank of New York Mellon Trust Company, N.A., as
trustee (the “Trustee”), as amended or supplemented from time to
time. The Company and the Authority are entering into this Agreement
in order to provide for the issuance of the Bonds and the loan of the proceeds
of the Bonds to the Company.
The
obligation of the Company to repay the loan of the proceeds of the Bonds made
pursuant hereto will be evidenced by the Company’s Pollution Control Facilities
Note (Pennsylvania Economic Development Financing Authority) Series 2008 in the
principal amount of $90,000,000 (the “Note”) issued to the Trustee as the
assignee of the Authority under the Indenture.
The
proceeds of the Prior Bonds were loaned to the Company pursuant to the terms of
a Pollution Control Facilities Loan Agreement dated as of February 1, 2003 (the
“Existing Agreement”) between the Lehigh County Industrial Development Authority
and the Company.
The
Company has transferred its interest in the Project Facilities associated with
the Sunbury Station to an unrelated third party, and its interests in the
remaining Project Facilities to affiliates of the Company.
Section
1.2 Definitions. Terms
used in this Agreement which are defined in the Indenture and are not otherwise
defined in this Agreement shall have the meanings set forth in the Indenture
unless the context or use clearly indicates another meaning or
intent. In addition to the terms defined in the recital clauses of
this Agreement, as used herein:
“Additional
Payments” means the amounts required to be paid by the Company pursuant to
Section 3.4.
“Agreement”
means this Pollution Control Facilities Loan Agreement, as amended or
supplemented from time to time.
“Authority’s
Fee” means an amount equal to 0.2% of the amount of the Loan.
“Authorized
Representative” means, (i) with respect to the Authority, each person at the
time designated to act on behalf of the Authority by written certificate
furnished to the Trustee containing the specimen signature of such person and
signed on behalf of the Authority by its Secretary or Assistant Secretary, (ii)
with respect to the Company, each person at the time designated to act on behalf
of the Company by written certificate furnished to the Trustee containing the
specimen signature of such person and signed on behalf of the Company by its
President, any Vice President, its Treasurer, its Secretary, any Assistant
Treasurer or any Assistant Secretary and (iii) with respect to the Credit
Facility Issuer, each person at the time designated to act on behalf of the
Credit Facility Issuer by written certificate furnished to the Trustee
containing the specimen signature of such person and signed on behalf of the
Credit Facility Issuer by its President, Vice President, Manager, Treasurer,
Secretary, Assistant Treasurer or Assistant Secretary.
“Company’s
Tax Certificate” means the Certificate Regarding Federal Tax Matters of the
Company executed on the Issue date with respect to matters necessary to
establish and maintain the exclusion from gross income for Federal income tax
purposes of the interest on the Bonds.
“Debt
Service” means, for any period or payable at any time, the principal of,
premium, if any, on and interest on the Bonds for that period or payable at the
time whether due on an Interest Payment Date, at maturity or upon acceleration
or redemption.
“Issue
Date” means October 28, 2008.
“Loan”
means the loan by the Authority to the Company of the proceeds of the Bonds
pursuant to Section 3.1 in the original principal amount of
$90,000,000.
“Loan
Payments” means the amounts required to be paid by the Company in repayment of
the Loan pursuant to Section 3.2.
“Local
Entity” means the Montour County Industrial Development Authority.
“Misuse
of Bond Proceeds” means the use of the proceeds of the Bonds for any purpose
materially different from the purpose described to and approved by the Authority
and to not be a “project” as defined in the Act.
“Project
Approval” means the initial official action of the Local Entity declaring its
intent with respect to the financing of the Project Facilities. The
date of the Project Approval is September 5, 2008.
“Purchase
Payments” means the amounts required to be paid by the Company pursuant to
Section 3.3.
“Related
Person” shall have the meaning set forth in Section 144(a)(3) of the Code and
shall include (to the extent there provided) any parent, subsidiary, affiliated
corporation or unincorporated enterprise, majority shareholder and commonly
owned entity.
“Remarketing
Agreement” means the Remarketing Agreement between the Company and the
Remarketing Agent relating to the Bonds, as the same may be amended,
supplemented or replaced from time to time.
“Resolutions”
means the resolutions of the Authority approving and authorizing the Bonds, the
Indenture and this Agreement.
“Unassigned
Authority’s Rights” means all of the rights of the Authority to receive
Additional Payments under Section 3.4, to be held harmless and indemnified under
Section 4.10, to be reimbursed for attorney’s fees and expenses under Section
6.4, to exercise remedies under Section 6.2 and to give or withhold consent to
or approval of amendments, modifications, termination or assignment of this
Agreement, or sale, transfer, assignment, lease (or assignment of lease) or
other disposal of the Project Facilities, or other matters requiring consent or
approval under Sections 4.1, 4.2, 4.4, 7.5 and 7.9.
Section
1.3 Company
Representations. The
Company represents as of the date hereof that:
(a) It is a
corporation duly organized and existing under the laws of the Commonwealth of
Pennsylvania, with full power and legal right to enter into this Agreement and
the Note and the Senior Secured Bonds (as defined below) and perform its
obligations hereunder and thereunder. The making and performance of
this Agreement, the Note and the Senior Secured Bonds on the part of the Company
have been duly authorized by all necessary action.
(b) The
Project Facilities constitute “pollution control facilities” as defined in the
Act and are consistent with the purposes of the Act.
(c) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will conflict in any material respect with or
constitute a material violation or breach of, or a material default under, the
Company’s articles of incorporation or by-laws, or any indenture or other
material agreement or instrument to which the Company is a party or by which it
or any of its property is bound.
(d) This
Agreement, the Note and the Senior Secured Bonds have been duly executed and
delivered by the Company and constitute the valid and binding obligations of the
Company enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting the
enforcement of creditors’ rights generally, to general equitable principles
(whether considered in a proceeding in equity or at law) and by an implied
covenant of good faith, fair dealing and reasonableness.
(e) The
Company is not a Disqualified Contractor.
(f) A portion
of the Project Facilities are located within the boundaries of the county, city,
town, borough or township which organized the Local Entity (or within the
boundaries of the county in which such city, town, borough or township is
located or in which such Local Entity is certified by the Pennsylvania
Industrial Development Authority to act as an industrial development agency as
defined in the Act).
(g) (i) All
of the proceeds of the Prior Bonds were used to refund $90,000,000 aggregate
principal amount of Pollution Control Revenue Refunding Bonds, 1992 Series A
(Pennsylvania Power & Light Company Project) (the “1992A Bonds”), the
proceeds of which were used to refund $20,000,000 aggregate principal amount of
Pollution Control Revenue Bonds, 1980 Series B (Pennsylvania Power & Light
Company Project) (the “1980B Bonds”) and $70,000,000 aggregate principal amount
of Pollution Control Revenue Refunding Bonds, 1982 Series A (Pennsylvania Power
& Light Company Project) (the “1982A Bonds”, and together with the 1980B
Bonds, the “Project Bonds”), and (ii) at least 90% of the proceeds of the Prior
Bonds (as allocated to original expenditures through the refunding of prior
bonds) were issued to provide “pollution control facilities” and “solid waste
disposal facilities” within the meaning of Sections 103(b)(4)(E) and (F) of the
Internal Revenue Code of 1954, as amended, and in effect prior to the passage of
the Tax Reform Act of 1986 (the “1954 Code”), and the applicable regulations
thereunder.
(h) Acquisition,
construction and installation of the Project Facilities has been
accomplished.
(i) The
Company and its affiliates have used or operated the Project Facilities in a
manner consistent with the purposes of the Project Facilities and the Act and
the Company knows of no reason why the Project Facilities will not be so
operated. With respect to the Project Facilities related to the
Sunbury Station that the Company sold to an unrelated third party, the Company
used or operated such Project Facilities when it owned them in a manner
consistent with the purposes of the Project Facilities and the Act and, after
due inquiry, the Company knows of no reason why such Project Facilities will not
be so operated by any owner of the Sunbury Station.
(j) The
information furnished by the Company and used by the Issuer in preparing the
certification pursuant to Section 148 of the Code and in preparing the Form 8038
information statement pursuant to Section 149(e) of the Code will be accurate
and complete as of the Issue Date.
(k) Neither
the Prior Bonds nor the Bonds are or will be “federally guaranteed,” as defined
in Section 149(b) of the Code; references to the Code and Sections of the Code
(or, as applicable, to the 1954 Code and Sections thereof) include Sections 1312
and 1313 of the Tax Reform Act of 1986, relevant applicable regulations and
proposed regulations thereunder and under the 1954 Code and any successor
provisions to those Sections, regulations or proposed regulations and, in
addition, all applicable official rulings and judicial determinations under the
foregoing applicable to the Prior Bonds or the Bonds, as
applicable. No costs of the Project Facilities to be financed with
the proceeds of the Bonds, except for certain preliminary costs such as
architectural, engineering, surveying, soil testing and similar costs incurred
before the start of construction of the Project Facilities, have been
paid by or on behalf of the Company, the Affiliates or any Related Person more
than 60 days prior to April 15, 2005.
(l) At no
time will any funds constituting gross proceeds of the Bonds be used in a manner
as would constitute failure of compliance with Section 148 of the
Code.
(m) The
proceeds derived from the sale of the Bonds (other than any accrued interest
thereon) will be used exclusively to refund the outstanding principal amount of
the Prior Bonds. The principal amount of the Bonds does not exceed
the outstanding principal amount of the Prior Bonds. None of the
proceeds (within the meaning of Section 147(g) of the Code) of the Bonds will be
used to pay for any costs of issuance of the Bonds.
(n) On the
date of issuance and delivery of the Prior Bonds, the Company reasonably
expected that all of the proceeds of such Prior Bonds would be used to carry out
the governmental purposes of such issue within the three-year period beginning
on the date such issue was issued and none of the proceeds of such issue, if
any, were invested in nonpurpose investments having a substantially guaranteed
yield for three years or more.
(o) Neither
the average maturity of the Prior Bonds nor the average maturity of the Bonds
exceeds 120% of the average reasonably expected economic lives of the facilities
financed or refinanced by the proceeds of the Bonds (determined under Section
147(b) of the Code).
(p) It is not
anticipated, as of the date hereof, that there will be created any “replacement
proceeds,” within the meaning of Section 1.148-1(c) of the Treasury Regulations,
with respect to the Bonds; however, in the event that any such replacement
proceeds are deemed to have been created, such amounts will be invested in
compliance with Section 148 of the Code.
(q) The
Company does not own or operate any of the Project Facilities. Each
affiliate of the Company that owns the Project Facilities has agreed with the
Company that, for so long as it owns any of the Project Facilities, it will
operate such Project Facilities in a manner consistent with the Company’s tax
covenants in this Agreement and the other transaction documents relating to the
issuance of the Bonds. Notwithstanding the foregoing, nothing in any
such agreement with such affiliate requires, and nothing in this Agreement shall
require, the Company or any such affiliate to operate any portion of the Project
Facilities, or prevents any such affiliate from selling all or any portion of
the Project Facilities, or from merging or consolidating with another
entity. Nothing in this Agreement shall bind any affiliate of the
Company that owns the Project Facilities or any portion thereof, or any
purchasers of any portions of the Project Facilities or portions thereof
sold.
Section
1.4 Authority Findings and
Representations. The
Authority hereby confirms its findings and represents that:
(a) The
Authority is a public body corporate and politic established in the Commonwealth
of Pennsylvania pursuant to the laws of the Commonwealth of Pennsylvania
(including the Act). Under the Act, the Authority has the power to
enter into the Indenture, the Purchase Agreement and this Agreement and to carry
out its obligations thereunder and to issue the Bonds to finance the Project
Facilities.
(b) By
adoption of the Resolutions at one or more duly convened meetings of the
Authority at which a quorum was present and acting throughout, the Authority has
duly authorized the execution and delivery of the Indenture, the Purchase
Agreement and this Agreement and performance of its obligations thereunder and
the issuance of the Bonds. Simultaneously with the execution and
delivery of this Agreement, the Authority has duly executed and delivered the
Indenture and issued and sold the Bonds.
(c) Based on
representations and information furnished to the Authority by or on behalf of
the Company and the Local Entity, the Authority has found that the Company is
qualified to be a beneficiary of financing provided by the Authority pursuant to
the Act.
(d) Based on
representations and information furnished to the Authority by or on behalf of
the Company, the Authority has found that the Project Facilities (i) will
promote the public purposes of the Act, (ii) are located within the boundaries
of the Commonwealth of Pennsylvania, and (iii) will constitute a project within
the meaning of the Act.
(e) The
refunding of the Prior Bonds has been approved (1) by the Local Entity, as
required by the Act, (2) by the Governor or Lieutenant Governor of the
Commonwealth of Pennsylvania as the “applicable elected representative”, as that
term is defined under the Code, after a public hearing held upon reasonable
notice, as required by the Code, and (3) by the Authority by adoption of the
Resolutions, as required by the Act.
II. Refunding
the Prior Bonds.
Section
2.1 Issuance of Bonds;
Application of Proceeds. To
provide funds to make the Loan for purposes of refunding the Prior Bonds, the
Authority will issue the Bonds in the aggregate principal amount of
$90,000,000. The Bonds will be issued pursuant to the Indenture and
will bear interest, mature and be subject to redemption all as set forth
therein. The Company hereby approves the terms and conditions of the
Indenture and the Bonds, and the terms and conditions under which the Bonds will
be issued, sold and delivered.
The
proceeds from the sale of the Bonds (including any underwriting discount) shall
be loaned to the Company pursuant to Section 3.1, and such proceeds (net of any
underwriting discount) shall be paid over to the Trustee for the purpose of
refunding the Prior Bonds as provided in the Indenture.
Section
2.2 Investment and Use of Fund
Moneys. At
the written request of an Authorized Representative of the Company, any moneys
held as part of the Bond Fund (except moneys representing principal of, or
premium, if any, or interest on, any Bonds which are deemed paid under Section
16.01 of the Indenture) shall be invested or reinvested by the Trustee as
provided in Section 8.02 of the Indenture. The Authority and the
Company each hereby covenants that it will restrict that investment and
reinvestment and the use of the proceeds of the Bonds in such manner and to such
extent, if any, as may be necessary, after taking into account reasonable
expectations at the time of delivery of and payment for the Bonds, so that the
Bonds will not constitute arbitrage bonds under Section 148 of the
Code.
Any
Authorized Representative of the Authority having responsibility for issuing the
Bonds is authorized and directed, alone or in conjunction with an Authorized
Representative of the Company and/or any other officer, partner, employee or
agent of or consultant to the Authority or the Company, to give an appropriate
certificate of the Authority pursuant to Section 148 of the Code, for inclusion
in the transcript of proceedings for the issuance of the Bonds, setting forth
the reasonable expectations of the Authority regarding the amount and use of the
proceeds of the Bonds and the facts, estimates and circumstances on which those
expectations are based, all as of the Issue Date. The Company shall
provide the Authority with, and the Authority’s certificate may be based on, a
certificate of the Authorized Representative of the Company or other appropriate
officer, partner, employee or agent of or consultant to the Company setting
forth the reasonable expectations of the Company on the Issue Date regarding the
amount and use of the proceeds of the Bonds and the facts, estimates and
circumstances on which they are based.
Section
2.3 Rebate
Fund. The
Company agrees to make such payments to the Trustee as are required of the
Company under Section 6.04 of the Indenture. The obligation of the
Company to make such payments shall remain in effect and be binding upon the
Company notwithstanding the release and discharge of the Indenture.
III. Loan
By Authority; Loan Payments; Other Payments
Section
3.1 Loan by
Authority. Upon
the terms and conditions of this Agreement, the Authority will make the Loan to
the Company on the Issue Date in a principal amount equal to the aggregate
principal amount of the Bonds. The Loan shall be deemed fully
advanced upon disbursement of the Bond proceeds in accordance with Section 4.02
of the Indenture.
Section
3.2 Loan
Payments.
(a) In
consideration of the issuance, sale and delivery of the Bonds by the Authority,
the Company hereby agrees to pay to the Trustee for the account of the Authority
Loan Payments in such amounts and manner so as to enable the Trustee to make
payment of the principal of, and premium, if any, and accrued interest on the
Bonds as the same shall become due and payable whether at stated maturity or by
acceleration, redemption or otherwise in accordance with the terms of the
Indenture; provided, however, that the obligation of the Company to make any
Loan Payment hereunder shall be reduced by the amount of any reduction under the
Indenture of the amount of the corresponding payment required to be made by the
Authority of the principal of or premium, if any, or interest on the
Bonds. Pursuant to the Indenture, the Authority directs the Trustee
to apply such Loan Payments in the manner provided in the
Indenture. Whenever payment or provision for payment has been made in
respect of the principal of, or premium, if any, and interest on all of the
Bonds, the Loan Payments shall be deemed paid in full.
(b) The
obligation of the Company to make the Loan Payments directly to the Trustee, as
the assignee of the Authority under the Indenture, shall be evidenced by the
Company’s Note substantially in the form of Exhibit B hereto, which shall be
delivered concurrently with the delivery by the Authority of the
Bonds.
(c) Notwithstanding
the foregoing, while any Credit Facility is in effect with respect to the Bonds,
the Company’s obligation to make Loan Payments hereunder in respect of the
principal of, and premium, if any, and accrued interest on the Bonds shall be
deemed to have been satisfied to the extent that moneys shall have been paid by
a Credit Facility Issuer to the Trustee for such payment in respect of the
Bonds, which amounts may be reimbursed by the Company directly to such Credit
Facility Issuer, and no Event of Default shall occur hereunder by reason of any
failure of the Company to make any such Loan Payment to the Trustee under
subsection (a) above unless the Trustee is notified by the Credit Facility
Issuer of the Company’s failure to have reimbursed the Credit Facility Issuer
(if any) in accordance with the terms of the Credit Facility.
To secure
its obligations under the Note, concurrently with the issuance by the Issuer of
the Bonds, the Company will execute and deliver to the Trustee the Company’s
Senior Secured Bonds, Variable Rate Pollution Control Series 2008, which will
contain principal, interest and redemption provisions corresponding to the
principal, interest and redemption provisions of the Bonds (the “Senior Secured
Bonds”). The Senior Secured Bonds will be issued pursuant to
Supplemental Indenture No. 9 dated as of October 1, 2008 which supplements the
Company’s Indenture dated as of August 1, 2001, as supplemented (as so
supplemented, the “Company Indenture”) to JPMorgan Chase Bank, as trustee (the
“Company Indenture Trustee”). Anything herein to the contrary
notwithstanding, the obligation of the Company to make any payment of the
principal of, or interest on, the Senior Secured Bonds shall be deemed to be
satisfied and discharged to the extent of the corresponding payment (i) made by
the Company to the Trustee pursuant to Section 3.2 of this Agreement and/or on
the Note and/or (ii) made with moneys on deposit in any fund or account
maintained under the Indenture for the payment of the principal or redemption
price of, or interest on, the Bonds.
At the
time any Bonds cease to be Outstanding (other than in connection with the
cancellation thereof following an exchange or transfer or the authentication of
other Bonds in lieu thereof pursuant to Section 2.09 of the Indenture), the
Issuer shall cause the Trustee to surrender to the Company Indenture Trustee a
corresponding principal amount of Senior Secured Bonds.
The
Issuer shall not sell, assign or otherwise transfer the Senior Secured Bonds,
except to the extent provided in Section 12.16 of the Indenture. In
view of the assignment referred to in Section 3.6 hereof, the Issuer agrees that
(i) the Senior Secured Bonds shall be issued and delivered to, registered in the
name of and owned and held by the Trustee for the benefit of the holders from
time to time of the Bonds; (ii) the Indenture shall provide that the Trustee
shall not sell, assign or transfer the Senior Secured Bonds except to a
successor trustee under the Indenture, and shall surrender Senior Secured Bonds
to the Company Indenture Trustee in accordance with the provisions of this
Section 3.2 and Section 12.17(b) of the Indenture; and (iii) the Company may
take such actions as it shall deem to be desirable to effect compliance with
such restrictions on transfer, including the placing of any appropriate legend
on each Senior Secured Bond and the issuance of stop-transfer instructions to
the Company Indenture Trustee or any other transfer agent under the Company
Indenture. Any action taken by the Trustee in accordance with the
provisions of Section 12.16 of the Indenture shall be binding upon the
Company.
Section
3.3 Purchase
Payments. To
the extent that moneys on deposit in the Remarketing Proceeds Account of the
Purchase Fund established under the Indenture are insufficient to pay the full
purchase price of Bonds payable pursuant to Section 5.03 of the Indenture on the
applicable Purchase Date, the Company shall promptly pay to the Trustee as
Purchase Payments for deposit in the Company Fund established under Section 5.07
of the Indenture amounts sufficient to cover such shortfalls in sufficient time
to enable the Trustee to deliver to the Tender Agent the purchase price of Bonds
payable pursuant to Section 5.03 of the Indenture; provided, however, that the
obligation of the Company to make any Purchase Payment hereunder shall be deemed
to have been satisfied to the extent that moneys shall have been paid by a
Credit Facility Issuer to the Trustee for such payment in respect of the
Bonds.
Section
3.4 Additional
Payments. The
Company shall pay as Additional Payments hereunder: (a) to the
Authority, the Authority’s Fee on the Issue Date and any and all costs and
expenses (including reasonable legal fees and expenses) incurred or to be paid
by the Authority in connection with the issuance and delivery of the Bonds or
otherwise related to actions taken by the Authority under this Agreement or the
Indenture or any amendment thereof, supplement thereto or consent or waiver
thereunder, including without limitation any annual charge made by a rating
agency to maintain a rating on the Bonds; (b) to the Local Entity, the Local
Entity’s fee on the Issue Date and any and all costs and expenses incurred or to
be paid by the Local Entity in connection with the Project Facilities; and (c)
to the Trustee, the Tender Agent, the Bond Registrar, the Paying Agent and their
agents, their reasonable fees, charges and expenses for acting as such under the
Indenture. The obligations of the Company under clause (c) shall
survive the termination of this Agreement and the Indenture, payment or
defeasance of the Bonds and the removal or resignation of the Trustee, the
Tender Agent, the Bond Registrar or the Paying Agent in accordance with the
Indenture for any reason.
Section
3.5 Obligations
Unconditional. The
obligations of the Company to make Loan Payments, Purchase Payments and Additional Payments
shall be absolute and unconditional, and the Company shall make such payments
without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including without limitation any defense, set-off,
recoupment or counterclaim which the Company may have or assert against the
Authority, the Trustee, the Remarketing Agent or any other Person, whether
express or implied, or any duty, liability or obligation arising out of or
connected with this Agreement, it being the intention of the parties that the
payments required of the Company hereunder will be paid in full when due without
any delay or diminution whatsoever. Loan Payments and Purchase
Payments required
to be paid by or on behalf of the Company hereunder shall be received by the
Authority or the Trustee as net sums and the Company agrees to pay or cause to
be paid all charges against or which might diminish such net sums.
Section
3.6 Assignment of Authority’s
Rights. To
secure the payment of the Debt Service, the Authority shall pledge and assign to
the Trustee all the Authority’s rights in, to and under this Agreement (except
for the Unassigned Authority’s Rights), the Revenues, the Note, the Senior
Secured Bonds and the other property comprising the Trust Estate. The
Company consents to such pledge and assignment and agrees to make or cause to be
made Loan Payments and Purchase Payments directly to the Trustee without defense
or set-off by reason of any dispute between the Company and the Trustee, and
further agrees to issue and deliver the Note and the Senior Secured Bonds
directly to the Trustee to be held by the Trustee in accordance with the
provisions of the Indenture. Whenever the Company is required to
obtain the consent of the Authority hereunder, the Company shall also obtain the
consent of the Trustee; provided that, except as otherwise expressly stipulated
herein or in the Indenture, the Company shall not be required to obtain the
Trustee’s consent with respect to the Unassigned Authority’s
Rights.
IV. Additional
Covenants of Company
Section
4.1 Corporate
Existence. So
long as the Bonds are outstanding, the Company agrees to maintain its corporate
existence and, to the extent required by Pennsylvania law, its qualification to
do business in Pennsylvania, except that it may dispose of all or substantially
all of its assets and may consolidate with or merge into another corporation or
entity or permit one or more corporations or entities to consolidate with or
merge into it so long as (i) (A) the surviving, resulting or transferee
corporation or entity, if other than the Company, is solvent, and assumes in
writing all of the obligations of the Company hereunder and under the Note and
is a corporation or other entity duly organized under the laws of one of the
states of the United States of America and, to the extent required by
Pennsylvania law, is duly qualified to do business in the Commonwealth of
Pennsylvania provided that the Company shall have delivered to the Trustee a
certificate from an officer of the Company to the effect that such disposition,
consolidation, merger and assumption complies with the provisions of this
Agreement and is not a Disqualified Contractor, and (B) if the surviving,
resulting or transferee corporation or entity is not the Company or an affiliate
of the Company, with the consent of the Authority, which consent shall not be
unreasonably withheld, (ii) immediately thereafter neither the Company nor its
successor will be in default under the Agreement or the Note and (iii) the
provisions of Section 7.9 hereof are satisfied.
Section
4.2 No Misuse of Bond Proceeds;
No Assignment; Maintenance of Employment.
(a) The
Company shall not cause, permit or suffer to exist a Misuse of Bond
Proceeds.
(b) The
Company shall not assign its interest under this Agreement in violation of
Section 7.9.
(c) The
Company shall use its best efforts to require affiliated entities to maintain at
least 50% of the employment levels stated in the Local Entity’s application to
the Authority on behalf of the Company pursuant to which the Bonds are issued or
shall seek a waiver of this requirement from the Pennsylvania Department of
Community and Economic Development.
Section
4.3 Reserved.
Section
4.4 Reserved.
Section
4.5 Financial Statements; Books
and Records. The
Company shall prepare or have prepared financial statements in accordance with
generally accepted accounting principles and shall keep true and proper books of
records and accounts in which full and correct entries are made of all its
business transactions. Copies of such financial statements shall be
provided to the Authority and the Trustee promptly upon request.
Section
4.6 Taxes, Other Governmental
Charges and Utility Charges. The
Company shall pay, or cause to be paid before the same become delinquent, all
taxes, assessments, whether general or special, and governmental charges of any
kind whatsoever that may at any time be lawfully assessed or levied against it;
provided that with respect to special assessments or other governmental charges
that lawfully may be paid in installments over a period of years, the Company
shall be obligated to pay only such installments as are required to be paid
during the term hereof; and provided further that the Company may, at its
expense, in good faith contest any such taxes, assessments and other charges
and, in the event of any such contest, may permit the taxes, assessments or
other charges so contested to remain unpaid during the period of such contest
and any appeal therefrom.
Section
4.7 Reserved.
Section
4.8 Reserved.
Section
4.9 Misuse of Bond Proceeds;
Litigation Notice. The
Company shall give the Authority, the Trustee and the Remarketing Agent prompt
written notice of any Misuse of Bond Proceeds.
Section
4.10 Indemnification. The
Company will indemnify and hold harmless the Authority and each member,
director, officer, employee, attorney and agent of the Authority for and against
any and all claims, losses, damages or liabilities (including the costs and
expenses of defending against any such claims) to which the Authority or any
member, director, officer, employee or agent of the Authority may become
subject, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise directly or indirectly out of (a) any loss or damage to
property or injury to or death of or loss by any person that may be occasioned
by any cause whatsoever pertaining to the construction, maintenance, operation
and use of the Project Facilities; (b) any breach or default on the part of the
Company in the performance of any covenant or agreement of the Company under
this Agreement or the Note or any related document, or arising from any act or
failure to act by the Company or any of its agents, contractors, servants,
employees or licensees; (c) the authorization, issuance and sale of the Bonds,
or the provision of any information or certification furnished in connection
therewith concerning the Bonds, the Project Facilities or the Company
(including, without limitation, any information furnished by the Company for
inclusion in any certification made by the Authority or for inclusion in, or as
a basis for preparation of, the information statements furnished by the
Authority and any information or certification obtained from the Company) to
assure the exclusion of the interest on the Bonds from the gross income of the
holders thereof for federal income tax purposes; (d) the Company’s failure to
comply with any requirements of this Agreement pertaining to compliance with the
Code to assure such exclusion of the interest or the provisions set forth in
Sections 4.11 and 4.12; (e) any failure by the Company to comply with the
provisions of the Act; and (f) any claim, action or proceeding brought with
respect to any matter set forth in clause (a), (b), (c), (d) or (e)
above.
The
Company will indemnify and hold the Trustee and its directors, officers, agents
and employees (collectively, the “Indemnitees”) harmless from and against any
and all claims, liabilities, losses, damages, fines, penalties and expenses,
including out-of-pocket expenses, incidental expenses, reasonable legal fees and
expenses, and the reasonable costs and expenses of defending against any such
claim (“Losses”) that may be imposed on, incurred by or asserted against, the
Indemnitees or any of them for following any instruction or other direction upon
which the Trustee is authorized to rely pursuant to the terms of this Agreement,
the Bonds, the Note or the Indenture. In addition to and not in
limitation of the immediately preceding sentence, the Company also agrees to
indemnify and hold the Indemnitees and each of them harmless from and against
any and all Losses that may be imposed on, incurred by or asserted against the
Indemnitees or any of them in connection with or arising out of the Trustee’s
performance under this Agreement, the Bonds or the Indenture or the
administration thereof, or in collecting under the Note, except in any case as a
result of the gross negligence, willful misconduct or bad faith of the
Trustee.
In case
any action or proceeding is brought against the Authority or the Trustee in
respect of which indemnity may be sought hereunder, the party seeking indemnity
promptly shall give notice of that action or proceeding brought against it to
the Company, and the Company upon receipt of that notice shall have the
obligation and the right to assume the defense of the action or proceeding;
provided that failure of a party to give that notice shall not relieve the
Company from any of its obligations under this Section unless (and then only to
the extent) that failure prejudices the defense of the action or proceeding by
the Company. At its own expense, an indemnified party may employ
separate counsel and participate in the defense. The Authority or the
Trustee, as the case may be, will cooperate with the Company, at the Company’s
expense, with respect to its assumption of the defense of any such action or
proceeding, and will take such reasonable actions as are requested of it by the
Company, at the Company’s expense, in connection therewith. The
Company shall not be liable for any settlement made without its consent, which
shall not be unreasonably withheld. The Company shall not approve any
settlement involving the Trustee without the Trustee’s prior written consent,
which shall not be unreasonably withheld.
The
indemnification set forth above is intended to and shall (i) include the
indemnification of all affected directors, officers, agents and employees of the
Authority and the
Trustee, respectively, and (ii) be enforceable by the Authority and the Trustee,
respectively, to the full extent permitted by law.
The
provisions of this Section 4.10 shall survive the termination of this Agreement
and the Indenture, payment or defeasance of the Bonds and the removal or
resignation of the Trustee in accordance with the Indenture for any
reason.
Section
4.11 Tax Covenants of Company and
Authority. The
Company covenants and represents that it will at all times do and perform all
acts and things necessary or desirable and within its reasonable control in
order to assure that interest paid on the Bonds shall not be includable in the
gross income of any holder thereof for federal income tax purposes, unless such
holder is a “substantial user” of the Project Facilities or a “related person”
of such a user within the meaning of Section 147(a) of the Code and Section
103(b)(13) of the 1954 Code. The Company also covenants and
represents that it shall not take or omit to take, or permit to be taken on its
behalf, any actions which, if taken or omitted, would adversely affect the
excludability from the gross income of the holder of interest paid on the Bonds
for federal income tax purposes. The Authority and the Company
mutually covenant for the benefit of the Bondholders that they will not use the
proceeds of the Bonds, any moneys derived, directly or indirectly, from the use
or investment thereof or any other moneys on deposit in any fund or account
maintained in respect of the Bonds (whether such moneys were derived from the
proceeds of the sale of the Bonds or from other sources) in a manner which would
cause the Bonds to be treated as “arbitrage bonds” within the meaning of Section
148 of the Code.
Section
4.12 Action to Maintain
Tax-Exempt Status. The
Company will take such actions as shall be necessary or desirable, from time to
time and within its reasonable control, to cause all of the representations and
warranties in this Section to remain true and correct during such periods as
shall be necessary to maintain the exclusion of interest paid on the Bonds from
the gross income of the holders thereof for federal income tax purposes (other
than a holder who is a “substantial user” of the Project Facilities or a
“related person” as those terms are used in Section 147(a) of the Code and
Section 103(b)(13) of the 1954 Code), pursuant to the requirements of the
Code. The Company shall further comply in all respects with any
undertakings made by it with respect to the Bonds set forth in the Company’s Tax
Certificate.
Section
4.13 Nondiscrimination/Sexual
Harassment Clause. The
Company hereby accepts and agrees to be bound by the standard
Nondiscrimination/Sexual Harassment Clause set forth in Exhibit C attached
hereto. For purposes of such Nondiscrimination/Sexual Harassment
Clause, the parties hereto understand that (i) this Agreement is the “contract”
and (ii) there is no subcontractor for the performance of the Company’s
obligations under this Agreement.
V. Redemption
of Bonds
Section
5.1 Optional
Redemption. At
any time and from time to time, the Company may deliver or cause to be delivered
Loan Payments to the Trustee in addition to the scheduled Loan Payments required
to be made under Section 3.2 and direct the Trustee to use the Loan Payments so
delivered for the purpose of calling Bonds for optional or extraordinary
optional redemption in accordance with the applicable provisions of the
Indenture and redeeming such Bonds at the redemption price stated in the
Indenture. Such Loan Payments shall be held and applied as provided in Section
6.02 of the Indenture and delivery thereof shall not operate to xxxxx or
postpone Loan Payments otherwise becoming due or to alter or suspend any other
obligations of the Company under this Agreement. Whenever the Bonds
are subject to optional redemption pursuant to the Indenture, the Authority
will, but only upon direction of the Company, direct the Trustee to call the
same for redemption as provided in the Indenture.
Section
5.2 Mandatory
Redemption. The
Company shall deliver or cause to be delivered to the Trustee the moneys needed
to redeem the Bonds in accordance with the mandatory redemption provisions set
forth in the Bonds and the Indenture. Whenever the Bonds are subject
to mandatory redemption pursuant to the Indenture, the Company will cooperate
with the Authority and the Trustee in effecting such redemption.
Section
5.3
Actions by
Authority. At
the request of the Company or the Trustee, the Authority shall take all steps
required of it under the applicable provisions of the Indenture or the Bonds to
effect the redemption of all or a portion of the Bonds pursuant to this
Article.
VI. Events
Of Default And Remedies
Section
6.1 Events of
Default. Each
of the following shall be an Event of Default:
(a) Failure
by the Company to make or cause to be made any Loan Payment or Purchase
Payment which shall
have resulted in an Event of Default described in clause (a), (b) or (d) of
Section 11.01 of the Indenture;
(b) Failure
by the Company to observe and perform any covenant, condition or agreement on
its part to be observed or performed under this Agreement or the Note (other
than payment obligations on the Note) for a period of sixty (60) days after
written notice, specifying such failure and requesting that it be remedied,
given to the Company by the Trustee; provided, that if such failure is of such
nature that it can be corrected (as agreed to by the Trustee) but not within
such period, the same shall not constitute an Event of Default so long as the
Company institutes prompt corrective action and is diligently pursuing the same
and provided further, that if the Company is unable to institute corrective
action or to pursue the same because of circumstances beyond its control, the
same shall not constitute an Event of Default until such circumstances no longer
exist and then only after the Company has had an opportunity to remedy the same
as provided above;
(c) The
Company shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian or the like of itself or of its property, or
(ii) admit in writing its inability to pay its debts generally as they become
due, or (iii) make a general assignment for the benefit of creditors, or (iv) be
adjudicated a bankrupt or insolvent, or (v) commence a voluntary case under the
United States Bankruptcy Code, or file a voluntary petition or answer seeking
reorganization, an arrangement with creditors or an order for relief, or seeking
to take advantage of any insolvency law or file an answer admitting the material
allegations of a petition filed against it in any bankruptcy, reorganization, or
insolvency proceeding, or corporate action shall be taken by it for the purpose
of effecting any of the foregoing, or (vi) have instituted against it,
without the application, approval or consent of the Company, a proceeding in any
court of competent jurisdiction, under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking in respect of the
Company an order for relief or an adjudication in bankruptcy, reorganization,
dissolution, winding up, liquidation, a composition or arrangement with
creditors, a readjustment of debts, the appointment of a trustee, receiver,
liquidator or custodian or the like of the Company or of all or any substantial
part of their assets, or other like relief in respect thereof under any
bankruptcy or insolvency law, and the same shall (A) result in the entry of
an order for relief or any such adjudication or appointment or (B) remain
unvacated, undismissed and undischarged for a period of 90 days;
(d) For any
reason the Bonds are declared due and payable by acceleration in accordance with
Section 11.02 of the Indenture and such acceleration shall not have been
annulled; and
(e) The
acceleration of the maturity of the Senior Secured Bonds upon an occurrence of
an “Event of Default” (as defined under the Company Indenture).
The
declaration of an Event of Default under paragraph (d) above, and the exercise
of remedies upon any such declaration, shall be subject to any applicable
limitations of federal bankruptcy law affecting or precluding that declaration
or exercise during the pendency of or immediately following any bankruptcy,
liquidation or reorganization proceedings.
Section
6.2 Remedies on
Default.
(a) Whenever
an Event of Default shall have happened and be subsisting uncured, any one or
more of the following remedial steps may be taken:
(1) If
acceleration of the principal amount of the Bonds has been declared pursuant to
Section 11.02 of the Indenture, the Trustee, by notice in writing to the
Company, shall declare all Loan Payments and amounts due on the Note to be
immediately due and payable, whereupon the same shall become immediately due and
payable; and
(2) The
Authority or the Trustee may pursue any and all remedies now or hereafter
existing at law or in equity to collect all amounts then due and thereafter to
become due under this Agreement or to enforce the performance and observance of
any other obligation or agreement of the Company under this Agreement and the
Note.
(b) The
Company covenants that, in case it shall fail to pay or cause to be paid any
Loan Payments or Purchase Payments as and when the same shall become due and
payable whether at maturity or by acceleration or otherwise, then, upon demand
of the Trustee, the Company will pay to the Trustee the whole amount that then
shall have become due and payable hereunder; and, in addition thereto, such
further amounts as shall be sufficient to cover the reasonable costs and
expenses of collection, including a reasonable compensation to the Trustee, its
agents and counsel, and any expenses or liabilities incurred by the Authority or
the Trustee, including counsel fees and expenses. In case the Company
shall fail forthwith to pay such amounts upon such demand, the Trustee shall be
entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid.
(c) In case
there shall be pending proceedings for the bankruptcy or reorganization of the
Company under the federal bankruptcy laws or any other applicable law, or in
case a receiver or trustee shall have been appointed for the benefit of the
creditors or the property of the Company, the Trustee shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount due hereunder, including interest owing and
unpaid in respect thereof, and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee allowed in such judicial
proceedings relative to the Company, its creditors or its property, and to
collect and receive any moneys or other property payable or deliverable on any
such claims, and to distribute the same after the deduction of its charges and
expenses. Any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the Authority or
the Trustee, and to pay to the Authority or the Trustee any amount due it for
compensation and expenses, including counsel fees and expenses incurred by it up
to the date of such distribution.
(d) Notwithstanding
the foregoing, the Trustee shall not be obligated to take any step which in its
opinion will or might cause it to expend money or otherwise incur liability
unless and until a satisfactory indemnity bond has been furnished to the Trustee
at no cost or expense to the Trustee. Any amounts collected as Loan
Payments or applicable to Loan Payments and any other amounts which would be
applicable to payment of Debt Service collected pursuant to action taken under
this Section shall, after the deduction of the Trustee’s charges and expenses,
be paid into the Bond Fund and applied in accordance with the provisions of the
Indenture or, if the Outstanding Bonds have been paid and discharged in
accordance with the provisions of the Indenture, shall be paid as provided in
Section 6.02(e) of the Indenture for transfers of remaining amounts in the Bond
Fund.
(e) The
provisions of this Section are subject to the further limitation that the
annulment by the Trustee of its declaration pursuant to Section 11.02 of the
Indenture that all of the Bonds are immediately due and payable also shall
constitute an annulment of any corresponding declaration made pursuant to
Subsection 6.2(a)(1); provided that no such waiver or rescission shall extend to
or affect any subsequent or other default or impair any right consequent
thereon.
(f) If
a waiver of any event of default under the Senior Secured Bonds or any annulment
or rescission of any acceleration of Senior Secured Bonds occurs in accordance
with the provisions of the Company Indenture, such waiver, annulment or
rescission shall constitute an automatic waiver, annulment or rescission of the
Event of Default described in Section 6.1(d) hereof and an automatic annulment
and rescission of any resulting acceleration of the Note.
Section
6.3 Remedies Not
Exclusive. No
remedy conferred upon or reserved to the Authority or the Trustee by this
Agreement is intended to be exclusive of any other available remedy or remedies,
including without limitation the remedies provided in the Act, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement, or now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power accruing
upon any default shall impair that right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the
Authority or the Trustee to exercise any remedy reserved to it in this Article,
it shall not be necessary to give any notice, other than any notice required by
law or for which express provision is made herein.
Section
6.4 Payment of Legal Fees and
Expenses. If
an Event of Default should occur and the Authority, the Credit Facility Issuer
(if any) or the Trustee should incur expenses, including reasonable attorneys’
fees and expenses, in connection with the enforcement of this Agreement, the
Indenture, the Note or the collection of sums due hereunder or thereunder, the
Company shall reimburse the Authority, the Credit Facility Issuer (if any) and
the Trustee, as applicable, for the expenses so incurred, upon
demand.
Section
6.5 No
Waiver. No
failure by the Authority or the Trustee to insist upon the strict performance by
the Company of any provision hereof or of the Note shall constitute a waiver of
their right to strict performance and no express waiver shall be deemed to apply
to any other existing or subsequent right to remedy the failure by the Company
to observe or comply with any provision hereof. No failure by the
Company to observe and perform any of the covenants set forth in Section 4.2
hereof shall be waived by the Trustee without the written consent of the
Authority.
Section
6.6 Notice of
Default. The
Company shall immediately notify the Trustee and the Authority in writing if it
becomes aware of the occurrence of any Event of Default hereunder or of any
fact, condition or event which, with the giving of notice or passage of time or
both, would become an Event of Default.
VII. Miscellaneous
Section
7.1 Term of
Agreement. This
Agreement shall be and remain in full force and effect from the Issue Date until
such time as all of the Bonds shall have been fully paid (or provision made for
such payment) pursuant to the Indenture, the Indenture shall have been released
pursuant to Section 16.01 thereof, and all other sums payable by the
Company under this Agreement shall have been paid, except for obligations of the
Company under Section 3.4(c) and Section 4.10, which shall survive any
termination of this Agreement.
Section
7.2 Notices. All
notices, certificates, requests or other communications hereunder shall be in
writing and shall be deemed to be sufficiently given when mailed by registered
or certified mail, postage prepaid, sent by telecopier or nationally recognized
overnight courier or delivered in person and addressed or sent as
follows:
|
If
to the Company:
|
PPL
Electric Utilities Corporation
|
|
Xxx
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxxxxxxxx,
XX 00000
|
|
|
Telecopier
No.: 000-000-0000
|
|
|
Attention: Xxxxxxx
X. Xxxxxxxx
|
|
|
If
to the Authority:
|
Pennsylvania
Economic Development Financing Authority
|
|
Pa.
Department of Community and Economic Development
|
|
|
Commonwealth
Keystone Building
|
|
|
000
Xxxxx Xxxxxx, 0xx Xxxxx
|
|
|
Xxxxxxxxxx,
XX 00000
|
|
|
Telecopier
No.: 000-000-0000
|
|
|
If
to the Trustee:
|
The
Bank of New York Mellon Trust Company, N.A.
|
|
0000
Xxxxxx Xxxxxx, 00xx Xxxxx
|
|
|
Xxxxxxxxxxxx,
XX 00000
|
|
|
Telecopier
No.: 000-000-0000
|
|
|
Attention: Global
Corporate Trust
|
|
|
If
to the Remarketing Agent:
|
|
|
1221
Avenue of the Xxxxxxxx, 00xx
Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Telecopier
No.: 000-000-0000
|
|
|
Attention: Xxxx
Xxx Xxxxxxxx
|
The
Company, the Authority, the Trustee and the Remarketing Agent, by notice given
hereunder to the Persons listed above, may designate any further or different
addresses or telecopier numbers to which subsequent notices, certificates,
requests or other communications shall be sent.
Section
7.3
Limitation of Liability; No
Personal Liability. In
the exercise of the powers of the Authority or the Trustee hereunder or under
the Indenture, including without limitation the application of moneys and the
investment of funds, neither the Authority or the Trustee nor their members,
directors, officers, employees or agents shall be accountable to the Company for
any action taken or omitted by any of them in good faith and with the belief
that it is authorized or within the discretion or rights or powers
conferred. The Authority, the Trustee and their members, directors,
officers, employees and agents shall be protected in acting upon any paper or
document believed to be genuine, and any of them may conclusively rely upon the
advice of counsel and may (but need not) require further evidence of any fact or
matter before taking any action. In the event of any default by the
Authority hereunder, the liability of the Authority to the Company shall be
enforceable only out of the Authority’s interest under this Agreement and there
shall be no other recourse for damages by the Company against the Authority, its
members, directors, officers, attorneys, agents and employees, or any of the
property now or hereafter owned by it or them. All covenants,
obligations and agreements of the Authority contained in this Agreement or the
Indenture shall be effective to the extent authorized and permitted by
applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, director, officer, agent or employee of the Authority, and no official
executing the Bonds shall be liable personally on the Bonds or be subject to any
personal liability or accountability by reason of the issuance thereof or by
reason of the covenants, obligations or agreements of the Authority contained in
this Agreement or the Indenture.
Section
7.4
Binding
Effect. This
Agreement shall inure to the benefit of and shall be binding in accordance with
its terms upon the Authority, the Company and their respective successors and
assigns; provided that this Agreement may not be assigned by the Company (except
in connection with a sale or transfer of assets pursuant to Section 4.1 or in
compliance with Section 7.9) and may not be assigned by the Authority except to
the Trustee pursuant to the Indenture or by the Trustee to a successor Trustee,
or as otherwise may be necessary to enforce or secure payment of Debt
Service. This Agreement may be enforced only by the parties, their
assignees and others who may, by law, stand in their respective
places.
Section
7.5
Amendments. Except
as otherwise expressly provided in this Agreement or the Indenture, subsequent
to the issuance of the Bonds and unless and until all conditions provided for in
the Indenture for release of the Indenture are met, this Agreement may not be
effectively amended, modified or terminated except by an instrument in writing
signed by the Company and the Authority, consented to by the Trustee, and in
accordance with the provisions of Article XV of the Indenture as
applicable.
Section
7.6
Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same
instrument.
Section
7.7
Severability. If
any provision of this Agreement is determined by a court to be invalid or
unenforceable, such determination shall not affect any other provision hereof,
each of which shall be construed and enforced as if the invalid or unenforceable
portion were not contained herein. Such invalidity or
unenforceability shall not affect any valid and enforceable application thereof,
and each such provision shall be deemed to be effective, operative and entered
into in the manner and to the full extent permitted by applicable
law.
Section
7.8
Governing
Law. This
Agreement shall be deemed to be a contract made under the laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
Section
7.9
Assignment. Except as
otherwise provided in this Section 7.9, the Company shall not assign this
Agreement or any interest of the Company herein, either in whole or in part,
without the prior written consent of the Trustee, which consent shall be given
if the following conditions are fulfilled: (i) the assignee assumes
in writing all of the obligations of the Company hereunder; (ii) the assignee
provides the Trustee with an opinion of Counsel satisfactory to the Trustee to
the effect that neither the validity nor the enforceability of this Agreement
shall be adversely affected by such assignment; (iii) the Project Facilities
shall continue in the opinion of Bond Counsel to be a “project” as such term is
defined in the Act after such assignment; (iv) such assignment shall not, in the
opinion of Bond Counsel, have an adverse effect on the exclusion from gross
income for federal income tax purposes of interest on the Bonds; (v) the
assignee shall not be a Disqualified Contractor and shall provide a written
certification to such effect to the Trustee and the Authority; and (vi) if the
assignee is other than an Affiliate of the Company, consent by the Authority,
which consent shall not be unreasonably withheld. Subject to the
foregoing, the terms “Authority,” “Company,” “Trustee” and “Remarketing Agent”
shall, where the context requires, include the respective successors and assigns
of such persons.
Section
7.10
Receipt of
Indenture. The
Company hereby acknowledges that it has received an executed copy of the
Indenture and is familiar with its provisions, and agrees that it is subject to
and bound by the terms thereof (including the terms thereof relating to
obligations of the Company) and it will take all such actions as are required or
contemplated of it under the Indenture to preserve and protect the rights of the
Trustee and of the Bondholders thereunder and that it will not take any action
which would cause a default or Event of Default thereunder.
[Signatures
appear on following page]
IN
WITNESS WHEREOF, the Authority and the Company, intending to be legally bound,
have caused this Agreement to be duly executed in their respective names, all as
of the date first above written.
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[SEAL]
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PENNSYLVANIA
ECONOMIC
DEVELOPMENT
FINANCING
AUTHORITY
|
|
Attest:
/s/ Xxxxx X.
Xxxxxxxx
(Assistant
Secretary)
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|
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By
/s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx X.
Xxxxxx
Title: Executive
Director
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|
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PPL
ELECTRIC UTILITIES
CORPORATION
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|
|
By /s/ Xxxxx X.
Xxxx
Name: Xxxxx X.
Xxxx
Title: Treasurer
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EXHIBIT
A
[DESCRIPTION
OF ORIGINAL PROJECT FACILITIES TO BE ATTACHED]
EXHIBIT
B
PPL
ELECTRIC UTILITIES CORPORATION
POLLUTION
CONTROL FACILITIES NOTE
(PENNSYLVANIA
ECONOMIC DEVELOPMENT FINANCING AUTHORITY)
SERIES
2008
This Note
is issued pursuant to an Pollution Control Facilities Loan Agreement dated as of
October 1, 2008 (the “Agreement”) by and between the Pennsylvania Economic
Development Financing Authority (the “Authority”) and the Company (as
hereinafter defined) relating to the refunding of $90,000,000 principal amount
of Pollution Control Revenue Refunding Bonds, Series 2003 (PPL Electric
Utilities Corporation Project) (the “Prior Bonds”), issued by the Lehigh County
Industrial Development Authority for the purpose of refunding certain prior
bonds issued to finance the cost of certain air or water pollution control
facilities or sewage or solid waste disposal facilities (collectively, the
“Project Facilities”), on behalf of the Company, which was formerly known as
Pennsylvania Power & Light Company.
PPL
Electric Utilities Corporation (the “Company”), a Pennsylvania corporation, for
value received, unconditionally promises to pay to The Bank of New York Mellon
Trust Company, N.A., as Trustee (including its successors in such capacity, the
“Trustee”) under the Trust Indenture dated as of October 1, 2008 (as the same
may be amended and supplemented from time to time, the “Indenture”) between the
Trustee and the Authority, the principal sum of NINETY MILLION DOLLARS
($90,000,000) on October 1, 2023, and to pay (i) interest thereon from the date
hereof until the payment of such principal sum has been made or provided for at
a rate or rates at all times equal to the interest rate or rates from time to
time borne by the Authority’s Pollution Control Facilities Revenue Bonds, Series
2008 (PPL Electric Utilities Corporation Project) (the “Bonds”) and payable on
each date that interest is payable on the Bonds, and (ii) to the extent provided
by law, on overdue interest at the rate or rates borne by the Bonds; provided,
however, that the obligation of the Company to make any payment hereunder (a)
shall be reduced by the amount of any reduction under the Indenture of the
amount of the corresponding payment required to be made by the Authority of the
principal of or premium or interest on the Bonds and (b) if a Credit Facility is
in effect with respect to the Bonds, shall be deemed to have been satisfied to
the extent that moneys shall have been paid by a Credit Facility Issuer to the
Trustee for such payment in respect of the Bonds.
If the
Bonds become subject to redemption as provided therein and in the Indenture, the
Company shall, as provided in the Agreement, on or before the proposed
redemption date for the Bonds, pay to the Trustee the whole or appropriate
portion of the unpaid principal amount of this Note with interest accrued to the
proposed redemption date, together with such premium as is necessary to pay the
corresponding premium, if any, on the Bonds.
In order
to secure its obligations with respect to the payment of principal of and
interest on this Note, the Company has delivered to the Trustee its Senior
Secured Bonds, Variable Rate Pollution Control Series 2008 (the “Senior Secured
Bonds”). The Senior Secured Bonds are issued pursuant to Supplemental
Indenture No. 9 of the Company dated as of October 1, 2008, which supplements
the Indenture dated as of August 1, 2001 of the Company to JPMorgan Chase Bank,
as trustee (the “Company Indenture Trustee”), as supplemented (the “Company
Indenture”). As provided in the Company Indenture, under certain
circumstances, the lien of the Company Indenture may be released.
If, for
any reason, the amounts specified above are not sufficient to make corresponding
payments of principal of, premium, if any, and interest on, all of the Bonds,
when such payments are due, the Company shall pay as additional amounts due
hereunder, the amounts required from time to time to make up any such
deficiency. Whenever payment or provision for payment has been made
in respect of the principal or redemption price of, and interest on, all of the
Bonds in accordance with the Indenture, this Note shall be deemed paid in full
and shall be canceled and returned to the Company.
All
payments of principal, redemption price and interest shall be made to the
Trustee at its corporate trust office designated pursuant to the Indenture, in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private
debts. All payments shall be made in funds which will be available no
later than 10:00 a.m. on the applicable due date, and shall be in the full
amount required hereunder unless the Trustee notifies the Company that it is
entitled to a credit under the Agreement or the Indenture.
The
obligations of the Company to make the payments required hereunder shall be
absolute and unconditional without defense or setoff by reason of any cause or
circumstance whatsoever, including without limitation, any acts or circumstances
that may constitute failure of consideration, destruction of or damage to the
Project Facilities or the Plants, commercial frustration of purpose, or failure
of the Authority to perform and observe any agreement, whether express or
implied, or any duty, liability or obligation arising out of or connected with
the Agreement, it being the intention of the Company and the Authority that the
payments hereunder will be paid in full when and as due without any delay or
diminution whatsoever.
In case
one or more of the Events of Default specified in Section 6.1 of the Agreement
shall have occurred and be continuing, then and in each and every such case, the
Trustee, by notice in writing to the Company, may declare the unpaid balance of
this Note to be due and payable immediately, if concurrently with or prior to
such notice the unpaid principal amount of the Bonds has been declared to be due
and payable, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Note or in the Agreement to the
contrary notwithstanding. Notwithstanding the foregoing, if after any
declaration of acceleration hereunder there is an annulment of any declaration
of acceleration with respect to the Bonds, such annulment shall also
automatically constitute an annulment of any corresponding declaration under
this Note and a waiver and rescission of the consequences of such
declaration.
The
Company is entitled to a credit against its obligations under this Note and this
Note shall not be subject to required payment or prepayment to the extent that
amounts which would otherwise be payable by the Company hereunder are paid from
funds held by the Trustee under the Indenture and available for such payment
(including from payments by the Company on the Senior Secured
Bonds).
In case
the Trustee shall have proceeded to enforce its rights under this Note or the
Agreement and such proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Trustee, then and in every
such case the Company and the Trustee shall be restored to their respective
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceeding had been
taken, subject to any such adverse determination.
In case
the Company shall fail forthwith to pay all amounts due hereunder and under the
Agreement upon such demand, the Trustee shall be entitled and empowered to
institute any action or proceeding at law or in equity for the collection of the
sums so due and unpaid, and may prosecute any such action or proceeding to
judgment or final decree, and may enforce any such judgment or final decree
against the Company and collect, in the manner provided by law out of the
property of the Company, the moneys adjudged or decreed to be
payable.
This Note
shall be governed by and interpreted under the laws of the Commonwealth of
Pennsylvania.
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed and
delivered.
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Dated: as of ________________
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PPL
ELECTRIC UTILITIES CORPORATION
|
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By:
________________________________
Name:
Title:
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EXHIBIT
C
NONDISCRIMINATION/SEXUAL
HARASSMENT CLAUSE
During
the term of this contract, the Company agrees as to itself and each tenant of
the Project Facilities controlling, controlled by or under common control with
the Company (each of the Company and each such tenant, a “Contractor”) as
follows:
1. In
the hiring of any employee(s) for the manufacture of supplies, performance of
work, or any other activity required under the contract or any subcontract, the
Contractor, subcontractor, or any person acting on behalf of the Contractor or
subcontractor shall not, by reason of gender, race, creed, or color,
discriminate against any citizen of this Commonwealth who is qualified and
available to perform the work to which the employment relates.
2. Neither
the Contractor nor any subcontractor nor any person on their behalf shall in any
manner discriminate against or intimidate any employee involved in the
manufacture of supplies, the performance of work, or any other activity required
under the contract on account of gender, race, creed, or color.
3. Contractors
and subcontractors shall establish and maintain a written sexual harassment
policy and shall inform their employees of the policy. The policy
must contain a notice that sexual harassment will not be tolerated and employees
who practice it will be disciplined.
4. Contractors
shall not discriminate by reason of gender, race, creed, or color against any
subcontractor or supplier who is qualified to perform the work to which the
contracts relates.
5. The
Contractor and each subcontractor shall furnish all necessary employment
documents and records to and permit access to their books, records, and accounts
by the contracting agency and the Bureau of Contract Administration and Business
Development, for purposes of investigation, to ascertain compliance with
provisions of this Nondiscrimination/Sexual Harassment Clause. If the
Contractor or any subcontractor does not possess documents or records reflecting
the necessary information requested, the Contractor or subcontractor shall
furnish such information on reporting forms supplied by the contracting agency
or the Bureau of Contract Administration and Business Development.
6. The
Contractor shall include the provisions of this Nondiscrimination/Sexual
Harassment Clause in every subcontract so that such provisions will be binding
upon each subcontractor.
7. The
Commonwealth may cancel or terminate the contract, and all money due or to
become due under the contract may be forfeited for a violation of the terms and
conditions of this Nondiscrimination/Sexual Harassment Clause. In
addition, the agency may proceed with debarment or suspension and may place the
Contractor in the Contractor Responsibility File.
