SERIES 2008A EXEMPT FACILITIES LOAN AGREEMENT

Exhibit 10(w)-1

EXECUTION VERSION

SERIES 2008A EXEMPT FACILITIES LOAN AGREEMENT

Between

PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY

and

PPL ENERGY SUPPLY, LLC

Dated as of December 1, 2008

 

 

Table of Contents

Page           

SERIES 2008A EXEMPT FACILITIES LOAN AGREEMENT dated as of December 1, 2008 (the “Agreement”) between PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY (the “Authority”) and PPL ENERGY SUPPLY, LLC (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 Project Facilities (as defined herein) and the financing thereof by the Authority through the issuance of the Authority’s Exempt Facilities Revenue Bonds, Series 2008A (PPL Energy Supply, LLC Project) in the original aggregate principal amount of $100,000,000 (the “Bonds”) and the loan of the proceeds thereof to the Company to finance a portion of the costs of the installation of certain “pollution control facilities” (as defined in the Act) consisting of limestone forced-oxidation flue gas desulfurization systems (or sulfur dioxide scrubbers) at (i) the Montour County Generating Station, Washingtonville, Montour County, Pennsylvania, (ii) the Brunner Island Generating System, York Haven, York County, Pennsylvania and (iii) the Keystone Generating Station, Plum Creek Township, Armstrong County, Pennsylvania (collectively, the “Plants”), such facilities as more fully described in Exhibit A are herein called the “Project Facilities”.

 

The Bonds will be issued under a Series 2008A Trust Indenture dated as of the date hereof (the “Indenture”) between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).  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 Exempt Facilities Note (Pennsylvania Economic Development Financing Authority) Series 2008A in the principal amount of $100,000,000 (the “Note”) issued to the Trustee as the assignee of the Authority under the Indenture.  Nothing herein shall require the Company to maintain any Credit Facility (as defined in the Indenture).

 

The Authority and the Company intend that substantially all of the Project Facilities constitute or will constitute “pollution control facilities” for purposes of the Act and solid waste disposal facilities for the purposes of the Internal Revenue Code of 1986, as amended (the “Code”), so that interest on the Bonds will not be included in gross income of the holders thereof for federal income tax purposes under the Code (except for such holders who are “substantial users” of the Project Facilities or “related persons” as provided in Section 147(a) of the Code).

 

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 Exempt 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 any 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.

 

“Completion Date” means the date that the Company certifies to the Trustee and the Authority that the Project Facilities have been completed.

 

“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 December 19, 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 $100,000,000.

 

“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 implementation or operation of the Project Facilities in a manner which would cause the Project Facilities to not be a “project” as defined in the Act or the use of the proceeds of the Bonds for any purpose materially different from the Project Facilities as described to and approved by the Authority.

 

“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 December 5, 2008.

 

“Project Costs” means costs of the Project Facilities permitted under the Act, including, but not limited to, the following:

 

(a)           Costs incurred in connection with the acquisition, construction, installation, equipment or improvement of the Project Facilities, including costs incurred in respect of the Project Facilities for preliminary planning and studies; architectural, engineering, accounting, consulting, legal and other professional fees and expenses; labor, services and materials;

 

(b)           Fees, charges and expenses incurred in connection with the authorization, sale, issuance and delivery of the Bonds, including without limitation underwriting discount, printing expense, title insurance, recording fees and the initial and first year annual fees and expenses of the Trustee, Authority, Local Entity and Remarketing Agent; provided that the amount of the proceeds of the Bonds used to finance such issuance costs (but excluding the Authority’s Fee) shall not exceed 2% of the aggregate face amount of the Bonds within the meaning of Section 147(g) of the Code;

 

(c)           Payment of interest on the Bonds or other interim indebtedness of the Company incurred to pay Project Costs on an interim basis and fees and expenses of the Trustee and Remarketing Agent accruing prior to the Completion Date; and

 

(d)           Any other costs, expenses, fees and charges properly chargeable to the cost of acquisition, construction, installation, equipment or improvement of the Project Facilities.

 

“Purchase Payments” means the amounts required to be paid by the Company pursuant to Section 3.3.

 

“Rehabilitation Expenditure” shall mean a “rehabilitation expenditure” as such term is defined in Section 147(d)(3) of the Code, including, without limiting the generality of the foregoing, a capital expenditure incurred in connection with the rehabilitation of a building or structure which is part of the Project Facilities, if such expenditure is incurred by the Company, the seller of such building to the Company (if incurred pursuant to the sales contract between such seller and the Company) or a successor to the Company; provided, that:

 

(1)           if an integrated operation is contained in such building or structure before its acquisition by Company, expenditures incurred to rehabilitate existing equipment or to replace existing equipment with equipment having substantially the same function is treated as incurred in connection with the rehabilitation of such building or structure; and

 

(2)           notwithstanding the foregoing, the term “Rehabilitation Expenditure” does not include any expenditure:

 

 

 

 

 

 

 

“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 exercise remedies under Section 6.2, to be reimbursed for attorney’s fees and expenses under Section 6.4 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 2.2, 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 limited liability company duly formed and validly existing under the laws of the State of Delaware, is duly qualified to do business in the Commonwealth of Pennsylvania, and has requisite power and legal right to enter into this Agreement and perform its obligations hereunder.  The making and performance of this Agreement on the part of the Company have been duly authorized by all necessary limited liability company action.

 

(b)           The Project Facilities will abate, reduce, remediate or aid in the prevention, control, collection, treatment, disposal or monitoring of solid waste and other pollutants and will facilitate compliance with the environmental requirements of federal, state or local agencies exercising jurisdiction thereover.

 

(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 certificate of formation or Limited Liability Company Agreement, 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 and the Note have been duly authorized, 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, by general equitable proceedings (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)           The Project Facilities will promote the public purposes of the Act and will not cause, directly or indirectly, the removal, either in whole or in part, of a plant, facility or establishment from one area of the Commonwealth of Pennsylvania to another.  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)           Company (or its subsidiaries) have acquired or will acquire all permits and licenses including, without limitation, all required environmental permits or approvals, and has satisfied or will satisfy in all material respects other requirements necessary, for the acquisition, construction, installation and/or operation of the Project Facilities.  The Project Facilities are a project within the meaning of the Act and will be operated as such.

 

(h)           The Company presently intends to use or operate   or cause to be used or operated the Project Facilities in a manner consistent with the Act until the date on which the Bonds have been fully paid and knows of no reason why the Project Facilities will not be so used or operated.

 

(i)           The information furnished by the Company and used by the Authority in preparing the arbitrage certificate 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.

 

(j)           The proceeds of the Bonds will not exceed the Project Costs.

 

(k)           The costs of issuance financed with proceeds of the Bonds, including any underwriting discount on the sale of the Bonds, will not exceed 2% of the proceeds of the Bonds.

 

(l)           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 or any Related Person more than 60 days prior to April 15, 2005.

 

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 a portion of such Project Facilities are 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), and (iii) will constitute a project within the meaning of the Act.

 

(e)           The Authority has filed a Preliminary Allocation Request (“PAR”) for purposes of receiving an allocation of the tax-exempt bond authority of the Commonwealth of Pennsylvania and has received approval of the PAR from the Pennsylvania Department of Community and Economic Development (the “Department”), certifying approval of such allocation for the Project Facilities as required by Section 146 of the Code.  The Authority will simultaneously with the issuance of the Bonds deliver a Final Allocation Request to the Department to obtain a final confirmation of such allocation.

 

(f)           The Project Facilities have been approved (1) by the Local Entity, as required by the Act, (2) by the Pennsylvania Secretary of Community and Economic Development, as required by the Act, (3) 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 (4) by the Authority by adoption of the Resolutions, as required by the Act.

 

(g)            The Authority has not and will not pledge the income and revenues derived from this Agreement other than pursuant to and as set forth in the Indenture.

II.           The Project Facilities.

Section 2.1   Acquisition of Project Facilities .  The Company (which for purposes of this provision and all other provisions of this Agreement pertaining to the Company’s ownership and operation of the Project Facilities shall include the Company’s direct or indirect subsidiaries that own and operate the Project Facilities) (a) has acquired, constructed, installed and equipped, or will acquire construct, install and equip, the Project Facilities substantially in all material respects in accordance with the description thereof in Exhibit A attached hereto and applicable law, (b) has procured or caused to be procured or will procure or cause to be procured all permits and licenses necessary for the prosecution of any and all work on the Project Facilities, and (c) has paid or will pay when due all costs and expenses incurred in connection with such acquisition, construction, installation, equipping and improvement from funds made available therefor in accordance with this Agreement or otherwise.  It is understood that the Company (or one or more of such subsidiaries) owns or leases the Project Facilities and that any contracts made by the Company (or any such subsidiary, as the case may be) with respect thereto and any work to be done by the Company (or any such subsidiary) on the Project Facilities are made or done by the Company (or any such subsidiary) on its own behalf and not as agent or contractor for the Authority.

 

Section 2.2   Additions and Changes to Project Facilities .  Subject to the provisions of Sections 4.11 and 4.12, the Company may, at its option and at its own cost and expense, at any time and from time to time, revise the description of the Project Facilities in Exhibit A attached hereto and/or make such additions, deletions and changes to the Project Facilities as it, in its discretion, may deem to be desirable for its uses and purposes, provided that (i) any such additions and changes shall, when made, constitute part of the Project Facilities for purposes of this Agreement, (ii) the Company shall supplement the information contained in Exhibit A attached hereto by filing with the Authority and the Trustee such supplemental information as is necessary to reflect such additions, deletions and changes so that the Authority and the Trustee will be reasonably able to ascertain the nature and cost of the facilities included in the Project Facilities and covered by this Agreement, (iii) such additions, deletions and changes will not result in a Misuse of Bond Proceeds, and (iv) if an addition, deletion or change is substantial in relation to the Project Facilities, the Company shall have first obtained and filed with the Authority and the Trustee an opinion of Bond Counsel to the effect that such addition, deletion or change is authorized or permitted under the Act and will not adversely affect the exclusion from gross income of interest on the Bonds under the Code.  In any case, the Company shall obtain the Authority’s approval of any addition to the Project Facilities or any material changes to the proposed facilities or other material changes not generally described or contemplated in Exhibit A attached hereto on the date of delivery of this Agreement, which approval shall not be unreasonably withheld, and the Company shall delete any facilities from the Project Facilities if such deletion is necessary to avoid a Misuse of Bond Proceeds or to maintain the exclusion from gross income of interest on the Bonds under the Code.

 

Section 2.3   Issuance of Bonds; Application of Proceeds .  To provide funds to make the Loan for purposes of paying Project Costs, the Authority will issue the Bonds in the aggregate principal amount of $100,000,000.  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 deposit in the Project Fund (other than any accrued interest which shall be deposited in the Bond Fund) as provided in the Indenture.  Pending disbursement pursuant to Section 2.4, the proceeds of the Bonds so deposited in the Project Fund, together with any investment earnings thereon, shall constitute a part of the Trust Estate and shall be subject to the lien of the Indenture pursuant to the granting clauses therein as security for the obligations described in such granting clauses, and to such end the Company hereby grants to the Trustee as security for such obligations a security interest in all of the Company’s right, title and interest in and to the Project Fund.

 

Section 2.4   Disbursements from Project Fund .  Subject to the provisions below, disbursements from the Project Fund shall be made to reimburse or pay the Company, or any Person designated by the Company, for Project Costs.  The Company agrees that the sums so disbursed from the Project Fund will be used only for the payment of Project Costs, and will not be used for any other purpose.

 

Subject to Section 6.03 of the Indenture, any disbursements from the Project Fund for the payment of the Project Costs shall be made by the Trustee only upon the written order of an Authorized Representative of the Company delivered to the Trustee with a copy to the Credit Facility Issuer, if any.  Subject to Section 6.03 of the Indenture, each such written order shall be substantially in the form of the disbursement request attached hereto as Exhibit B and shall be consecutively numbered and accompanied by a statement in reasonable detail listing the Project Costs to be paid to any contractors, materialmen or suppliers or incurred by the Company for which it is to be reimbursed.  Any disbursement for any item which is inconsistent with the information statement filed by the Authority in connection with the issuance of the Bonds as required by Section 149(e) of the Code, shall be accompanied by an opinion of a Bond Counsel to the effect that such disbursement will not result in the interest on the Bonds becoming included in the gross income of the holders thereof for federal income tax purposes.   In case any contract provides for the retention by the Company of a portion of the contract price, there shall be paid from the Project Fund only the net amount remaining after deduction of any such portion, and only when that retained amount is due and payable, may it be paid from the Project Fund.

 

Section 2.5   Company Required to Pay Costs in Event Project Fund Insufficient .  If moneys in the Project Fund are not sufficient to reimburse the Company for all Project Costs, the Company will not be entitled to any reimbursement for excess expense from the Authority, the Trustee or any Bondholder; nor shall the Company be entitled to any abatement, diminution or postponement of the Loan Payments.

 

Section 2.6   Completion .  When the Company certifies to the Trustee and the Authority that the Project Facilities have been completed, any amount then remaining in the Project Fund shall be applied by the Trustee in accordance with the provisions of the Indenture.

 

Section 2.7   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) or the Project Fund 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 2.8   Rebate Fund .  The Company agrees to make such payments to the Trustee as are required of the Company under Section 6.05 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 deposit of the proceeds of the Bonds (net of any underwriting discount) in the Bond Fund and the Project Fund pursuant to Section 2.3.

 

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 C hereto, which shall be delivered concurrently with the delivery by the Authority of the Bonds.

 

(c)           Notwithstanding the foregoing, if a Credit Facility is then in effect and while such 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 in accordance with the terms of the Credit Facility.

 

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 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 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 the Company

Section 4.1   Maintenance of Existence .  So long as the Bonds are Outstanding, the Company will maintain its existence and 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 limited liability company, corporation or entity or permit one or more limited liability companies, corporations or entities to consolidate with or merge into it so long as (i) (A) the surviving, resulting or transferee limited liability company, corporation or entity, if other than the Company, (1) is s