Exhibit 4.20
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT is made as of this 18th day
of December, 2001, by and among PHILADELPHIA SUBURBAN WATER COMPANY, a
Pennsylvania corporation ("Borrower"), the several banks which are parties to
this Agreement (each a "Bank" and collectively, "Banks") and PNC BANK, NATIONAL
ASSOCIATION in its capacity as agent for Banks (in such capacity, "Agent").
BACKGROUND
A. Borrower, Agent and certain Banks are parties to a Credit Agreement,
dated as of December 22, 1999, as amended by a First Amendment to Credit
Agreement dated as of November 28, 2000 (as so amended, the "Credit Agreement"),
pursuant to which those Banks agreed to make revolving credit loans to Borrower
in an aggregate outstanding amount of up to $50,000,000 (the "Loans"). The Loans
are evidenced by Borrower's Revolving Credit Notes in the aggregate principal
face amount of $50,000,000 (the "Notes").
B. Borrower, Agent and Banks desire to increase the amount of the
facility by $20,000,000, increase the Commitment of Citizens Bank of
Pennsylvania (successor by assignment from Mellon Bank, N.A.) ("Citizens"), add
Fleet National Bank ("Fleet") as an additional Bank under the Credit Agreement,
modify certain covenants in the Credit Agreement and extend the Termination Date
of the facility, all on the terms and subject to the conditions herein set
forth.
NOW THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
AGREEMENT
1. Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.
2. Amendments to Credit Agreement. Effective on December 18, 2001 (the
"Effective Date") the Credit Agreement is hereby amended as follows:
(a) The definition of Termination Date in Section 1.1 is hereby amended
and restated to read in full as follows:
" "Termination Date": the earlier of (a) December 16, 2002 or
any later date to which the Termination Date shall have been
extended pursuant to subsection 2.8(d) hereof and (b) the date
the Commitments are terminated as provided herein."
(b) Subsection 6.2(vii) is hereby amended and restated to read in full
as follows:
"(vii) indebtedness to the Pennsylvania
Infrastructure Investment Authority for the purchase of
capital assets; and"
(c) The amount of the Total Commitment is hereby increased from
$50,000,000 to $70,000,000 and any references to "$50,000,000" in the Credit
Agreement shall be changed to "$70,000,000." $5,000,000 of such increase shall
be allocated to Citizens increasing its Commitment from $12,500,000 to
$17,500,000 and $15,000,000 of such increase shall become the Commitment of
Fleet upon its joinder as a party to the Credit Agreement as provided hereunder.
(d) To give effect to the increase in the Total Commitment, the joinder
of Fleet and the change in the Commitment of Citizens, Schedule I to the Credit
Agreement is hereby amended and replaced with Schedule I attached hereto.
3. Joinder of Fleet. Effective on the Effective Date, Fleet hereby
joins in and becomes a party to the Credit Agreement with a Commitment of
$15,000,000, agrees to be bound by the provisions of the Credit Agreement and
shall have the rights and obligations of a Bank thereunder and under any other
document issued in connection therewith. Fleet hereby makes and agrees to be
bound by all of the representations, warranties and agreements set forth in
Section 9.6(c) of the Agreement as if it were an assignee of its Commitment
under the provisions of Section 9.6.
4. Replacement and Additional Notes. Concurrently with the execution
and delivery of this Agreement, Borrower shall execute and deliver to Citizens a
replacement Revolving Credit Note in the face amount of $17,500,000 and to Fleet
a Revolving Credit Note in the face amount of $15,000,000 in each case in the
form of Exhibit B-2 attached to the Credit Agreement. Such replacement Revolving
Credit Note to Citizens shall evidence any outstanding Revolving Credit Loans
and upon receipt thereof the existing Revolving Credit Note to Citizens shall be
cancelled and returned to Borrower.
5. Adjusting Payments. Prior to the Effective Date Agent shall notify
each Bank as to the adjusting payments which will be required to be made to the
outstanding Revolving Credit Loans of each Bank in order to give effect to the
increase in the Total Commitment and the increase to and addition of the
individual Commitments of certain Banks pursuant to the provisions of Sections
2(c) and 3 above so that after such adjusting payments are made each Bank's
outstanding Revolving Credit Loans evidenced by such Bank's Revolving Credit
Note shall be in an amount equal to its Commitment Percentage of all outstanding
Revolving Credit Loans. On the Effective Date each Bank agrees to pay to the
other Banks the amounts, if any, specified by Agent in such notice.
6. Merger of Borrower. Borrower has advised Agent and Banks that on or
about December 31, 2001 Borrower and its Pennsylvania affiliates will merge with
and into Pennsylvania Suburban Water Company, a Pennsylvania corporation
("PSWC") and has requested that Banks consent to such merger (the "Merger").
Notwithstanding the provisions of Section 6.4, Banks hereby consent to the
Merger subject to compliance, to the satisfaction of Agent, with the following
terms and conditions: (a) the Merger occurs no later than March 31, 2002 and
after giving effect thereto PSWC (i) is and remains a wholly-owned subsidiary of
the Parent Company, (ii) has a senior secured indebtedness rating (the "Debt
Rating") from S&P of either AA- or A+ and (iii) shall have succeeded to and
assumed all of the rights, obligations and liabilities of Borrower under the
Credit Agreement and the Notes, (b) immediately after the Merger and after
giving effect thereto (assuming that pro forma adjustments are made to the
financial statements of Borrower reflecting the Merger) PSWC, as successor
Borrower, is in compliance with the Credit Agreement and no Default or Event of
Default shall be in existence or result from the Merger, and Borrower shall have
delivered to Agent a certificate of a Responsible Officer certifying to the
foregoing, (including detailed calculations demonstrating pro forma compliance
with all financial covenants), (c) if the Debt Rating of PSWC is A+, the
interest rate margin above the Eurodollar Rate for purposes of Section 2.6(b) of
the Credit Agreement shall be increased from twenty two and one-half basis
points (.225%) to thirty two and one-half basis points (.325%) effective as of
the effective date of the Merger, and (d) PSWC, as successor Borrower, shall, at
Agent's request, execute and deliver such filings, agreements, documents and
instruments as Agent shall have reasonably requested to evidence and confirm the
completion of the Merger consistent with the terms and conditions hereof,
including evidence from S&P of the Debt Rating of PSWC, and the succession of
PSWC as Borrower under the Credit Agreement and the Notes. Agent will provide
Banks with notice of the effective date of the Merger and with copies of each
such filing, agreement, document and instrument executed and/or delivered by
Borrower and/or Agent in compliance with this Section.
7. Loan Documents. Except where the context clearly requires otherwise,
all references to the Credit Agreement in any of the Loan Documents or any other
document delivered to Banks or Agent in connection therewith shall be to the
Credit Agreement as amended by this Agreement.
8. Borrower's Ratification. Borrower agrees that it has no defenses or
set-offs against Banks or Agent or their respective officers, directors,
employees, agents or attorneys, with respect to the Loan Documents, all of which
are in full force and effect, and that all of the terms and conditions of the
Loan Documents not inconsistent herewith shall remain in full force and effect
unless and until modified or amended in writing in accordance with their terms.
Borrower hereby ratifies and confirms its obligations under the Loan Documents
as amended hereby and agrees that the execution and delivery of this Agreement
does not in any way diminish or invalidate any of its obligations thereunder.
9. Representations and Warranties. Borrower hereby represents and
warrants to Agent and Banks that:
(a) Except as otherwise previously disclosed to Agent and Banks,
the representations and warranties made in the Credit Agreement, as amended by
this Agreement, are true and correct as of the date hereof;
(b) No Default or Event of Default under the Credit Agreement
exists on the date hereof; and
(c) This Agreement and the replacement and additional Revolving
Credit Notes have been duly authorized, executed and delivered so as to
constitute the legal, valid and binding obligations of Borrower, enforceable in
accordance with its terms.
All of the above representations and warranties shall survive the
making of this Agreement.
10. Conditions Precedent. The effectiveness of the amendments set forth
herein is subject to the fulfillment, to the satisfaction of Agent and its
counsel, of the following conditions precedent on or before the Effective Date:
(a) Borrower shall have delivered to Agent, with copies or
counterparts for each Bank as appropriate, the following, all of which shall be
in form and substance satisfactory to Agent and shall be duly completed and
executed:
(i) This Agreement;
(ii) The replacement Revolving Credit Note to Citizens and the
additional Revolving Credit Note to Fleet;
(iii) Copies, certified by the Secretary or an Assistant
Secretary of Borrower of resolutions of the board of
directors of Borrower in effect on the date hereof
authorizing the execution, delivery and performance of
this Agreement and the replacement and additional
Revolving Credit Notes and the other documents and
transactions contemplated hereby;
(iv) Copies, certified by its corporate secretary of the
articles of incorporation, certificate of formation, and
by-laws of Borrower as in effect, or a certificate stating
that there have been no changes to any such documents
since the most recent date, true and correct copies
thereof were delivered to Agent;
(v) Copies of the proposed terms and conditions of the Merger
as they exist on the date hereof; and
(vi) Such additional documents, certificates and information as
Agent or Banks may require pursuant to the terms hereof or
otherwise reasonably request.
(b) The representations and warranties set forth in the Credit
Agreement shall be true and correct on and as of the date hereof.
(c) No Default or Event of Default shall have occurred and be
continuing as of the date hereof.
(d) Borrower shall have paid to Agent for the benefit of Banks an
additional fee of $42,000 to be distributed to Banks pro rata in accordance with
their Commitments (after giving effect to the increase and adjustment in the
Commitments provided herein).
11. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the Loan
Documents and all other documents delivered to Agent and Banks in connection
therewith shall remain unaltered and in full force and effect except as modified
or amended hereby. To the extent that any term or provision of this Agreement is
or may be deemed expressly inconsistent with any term or provision in any Loan
Document or any other document executed in connection therewith, the terms and
provisions hereof shall control.
(b) The execution, delivery and effectiveness of this Agreement
shall neither operate as a waiver of any right, power or remedy of Agent or
Banks under any of the Loan Documents nor constitute a waiver of any Default or
Event of Default or default thereunder.
(c) In consideration of Agent's and Banks' agreement to amend the
existing credit facility, Borrower hereby waives and releases Agent and Banks
and their respective officers, attorneys, agents and employees from any
liability, suit, damage, claim, loss or expense of any kind or failure
whatsoever and howsoever arising that it ever had up until, or has as of, the
date of this Agreement.
(d) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(e) In the event any provisions of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
(f) This Agreement shall be governed by and construed according to
the laws of the Commonwealth of Pennsylvania.
(g) This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and assigns and may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
(h) The headings used in this Agreement are for convenience of
reference only, do not form a part of this Agreement and shall not affect in any
way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, Borrower, Agent and Banks have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
PHILADELPHIA SUBURBAN
WATER COMPANY
By: /s/ Xxxxx X. Xxxx
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Title: Vice President and Treasurer
PNC BANK, NATIONAL ASSOCIATION, as a
Bank and as Agent
By: /s/ Xxxxx Xxxxxxxx
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Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxx Xxxxxxxx
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Title:
CITIZENS BANK OF PENNSYLVANIA
(successor by assignment from Mellon Bank, N.A.)
By: /s/ Xxxx Xxxx
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Title:
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxx
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Title: Senior Vice President
