<-- Codes
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT is dated as of August 14, 1997, and
is made by and among PG Energy Inc., a Pennsylvania corporation
(the "Borrower"), the Banks (as hereinafter defined) and PNC Bank,
National Association, in its capacity as agent for the Banks under
this Agreement (hereinafter referred to in such capacity as the
"Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to make term
loans to the Borrower in an aggregate principal amount of Twenty-
Five Million Dollars ($25,000,000); and
WHEREAS, the Banks are willing to provide such term loans upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending
to be legally bound hereby, covenant and agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
<- tabs set here I.1Certain Definitions. In addition to words and
terms defined elsewhere in this Agreement, the following words and
terms shall have the following meanings, respectively, unless the
context hereof clearly requires otherwise:
Affiliate as to any person shall mean any other person
which directly or indirectly controls, is controlled by, or is
under common control with such person. Control, as used herein,
shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by
contract or otherwise, including the power to elect a majority of
the directors or trustees of a corporation or trust, as the case
may be.
Agent shall mean PNC Bank, National Association, a
national banking association, and its successors and assigns as
permitted hereunder.
Agent's Fee shall have the meaning assigned to that
term in Section 9.15 hereof.
Agreement shall mean this Term Loan Agreement as the
same may be supplemented or amended from time to time including all
schedules and exhibits hereto.
Assignment and Assumption Agreement shall mean an
Assignment and Assumption Agreement by and among the Borrower, a
Purchasing Bank, the Transferor Bank and the Agent substantially in
the form of Exhibit "D" hereto.
Authorized Officer shall mean those persons designated
by written notice to the Agent from the Borrower, authorized to
execute notices, reports and other documents required hereunder.
The Borrower may amend such list of persons from time to time by
giving written notice of such amendment to the Agent.
Banks shall mean the financial institutions named on
Schedule 1.1(a) hereto and their respective successors and assigns
as permitted hereunder, each of which is referred to herein as a
Bank.
Base Rate shall mean the greater of (i) the interest
rate per annum announced from time to time by the Agent at its
Principal Office as its then prime rate, which rate may not be the
lowest rate then being charged commercial borrowers by the Agent,
or (ii) the Federal Funds Effective Rate plus fifty (50) basis
points (1/2 of 1%) per annum.
Base Rate Option shall have the meaning assigned to
that term in Section 3.1(b)(i) of the Agreement.
Benefit Arrangement shall mean at any time an "employee
benefit plan", within the meaning of Section 3(3) of ERISA, which
is neither a Plan nor a Multiemployer Plan and which is maintained,
sponsored or otherwise contributed to, by any member of the ERISA
Group.
Borrower shall mean PG Energy Inc., a corporation
organized and existing under the laws of the Commonwealth of
Pennsylvania.
Borrowing Tranche shall mean (i) Term Loans to which a
Euro-Rate Option applies by reason of the selection of, conversion
to or renewal of such Interest Rate Option on the same day and
having the same Interest Period, and (ii) Term Loans to which the
Base Rate Option applies by reason of the selection of or
conversion to such Interest Rate Option.
Business Day shall mean (i) with respect to matters
relating to the Euro-Rate Option, a day on which banks in the
London interbank market are dealing in U.S. Dollar deposits and on
which commercial banks are open for domestic and international
business in Xxxxxx-Xxxxx, Pennsylvania, and (ii) with respect to
any other matter, a day on which commercial banks are open for
business in Xxxxxx-Xxxxx, Pennsylvania.
Capital Stock shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.
Capitalization shall mean the sum of Net Worth plus
Total Debt.
Cash Equivalents shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States
Government or any agency or instrumentality thereof having
maturities of not more than ninety (90) days from the date of
acquisition, (ii) time deposits and certificates of deposit with
maturities of not more than ninety (90) days from the date of
acquisition of any of the Banks or any domestic commercial bank
having capital and surplus in excess of Five Hundred Million
Dollars ($500,000,000), (iii) repurchase obligations with a term of
not more than thirty (30) days for underlying securities of the
types described in clauses (i) and (ii) entered into with any bank
meeting the qualifications specified in clause (ii) above, and (iv)
commercial paper maturing in one hundred eighty (180) days or less
rated not lower than A-1 by S&P or P-1 by Moody's on the date of
acquisition.
Closing Date shall mean the Business Day on which all
of the conditions set forth in Section 6.1 hereof shall have been
satisfied or waived in writing by the Agent, which shall be August
14, 1997 or such other date as the parties may agree. The closing
shall take place at 11:00 A.M., local time, on the Closing Date at
the offices of the Agent, 00 Xxxx Xxxxxx Xxxxxx, Xxxxxx-Xxxxx,
Pennsylvania, or at such other time and place as the parties agree.
Common Stock shall mean the common stock, no par value,
of the Borrower.
Dollar, Dollars, U.S. Dollars and the symbol $ shall
mean lawful money of the United States of America.
EBIT shall mean for any period the sum of the amounts
for such period of (i) net income of the Borrower before
extraordinary items, results of discontinued operations, and
dividends on Preferred Stock and (ii) income taxes of the Borrower
and Interest Expense, all as determined in accordance with GAAP.
Eligible Assignee means any of the following which has
been approved by the Borrower and the Agent, which approval shall
not be unreasonably withheld, it being understood that such
approval may be withheld if Borrower or Agent reasonably believes
that an assignment or sale of participations under Section 10.11
may result in a Prohibited Transaction (provided, however, that
approval by the Borrower shall not be required if an Event of
Default shall have occurred and be continuing): (i) a commercial
bank organized under the laws of the United States, or any State
thereof; (ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State
thereof; (iii) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such
country, provided that such bank is acting through a branch or
agency located in the United States; (iv) a commercial finance
company or finance subsidiary of a corporation organized under the
laws of the United States or any State thereof; and (v) an
insurance company organized under the laws of the United States or
any State thereof.
Environmental Complaint shall mean any written
complaint setting forth a cause of action for personal or property
damage or equitable relief, or any order, notice of violation or
citation issued pursuant to any Environmental Laws by an Official
Body or arising out of, or issued pursuant to, any Environmental
Laws or any Environmental Conditions.
Environmental Conditions shall mean any conditions of
the environment, including, without limitation, the work place, the
ocean, natural resources (including flora or fauna), soil, surface
water, ground water, any actual or potential drinking water supply
sources, substrata or the ambient air, relating to or arising out
of, or caused by the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping,
emptying, discharging, injecting, escaping, leaching, disposal,
dumping, threatened release or other management or mismanagement of
Regulated Substances resulting from the use of, or operations on,
the Property.
Environmental Laws shall mean all federal, state and
local laws and regulations, including permits, orders, judgments,
consent decrees issued, or entered into, pursuant thereto, relating
to pollution or protection of human health or the environment or
employee safety in the work place.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended or supplemented
from time to time, and any successor statute of similar import, and
the rules and regulations thereunder, as from time to time in
effect.
ERISA Group shall mean, at any time, the Borrower and
all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control and
all other entities which, together with the Borrower, are treated
as a single employer under Section 414 of the Internal Revenue
Code.
Euro-Rate shall mean, with respect to any Term Loans to
which the Euro-Rate Option applies for any Euro-Rate Interest
Period, the interest rate per annum determined by the Agent by
dividing (the resulting quotient rounded upward to the nearest
1/100 of 1% per annum) (i) the rate of interest determined by the
Agent in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the
rates of interest per annum for deposits in U.S. Dollars offered by
banks in the London interbank market to major money center banks at
approximately 11:00 A.M. London time two (2) Business Days prior to
the first day of each Euro-Rate Interest Period for delivery on the
first Business Day of such Euro-Rate Interest Period in amounts
comparable to the then outstanding aggregate principal amount of
the Term Loans and having maturities comparable to such Euro-Rate
Interest Period by (ii) a number equal to 1.00 minus the Euro-Rate
Reserve Percentage. The Euro-Rate may also be expressed by the
following formula:
[average of rates offered to ]
Euro-Rate = [major money center banks ]
[in the London interbank market ]
[as determined by Agent ]
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate
Option outstanding on the effective date of any change in the Euro-
Rate Reserve Percentage as of such effective date. The Agent shall
give prompt notice to the Borrower of the Euro-Rate as determined
or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.
Euro-Rate Interest Period shall have the meaning
assigned to that term in Section 3.2 hereof.
Euro-Rate Option shall have the meaning assigned to
that term in Section 3.1(b)(ii) hereof.
Euro-Rate Reserve Percentage shall mean for any day the
percentage (expressed as a decimal rounded upward to the nearest
1/100 of 1%) as determined by the Agent in accordance with its
usual procedures (which determination shall be conclusive absent
manifest error) which is in effect on such day as prescribed by the
Board of Governors of the Federal Reserve System (or any successor)
for determining the reserve requirements (including, without
limitation, supplemental, marginal and emergency reserve
requirements) for the Agent with respect to eurocurrency funding
(currently referred to as "Eurocurrency Liabilities").
Event of Default shall mean any of the Events of
Default described in Section 8.1 hereof.
Federal Funds Effective Rate shall mean for any day the
rate per annum (based on a year of three hundred sixty [360] days
and actual days elapsed and rounded upward to the nearest 1/100 of
1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates
on overnight Federal funds transactions arranged by Federal funds
brokers on the previous trading day, as computed and announced by
such Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and announces the
weighted average it refers to as the "Federal Funds Effective Rate"
as of the date of this Agreement; provided, if such Federal Reserve
Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal
Funds Effective Rate for the last day of which such rate was
announced.
First Mortgage Indenture shall mean the Indenture of
Mortgage and Deed of Trust dated March 15, 1946 from Scranton
Spring Brook Water Service Company (a predecessor to the Borrower)
to First Trust of New York, National Association, as Trustee, as
supplemented or amended from time to time.
Funding Date shall mean the Business Day on which the
Term Loans are made hereunder, which shall be designated by the
Borrower by written notice to the Agent at least one (1) Business
Day in advance (subject to Section 6.2(f) hereof), and which shall
be no later than thirty (30) days after the Closing Date, or such
later date as may be otherwise agreed by the Agent and the
Borrower.
GAAP shall mean generally accepted accounting
principles as are in effect from time to time, subject to the
provisions of Section 1.3 hereof, and applied on a consistent basis
(except for changes in application in which the Borrower's
independent certified public accountants concur) both as to
classification of items and amounts.
Guaranty or Guarantee means any obligation, direct or
indirect, by which a Person undertakes to guaranty, assume or
remain liable for the payment of another Person's obligations,
including but not limited to (i) endorsements of negotiable
instruments, (ii) discounts with recourse, (iii) agreements to pay
upon a second Person's failure to pay, (iv) agreements to maintain
the capital, working capital solvency or general financial
condition of a second Person and (v) agreements for the purchase or
other acquisition of products, materials, supplies or services, if
in any case payment therefor is to be made regardless of the non-
delivery of such products, materials or supplies or the non-
furnishing of such services.
Historical Statements shall have the meaning assigned
to that term in Section 5.1(i)(A) hereof.
Indebtedness shall mean as to any Person at any time,
any and all indebtedness, obligations or liabilities (whether
matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, or joint or several) of such
Person for or in respect of: (i) borrowed money, (ii) amounts
raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations under
any letter of credit, currency swap agreement, interest rate swap,
cap, collar or floor agreement or other interest rate management
device, (iv) any other transaction (including without limitation
forward sale or purchase agreements, capitalized leases and
conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade
payables and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note or other
evidence of indebtedness and which are not more than thirty (30)
days past due), or (v) any Guaranty of Indebtedness for borrowed
money.
Interest Expense shall mean for any period, the
aggregate amount of interest expense of the Borrower during such
period, including without limitation interest with respect to all
long-term and short-term Indebtedness of the Borrower, imputed
interest expense, other interest and amortization of debt expense,
all as determined in accordance with GAAP.
Interest Payment Date shall mean each date specified
for the payment of interest in Section 4.2 hereof.
Interest Rate Election shall have the meaning assigned
to that term in Section 3.1(c) hereof.
Interest Rate Option shall mean the Euro-Rate Option or
the Base Rate Option.
Internal Revenue Code shall mean the Internal Revenue
Code of 1986, as the same may be amended or supplemented from time
to time, and any successor statute of similar import, and the rules
and regulations thereunder, as from time to time in effect.
Labor Contracts shall have the meaning assigned to that
term in Section 5.1(r).
Law shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance,
opinion, release, ruling, order, injunction, writ, decree or award
of any Official Body.
Lien shall mean any mortgage, deed of trust, pledge,
lien, security interest, charge or other encumbrance or security
arrangement of any nature whatsoever, whether voluntarily or
involuntarily given, including but not limited to, any conditional
sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security
and any filed financing statement or other notice of any of the
foregoing (whether or not a lien or other encumbrance is created or
exists at the time of the filing).
Loan Documents shall mean this Agreement and the Notes,
as the same may be supplemented or amended from time to time in
accordance herewith or therewith, and Loan Document shall mean any
of the Loan Documents.
Material Adverse Change shall mean any set of
circumstances or events which (a) has or is reasonably likely to
have any material adverse effect whatsoever upon the validity or
enforceability of this Agreement or any other Loan Document, (b) is
or is reasonably likely to be material and adverse to the business,
properties, assets, financial condition or results of operations of
the Borrower, (c) impairs materially or is reasonably likely to
impair materially the ability of the Borrower to duly and
punctually pay or perform its obligations under the Loan Documents,
or (d) impairs materially or is reasonably likely to impair
materially the ability of the Agent or any of the Banks, to the
extent permitted, to enforce their legal remedies pursuant to this
Agreement or any other Loan Document.
Moody's shall mean Xxxxx'x Investors Service, Inc., a
corporation organized and existing under the laws of the State of
Delaware, its successors and assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed
to refer to any other nationally recognized securities rating
agency designated by the Agent, with the approval of the Borrower,
by notice to the Banks and the Borrower.
Multiemployer Plan shall mean any employee benefit plan
which is a "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA and to which the Borrower or any member of the
ERISA Group is then making or accruing an obligation to make
contributions or, within the preceding five plan years, has made or
had an obligation to make such contributions.
Multiple Employer Plans shall mean a Plan which has two
or more contributing sponsors (including the Borrower or any member
of the ERISA Group) at least two of whom are not under common
control, as such a plan is described in Sections 4063 and 4064 of
ERISA.
Net Worth means as of any date of determination, the
aggregate on such date of all amounts classified on the balance
sheet of the Borrower prepared in accordance with GAAP as in effect
on such date as (i) Common Shareholder's Investment, and (ii)
Preferred Stock of the Borrower.
Notes shall mean collectively all of, and Note shall
mean separately any of, the promissory notes of the Borrower
substantially in the form of Exhibit "A" hereto evidencing the Term
Loans together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof in whole or in
part.
Official Body shall mean any national, federal, state,
local or other government or political subdivision or any agency,
authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.
PBGC shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA
or any successor.
PEI means Pennsylvania Enterprises, Inc., a corporation
organized and existing under the laws of the Commonwealth of
Pennsylvania.
Permitted Liens shall mean:
(i) Liens for taxes,
assessments, or similar charges, incurred
in the ordinary course of business and
which are not yet due and payable, or if
due and payable, (aa) are being contested
in good faith and by appropriate and lawful
proceedings diligently conducted and (bb)
for which such reserves or other
appropriate provisions, if any, as shall be
required by GAAP shall have been made and
(cc) which shall be paid in accordance with
the terms of any final judgments or orders
relating thereto within thirty (30) days
after the entry of such judgments or
orders;
(ii) Pledges or
deposits (including liens, security
interests and mortgages securing letters of
credit issued for the account of Borrower)
made in the ordinary course of business to
secure payment of workmen's compensation,
or to participate in any fund in connection
with workmen's compensation, unemployment
insurance, old-age pensions or other social
security programs or to secure liability to
insurance carriers under insurance or self-
insurance agreements or arrangement;
(iii) Liens of
mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing
obligations incurred in the ordinary course
of business that are not yet due and
payable and Liens of landlords securing
obligations to pay lease payments that are
not yet due and payable or in default, or
if such Liens are due and payable, (aa) are
being contested in good faith and by
appropriate and lawful proceedings
diligently conducted and (bb) for which
such reserves or other appropriate
provisions, if any, as required by GAAP
shall have been made and (cc) which shall
be paid in accordance with the terms of any
final judgments or orders relating thereto
within thirty (30) days after the entry of
such judgments or orders;
(iv) Pledges or
deposits made in the ordinary course of
business to secure performance of bids,
tenders, contracts (other than for the
repayment of borrowed money) or leases, not
in excess of the aggregate amounts due
thereunder, or to secure statutory
obligations, or surety, appeal, indemnity,
performance or other similar bonds required
in the ordinary course of business;
(v) (aa) Encumbrances
consisting of zoning restrictions,
easements, rights-of-way, or other
restrictions on the use of real property,
(bb) defects in title to real property, and
(cc) Liens, encumbrances and title defects
affecting real property not known by
Borrower and not discoverable by a search
of the public records, none of which
materially impairs the use of such
property;
(vi) Liens, security
interests and mortgages in favor of the
Agent for the benefit of the Banks;
(vii) Liens in existence on
the Closing Date listed on Schedule 1.1(b);
(viii) Liens
created under the First Mortgage Indenture,
as such instrument may be supplemented or
amended from time to time;
(ix) Liens on assets
of corporations which are merged into or
acquired by the Borrower or a Subsidiary of
the Borrower after the date of this
Agreement; provided that (A) such Liens
existed at the time of such merger or
acquisition and were not created in
anticipation thereof, (B) no such Lien is
spread to cover any property or assets of
the Borrower or any Subsidiary of the
Borrower and (C) the principal amount of
Indebtedness secured thereby is not
increased from the amount outstanding
immediately prior to such merger or
acquisition;
(x) Liens upon real
and/or tangible personal property acquired
by purchase, construction or otherwise by
the Borrower or any of its Subsidiaries,
each of which Liens either (A) existed on
such property before the time of its
acquisition and was not created in
anticipation thereof or (B) was created
solely for the purpose of securing long-
term Indebtedness (or construction loans
not constituting long-term Indebtedness)
representing or incurred to finance,
refinance or refund, the cost (including
the cost of construction) of the respective
property; provided that no such Lien shall
extend to or cover any property of the
Borrower or any Subsidiary of the Borrower
other than the respective property so
acquired and improvements thereon;
(xi) Liens created by
or resulting from any litigation or legal
proceedings which are currently being
contested in good faith by appropriate and
lawful proceedings diligently conducted and
for which such reserves or other
appropriate provisions, if any, as shall be
required by GAAP shall have been made and
Liens arising out of judgments or orders
for the payment of money which do not
constitute an Event of Default hereunder;
(xii) Leases or
subleases not otherwise prohibited by this
Agreement; and
(xiii) Liens on the assets of
the Borrower and its Subsidiaries (not
otherwise permitted hereunder) which secure
obligations not exceeding five percent (5%)
of the Net Worth of the Borrower under GAAP
(measured on the last day of the most
recently completed fiscal quarter).
Person or person shall mean any individual,
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political
subdivision or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit
plan (including a Multiple Employer Plan but not a Multiemployer
Plan) which is covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained by any entity
which was at such time a member of the ERISA Group for employees of
any entity which was at such time a member of the ERISA Group.
PNC Bank shall mean PNC Bank, National Association, a
national banking association, and its successors and assigns.
Potential Event of Default shall mean any event or
condition which with notice, passage of time or a determination by
the Agent or the Required Banks, or any combination of the
foregoing, would constitute an Event of Default.
Preferred Stock shall mean the preferred stock, par
value $100 per share, of the Borrower, from time to time
outstanding (regardless of class or series).
Principal Office shall mean the principal commercial
banking office of the Agent in Xxxxxx-Xxxxx, Pennsylvania.
Prohibited Transaction shall mean any prohibited
transaction as defined in Section 4975 of the Internal Revenue Code
or Section 406 of ERISA for which neither a statutory, an
individual nor a class exemption has been issued by the United
States Department of Labor.
Property shall mean all real property, both owned and
leased, of the Borrower.
Purchasing Bank shall mean a Bank which becomes a party
to this Agreement by executing an Assignment and Assumption
Agreement.
Ratable Share shall mean the proportion that a Bank's
Term Loan bears to the Term Loans of all of the Banks,
respectively, in the aggregate.
Register has the meaning specified in Section 10.11(d).
Regulated Substances shall mean any substance, the
generation, manufacture, processing, distribution, treatment,
storage, disposal, transport, recycling, reclamation, use, reuse or
other management or mismanagement of which is regulated by the
Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as
promulgated by the Board of Governors of the Federal Reserve
System, as amended from time to time.
Reportable Event means a reportable event described in
Section 4043(b) of ERISA and regulations thereunder with respect to
a Plan or Multiemployer Plan other than those events as to which
the thirty (30) day notice period is waived under subsections .13,
.14, .15 (with respect to a partial termination), .16, .18, .19 or
.20 of PBGC Reg. 2615.
Required Banks shall mean two or more Banks whose Term
Loans outstanding aggregate at least 51% of the total principal
amount of the Term Loans outstanding hereunder.
Restricted Payment shall have the meaning assigned to
that term in Section 7.2(e) hereof.
SEC Reports shall have the meaning assigned to that
term in Section 5.1(g) hereof.
S&P shall mean Standard & Poors Corporation, a
corporation organized and existing under the laws of the State of
New York, its successors and assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to
refer to any other nationally recognized securities rating agency
designated by the Agent, with the approval of the Borrower, by
notice to the Banks and the Borrower.
Shares shall have the meaning assigned to that term in
Section 5.1(b) hereof.
Subsidiary of any person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or
number of votes) of the outstanding Capital Stock or shares of
beneficial interest normally entitled to vote for the election of
one or more directors or trustees (regardless of any contingency
which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such person or one or more of
such person's Subsidiaries, or any partnership of which such person
is a general partner or of which 50% or more of the partnership
interests is at the time directly or indirectly owned by such
person or one or more of such person's Subsidiaries, and (ii) any
corporation, trust, partnership or other entity which is controlled
or capable of being controlled by such person or one or more of
such person's Subsidiaries.
Term Loan Commitment shall mean as to any Bank at any
time, the amount set forth opposite its name on Schedule 1.1(a)
hereto in the column labeled "Amount of Term Loan Commitment," and
thereafter on Schedule I to the most recent Assignment and
Assumption Agreement.
Term Loans shall mean collectively all of, and Term
Loan shall mean separately any of, the Term Loans made by the Banks
or one of the Banks to the Borrower pursuant to Section 2.1 hereof.
Total Debt shall mean as of any date of determination,
all Indebtedness of the Borrower as of such date determined in
accordance with GAAP.
Transferor Bank shall mean the selling Bank pursuant to
an Assignment and Assumption Agreement.
Transfer Effective Notice shall have the meaning
ascribed to it in the applicable Assumption and Assignment
Agreement.
Utility Act shall mean the Public Utility Holding
Company Act of 1935, as amended or supplemented from time to time,
and any successor statute of similar import, as from time to time
in effect.
I.2 Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the
singular, the singular the plural and the part the whole, "or" has
the inclusive meaning represented by the phrase "and/or," and
"including" has the meaning represented by the phrase "including
without limitation." References in this Agreement to
"determination" of or by the Agent or the Banks shall be deemed to
include good faith estimates by the Agent or the Banks (in the case
of quantitative determinations) and good faith beliefs by the Agent
or the Banks (in the case of qualitative determinations). Whenever
the Agent or the Banks are granted the right herein to act in its
or their sole discretion or to grant or withhold consent such right
shall be exercised in good faith. The words "hereof," "herein,"
"hereunder" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this
Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or
affect the construction of this Agreement or the interpretation
thereof in any respect. Section, schedule and exhibit references
are to this Agreement unless otherwise specified.
I.3 Accounting Principles. Except as otherwise provided in
this Agreement, all computations and determinations as to
accounting or financial matters and all financial statements to be
delivered pursuant to this Agreement shall be made and prepared in
accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP.
ARTICLE II
TERM LOANS
II.1 Term Loans. Subject to the terms and conditions hereof
and relying upon the representations and warranties herein set
forth, each of the Banks severally agrees to make a term loan on
the Funding Date (the "Term Loan" of such Bank) to the Borrower in
the principal amount set forth opposite its name on Schedule
1.1(a). The obligations of each Bank hereunder are several. The
failure of any Bank to perform its obligations hereunder shall not
affect the obligations of the Borrower, or any other Bank, to any
other party nor shall the Borrower, or any other Bank, be liable
for the failure of such Bank to perform its obligations hereunder.
II.2 Use of Proceeds. The Borrower shall use the entire
proceeds of the Term Loans for the purpose of repaying existing
indebtedness of the Borrower.
II.3 Notes. The obligation of the Borrower to repay the
Term Loan made to it by each Bank, together with interest thereon,
shall be evidenced by a promissory note of the Borrower dated the
Funding Date in substantially the form attached hereto as Exhibit
"A", payable to the order of each Bank in a principal amount equal
to the Term Loan of such Bank.
II.4 Taxes. Each Bank that is not created or incorporated
under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Agent (i) two
duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case may be
(assuming that it is entitled to do so), and (ii) two duly
completed copies of Internal Revenue Service Form W-8 or W-9 or
successor applicable form. Each such Bank also agrees to deliver
to the Borrower and the Agent two further copies of the said Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms or
other manner of certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, and such extensions or
renewals thereof as may reasonably be requested by the Borrower or
the Agent, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form
with respect to it and such Bank so advises the Borrower and the
Agent. Such Bank shall certify (i) in the case of Form 1001 or
4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal
income taxes (assuming that it is entitled to do so) and (ii) in
the case of Form W-8 or W-9, that it is entitled to an exemption
from United States backup withholding tax.
ARTICLE III
INTEREST RATES
III.1 Interest Rate Options
(a) Selection of Interest Rate Options. The Borrower
shall pay interest in respect of the outstanding unpaid principal
amount of the Term Loans as selected by it from the Base Rate
Option or Euro-Rate Option set forth in Section 3.1(b) below
applicable to the Term Loans; it being understood that, subject to
the provisions of this Agreement, the Borrower may select different
Interest Rate Options and different Euro-Rate Interest Periods to
apply simultaneously to the Term Loans comprising different
Borrowing Tranches and may convert to or renew one or more Interest
Rate Options with respect to all or any portion of the Term Loans
comprising any Borrowing Tranche; provided that there shall not be
at any one time outstanding more than three (3) Borrowing Tranches
in the aggregate for all Term Loans outstanding. If at any time
the designated rate applicable to any Term Loan made by any Bank
exceeds such Bank's highest lawful rate, the rate of interest on
such Bank's Term Loan shall be limited to such Bank's highest
lawful rate.
(b) Term Loan Interest Rate Options. The Borrower
shall have the right to select from the following Interest Rate
Options applicable to the Term Loans:
(i) Base Rate
Option: A fluctuating rate per annum
(computed on the basis of a year of
three hundred sixty-five [365] or
three hundred sixty-six [366] days, as
the case may be, and actual days
elapsed) equal to the Base Rate, such
interest rate to change automatically
from time to time effective as of the
effective date of each change in the
Base Rate; or
(ii) Euro-Rate
Option: A rate per annum (computed on
the basis of a year of three hundred
sixty (360) days and actual days
elapsed) equal to the sum of (A) the
Euro-Rate, plus (B) (I) 60 basis
points for any day on which the long-
term senior secured debt of the
Borrower is rated (x) BBB- or lower by
S&P or (y) Baa3 or lower by Xxxxx'x,
(II) 42.5 basis points for any day on
which the long-term senior secured
debt of the Borrower is rated (x) BBB
by S&P or (y) Baa2 by Xxxxx'x, (III)
32.5 basis points for any day on which
the long-term senior secured debt of
the Borrower is rated BBB+ by S&P or
(y) Baa1 by Xxxxx'x, and (iv) 25 basis
points for any day on which the long-
term senior secured debt is rated (x)
A- by S&P or (y) A3 by Xxxxx'x; if the
Borrower's long-term senior debt
rating by S&P and Xxxxx'x are covered
by different subsections set forth
above, the interest rate under the
Euro-Rate Option shall be based upon
the lower number of basis points set
forth in such subsections (for
example, if the S&P rating is BBB and
the Xxxxx'x rating is Baa3, the
interest rate shall be equal to the
Euro-Rate plus 42.5 basis points)
(c) Rate Quotations. The Borrower may call the Agent
on or before the date on which the Borrower's election of a Euro-
Rate Option (the "Interest Rate Election") is to be delivered to
the Agent in order to receive an indication of the rates then in
effect, but it is acknowledged that such projection shall not be
binding on the Agent or the Banks nor affect the rate of interest
which thereafter is actually in effect when the election is made.
III.2 Euro-Rate Interest Periods. At any time when the
Borrower shall select or renew a Euro-Rate Option, the Borrower
shall notify the Agent thereof at least three (3) Business Days
prior to the effective date of such Euro-Rate Option, by delivering
an Interest Rate Election to the Agent. The Interest Rate Election
shall specify an interest period during which such Euro-Rate Option
shall apply for all Term Loans (the "Euro-Rate Interest Period"),
such period to be one (1), two (2), three (3) or six (6) months,
provided that:
(a) any Euro-Rate Interest Period which would
otherwise end on a date which is not a Business Day shall be
extended to the next succeeding Business Day unless such Business
Day falls in the next calendar month, in which case such Euro-Rate
Interest Period shall end on the next preceding Business Day;
(b) any Euro-Rate Interest Period which begins on the
last day of a calendar month for which there is no numerically
corresponding day in the subsequent calendar month during which
such Euro-Rate Interest Period is to end shall end on the last
Business Day of such subsequent month;
(c) the Borrower shall not select, convert to or renew
a Euro-Rate Interest Period for any part of the Term Loans that
would end after the maturity date of the Term Loans;
(d) in the case of the renewal of a Euro-Rate Option
at the end of a Euro-Rate Interest Period, the first day of the new
Euro-Rate Interest Period shall be the last day of the preceding
Euro-Rate Interest Period, without duplication in the payment of
interest for such day.
III.3 Interest After Default; Interest on Overdue Amount.
(a) Upon the occurrence of an Event of Default and
during any period in which an Event of Default exists (i) the
principal amount of all of the Term Loans to which the Base Rate
Option is applicable, whether or not the same have become due and
payable by maturity, acceleration, declaration or otherwise, shall
bear interest at a rate per annum which shall be two hundred (200)
basis points (2%) per annum above the rate otherwise in effect
under the Base Rate Option, such interest rate to change
automatically from time to time, effective as of the effective date
of each change in the Base Rate and (ii) the principal amount of
all or any part of the Term Loans to which the Euro-Rate Option is
applicable, whether or not the same have become due and payable by
maturity, acceleration, declaration or otherwise, shall bear
interest, until the end of the then current Euro-Rate Interest
Period, at a rate per annum which shall be two hundred (200) basis
points (2%) per annum above the rate otherwise in effect under the
Euro-Rate Option. At the end of the then current Euro-Rate
Interest Period, such part of the Term Loans bearing interest at
the Euro-Rate Option shall automatically be converted to the Base
Rate Option, and thereafter the interest rate shall be calculated
in accordance with clause (i) of this Section 3.3(a).
(b) If the Borrower fails to make any payment of
interest on the Term Loans when due, the Borrower shall, to the
extent permitted by applicable law, pay interest on the amount of
such overdue payment at a rate of interest equal to the Base Rate
for the first three (3) days following the due date and thereafter
at a rate of interest equal to the Base Rate plus two hundred (200)
basis points (2%); such interest shall be calculated from and
including the due date of such payment to but excluding the date of
payment of such amount in full, payable on demand.
(c) If the Borrower fails to make any payment of fees,
costs, expenses or indemnities when due under this Agreement, the
Borrower shall, to the extent permitted by applicable law, pay
interest on the amount of such overdue payment at a rate of
interest equal to the Base Rate plus two hundred (200) basis points
(2%); such interest shall be calculated from and including the
fourth (4th) day following the due date of such payment to but
excluding the date of payment of such amount in full, payable on
demand.
III.4 Euro-Rate Unascertainable.
(a) If on any date on which a Euro-Rate would
otherwise be determined, the Agent shall have determined (which
determination shall be conclusive absent manifest error) that:
(i) adequate and
reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) a
contingency has occurred which
materially and adversely affects the
London interbank market relating to
the Euro-Rate, or
(b) if at any time any Bank shall have determined
(which determination shall be conclusive absent manifest error)
that:
(i) the
maintenance of any Term Loan to which
a Euro-Rate Option applies has been
made impracticable or unlawful by
compliance by such Bank in good faith
with any Law or any interpretation or
application thereof by any Official
Body or with any request or directive
of any such Official Body (whether or
not having the force of Law), or
(ii) such Euro-
Rate Option will not adequately and
fairly reflect the cost to such Bank
of the establishment or maintenance of
any such Term Loan, or
(iii) after
making all reasonable efforts that
deposits of the relevant amount in
Dollars for the relevant Euro-Rate
Interest Period for a Term Loan to
which a Euro-Rate Option applies are
not available to such Bank at the
effective cost of funding a proposed
Euro-Rate loan, in the London
interbank market,
then, in the case of any event specified in subsection (a) above,
the Agent shall promptly so notify the Banks and the Borrower
thereof and in the case of an event specified in subsection (b)
above, such Bank shall promptly so notify the Agent and endorse a
certificate to such notice as to the specific circumstances of such
notice and the Agent shall promptly send copies of such notice and
certificate to the other Banks and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than
the date such notice is given) the obligation of (A) the Banks in
the case of such notice given by the Agent or (B) such Bank in the
case of such notice given by such Bank to allow the Borrower to
continue the Euro-Rate Option shall be suspended until the Agent
shall have later notified the Borrower or such Bank shall have
later notified the Agent, of the Agent's or such Bank's, as the
case may be, determination (which determination shall be conclusive
absent manifest error) that the circumstances giving rise to such
previous determination no longer exist. If at any time the Agent
makes a determination under subsection (a) or (b) of this Section
3.4 and the Borrower has previously notified the Agent of its
selection of a Euro-Rate Option and such Euro-Rate Option has not
yet gone into effect, such notification shall be deemed to provide
for selection of, conversion to or renewal of the Base Rate Option
otherwise available with respect to such Term Loans. If any Bank
notifies the Agent of a determination under subsection (b) of this
Section 3.4, the Borrower shall, subject to the Borrower's
indemnification obligations under Section 4.6(b), as to any Term
Loan of the Bank to which a Euro-Rate Option applies, on the date
specified in such notice either convert such Term Loan or prepay
such Term Loan in accordance with Section 4.5(A) hereof. Absent
due notice from the Borrower of conversion or prepayment such Term
Loan shall automatically be converted to the Base Rate Option
otherwise available with respect to such Term Loan upon such
specified date.
III.5 Failure to Select Euro-Rate Option. The Borrower shall
be deemed to have selected the Base Rate Option for any interest
period of the Term Loans during which the Euro-Rate Option shall
not apply under Section 3.2. If an Event of Default shall occur
and be continuing, the Borrower may not select or renew the Euro-
Rate Option.
ARTICLE IV
PAYMENTS
IV.1 Principal Payment Date. The outstanding unpaid
principal amount of the Term Loans shall be due and payable in full
on August 14, 2002.
IV.2 Interest Payment Dates. Interest on Term Loans to
which the Base Rate Option applies shall be due and payable in
arrears on the first Business Day of each January, April, July and
October after the date hereof and on maturity or upon acceleration
of the Notes. Interest on Term Loans to which a Euro-Rate Option
applies shall be due and payable (a) as to any such Term Loan
having an Euro-Rate Interest Period of three (3) months or less,
the last day of such Euro-Rate Interest Period, (b) as to any such
Term Loan having an Interest Period longer than three (3) months,
the day which is (i) three (3) months after the first day of such
Euro-Rate Interest Period and (ii) the last day of such Euro-Rate
Interest Period, and (c) if the payment of the Notes is
accelerated, the date of the acceleration of the Notes. After the
maturity of the Term Loans, whether by acceleration or otherwise,
interest on the Term Loans shall be payable on demand.
IV.3 Payments. All payments and prepayments to be made in
respect of principal, interest, Agent's Fee or other fees or
amounts due from the Borrower hereunder shall be payable prior to
11:00 A.M. (Xxxxxx-Xxxxx, PA time) on the date when due without
presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by the Borrower, and without setoff,
counterclaim or other deduction of any nature, and an action
therefor shall immediately accrue. Such payments shall be made to
the Agent at the Principal Office for the ratable accounts of the
Banks with respect to the Term Loans in Dollars and in immediately
available funds, and the Agent shall promptly distribute such
amounts to the Banks in immediately available funds, provided that
in the event payments are received by 11:00 A.M. (Xxxxxx-Xxxxx, PA
time) by the Agent with respect to the Term Loans and such payments
are not distributed to the Banks on the same day received by the
Agent, the Agent shall pay the Banks the Federal Funds Effective
Rate with respect to the amount of such payments for each day held
by the Agent and not distributed to the Banks. The Agent's and each
Bank's statement of account, ledger or other relevant record shall,
in the absence of manifest error, be conclusive as the statement of
the amount of principal of and interest on the Term Loans and other
amounts owing under this Agreement and shall be deemed an "account
stated."
IV.4 Pro Rata Treatment of Banks. Each selection of,
conversion to or renewal of any Interest Rate Option and each
payment or prepayment by the Borrower with respect to principal,
interest or other fees or amounts due from the Borrower hereunder
to the Banks with respect to the Term Loans, shall (except as
provided in Section 3.4(b), 4.5(A)(b) or 4.6(a) hereof) be made in
proportion to the Term Loans outstanding from each Bank.
IV.5 (A) Voluntary Prepayments.
(a) The Borrower shall have the right at its option
from time to time to prepay the Term Loans in whole or part without
premium or penalty (provided, however, that a premium or penalty
will be payable to the extent provided in subsection (b) below or
in Section 4.6 hereof ):
(i) at any time
with respect to any Term Loan to which
the Base Rate Option applies,
(ii) on the last
day of the applicable Euro-Rate
Interest Period with respect to Term
Loans to which a Euro-Rate Option
applies,
(iii) on the
date specified in a notice by any
Bank pursuant to Section 3.4(b) hereof
with respect to any Term Loan to which
a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Term Loans,
it shall provide a prepayment notice to the Agent at least one (1)
Business Day prior to the date of prepayment of Term Loans setting
forth the following information:
(y) the date, which shall be a
Business Day, on which the proposed
prepayment is to be made; and
(z) the total principal amount
of such prepayment, which shall not be
less than One Hundred Thousand Dollars
($100,000).
All prepayment notices shall be irrevocable. The principal amount
of the Term Loans for which a prepayment notice is given, together
with interest on such principal amount except with respect to Term
Loans to which the Base Rate Option applies, shall be due and
payable on the date specified in such prepayment notice as the date
on which the proposed prepayment is to be made.
(b) In the event any Bank (i) gives notice under
Section 3.4(b) or Section 4.6(a) hereof, or (ii) does not approve
any action as to which consent of the Required Banks is requested
by the Borrower and obtained hereunder, the Borrower shall have the
right, upon seven (7) days' written notice to the Agent, to prepay
the Term Loans of such Bank in whole together with all interest
accrued thereon, within ninety (90) days after (y) receipt of such
Bank's notice under Section 3.4(b) or 4.6(a), or (z) the date of
obtaining the consent which such Bank has not approved, as
applicable, provided the Borrower shall also pay to such Bank at
the time of such prepayment any amounts required under Section 4.6.
(B) Mandatory Prepayments. Within five (5) days after
the occurrence of either of the following events, the Borrower
shall notify the Agent and the Banks in writing of such occurrence.
Upon request of the Required Banks made within thirty (30) days
after the Agent receives the notice to be provided pursuant to the
preceding sentence, the Borrower shall, within thirty (30) days
after receipt of the request of the Required Banks, prepay the Term
Loans, together with all interest thereon, and fees due, in full,
without premium or penalty (provided, however, that a premium or
penalty will be payable to the extent provided in Section 4.6
hereof):
(i) any person
or group of persons (within the
meaning of Sections 13(a) or 14(a) of
the Securities Exchange Act of 1934,
as amended) shall have acquired
beneficial ownership of (within the
meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission
under said Act) twenty percent (20%)
or more of the shares of stock of PEI
whose holders are entitled under
ordinary circumstances to vote for the
election of directors of Borrower
(irrespective of whether, at the time,
stock of any other class or classes
shall have or might have voting power
by reason of the happening of any
contingency); or
(ii) during any
period of twelve (12) consecutive
months, individuals who at the
beginning of such period constituted
the PEI board of directors (together
with any new directors whose election
by the PEI board of directors or whose
nomination for election by PEI's
shareholders was approved by a vote of
at least two-thirds of the directors
then still in office who either were
directors at the beginning of such
period or whose election or nomination
for election was previously so
approved) cease for any reason to
constitute a majority of the directors
then in office.
The Borrower shall notify the Agent in writing at least one (1)
Business Day prior to the date (which shall be a Business Day) on
which the prepayment will be made.
IV.6 Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc. If,
after the date hereof, any Law, guideline or interpretation or any
change in any Law, guideline or interpretation or application
thereof by any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive
(whether or not having the force of law) of any central bank or
other Official Body:
(i) subjects any
Bank to any tax or changes the basis
of taxation with respect to this
Agreement, the Notes, the Term Loans
or payments by the Borrower of
principal, interest, fees, or other
amounts due from the Borrower
hereunder or under the Notes (except
for franchise taxes and taxes on the
overall net income of such Bank),
(ii) imposes,
modifies or deems applicable any
reserve, special deposit or similar
requirement (excluding any reserve
requirement included in any applicable
Euro-Rate Reserve Percentage) against
credits or commitments to extend
credit extended by, or assets (funded
or contingent) of, deposits with or
for the account of, or other
acquisitions of funds by, any Bank, or
(iii)
imposes, modifies or deems applicable
any capital adequacy or similar
requirement (A) against assets (funded
or contingent) of, or letters of
credit, other credits or commitments
to extend credit extended by, any
Bank, or (B) otherwise applicable to
the obligations of any Bank under this
Agreement,
and the result of any of the foregoing is to increase the cost to,
reduce the income receivable by, or impose any expense (including
loss of margin) upon any Bank with respect to this Agreement, the
Notes or the making, maintenance or funding of any part of the Term
Loans (or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of return on
any Bank's capital, taking into consideration such Bank's customary
policies with respect to capital adequacy) by an amount which such
Bank deems to be material, such Bank shall from time to time notify
the Borrower and the Agent of the amount determined in good faith
(using any averaging and attribution methods employed in good
faith) by such Bank (which determination shall be conclusive absent
manifest error) to be necessary to compensate such Bank for such
increase in cost, reduction of income or additional expense. Such
notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the
Borrower to such Bank ten (10) Business Days after such notice is
given.
(b) Indemnity. In addition to the compensation
required by subsection (a) of this Section 4.6, the Borrower shall
indemnify each Bank against all liabilities, losses or expenses
(including loss of margin, any loss or expense incurred in
liquidating or employing deposits from third parties and any loss
or expense incurred in connection with funds acquired by a Bank to
fund or maintain Term Loans subject to the Euro-Rate Option) which
such Bank sustains or incurs as a consequence of any
(i) payment,
prepayment or conversion of any Term
Loan to which the Euro-Rate Option
applies on a day other than the last
day of the corresponding Euro-Rate
Interest Period (whether or not such
payment or prepayment is mandatory,
voluntary or automatic and whether or
not such payment or prepayment is then
due),
(ii) attempt by
the Borrower to revoke (expressly, by
later inconsistent notices or
otherwise) in whole or part any notice
relating to prepayments under Section
4.5, or
(iii) default
by the Borrower in the payment of any
principal of, or interest on, any Term
Loan when due (whether by acceleration
or otherwise).
If any Bank sustains or incurs any such loss or expense
it shall from time to time notify the Borrower of the amount
determined in good faith by such Bank (which determination shall be
conclusive absent manifest error and may include such assumptions,
allocations of costs and expenses and averaging or attribution
methods as such Bank shall deem reasonable) to be necessary to
indemnify such Bank for such loss or expense. Such notice shall
set forth in reasonable detail the basis for such determination.
Such amount shall be due and payable by the Borrower to such Bank
within ten (10) Business Days after such notice is given.
IV.7 Loan Accounts. Each Bank shall open and maintain on
its books a loan account in the Borrower's name with respect to
Term Loans made, repayments, prepayments, the computation and
payment of interest, fees and other amounts due and sums paid to
such Bank hereunder. Such loan account shall be conclusive and
binding on the Borrower as to the amount at any time due to such
Bank from the Borrower, except in the case of manifest error. Each
Bank shall make available at the request of the Borrower on no more
frequently than a calendar quarterly basis a copy of each such loan
account. The failure of any Bank to maintain such loan account
shall not impair any of the obligations of the Borrower under the
Loan Documents.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
V.1 Representations and Warranties. The Borrower
represents and warrants to the Agent and each of the Banks as
follows:
(a) Organization and Qualification. The Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania; the Borrower
has the lawful power to own or lease its properties and to engage
in the business it presently conducts or proposes to conduct; and
the Borrower is duly licensed or qualified and in good standing in
all other jurisdictions where the property owned or leased by it or
the nature of the business transacted by it or both makes such
licensing or qualification necessary (except for jurisdictions in
which such failure to be so licensed or qualified is not reasonably
likely to result in a Material Adverse Change).
(b) Capitalization and Ownership. As of the Closing
Date, the authorized Capital Stock of the Borrower consists of ten
million (10,000,000) shares of Common Stock of which three million
three hundred fourteen thousand one hundred fifty-five (3,314,155)
shares are issued and outstanding, and nine hundred ninety-seven
thousand and five hundred (997,500) shares of Preferred Stock of
which one hundred seventy-two thousand three hundred eighty-six
(172,386) shares are issued and outstanding (the foregoing issued
and outstanding Capital Stock of the Borrower is referred to herein
collectively as the "Shares"). PEI owns all of the issued and
outstanding Common Stock of the Borrower and such stock is not
pledged to any other Person. All of the Shares have been validly
issued and are fully paid and nonassessable. There are no options,
warrants or other rights outstanding to purchase any shares of
Common Stock.
(c) Subsidiaries. None of the Subsidiaries of
Borrower is a "significant subsidiary" as such term is defined in
Rule 1-02(v) of Regulation S-X promulgated by the Securities and
Exchange Commission.
(d) Power and Authority. The Borrower has full
corporate power and corporate authority to enter into, execute,
deliver and carry out this Agreement and the other Loan Documents
to which it is a party, to incur the Indebtedness contemplated by
the Loan Documents and to perform its obligations under the Loan
Documents to which it is a party and all such actions have been
duly authorized by all necessary corporate proceedings on its part.
(e) Validity and Binding Effect. This Agreement has
been and each other Loan Document, when duly executed and delivered
by the Borrower, will have been duly and validly executed and
delivered by the Borrower. This Agreement and each of the other
Loan Documents delivered by the Borrower pursuant to the provisions
hereof will constitute legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
respective terms, except to the extent that enforceability of any
of the foregoing Loan Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or
limiting the right of specific performance and by general equitable
principles.
(f) No Conflict. Neither the execution and delivery
of this Agreement or the other Loan Documents by the Borrower nor
the consummation of the transactions herein or therein contemplated
or compliance with the terms and provisions hereof or thereof by
Borrower will conflict with, constitute a default under or result
in any breach of (i) the terms and conditions of the articles of
incorporation, by-laws or other organizational documents of the
Borrower or (ii) any Law or any material agreement or instrument or
order, writ, judgment, injunction or decree to which the Borrower
is a party or by which it is bound or to which it is subject, or
result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter
acquired) of the Borrower.
(g) Litigation. Except as set forth on Schedule
5.1(g) and except as disclosed in Borrower's or PEI's Form 10-K for
the fiscal year ended December 31, 1996, or Form 10-Q for the
quarter ended June 30, 1997 (such reports are collectively referred
to herein as "SEC Reports"), submitted to the Securities and
Exchange Commission, there are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Borrower,
threatened against PEI, the Borrower or any of their respective
Subsidiaries at law or equity before any Official Body which
individually or in the aggregate is reasonably likely to result in
any Material Adverse Change. Neither PEI, the Borrower nor any of
their respective Subsidiaries is in violation of any order, writ,
injunction or any decree of any Official Body which is reasonably
likely to result in any Material Adverse Change, except as
disclosed in the SEC Reports or on Schedule 5.1(g).
(h) Title to Properties. The Borrower and each of its
Subsidiaries have good title to, or a valid leasehold interest in,
all their respective real and tangible personal property, except to
the extent the failure to have such title or leasehold interests is
not reasonably likely, individually or in the aggregate, to result
in a Material Adverse Change, and none of such property is subject
to any Liens except Permitted Liens.
(i) Financial Statements.
(A) Historical Statements. The Borrower has
delivered to the Agent copies of (x) the audited consolidated year-
end financial statements of PEI and its Subsidiaries and (y) the
audited year-end financial statements of the Borrower for and as of
the end of the fiscal year ended December 31, 1996 (the "Historical
Statements"). The Historical Statements were compiled from the
books and records maintained by PEI's and Borrower's management,
present fairly in all material respects (x) the consolidated
financial condition of PEI and its Subsidiaries and (y) the
financial condition of the Borrower as of their date and the
results of operations for the fiscal period then ended and have
been prepared in accordance with GAAP consistently applied.
(B) Absence of any Material Adverse Change.
Since June 30, 1997, no Material Adverse Change has occurred,
except as disclosed in the SEC Reports.
(j) Margin Stock. Neither the Borrower nor any
Subsidiary of Borrower engages or intends to engage principally, or
as one of its important activities, in the business of extending
credit for the purpose, immediately, incidentally or ultimately, of
purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Term Loan has been
or will be used, immediately, incidentally or ultimately, to
purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock or to
refund Indebtedness originally incurred for such purpose, or for
any purpose which entails a violation of or which is inconsistent
with the provisions of the regulations of the Board of Governors of
the Federal Reserve System. Neither the Borrower nor any of its
Subsidiaries holds or intends to hold margin stock in such amounts
that more than 25% of the reasonable value of the assets of the
Borrower or any of its Subsidiaries are or will be represented by
margin stock.
(k) Taxes. All federal, state, local and other tax
returns required to have been filed with respect to PEI, the
Borrower or any Subsidiary of Borrower have been filed and payment
or adequate provision has been made for the payment of all taxes,
fees, assessments and other governmental charges which have or may
become due pursuant to said returns or to assessments received
except to the extent that such taxes, fees, assessments and other
charges are being contested in good faith by appropriate
proceedings diligently conducted and for which such reserves or
other appropriate provisions, if any, as shall be required by GAAP
shall have been made. There are no agreements or waivers extending
the statutory period of limitations applicable to any consolidated
federal income tax return of PEI for any period.
(l) Consents and Approvals. No consent, approval,
exemption, order or authorization of, or a registration or filing
with any Official Body or any other person is required to be
obtained or made by PEI or Borrower under any Law or any agreement
in connection with the execution, delivery and carrying out of this
Agreement and the other Loan Documents by the Borrower, except as
listed on Schedule 5.1(l) attached hereto, all of which shall have
been obtained or made on or prior to the Closing Date, and except
ordinary disclosures in filings required to be made by PEI or the
Borrower pursuant to the disclosure requirements of the Securities
Act of 1933 and the Securities Exchange Act of 1934, none of which
disclosures is required to be made prior to the execution and
delivery of this Agreement and the other Loan Documents.
(m) No Event of Default; Compliance with Instruments.
No event has occurred and is continuing and no condition exists or
will exist after giving effect to the borrowings to be made on the
Funding Date under the Loan Documents which constitutes an Event of
Default or Potential Event of Default. Neither the Borrower nor
any of its Subsidiaries is in violation of (i) any term of its
articles of incorporation, by-laws, or other organizational
documents or (ii) any material agreement or instrument to which it
is a party or by which it or any of its properties may be subject
or bound, where such violation would constitute a Material Adverse
Change; all such material agreements and instruments are valid,
binding and enforceable upon the Borrower or any of its
Subsidiaries and, to the Borrower's knowledge, upon each of the
other parties thereto, in accordance with their respective terms,
except where the failure to be valid, binding and enforceable would
not constitute a Material Adverse Change, and there is no default
thereunder by Borrower or any of its Subsidiaries and, to the
Borrower's knowledge, by any other party thereto, except where any
such default would not constitute a Material Adverse Change.
(n) Insurance. There are in full force and effect for
the benefit of the Borrower and each of its Subsidiaries insurance
policies and bonds providing adequate coverage from (to the
knowledge of Borrower) reputable and financially sound insurers in
amounts sufficient to insure the assets and risks of the Borrower
and its Subsidiaries in accordance with prudent business practice
in the industry of the Borrower and its Subsidiaries. No notice
has been given or claim made and to the knowledge of Borrower, no
grounds exist, to cancel or void any of such policies or bonds or
to reduce the coverage provided thereby, except where such
cancellation or reduction in coverage would not constitute a
Material Adverse Change.
(o) Compliance with Laws. Except as disclosed in the
SEC Reports, the Borrower and each of its Subsidiaries is in
compliance in all material respects with all applicable Laws (other
than Environmental Laws which are specifically addressed in
subsection (s)) in all jurisdictions in which the Borrower or any
of its Subsidiaries is doing business except where the failure to
do so would not constitute a Material Adverse Change.
(p) Investment Companies; Other Regulations. The
Borrower is not an "investment company" registered or required to
be registered under the Investment Company Act of 1940 or under the
"control" of an "investment company" as such terms are defined in
the Investment Company Act of 1940 and shall not become such an
"investment company" or under such "control." PEI, the Borrower
and their respective Subsidiaries are exempt from the requirements
of the Utility Act and the rules thereunder, other than the
requirements of Section 9(a)(2) thereof.
(q) Plans and Benefit Arrangements. Except as set
forth on Schedule 5.1(q) hereto or as described in the SEC Reports:
(i) The Borrower and each member of the ERISA
Group are in compliance in all material respects with any
applicable provisions of ERISA with respect to all Benefit
Arrangements, Plans and Multiemployer Plans. There has been no
Prohibited Transaction with respect to any Benefit Arrangement or
any Plan or, to the knowledge of the Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in
any material liability of the Borrower or any other member of the
ERISA Group. The Borrower and all members of the ERISA Group have
made when due any and all payments required to be made under any
agreement relating to a Multiemployer Plan or a Multiple Employer
Plan or any Law pertaining thereto. With respect to each Plan and,
to the knowledge of Borrower, each Multiemployer Plan, the Borrower
and each member of the ERISA Group (i) have fulfilled in all
material respects their obligations under the minimum funding
standards of ERISA, (ii) have not incurred any liability to the
PBGC (other than for premiums not yet due) and (iii) have not had
asserted against them any penalty for failure to fulfill the
minimum funding requirements of ERISA.
(ii) To the knowledge of the Borrower,
each Multiemployer Plan and Multiple Employer Plan is able to pay
benefits thereunder when due.
(iii) Neither the Borrower nor any other
member of the ERISA Group has instituted or intends to institute
proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC
under Section 302(f)(4)(A) of ERISA has occurred or is reasonably
expected to occur with respect to any Plan, and no amendment with
respect to which security is required under Section 307 of ERISA
has been made or is reasonably expected to be made to any Plan.
(v) The aggregate actuarial present value of
all benefit liabilities (whether or not vested) under each Plan,
determined on a termination basis, as of the date of the most
recent actuarial report for such Plan, does not exceed the
aggregate fair market value of the assets of such Plan.
(vi) Neither the Borrower nor any other
member of the ERISA Group has incurred or reasonably expects to
incur any material withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower
nor any other member of the ERISA Group has been notified by any
Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been terminated
within the meaning of Title IV of ERISA and, to the knowledge of
the Borrower, no Multiemployer Plan or Multiple Employer Plan is
expected to be reorganized or terminated, within the meaning of
Title IV of ERISA.
(vii) To the extent that any Benefit
Arrangement is insured, the Borrower and all members of the ERISA
Group have paid when due all contributions and premiums required to
be paid under each Benefit Arrangement for all periods through and
including the Closing Date. To the extent that any Benefit
Arrangement is funded other than with insurance, the Borrower and
all members of the ERISA Group have made when due all
contributions, to the extent required by applicable Law or the
terms of such Benefit Arrangement to be paid for all periods
through and including the Closing Date.
(r) Employment Matters. The Borrower and each of its
Subsidiaries are in compliance with all employee benefit plans,
employment agreements, collective bargaining agreements and labor
contracts (the "Labor Contracts") and all applicable federal, state
and local labor and employment Laws including, but not limited to,
those related to equal employment opportunity and affirmative
action, labor relations, minimum wage, overtime, child labor,
medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment
compensation, except where the failure to comply would not
constitute a Material Adverse Change. There are no outstanding
grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of the Borrower or
any of its Subsidiaries which in any case would constitute a
Material Adverse Change.
(s) Environmental Matters. Except as disclosed on
Schedule 5.1(s) hereto or as described in the SEC Reports:
(i) Neither the Borrower nor any of its
Subsidiaries has received any Environmental Complaint from any
Official Body or private person alleging that the Borrower or any
of its Subsidiaries or any prior or subsequent owner of the
Property is a potentially responsible party under the Comprehensive
Environmental Response, Cleanup and Liability Act, 42 U.S.C.
9601, et seq., which Environmental Complaint is reasonably expected
to result in any Material Adverse Change. There are no pending or,
to the Borrower's knowledge, threatened Environmental Complaints
relating to the Borrower, any Subsidiary of the Borrower or, to the
Borrower's knowledge, without any inquiry, any prior or subsequent
owner of the Property pertaining to, or arising out of, any
Environmental Conditions, which Environmental Complaints are
reasonably expected to result in any Material Adverse Change.
(ii) Except for conditions, violations or
failures which individually and in the aggregate are not reasonably
likely to result in a Material Adverse Change, there are no
circumstances at, on or under the Property that constitute a breach
of or non-compliance with any of the Environmental Laws, and there
are no past or present Environmental Conditions at, on or under the
Property or, to the Borrower's knowledge, without any inquiry at,
on or under adjacent property, that prevent compliance with the
Environmental Laws at the Property.
(iii) Neither the Property nor any
structures, improvements, equipment, fixtures, activities or
facilities thereon or thereunder contain or use Regulated
Substances except in compliance with Environmental Laws, other than
such containment or use which individually and in the aggregate is
not reasonably likely to result in any Material Adverse Change.
There are no processes, facilities, operations, equipment or any
other activities at, on or under the Property, or, to the
Borrower's knowledge, without any inquiry, at, on or under adjacent
property, that currently result in the release of Regulated
Substances on to the Property in violation of the Environmental
Laws, except to the extent that such releases are not likely to
result in a Material Adverse Change.
(iv) There are no underground storage
tanks, or underground piping associated with such tanks, used for
the management of Regulated Substances at, on or under the Property
that are not in compliance with all Environmental Laws, other than
those with respect to which the failure to comply with
Environmental Laws is not reasonably likely, either individually or
in the aggregate, to result in a Material Adverse Change, and there
are no abandoned underground storage tanks or underground piping
associated with such tanks, previously used for the management of
Regulated Substances at, on or under the Property that have not
been either abandoned in place, or removed, in accordance with the
Environmental Laws, other than those with respect to which the
failure to comply with Environmental Laws is not reasonably likely,
either individually or in the aggregate, to result in a Material
Adverse Change.
(v) The Borrower and each of its Subsidiaries
have all material permits, licenses, authorizations and approvals
necessary under the Environmental Laws for the conduct of the
business of the Borrower and each of its Subsidiaries as presently
conducted, other than those with respect to which the failure to
comply with Environmental Laws is not reasonably likely, either
individually or in the aggregate, to result in a Material Adverse
Change. The Borrower and each of its Subsidiaries have, to the
Borrower's knowledge, submitted all material notices, reports and
other filings required by the Environmental Laws to be submitted to
an Official Body which pertain to past and current operations on
the Property.
(vi) Except for violations which
individually and in the aggregate are not likely to result in a
Material Adverse Change, all past and present on-site generation,
storage, processing, treatment, recycling, reclamation or disposal
of Regulated Substances at, on, or under the Property and all off-
site transportation, storage, processing, treatment, recycling,
reclamation or disposal of Regulated Substances has been done in
accordance with the Environmental Laws.
(t) Senior Debt Status. The obligations of the
Borrower under this Agreement and the Notes rank at least pari
passu in priority of payment with all other Indebtedness of the
Borrower except Indebtedness of the Borrower to the extent secured
by Permitted Liens. There is no Lien upon or with respect to any
of the properties or income of the Borrower which secures
Indebtedness or other obligations of any person except for
Permitted Liens.
ARTICLE VI
CONDITIONS OF LENDING
The obligation of each Bank to make a Term Loan hereunder on
the Funding Date is subject to the performance by the Borrower of
its obligations to be performed hereunder at or prior to the making
of any such Term Loan and to the satisfaction of the following
further conditions:
VI.1 Closing Conditions. On the Closing Date:
(a) The representations and warranties of the Borrower
contained in Article V hereof shall be true and accurate in all
material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made
on and as of such Closing Date (except representations and
warranties which relate solely to an earlier date or time, which
representations and warranties shall be true and correct in all
material respects on and as of the specific date or times referred
to therein), and the Borrower shall have performed and complied in
all material respects with all covenants and conditions hereof; no
Event of Default or Potential Event of Default under this Agreement
shall have occurred and be continuing or shall exist; and there
shall be delivered to the Agent for the benefit of each Bank a
certificate of the Borrower, dated the Closing Date and signed by
the Chief Executive Officer and President or Chief Financial
Officer of the Borrower, to each such effect;
(b) There shall be delivered to the Agent for the
benefit of each Bank a certificate dated the Closing Date and
signed by the Secretary or an Assistant Secretary of the Borrower,
certifying as appropriate as to:
(i) all corporate action taken by the Borrower
in connection with this Agreement and the other Loan Documents;
(ii) the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents and
the true signatures of such officer or officers and the identities
of the Authorized Officers permitted to act on behalf of the
Borrower for purposes of this Agreement and the true signatures of
such officers, on which the Agent and each Bank may conclusively
rely; and
(iii) copies of its organizational
documents, including its articles of incorporation as in effect on
the Closing Date together with a certificate from the Secretary of
State of the Commonwealth of Pennsylvania as to the continued
existence and good standing of the Borrower as well as a copy of
its bylaws.
(c) This Agreement and each other Loan Document shall
have been duly executed and delivered by the Borrower to the Agent
for the benefit of the Banks.
(d) There shall be delivered to the Agent for the
benefit of each Bank a written opinion of Xxxxxx Xxxxxxx & Xxxx,
L.L.P., special counsel for the Borrower and Xxxxxxx X. Sunday,
House Counsel of the Borrower (both of whom may rely on the
opinions of each other and such other counsel as may be acceptable
to the Agent), dated the Closing Date and in form and substance
satisfactory to the Agent and its counsel as to the matters set
forth in Exhibit "B-1" and Exhibit "B-2" hereto.
(e) All legal details and proceedings in connection
with the transactions contemplated by the Agreement and the other
Loan Documents shall be in form and substance reasonably
satisfactory to the Agent and counsel for the Agent, and the Agent
shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in
connection with such transactions, in form and substance reasonably
satisfactory to the Agent and said counsel, as the Agent or said
counsel may reasonably request.
(f) The Borrower shall pay or cause to be paid to the
Agent for itself and for the account of the Banks to the extent not
previously paid all fees, costs and expenses for which the Agent
and the Banks are entitled to be reimbursed.
(g) All material consents required to effectuate the
transactions contemplated hereby as set forth on Schedule 5.1(l)
shall have been obtained.
(h) The making of the Term Loans shall not contravene
any Law applicable to the Borrower or any of the Banks.
(i) No action, proceeding, investigation, regulation
or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to
enjoin, restrain or prohibit, or to obtain damages in respect of
this Agreement or the consummation of the transactions contemplated
hereby or which, in the Agent's sole discretion, would make it
inadvisable to consummate the transactions contemplated by this
Agreement or any of the other Loan Documents.
VI.2 Funding Conditions. On the Funding Date:
(a) All of the conditions set forth in Section 6.1
hereof shall have been satisfied or waived in writing by the Agent.
(b) The representations and warranties of the Borrower
contained in Article V hereof shall be true and accurate in all
material respects on and as of the Funding Date with the same
effect as though such representations and warranties had been made
on and as of such Funding Date (except representations and
warranties which relate solely to an earlier date or time, which
representations and warranties shall be true and correct in all
material respects on and as of the specific date or times referred
to therein), and the Borrower shall have performed and complied in
all material respects with all covenants and conditions hereof; no
Event of Default or Potential Event of Default under this Agreement
shall have occurred and be continuing or shall exist; and there
shall be delivered to the Agent for the benefit of each Bank a
certificate of the Borrower, dated the Funding Date and signed by
the Chief Executive Officer and President or Chief Financial
Officer of the Borrower, to each such effect;
(c) The Notes shall have been duly executed and
delivered by the Borrower to the Agent for the benefit of the
Banks.
(d) The making of the Term Loans shall not contravene
any Law applicable to the Borrower or any of the Banks.
(e) No action, proceeding, investigation, regulation
or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to
enjoin, restrain or prohibit, or to obtain damages in respect of
this Agreement or the consummation of the transactions contemplated
hereby or which, in the Agent's sole discretion, would make it
inadvisable to consummate the transactions contemplated by this
Agreement or any of the other Loan Documents.
(f) The Borrower shall have delivered to the Agent an
Interest Rate Election specifying the Euro-Rate Option in
accordance with Section 3.2 hereof at least three (3) Business Days
prior to the Funding Date.
ARTICLE VII
COVENANTS
VII.1 Affirmative Covenants. The Borrower covenants and
agrees that until payment in full of the Term Loans and interest
thereon, the Borrower shall comply at all times with the following
affirmative covenants:
(a) Preservation of Existence, etc. The Borrower
shall maintain its corporate existence and license or qualification
and good standing in the Commonwealth of Pennsylvania and in each
other jurisdiction in which its ownership or lease of property or
the nature of its business makes such license or qualifications
necessary (except for such other jurisdictions in which such
failure to be so licensed or qualified could not reasonably be
expected to result in a Material Adverse Change).
(b) Payment of Taxes. The Borrower shall duly pay and
discharge, and shall cause each of its Subsidiaries to pay and
discharge, all taxes to which it is subject or which are asserted
against it, promptly as and when the same shall become due and
payable, prior to the date on which penalties attach thereto,
except to the extent that such taxes are being contested in good
faith and by appropriate and lawful proceedings diligently
conducted and for which such reserve (including reserves for any
additional amounts which would be payable as a result of the
failure to discharge any such taxes) or other appropriate
provisions, if any, as shall be required by GAAP shall have been
made.
(c) Maintenance of Insurance. The Borrower shall
insure its properties and assets against loss or damage by fire and
such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, worker's
compensation and public liability) and against other risks
(including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar
circumstances carrying on similar businesses, and with reputable
and financially sound insurers, including self-insurance to the
extent customary. At the request of the Agent, the Borrower shall
deliver (x) on the Closing Date and annually thereafter an original
certificate of insurance signed by the Borrower's independent
insurance broker describing and certifying as to the existence of
the insurance required to be maintained by this Agreement and the
other Loan Documents and (y) from time to time a summary schedule
indicating all insurance then in force with respect to the Borrower
and its Subsidiaries.
(d) Maintenance of Properties and Leases. The
Borrower shall maintain in good repair, working order and condition
(ordinary wear and tear excepted) in accordance with the general
practice of other businesses of similar character and size, all of
those properties useful or necessary to its business, and from time
to time, the Borrower will make or cause to be made all appropriate
repairs, renewals or replacements thereof.
(e) Maintenance of Patents, Trademarks, etc. The
Borrower shall maintain in full force and effect all franchises,
permits and other authorizations necessary for the ownership and
operation of its properties and business if the failure so to
maintain the same would constitute a Material Adverse Change.
(f) Visitation Rights. The Borrower shall permit any
of the officers or authorized employees or representatives of the
Agent or any of the Banks to visit and inspect any of its
properties and to examine and make excerpts from its books and
records and discuss its business affairs, finances and accounts
with its officers in connection with the transactions contemplated
by the Loan Documents, all in such detail and at such times and as
often as any of the Banks may reasonably request, provided that
each Bank shall provide the Borrower and the Agent with reasonable
notice prior to any visit or inspection.
(g) Keeping of Records and Books of Account. The
Borrower shall maintain and keep, and shall cause each of its
Subsidiaries to maintain and keep, proper books of record and
account which enable the Borrower and each of its Subsidiaries to
issue financial statements in accordance with GAAP and as otherwise
required by applicable Laws of any Official Body having
jurisdiction over the Borrower or any of its Subsidiaries, and in
which true and correct entries shall be made in all material
respects of all its dealings and business and financial affairs.
(h) Plans and Benefit Arrangements. The Borrower
shall comply, and shall cause each member of the ERISA Group to
comply, with ERISA, the Internal Revenue Code and other applicable
Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not
result in a Material Adverse Change. Without limiting the
generality of the foregoing, the Borrower shall cause all of its
Plans and all Plans maintained by any member of the ERISA Group to
be funded in accordance with the minimum funding requirements of
ERISA and shall make, and cause each member of the ERISA Group to
make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.
(i) Compliance with Laws. The Borrower shall comply
with all applicable Laws, provided that it shall not be deemed to
be a violation of this Section 7.1(i) if any failure to comply with
any Law would not result in fines, penalties, other similar
liabilities or injunctive relief which in the aggregate would
constitute a Material Adverse Change.
(j) Use of Proceeds. The Borrower will use the
proceeds of the Term Loans only for lawful purposes in accordance
with Section 2.2 hereof as applicable and such uses shall not
contravene any applicable Law or any other provision hereof.
(k) Environmental Laws. (i) The Borrower shall
comply in all material respects with all Environmental Laws and
shall obtain and comply, and shall cause each of its Subsidiaries
to obtain and comply, in all material respects with and maintain
any and all licenses, approvals, registrations or permits required
by Environmental Laws;
(ii) The Borrower shall conduct and
complete, and shall cause each of its Subsidiaries to conduct and
complete, in all material respects all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all
Official Bodies respecting Environmental Laws, except to the extent
that the same are being contested in good faith by appropriate and
lawful proceedings diligently conducted and for which such reserves
or other appropriate provisions, if any, required by GAAP shall
have been made; and
(iii) The Borrower shall defend, indemnify
and hold harmless the Agent and the Banks, and their respective
employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of or noncompliance with any
Environmental Laws applicable to the real property owned or
operated by the Borrower or any of its Subsidiaries, or any orders,
requirements or demands of any Official Bodies related thereto,
including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, court costs
and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct
of the party seeking indemnification therefor.
(l) Utility Act. The Borrower shall maintain, and
cause PEI to maintain, their respective exemptions from the
requirements of the Utility Act and the rules thereunder, other
than the requirements of Section 9(a)(2) thereof.
(m) Senior Debt Status. The obligations of the
Borrower under this Agreement and the Notes will rank at least pari
passu in priority of payment with all other Indebtedness of the
Borrower except Indebtedness of the Borrower to the extent secured
by Permitted Liens.
VII.2 Negative Covenants. The Borrower covenants and agrees
that until payment in full of the Term Loans and interest thereon,
the Borrower shall comply with the following negative covenants:
(a) Indebtedness. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, at any time create,
incur, assume or suffer to exist any Indebtedness, except:
(i) Indebtedness
under the Loan Documents;
(ii) Existing
Indebtedness as set forth on Schedule
7.2(a) hereto (including any
extensions or renewals thereof
provided there is no increase in the
amount thereof or other significant
change in the terms thereof unless
otherwise specified on Schedule
7.2(a));
(iii)
Indebtedness of a Subsidiary of the
Borrower to the Borrower or to a
wholly owned Subsidiary of the
Borrower; and
(iv) Additional
Indebtedness of the Borrower and its
Subsidiaries, provided that the
incurrence of or continued existence
of such additional Indebtedness shall
not cause the Borrower to violate
Section 7.2(p).
(b) Liens. The Borrower shall not, and shall not
permit any Subsidiary of Borrower to, at any time create, incur,
assume or suffer to exist any Lien on any of its property or
assets, tangible or intangible, now owned or hereafter acquired, or
agree or become liable to do so, except Permitted Liens.
(c) Guaranties. Other than Guaranties of an
obligation or liability of a Subsidiary, the Borrower shall not,
and shall not permit any Subsidiary of Borrower to, at any time,
directly or indirectly, become or be liable in respect of any
Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable
upon or with respect to any obligation or liability of any other
person.
(d) Loans, Acquisitions and Investments. The Borrower
shall not, and shall not permit any Subsidiary of Borrower to, at
any time make any loan or advance to, or purchase or otherwise
acquire any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) in, or assets of,
or any other investment or interest in, or make any capital
contribution to, any other person, or agree to or become liable to
do any of the foregoing, except:
(i) trade credit extended on usual and
customary terms in the ordinary course of business;
(ii) loans and advances to employees to
meet expenses incurred by such employees in the ordinary course of
business;
(iii) Cash Equivalents;
(iv) investments and capital contributions
by the Borrower in and to, and advances by the Borrower to, its
Subsidiaries and investments and capital contributions by such
Subsidiaries in and to, and advances by such Subsidiaries to, the
Borrower and in and to other Subsidiaries of the Borrower in an
aggregate amount not to exceed Five Million Dollars ($5,000,000);
and
(v) other investments and capital contributions
(not covered by Section 7.2(d)(iv) above) and acquisitions that do
not, in the aggregate, exceed Five Million Dollars ($5,000,000) in
any twelve (12) month period.
(e) Dividends and Related Distributions. The Borrower
shall not, and shall not permit any Subsidiary of the Borrower to,
declare or pay any dividend (other than dividends payable solely in
Common Stock and dividends payable by any wholly-owned Subsidiary
of the Borrower to the Borrower or to another wholly-owned
Subsidiary of the Borrower) on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement or other acquisition of, any
shares of any class of Capital Stock of the Borrower or any
warrants or options to purchase any such Capital Stock, whether now
or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary of Borrower
(such declarations, payments, setting apart, purchases,
redemptions, defeasances, retirements, acquisitions and
distributions being herein called "Restricted Payments), except
that, so long as no Potential Event of Default or Event of Default
has occurred, is continuing or will result from the payment of a
Restricted Payment, the Borrower may during any fiscal year make
Restricted Payments as follows: the Borrower may (a) declare, and
pay within ninety (90) days of the date of declaration, dividends
on Common Stock, (b) declare, and pay within ninety (90) days of
the date of declaration, dividends on Preferred Stock and (c)
redeem Preferred Stock in accordance with the Borrower's Restated
Articles of Incorporation, as amended; provided, however, that
nothing contained in this Section 7.2(e) shall prohibit the
Borrower from making any Restricted Payments to the holders of its
9% Cumulative Preferred Stock pursuant to the Borrower's Restated
Articles of Incorporation, as amended, except to the extent that
such payments would be prohibited by the Borrower's Restated
Articles of Incorporation, as amended.
(f) Liquidations, Mergers and Consolidations. The
Borrower shall not, and shall not permit any Subsidiary of Borrower
to, dissolve, liquidate or wind-up its affairs, or become a party
to any merger or consolidation, or sell, lease, transfer, or
otherwise dispose of all of its assets, provided that:
(i) any wholly-owned Subsidiary of Borrower may
consolidate or merge into the Borrower or another direct or
indirect wholly-owned Subsidiary of Borrower; and
(ii) any wholly-owned Subsidiary of
Borrower may sell, lease, transfer or otherwise dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or another direct or indirect wholly-owned Subsidiary of
Borrower.
(g) Dispositions of Assets or Subsidiaries. Excluding
the payment of cash as consideration for assets purchased by, or
services rendered to, the Borrower or any Subsidiary of the
Borrower, the Borrower shall not, and shall not permit any
Subsidiary of Borrower to, sell, convey, assign, lease, or
otherwise transfer or dispose of, voluntarily or involuntarily, any
of its properties or assets, tangible or intangible (including but
not limited to sale, assignment, discount or other disposition of
accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of Capital Stock [other
than Capital Stock issued by the Borrower], shared or beneficial
interests or partnership interests), except:
(i) any sale, transfer or lease of assets in
the ordinary course of business which are no longer necessary or
required in the conduct of the Borrower's business;
(ii) any sale, transfer or lease of assets
by any wholly owned Subsidiary of the Borrower to the Borrower or
any other wholly owned Subsidiary of Borrower;
(iii) any sale, transfer or lease of assets
in the ordinary course of business which are replaced by substitute
assets acquired or leased;
(iv) sales of assets set forth on Schedule
7.2(g) hereof;
(v) the sale or other disposition of any other
property in the ordinary course of business, provided that (other
than inventory) the aggregate book value of all assets so sold or
disposed of pursuant to this Section 7.2(g) in any period of twelve
(12) consecutive months shall not exceed five percent (5%) of the
total assets of the Borrower as at the beginning of such twelve-
month period; or
(vi) any sale, transfer or lease of
assets, other than those specifically excepted pursuant to clauses
(i) through (v) above, which is approved by the Required Banks.
(h) Affiliate Transactions. The Borrower shall not,
and shall not permit any of its Subsidiaries to, enter into or
carry out any material transaction, other than transactions entered
into between the Borrower and any of its Subsidiaries, or between
any Subsidiaries (including, without limitation, purchasing
property or services or selling property or services), with an
Affiliate unless such transaction is not otherwise prohibited by
this Agreement, is entered into in the ordinary course of business
upon fair and reasonable arm's-length terms and conditions which
are fully disclosed to the Agent and is in accordance with all
applicable Law.
(i) Subsidiaries, Partnerships and Joint Ventures.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, own or create any Subsidiaries other than those
listed in Schedule 7.2(i) and those which are not "significant
subsidiaries" as such term is defined in Rule 1.02(v) of Regulation
S-X promulgated by the Securities and Exchange Commission, without
the consent of the Required Banks, such consent not to be
unreasonably withheld. The Borrower shall not become or agree to
become a general or limited partner in any general or limited
partnership or a joint venturer in any joint venture, without the
consent of the Required Banks, such consent not to be unreasonably
withheld.
(j) Continuation of or Change in Business. The
Borrower and its Subsidiaries shall not engage in any business
other than the operation of a public utility company for the
delivery of natural gas to residential, commercial and governmental
establishments in the northeastern Pennsylvania area, substantially
as conducted and operated by the Borrower and its Subsidiaries
during the present fiscal year, and the Borrower shall not permit
any material change in such business.
(k) Plans and Benefit Arrangements. The Borrower
shall not, and shall not permit any member of the ERISA Group to:
(i) fail to satisfy the minimum funding
requirements of ERISA and the Internal Revenue Code with respect to
any Plan;
(ii) request a minimum funding waiver from
the Internal Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction
with any Plan, Benefit Arrangement or Multiemployer Plan which,
alone or in conjunction with any other circumstances or set of
circumstances resulting in liability under ERISA, would constitute
a Material Adverse Change;
(iv) permit the aggregate actuarial
present value of all benefit liabilities (whether or not vested)
under each Plan determined on a termination basis, as disclosed in
the most recent actuarial report completed with respect to such
Plan, to exceed the fair market value of the assets of such Plan as
of any actuarial valuation date;
(v) fail to make when due any contribution to
any Multiemployer Plan that the Borrower or any member of the ERISA
Group may be required to make under any agreement relating to such
Multiemployer Plan, or any Law pertaining thereto;
(vi) withdraw (completely or partially)
from any Multiemployer Plan or be deemed under Section 4062(e) of
ERISA to withdraw from any Multiple Employer Plan, where any such
withdrawal is likely to result in a material liability of the
Borrower or any member of the ERISA Group;
(vii) terminate, or institute proceedings
to terminate, any Plan, where such termination is likely to result
in a material liability to the Borrower or any member of the ERISA
Group;
(viii) make any amendment to any Plan with
respect to which security is required under Section 307 of ERISA;
or
(ix) fail to give any and all notices and
make all disclosures and governmental filings required under ERISA
or the Internal Revenue Code, where such failure is likely to
result in a Material Adverse Change.
(l) Fiscal Year. The Borrower shall not, and shall
not permit any of its Subsidiaries to, change its fiscal year from
the twelve (12) month period beginning January 1 and ending
December 31.
(m) Issuance of Stock. The Borrower shall not permit
any Subsidiary of Borrower to issue any additional shares of
Capital Stock other than to Borrower and to other wholly-owned
Subsidiaries of Borrower.
(n) Changes in Organizational Documents. The Borrower
shall not, and shall not permit any Subsidiary of Borrower to,
amend in any respect its articles of incorporation (except to
increase the number of authorized shares of its Capital Stock or
authorize the issuance of additional Preferred Stock and/or to file
statements affecting class or series) without providing at least
ten (10) calendar days' prior written notice to the Agent and the
Banks.
(o) Minimum Interest Coverage Ratio. As of the last
day of each fiscal quarter, the ratio of (i) EBIT for the four
fiscal quarters ending on such date, to (ii) Interest Expense for
such four fiscal quarters, shall not be less than 2.00:1.00.
(p) Maximum Leverage Ratio. At no time shall Total
Debt exceed sixty percent (60%) of Capitalization.
VII.3 Reporting Requirements. The Borrower covenants and
agrees that until payment in full of the Term Loans and interest
thereon, the Borrower will maintain, and will cause PEI to
maintain, a system of accounting established and administered in
accordance with GAAP, and will set aside on its books all such
proper reserves as shall be required by GAAP. Further, the Borrower
will:
(i) deliver to the Agent within forty-five (45)
days after the end of each of the first three quarterly fiscal
periods in each fiscal year of the Borrower and PEI, (A) balance
sheets as at the end of such period for the Borrower and for PEI on
a consolidated basis, (B) statements of income for such period for
the Borrower and for PEI on a consolidated basis and, in the case
of the second and third quarterly periods, for the period from the
beginning of the current fiscal year to the end of such quarterly
period, (C) statements of cash flow for such period for the
Borrower and for PEI on a consolidated basis and, in the case of
the second and third quarterly periods, for the period from the
beginning of the current fiscal year to the end of such quarterly
period, and (D) statements of retained earnings for such period for
the Borrower and for PEI on a consolidated basis and, in the case
of the second and third quarterly periods, for the period from the
beginning of the current fiscal year to the end of such quarterly
period, each setting forth, in comparative form, corresponding
figures for the corresponding period in the immediately preceding
fiscal year and all prepared in reasonable detail and certified,
subject to changes resulting from year-end adjustments, by the
Chief Financial Officer of the Borrower and PEI to have been
prepared in accordance with GAAP;
(ii) deliver to the Agent within ninety
(90) days after the end of each fiscal year of the Borrower and
PEI, (A) balance sheets as at the end of such year for the Borrower
and for PEI on a consolidated basis, (B) statements of income for
such year for the Borrower and for PEI on a consolidated basis, (C)
statements of cash flow for such year for the Borrower and for PEI
on a consolidated basis, and (D) statements of retained earnings
for such year for the Borrower and for PEI on a consolidated basis,
each setting forth, in comparative form, corresponding figures for
the immediately preceding fiscal year and all prepared in
reasonable detail and certified without limitation as to scope by
independent certified public accountants acceptable to the Required
Banks, together with a report of such independent certified public
accountants which report shall state that such financial statements
present fairly in all material aspects the financial position of
the Borrower and PEI and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flow for the
periods indicated in conformity with GAAP and that the examination
by such accountants in connection with such financial statements
has been made in accordance with generally accepted auditing
standards;
(iii) deliver to the Agent, together with
each delivery of financial statements pursuant to items (i) and
(ii) above, a Compliance Certificate substantially in the form of
Exhibit "C" hereto, properly completed, (A) stating that the signer
has reviewed the terms of this Agreement and of the Notes and has
made, or caused to be made under his supervision, a review of the
transactions and condition of the Borrower and of PEI and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence
during such accounting period, and that the signer does not have
knowledge of the existence, as at the date of such Compliance
Certificate, of any condition or event which constitutes an Event
of Default or a Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Borrower has taken
or is taking or proposes to take with respect thereto, and (B)
demonstrating in reasonable detail compliance as at the end of such
accounting period with the restrictions contained in Sections
7.2(o) and 7.2(p) hereof;
(iv) upon request of the Agent, deliver to
the Agent as soon as it becomes available, but in no event later
than March 31 of each fiscal year of the Borrower, a capital budget
and operating budget of the Borrower and its Subsidiaries for such
fiscal year and financial projections of the Borrower and its
Subsidiaries for a one (1) year period beginning with such fiscal
year;
(v) promptly give written notice to the Agent
of the happening of any event which constitutes an Event of Default
hereunder or a Potential Event of Default hereunder, but in no
event shall any such notice be given later than five (5) days after
the occurrence of any of the foregoing events;
(vi) promptly give written notice to the
Agent of any pending or threatened claim, litigation or threat of
litigation which arises between the Borrower or any of its
Subsidiaries and any other party or parties (including without
limitation an Official Body) which claim, litigation or threat of
litigation is reasonably likely to cause a Material Adverse Change
to the financial condition or operations of the Borrower, any such
notice to be given not later than five (5) days after the Borrower
becomes aware of the occurrence of any such claim, litigation or
threat of litigation;
(vii) promptly deliver to the Agent (but in
no event later than thirty (30) days after PEI or Borrower
receives, submits or sends them) copies of (A) all management
letters and other reports submitted to PEI or the Borrower by
independent certified public accountants in connection with an
annual or interim audit of the books of the Borrower, or of PEI or
any of its Subsidiaries made by such accountants, (B) all reports,
notices and proxy statements sent by PEI or the Borrower to their
respective shareholders and (C) all regular and periodic reports
and definitive proxy materials including but not limited to Forms
10-K, 10-Q and 8-K filed by PEI or the Borrower with any securities
exchange or the Securities and Exchange Commission or its successor
in interest;
(viii) copies of any final order in any
proceeding to which the Borrower or any of its Subsidiaries is a
party issued by any Official Body which is reasonably likely to
result in a Material Adverse Change; and, upon the request of the
Agent, a summary description of any rate filing made by Borrower or
any of its Subsidiaries with any Official Body and a copy of all
final orders of such body relating thereto; and
(ix) such other reports and information as
the Agent or any Bank may from time to time reasonably request.
In complying with the terms of this Section 7.3, the Borrower shall
deliver to the Agent sufficient copies of each document required to
be delivered hereunder to enable the Agent to deliver at least one
(1) copy of each such document to each Bank.
VII.4 Notices Regarding Plans and Benefit Arrangements.
Borrower shall deliver to Agent:
(a) Promptly upon becoming aware of the occurrence
thereof, notice (including the nature of the event and, when known,
any action taken or threatened by the Internal Revenue Service or
the PBGC with respect thereto) of:
(i) any Reportable Event with respect to the
Borrower or any member of the ERISA Group,
(ii) any Prohibited Transaction which
could subject the Borrower or any member of the ERISA Group to a
civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Internal Revenue Code in connection
with any Plan, Benefit Arrangement or any trust created thereunder,
if such tax and/or penalty is reasonably likely to result in a
Material Adverse Change,
(iii) any assertion of material withdrawal
liability with respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal
from a Multiemployer Plan by the Borrower or any member of the
ERISA Group under Title IV of ERISA (or assertion thereof), where
such withdrawal is likely to result in material withdrawal
liability,
(v) any cessation of operations (by the
Borrower or any member of the ERISA Group) at a facility in the
circumstances described in Section 4062(e) of ERISA,
(vi) withdrawal by the Borrower or any
member of the ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any
member of the ERISA Group to make a payment to a Plan required to
avoid imposition of a lien under Section 302(f) of ERISA,
(viii) the adoption of an amendment to a
Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA, or
(ix) any change in the actuarial
assumptions or funding methods used for any Plan, where the effect
of such change is to materially increase or materially reduce the
unfunded benefit liability or obligation to make periodic
contributions.
(b) Promptly after receipt thereof, copies of (i) all
notices received by the Borrower or any member of the ERISA Group
of the PBGC's intent to terminate any Plan administered or
maintained by the Borrower or any member of the ERISA Group, or to
have a trustee appointed to administer any such Plan; and (ii) at
the request of the Agent or any Bank each annual report (IRS Form
5500 series) and all accompanying schedules, the most recent
actuarial reports, the most recent financial information concerning
the financial status of each Plan administered or maintained by the
Borrower or any member of the ERISA Group, and schedules showing
the amounts contributed to each such Plan by or on behalf of the
Borrower or any member of the ERISA Group in which any of their
personnel participate or from which such personnel may derive a
benefit, and each Schedule B (Actuarial Information) to the annual
report filed by the Borrower or any member of the ERISA Group with
the Internal Revenue Service with respect to each such Plan.
(c) Promptly upon the filing thereof, copies of any
PBGC Form 200, 500, 600 or 601, or any successor form filed with
the PBGC in connection with the termination of any Plan.
ARTICLE VIII
DEFAULT
VIII.1 Events of Default. An Event of Default shall mean the
occurrence or existence of any one or more of the following events
or conditions (whatever the reason therefor and whether voluntary,
involuntary or effected by operation of Law):
(a) (i) The Borrower shall fail to pay any
principal of any Term Loan (including mandatory prepayments or
payment due at maturity) when due; or (ii) the Borrower shall fail
to pay any interest on any Term Loan or any other amount owing
hereunder or under the other Loan Documents after such interest or
other amount becomes due in accordance with the terms hereof or
thereof and such failure shall continue for a period of three (3)
days;
(b) Any representation or warranty made at any time by
the Borrower herein or by the Borrower in any other Loan Document,
or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have
been false or misleading in any material respect as of the time it
was made or furnished;
(c) The Borrower shall default in the observance or
performance of any covenant contained in Section 7.2 hereof;
(d) The Borrower shall default in the observance or
performance of any other covenant, condition or provision hereof,
or of any other Loan Document and such default shall continue
unremedied for a period of twenty (20) Business Days after any
officer of the Borrower becomes aware of the occurrence thereof;
(e) A default or event of default shall occur at any
time under the terms of any other agreements involving borrowed
money or the extension of credit or any other Indebtedness now
existing or hereinafter incurred, including but not limited to
Existing Indebtedness as set forth on Schedule 7.2(a) under which
the Borrower or any of its Subsidiaries may be obligated as
borrower or guarantor (i) in excess of Five Hundred Thousand
Dollars ($500,000) in the aggregate, and such breach, default or
event of default consists of the failure to pay (beyond any period
of grace permitted with respect thereto, whether waived or not) any
Indebtedness when due (whether at stated maturity, by acceleration
or otherwise) or if such breach or default causes the acceleration
of any such Indebtedness or the termination of any commitment to
lend or (ii) in excess of Ten Million Dollars ($10,000,000) in the
aggregate, and such breach or default permits the acceleration of
any Indebtedness or the termination of any commitment to lend;
(f) Any final judgments or orders for the payment of
money in excess of One Million Dollars ($1,000,000) in the
aggregate shall be entered against the Borrower or any of its
Subsidiaries by a court having jurisdiction in the premises which
judgment is not paid, discharged, vacated, bonded or stayed pending
appeal within a period of thirty (30) days from the date of entry;
(g) Any of the Loan Documents shall cease to be legal,
valid and binding agreements enforceable against the Borrower in
accordance with the respective terms thereof or shall in any way be
terminated (except in accordance with its terms) or become
ineffective or inoperative in any material respect or shall in any
way cease to give or provide in any material respect the respective
rights, titles, interests, remedies, powers or privileges intended
to be created thereby;
(h) A notice of lien or assessment in excess of One
Million Dollars ($1,000,000) in the aggregate is filed of record
with respect to all or any part of the assets of the Borrower or
any of its Subsidiaries by the United States, or any department,
agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including, without
limitation, the PBGC, or if any taxes or debts owing at any time or
times hereafter to any one of these becomes payable and the same is
not paid within thirty (30) days after the same becomes payable, or
if such notice is filed or such payment is not so made, unless the
Borrower (aa) contests such lien, assessment, tax or debt in good
faith by appropriate and lawful proceedings diligently conducted
and (bb) establishes such reserves or other appropriate provisions,
if any, as shall be required by GAAP and (cc) pays such lien,
assessment, tax or debt in accordance with the terms of any final
judgments or orders relating thereto within thirty (30) days after
the entry of such judgments or orders;
(i) The Borrower or PEI ceases to be solvent or admits
in writing its inability to pay its debts as they mature;
(j) Any of the following occurs: (i) any Reportable
Event, which constitutes grounds for the termination of any Plan by
the PBGC or the appointment of a trustee to administer or liquidate
any Plan, shall have occurred and be continuing; (ii) proceedings
shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect to
any Plan; (iii) a trustee shall be appointed under Section 4042 of
ERISA to administer or liquidate any Plan; (iv) the PBGC shall give
notice of its intent to institute proceedings to terminate any Plan
or Plans or to appoint a trustee to administer or liquidate any
Plan and, in the case of the occurrence of (i), (ii), (iii) or (iv)
of this Section 8.1(j) above, the amount of Borrower's liability is
likely to exceed five percent (5%) of its Net Worth; (v) the
Borrower or any member of the ERISA Group shall fail to make any
contributions when due to a Plan or a Multiemployer Plan; (vi) the
Borrower or any member of the ERISA Group shall make any amendment
to a Plan with respect to which security is required under Section
307 of ERISA; (vii) the Borrower or any member of the ERISA Group
shall withdraw completely or partially from a Multiemployer Plan;
(viii) the Borrower or any member of the ERISA Group shall withdraw
(or shall be treated under Section 4062(e) of ERISA as having
withdrawn) from a Multiple Employer Plan; or (ix) any applicable
Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer
Plans or Benefit Arrangements and, with respect to any of the
events specified in (v), (vi), (vii), (viii) or (ix), any such
occurrence would be reasonably likely to materially and adversely
affect the total enterprise represented by the Borrower and the
other members of the ERISA Group;
(k) The Borrower ceases to conduct its businesses as
contemplated, or the Borrower is enjoined, restrained or in any way
prevented by court order from conducting all or any material part
of its business and such injunction, restraint or other preventive
order is not dismissed or stayed within thirty (30) days after the
entry thereof;
(l) A proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for
relief in respect of the Borrower or PEI in an involuntary case
under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of the Borrower or PEI for any substantial
part of its property, or for the winding-up or liquidation of its
affairs, and such proceeding shall remain undismissed or unstayed
and in effect for a period of thirty (30) consecutive days or such
court shall enter a decree or order granting any of the relief
sought in such proceeding; or
(m) The Borrower or PEI shall commence a voluntary
case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, shall consent to the
entry of an order for relief in an involuntary case under any such
law, or shall consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator,
conservator (or other similar official) of itself or for any
substantial part of its property or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any action in furtherance
of any of the foregoing.
VIII.2 Consequences of Event of Default.
(a) If an Event of Default specified under subsections
(a) through (k) of Section 8.1 hereof shall occur and be
continuing, with the consent of the Required Banks, the Agent may,
and upon the request of the Required Banks, the Agent shall by
written notice to the Borrower, declare the unpaid principal amount
of the Notes then outstanding and all interest accrued thereon, any
unpaid fees and all other Indebtedness of the Borrower to the Banks
hereunder and thereunder to be forthwith due and payable, and the
same shall thereupon become and be immediately due and payable to
the Agent for the benefit of each Bank without presentment, demand,
protest or any other notice of any kind, all of which are hereby
expressly waived; and
(b) If an Event of Default specified under subsections
(l) or (m) of Section 8.1 hereof shall occur, the unpaid principal
amount of the Notes then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower
to the Banks hereunder and thereunder shall be immediately due and
payable, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived; and
(c) If an Event of Default shall occur and be
continuing, any Bank to whom any obligation is owed by the Borrower
hereunder or under any other Loan Document or any participant of
such Bank which has agreed in writing to be bound by the provisions
of Section 10.11 hereof and any branch, subsidiary or affiliate of
such Bank or participant anywhere in the world shall have the
right, in addition to all other rights and remedies available to
it, without notice to the Borrower, to set-off against and apply to
the then unpaid balance of all the Term Loans and all other
obligations of the Borrower hereunder or under any other Loan
Document any debt owing to, and any other funds held in any manner
for the account of, the Borrower by such Bank or participant or by
such branch, subsidiary or affiliate, including, without
limitation, all funds in all deposit accounts (whether time or
demand, general or special, provisionally credited or finally
credited, or otherwise) now or hereafter maintained by the Borrower
for its own account (but not including funds held in custodian or
trust accounts) with such Bank or participant or such branch,
subsidiary or affiliate. Such right shall exist whether or not any
Bank or the Agent shall have made any demand under this Agreement
or any other Loan Document, whether or not such debt owing to or
funds held for the account of the Borrower is or are matured or
unmatured and regardless of the existence or adequacy of any other
security, right or remedy available to any Bank or the Agent; and
(d) If an Event of Default shall occur and be
continuing, and whether or not the Agent shall have accelerated the
maturity of the Term Loans of the Borrower pursuant to any of the
foregoing provisions of this Section 8.2, the Agent or any Bank, if
owed any amount with respect to the Notes, may, after obtaining the
consent of the Required Banks, proceed to protect and enforce its
rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant or
agreement contained in this Agreement or the Notes, including as
permitted by applicable Law the obtaining of the appointment of a
receiver, and, if such amount shall have become due, by declaration
or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of the Agent or such Bank; and
(e) In addition to all of the rights and remedies
contained in this Agreement or in any of the other Loan Documents,
the Agent and the Banks shall have all of the rights and remedies
of a creditor under applicable Law, all of which rights and
remedies shall be cumulative and non-exclusive, to the extent
permitted by Law. The Agent may, and upon the request of the
Required Banks shall, exercise all post-default rights granted to
the Agent and the Banks under the Loan Documents or applicable Law.
ARTICLE IX
AGENT
IX.1 Appointment. Each Bank hereby irrevocably designates,
appoints and authorizes PNC Bank to act as Agent for such Bank
under this Agreement and the other Loan Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the
Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and any other
instruments and agreements referred to herein and therein, and to
exercise such powers and to perform such duties hereunder and
thereunder, as are specifically delegated to or required of the
Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. PNC Bank agrees to act as the Agent
on behalf of the Banks to the extent provided in this Agreement.
IX.2 Delegation of Duties. The Agent may perform any of its
duties hereunder by or through agents or employees (provided such
delegation does not constitute a relinquishment of its duties as
Agent hereunder) and, subject to Sections 9.5 and 9.6 hereof, shall
be entitled to engage and pay for the advice or services of any
attorneys, accountants or other experts concerning all matters
pertaining to its duties hereunder and to rely upon any advice so
obtained.
IX.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or otherwise exist. The duties
of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement a fiduciary or
trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of
this Agreement except as expressly set forth herein. Each Bank
expressly acknowledges: (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or
warranty by the Agent to any Bank; (ii) that it has made and will
continue to make, without reliance upon the Agent, its own
independent investigation of the financial condition and affairs
and its own appraisal of the credit worthiness of the Borrower in
connection with this Agreement and the making and continuance of
the Term Loans hereunder; and (iii) except as expressly provided
herein, that the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any
credit or other information with respect thereto, whether coming
into its possession before the making of any Term Loan or at any
time or times thereafter.
IX.4 Actions in Discretion of Agent; Instructions from the
Banks. The Agent agrees, upon the written request of the Required
Banks, to take or refrain from taking any action of the type
specified as being within the Agent's rights, powers or discretion
herein, provided that the Agent shall not be required to take any
action which exposes the Agent to personal liability or which is
contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent
shall have authority, in its sole discretion, to take or not to
take any such action, unless this Agreement specifically requires
the consent of the Required Banks or all of the Banks. Any action
taken or failure to act pursuant to such instructions or discretion
shall be binding on the Banks, subject to Section 9.6 hereof.
Subject to the provisions of Section 9.6, no Bank shall have any
right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting hereunder in accordance with
the instructions of the Required Banks, or in the absence of such
instructions, in the absolute discretion of the Agent.
IX.5 Reimbursement and Indemnification of Agent by the
Borrower. The Borrower unconditionally agrees upon demand to pay
or reimburse the Agent and save the Agent harmless against (a)
liability for the payment of all reasonable out-of-pocket costs,
expenses and disbursements, including but not limited to reasonable
fees and expenses of counsel, appraisers and environmental
consultants, incurred by the Agent (provided, however, that with
respect only to the fees and expenses of appraisers and
environmental consultants, the Borrower's agreement to pay and
reimburse and save harmless shall relate to such fees and expenses
incurred after the occurrence of an Event of Default) (i) in
connection with the development, negotiation, preparation,
printing, execution, administration, syndication, interpretation
and performance of this Agreement and the other Loan Documents,
(ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof, (iii) in connection with the
enforcement of this Agreement or any other Loan Document or
collection of amounts due hereunder or thereunder or the proof and
allowability of any claim arising under this Agreement or any other
Loan Document, whether in bankruptcy or receivership proceedings or
otherwise, and (iv) in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any
of the terms hereof or of any rights hereunder or under any other
Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, and (b) all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Agent, in
its capacity as such, in any way relating to or arising out of this
Agreement or any other Loan Documents or any action taken or
omitted by the Agent hereunder or thereunder, provided that the
Borrower shall not be liable for any portion of the liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of an indemnitee if the same
results from an indemnitee's gross negligence or willful
misconduct, or if the Borrower was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at
its expense, or if the same results from a compromise or settlement
agreement entered into without the consent of the Borrower. Except
to the extent covered by the preceding sentence, the Borrower shall
not be liable to the Agent for consequential or punitive damages
resulting from any breach of contract, tort or other wrong in
connection with the negotiation, documentation, administration or
collection of the Term Loans or any of the Loan Documents. In
addition, the Borrower agrees upon demand to reimburse and pay all
reasonable out-of-pocket expenses of the Agent's regular employees
and agents engaged after the occurrence of an Event of Default to
perform audits of the Borrower's books, records and business
properties.
IX.6 Exculpatory Provisions. Neither the Agent nor any of
its directors, officers, employees, agents, attorneys or affiliates
shall (a) be liable to any Bank for any action taken or omitted to
be taken by it or them hereunder, or in connection herewith
including without limitation pursuant to any Loan Document, unless
caused by its or their own gross negligence or willful misconduct,
(b) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due
execution of this Agreement or any other Loan Documents or for any
recital, representation, warranty, document, certificate, report or
statement herein or made or furnished under or in connection with
this Agreement or any other Loan Documents, or (c) be under any
obligation to any of the Banks to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Borrower, or the
financial condition of the Borrower, or the existence or possible
existence of any Event of Default or Potential Event of Default.
Neither the Agent nor any Bank nor any of their respective
directors, officers, employees, agents, attorneys or affiliates
shall be liable to the Borrower for consequential or punitive
damages resulting from any breach of contract, tort or other wrong
in connection with the negotiation, documentation, administration
or collection of the Term Loans or any of the Loan Documents.
IX.7 Reimbursement and Indemnification of Agent by Banks.
Each Bank agrees to reimburse and indemnify the Agent (to the
extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so) in proportion to its Ratable
Share from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as
such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by the
Agent hereunder or thereunder, provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of an indemnitee (a) if the same results from such
indemnitee's gross negligence or willful misconduct, or (b) if such
Bank was not given notice of the subject claim and the opportunity
to participate in the defense thereof, at its expense, or (c) if
the same results from a compromise and settlement agreement entered
into without the consent of such Bank. In addition, each Bank
agrees promptly upon demand to reimburse the Agent (to the extent
not reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so) in proportion to its Ratable Share for
all amounts due and payable by the Borrower to the Agent in
connection with the Agent's audit of the Borrower's books, records
and business properties.
IX.8 Reliance by Agent. The Agent shall be entitled to rely
upon any writing, telegram, facsimile, telex or teletype message,
resolution, notice, consent, certificate, letter, cablegram,
statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or persons, and upon the
advice and opinions of counsel and other professional advisers
selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Banks against any
and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
IX.9 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Potential Event
of Default or Event of Default unless the Agent has received
written notice from a Bank or the Borrower referring to this
Agreement, describing such Potential Event of Default or Event of
Default and stating that such notice is a "notice of default";
promptly upon receipt of any such notice, the Agent shall send a
copy thereof to each Bank.
IX.10 Notices. The Agent shall send to each Bank a copy of
all notices received from the Borrower pursuant to the provisions
of this Agreement or the other Loan Documents (including all
documents received by the Agent pursuant to Section 7.3 of this
Agreement) promptly upon receipt thereof.
IX.11 Banks in Their Individual Capacities. With respect to
the Term Loan made by it, the Agent shall have the same rights and
powers hereunder as any other Bank and may exercise the same as
though it were not the Agent, and the term "Banks" shall, unless
the context otherwise indicates, include the Agent in its
individual capacity. PNC Bank and its affiliates and each of the
Banks and their respective affiliates may, without liability to
account, except as prohibited herein, make loans to, accept
deposits from, discount drafts for, act as trustee under indentures
of, and generally engage in any kind of banking or trust business
with, the Borrower and its affiliates, and in the case of the
Agent, as though it were not acting as Agent hereunder and in the
case of each Bank, as though such Bank were not a Bank hereunder.
IX.12 Holders of Notes. The Agent may deem and treat any
payee of any Note as the owner thereof for all purposes hereof
unless and until written notice of the assignment or transfer
thereof shall have been filed with the Agent. Any request,
authority or consent of any person who at the time of making such
request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued
in exchange therefor.
IX.13 Equalization of Banks. The Banks and the holders of
any participations in any Notes agree among themselves that, with
respect to all amounts received by any Bank or any such holder
which may be applied to any obligation hereunder or under any Note
or under any such participation, whether received by voluntary
payment, by realization upon security, if any, by the exercise of
the right of set-off or banker's lien, by counterclaim or by any
other non-pro rata source, notwithstanding any right of any Bank or
holder of any participation in any Note to apply such amounts to
any other obligation, all such amounts shall be applied first to
all obligations of Borrower under this Agreement and the other Loan
Documents and equitable adjustment will be made in the manner
stated in the following sentence so that, in effect, all such
excess amounts will be shared ratably among the Banks and such
holders in proportion to their interests in payments under the
Notes, except as otherwise provided in Sections 3.4(b), 4.5(A)(b)
or 4.6(a) hereof. The Banks or any such holder receiving any such
amount shall purchase for cash from each of the other Banks an
interest in such Bank's Term Loan in such amount as shall result in
a ratable participation by the Banks and each such holder in the
aggregate unpaid amount under the Notes, provided that if all or
any portion of such excess amount is thereafter recovered from the
Bank or the holder making such purchase, such purchase shall be
rescinded and the purchase price restored to the extent of such
recovery, together with interest or other amounts, if any, required
by law (including court order) to be paid by the Bank or the holder
making such purchase.
IX.14 Successor Agent. The Agent may resign as Agent upon
not less than thirty (30) days' prior written notice to the
Borrower and the Banks. If the Agent shall resign under this
Agreement, then either (a) the Required Banks shall appoint a
successor agent for the Banks, or (b) if a successor agent shall
not be so appointed and approved within the thirty (30) day period
following the Agent's notice to the Banks of its resignation, then
the Agent shall appoint, with the consent of the Borrower, such
consent not to be unreasonably withheld, a successor agent who
shall serve as Agent until such time as the Required Banks appoint
a successor agent. Upon an appointment pursuant to either clause
(a) or (b) above, such successor agent shall succeed to the rights,
powers and duties of the Agent and the term "Agent" shall mean such
successor agent, effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated
without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the
resignation of any Agent hereunder, the provisions of this Article
IX shall inure to the benefit of such former Agent and such former
Agent shall not by reason of such resignation be deemed to be
released from liability for any actions taken or not taken by it
while it was an Agent under this Agreement.
IX.15 Agent's Fee. The Borrower shall pay an Agent's Fee in
accordance with the letter dated May 14, 1997 among the Borrower,
PNC Capital Markets, Inc. and the Agent.
IX.16 Calculations. In the absence of gross negligence or
willful misconduct, the Agent shall not be liable for any error in
computing the amount payable to any Bank whether in respect of the
Term Loans, fees or any other amounts due to the Banks under this
Agreement. In the event an error in computing any amount payable
to any Bank is made, the Agent, the Borrower and each affected Bank
shall, forthwith upon discovery of such error, make such
adjustments as shall be required to correct such error, and any
compensation therefor will be calculated at the Federal Funds
Effective Rate.
IX.17 Beneficiaries. Except as expressly provided herein,
the provisions of this Article IX are solely for the benefit of the
Agent and the Banks, and the Borrower shall not have any rights to
rely on or enforce any of the provisions hereof. In performing its
functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Borrower.
ARTICLE X
MISCELLANEOUS
X.1 Modifications Amendments or Waivers. With the written
consent of the Required Banks, the Agent, acting on behalf of all
the Banks, and the Borrower may from time to time enter into
written agreements amending or changing any provision of this
Agreement or any other Loan Document or the rights of the Banks or
the Borrower hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the
obligations of the Borrower hereunder or thereunder. Any such
agreement, waiver or consent made with such written consent shall
be effective to bind all the Banks; provided, that, without the
written consent of all the Banks (including in the case of
subsection 10.1(b), all institutions which are participants under
Section 10.11(f) hereof), no such agreement, waiver or consent may
be made which will:
(a) Reduce the amount of any fees payable to any Bank
hereunder, or amend or waive Sections 4.4, 9.6, 9.13 and 10.11(a),
or Article VI, hereof;
(b) Whether or not any Term Loans are outstanding,
extend the time for payment of principal or interest of any Term
Loan, or reduce the principal amount of or the rate of interest
borne by any Term Loan, or otherwise affect the terms of payment of
the principal of or interest of any Term Loan; or
(c) Amend this Section 10.1, change the definition of
Required Banks, or change any requirement providing for the Banks
or the Required Banks to authorize the taking of any action
hereunder.
X.2 No Implied Waivers; Cumulative Remedies; Writing
Required. No course of dealing and no delay or failure of the
Agent or any Bank in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or operate as a waiver
thereof; nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right,
power, remedy or privilege preclude any further exercise thereof or
of any other right, power, remedy or privilege. The rights and
remedies of the Agent and the Banks under this Agreement and any
other Loan Documents are cumulative and not exclusive of any rights
or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any
Bank of any breach or default under this Agreement or any such
waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set
forth in such writing.
X.3 Reimbursement and Indemnification of Agent and Banks by
the Borrower; Taxes. The Borrower agrees unconditionally upon
demand to pay or reimburse to each Bank and to save such Bank
harmless against (i) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements (including
reasonable fees and expenses of counsel for each Bank except with
respect to (a) and (b) below and subject to this Section 10.3),
incurred by such Bank (a) in connection with the administration and
interpretation of this Agreement and the other Loan Documents, (b)
relating to any amendments, waivers or consents pursuant to the
provisions hereof, (c) in connection with the enforcement of this
Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (d) in any
workout, restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or
of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy
proceedings, or (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against such Bank, in its capacity as
such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by such
Bank hereunder or thereunder, provided that the Borrower shall not
be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (a) if the same results from such Bank's gross
negligence or willful misconduct, or (b) if the Borrower was not
given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or (c) if the
same results from a compromise or settlement agreement entered into
by such Bank without the consent of the Borrower or (d) if the same
results from legal proceedings commenced by any Bank against any
other Bank. Except to the extent covered by the preceding
sentence, the Borrower shall not be liable to any Bank for
consequential or punitive damages resulting from any breach of
contract, tort or other wrong in connection with the negotiation,
documentation, administration or collection of the Term Loans or
any of the Loan Documents. The Banks will attempt to minimize the
fees and expenses of legal counsel for the Banks which are subject
to reimbursement by the Borrower hereunder by using one (1) law
firm to represent the Banks and the Agent, absent any conflict of
interest. The Borrower agrees unconditionally to pay all stamp,
document, transfer, recording or filing taxes or fees and similar
impositions now or hereafter determined by the Agent or any Bank to
be payable in connection with this Agreement or any other Loan
Document, and the Borrower agrees unconditionally to save the Agent
and the Banks harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or
impositions.
X.4 Holidays. Whenever any payment or action to be made or
taken hereunder shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on the
next following Business Day, and such extension of time shall be
included in computing interest or fees, if any, in connection with
such payment or action.
X.5 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right
from time to time, without notice to the Borrower, to deem any
branch, subsidiary or affiliate (which for the purposes of this
Section 10.5 shall mean any corporation or association which is
directly or indirectly controlled by or is under direct or indirect
common control with any corporation or association which directly
or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Term Loan, provided that immediately
following (on the assumption that a payment were then due from the
Borrower to such other office) and as a result of such change the
Borrower would not be under any greater financial obligation
pursuant to Section 4.5 hereof than it would have been in the
absence of such change. Notional funding offices may be selected
by each Bank without regard to the Bank's actual methods of making,
maintaining or funding the Term Loans or any sources of funding
actually used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right
from time to time to make or maintain any Term Loan by arranging
for a branch, subsidiary or affiliate of such Bank to make or
maintain such Term Loan subject to the last sentence of this
Section 10.5(b). If any Bank causes a branch, subsidiary or
affiliate to make or maintain any part of the Term Loans hereunder,
all terms and conditions of this Agreement shall, except where the
context clearly requires otherwise, be applicable to such part of
the Term Loans to the same extent as if such Term Loans were made
or maintained by such Bank but in no event shall any Bank's use of
such a branch, subsidiary or affiliate to make or maintain any part
of the Term Loans hereunder cause such Bank or such branch,
subsidiary or affiliate to incur any cost or expenses payable by
the Borrower hereunder or require the Borrower to pay any other
compensation to any Bank (including, without limitation, any
expenses incurred or payable pursuant to Section 4.5 hereof) which
would otherwise not be incurred.
X.6 Notices. All notices, requests, demands, directions
and other communications (collectively "notices") given to or made
upon any party hereto under the provisions of this Agreement shall
be by telephone or in writing (including facsimile communication)
unless otherwise expressly permitted hereunder and shall be
delivered or sent by facsimile to the respective parties at the
addresses and numbers set forth under their respective names on the
signature pages hereof or in accordance with any subsequent
unrevoked written direction from any party to the others. All
notices shall, except as otherwise expressly herein provided, be
effective (a) in the case of facsimile, when received, except if
received other than during normal business hours, in which case on
the next Business Day, (b) in the case of hand-delivered notice,
when hand delivered, (c) in the case of telephone, when telephoned,
provided, however, that in order to be effective, telephonic
notices must be confirmed in writing no later than the next
Business Day by facsimile, (d) if given by mail, four (4) days
after such communication is deposited in the mails with first class
postage prepaid, return receipt requested, and (e) if given by any
other means (including by air courier), when delivered; provided,
that notices to the Agent shall not be effective until received.
Any Bank giving any notice to the Borrower shall simultaneously
send a copy thereof to the Agent, and the Agent shall promptly
notify the other Banks of the receipt by it of any such notice.
X.7 Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall
be held invalid or unenforceable in whole or in part in any
jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
X.8 Governing Law. This Agreement shall be deemed to be a
contract under the laws of the Commonwealth of Pennsylvania and for
all purposes shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania
without regard to its conflict of laws principles.
X.9 Prior Understanding. This Agreement supersedes all
prior understandings and agreements, whether written or oral,
between the parties hereto and thereto relating to the transactions
provided for herein and therein, including, but not limited to, any
prior confidentiality agreements and commitment letters.
X.10 Duration; Survival. All representations and warranties
of the Borrower contained herein or made in connection herewith
shall survive the making of Term Loans and shall not be waived by
the execution and delivery of this Agreement, any investigation by
the Agent or the Banks, the making of Term Loans, or payment in
full of the Term Loans. All covenants and agreements of the
Borrower contained in Section 7.1, 7.2 and 7.3 herein shall
continue in full force and effect from and after the date hereof
until payment in full of the Term Loans. All covenants and
agreements of the Borrower contained herein relating to the payment
of principal, interest, premiums, additional compensation or
expenses and indemnification, including those set forth in the
Notes, Article IV and Section 9.5, 9.7 and 10.3 hereof, shall
survive payment in full of the Term Loans.
X.11 Successors and Assigns. (a) This Agreement shall
be binding upon and shall inure to the benefit of the Banks, the
Agent, the Borrower and their respective successors and permitted
assigns, except that the Borrower may not assign or transfer any of
its rights and obligations hereunder or any interest herein.
(b) Each Bank may assign to one or more banks or other
entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its
Term Loan owing to it and the Note held by it); provided, however,
that (i) except in the case of an assignment to an existing Bank or
an Affiliate of an existing Bank or a successor by merger to an
existing Bank, the amount of the Term Loan Commitment of the
Transferor Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Assumption
Agreement with respect to such assignment) shall in no event be
less than Five Million Dollars ($5,000,000), (ii) each such
assignment shall be to an Eligible Assignee or to an existing Bank
or a successor by merger to an existing Bank or to an Affiliate of
an existing Bank or a successor by merger to an existing Bank or
the assignor, (iii) such assignment shall not result in a
Prohibited Transaction, and (iv) the parties to each such
assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and
Assumption Agreement, together with any Note subject to such
assignment and, a processing and recordation fee of Three Thousand
Dollars ($3,000). Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Assumption Agreement, which effective date shall be
the second Business Day following the Transfer Effective Notice,
(x) the Purchasing Bank shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Assumption Agreement, have the
rights and obligations of a Bank under the Loan Documents and (y)
the Transferor Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Assumption Agreement, relinquish its rights and be
released from its obligations under the Loan Documents (and, in the
case of an Assignment and Assumption Agreement covering all or the
remaining portion of a Transferor Bank's rights and obligations
under the Loan Documents, such Transferor Bank shall cease to be a
party thereto.)
Notwithstanding the foregoing, nothing herein shall
prohibit any Bank from pledging or assigning any Note to any
Federal Reserve Bank in accordance with Law.
(c) By executing and delivering an Assignment and
Assumption Agreement, the Transferor Bank and the Purchasing Bank
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Assumption Agreement, such Transferor Bank makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or
in connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such Transferor Bank makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Loan
Documents or any instrument or document furnished pursuant hereto;
(iii) such Purchasing Bank confirms that it has received a copy of
the Loan Documents, together with copies of the documents and
information as it has deemed appropriate to make its own credit
analysis and decisions to enter into such Assignment and Assumption
Agreement; (iv) such Purchasing Bank will, independently and
without reliance upon the Agent, such Transferor Bank or any other
Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such
Purchasing Bank confirms that it is an Eligible Assignee, an
existing Bank or a successor by merger to an existing Bank or is an
Affiliate of an existing Bank or a successor by merger to an
existing Bank or the assignor; (vi) such Purchasing Bank appoints
and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such
Purchasing Bank agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Bank.
(d) The Agent shall maintain at its address referred
to in Section 10.6 a copy of each Assignment and Assumption
Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the
principal amount of the Term Loans owing to, each Bank from time to
time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all
purposes of the Loan Documents. The Register shall be available
for inspection by the Borrower or any Bank at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Assumption
Agreement executed by a Transferor Bank and an assignee
representing that it is an Eligible Assignee or is an existing Bank
or a successor by merger to an existing Bank or an Affiliate of an
existing Bank or a successor by merger to an existing Bank or is an
Affiliate of such Transferor Bank, together with the Note subject
to such assignment, the Agent shall, if such Assignment and
Assumption Agreement has been completed and is in substantially the
form of Exhibit "D" hereto and is permitted under this Agreement,
(i) accept such Assignment and Assumption Agreement, (ii) record
the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower. Within five (5) Business
Days after its receipt of such notice, the Borrower, at the
Transferor Bank's expense, shall execute and deliver to the Agent
in exchange for the surrendered Note a new Note to the order of
such assignee in an amount equal to the Term Loan assumed by it
pursuant to such Assignment and Assumption Agreement and, if the
Transferor Bank has retained a Term Loan hereunder, a new Note to
the order of the Transferor Bank in an amount equal to the Term
Loan retained by it hereunder. Such new Note or Notes shall be in
an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note, shall be dated the Funding Date
and shall otherwise be in substantially the form of Exhibit "A".
There shall be no loss of interest on the surrendered Note. All
Notes executed and issued upon any transfer of Notes shall be
legal, valid and binding obligations of the Borrower, evidencing
the same debt, and entitled to the same security and benefits under
this Agreement as the Notes surrendered for such transfer or
exchange.
(f) Each Bank may sell participations to one or more
banks or to other entities in or to all or a portion of its rights
and obligations under this Agreement; provided, however, that (i)
such Bank's obligations under this Agreement (including, without
limitation, its Term Loan to the Borrower hereunder) shall remain
unchanged, (ii) such sale of participations shall not result in a
Prohibited Transaction, (iii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iv) such Bank shall remain the holder of such Note
for all purposes of this Agreement, and (v) the Borrower, the Agent
and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations
under this Agreement.
(g) Any Bank may, in connection with an assignment or
participation or proposed assignment or participation pursuant to
this Section 10.11, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the
Borrower furnished to such Bank by or on behalf of the Borrower;
provided that, prior to any disclosure, the assignee or participant
or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the
Borrower received by it from such Bank as provided in Section 10.12
hereof.
X.12 Confidentiality. The Agent and the Banks each agree to
keep confidential all information obtained from the Borrower which
is nonpublic and confidential or proprietary in nature (including
any information the Borrower specifically designates as
confidential), except as provided below, and to use such
information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The
Agent and the Banks shall be permitted to disclose such information
(i) to outside legal counsel, accountants and other professional
advisors who need to know such information in connection with the
administration and enforcement of this Agreement, subject to
agreement of such persons to maintain the confidentiality, (ii) to
assignees and participants and proposed assignees and participants
as contemplated by Section 10.11, (iii) to the extent requested by
any bank regulatory authority or, with notice to the Borrower, as
otherwise required by applicable law or by any subpoena or similar
legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this
Agreement, (iv) if it becomes publicly available other than as a
result of a breach of this Agreement or becomes available from a
source not subject to confidentiality restrictions, or (v) the
Borrower shall have consented to such disclosure.
X.13 Counterparts. This Agreement may be executed by
different parties hereto on any number of separate counterparts,
each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one
and the same instrument.
X.14 Agent's or Bank's Consent. Whenever the Agent's or any
Bank's consent is required to be obtained under this Agreement or
any of the other Loan Documents as a condition to any action,
inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and
absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
X.15 Exceptions. The representations, warranties and
covenants contained herein shall be independent of each other and
no exception to any representation, warranty or covenant shall be
deemed to be an exception to any other representation, warranty or
covenant contained herein unless expressly provided herein or in
any Schedule, nor shall any such exceptions be deemed to permit any
action or omission that would be in contravention of applicable
law.
X.16 Consent to Forum; Waiver of Jury Trial. The Borrower
hereby irrevocably consents to the non-exclusive jurisdiction of
the Court of Common Pleas of Luzerne County, Pennsylvania and the
United States District Court for the Middle District of
Pennsylvania as to any and all matters arising out of or relating
to this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby, and waives personal service of any
and all process upon it and consents that all such service of
process may be made by certified or registered mail directed to the
Borrower at the address provided for in Section 10.6 hereof, or may
be made as otherwise provided under the laws of the Commonwealth of
Pennsylvania. The Borrower waives any objection to jurisdiction
and venue of any action instituted against it as provided above, or
based upon forum non conveniens, and agrees not to assert any
defense or claim based on lack of jurisdiction or venue, or forum
non conveniens.
THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT TO THE FULL EXTENT PERMITTED BY LAW.
This Section is a material aspect of this Agreement and the
Borrower acknowledges that the Banks would not extend credit to the
Borrower hereunder if the consents and waivers set forth in this
Section 10.16 were not a part of this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the
day and year first above written.
ATTEST: (SEAL) PG ENERGY INC.
By:/s/ Xxxxxxx X. Xxxxxxxx By: /s/Xxxx X. Xxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxx, Xx.
Title: Treasurer and Title: Vice President,
Assistant Secretary Financial Services
Address for Notices:
PG Energy Inc.
Xxx XXX Xxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000-0000
Telecopier No. (000) 000-0000
Attention: Xxxxxxx X. XxXxxxxxxx
Telephone No. (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address for Notices:
PNC Bank, National Association
00 Xxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx-Xxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Telephone No. (000) 000-0000
FIRST UNION NATIONAL BANK
By:/s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: Vice President
Address for Notices:
First Union National Bank
One First Union Center, 5th Floor
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Xx. Xxxxx X. Xxxx
Telephone No. (000) 000-0000
MELLON BANK, N.A.
By:/s/W.Xxxxx XxXxxxx
Name: W.Xxxxx XxXxxxx
Title: Vice President
Address for Notices:
Mellon Bank, N.A.
Northeastern Region
Middle Market Department
0 Xxxx Xxxxxx Xxxxxx
Xxxxxx-Xxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: W. Xxxxx XxXxxxx
Telephone No. (000) 000-0000
CORESTATES BANK, N.A.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address for Notices:
CoreStates Bank, N.A.
0 Xxxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Telephone No. (000) 000-0000
SCHEDULE 1.1(a)
TERM LOAN AMOUNT OF BANKS
BANK AMOUNT
OF TERM LOAN PERCENTAGE
[CAPTION]
[S] [C] [C]
PNC Bank, National Association $ 10,000,000 40%
First Union National Bank 5,000,000 20%
Mellon Bank, N.A. 5,000,000 20%
CoreStates Bank, N.A. 5,000,000 20%
$25,000,000 100%
SCHEDULE 1.1(b)
PERMITTED LIENS
1. Liens existing pursuant to the Indenture of Mortgage and Deed
of Trust dated as of March 15, 1946, from the Borrower
(formerly Scranton-Spring Brook Water Service Company) to
First Trust of New York, National Association, as supplemented
by thirty supplemental indentures.
SCHEDULE 5.1(g)
LITIGATION
None
SCHEDULE 5.1(l)
CONSENTS AND APPROVALS
1. Securities Certificate adopted and entered on July 10, 1997,
by the Pennsylvania Public Utility Commission.
SCHEDULE 5.1(q)
EMPLOYEE BENEFIT PLAN DISCLOSURES
None
SCHEDULE 5.1(s)
ENVIRONMENTAL DISCLOSURES
None
SCHEDULE 7.2(a)
EXISTING INDEBTEDNESS
1. Indebtedness under the Indenture of Mortgage and Deed of Trust
dated as of March 15, 1946, from the Borrower (formerly
Scranton-Spring Brook Water Service Company) to First Trust of
New York, National Association, as supplemented by thirty
supplemental indentures aggregating $55,000,000 as of August
14, 1997.
2. Indebtedness under Promissory Notes dated April 8, 1997,
issued by the Borrower in favor of Mellon Bank, N.A., in the
amount of $_______ as of August 14, 1997.
3. Indebtedness under a Promissory Note dated May 30, 1996, as
amended, issued by the Borrower in favor of PNC Bank, National
Association, in the amount of $_______ as of August 14, 1997.
4. Indebtedness under a Promissory Note dated March 25, 1997,
issued by the Borrower in favor of First Union National Bank,
National Association, in the amount of $______ as of August
14, 1997.
5. Indebtedness under a Promissory Note dated July 3, 1997,
issued by the Borrower in favor of CoreSTates Bank, N.A. in
the amount of $_______ as of August 14, 1997.
6. Indebtedness under a Promissory Note dated May 28, 1997,
issued by the Borrower in favor of Fleet Bank in the amount of
$_______ as of August 14, 1997.
7. Indebtedness under a Promissory Note dated June 24, 1997,
issued by the Borrower in favor of First Heritage Bank in the
amount of $1,500,000 as of August 14, 1997.
8. Indebtedness under a Promissory Note dated August 1, 1997,
issued by the Borrower in favor of Penn Security Bank & Trust
Company in the amount of $1,000,000 as of August 14, 1997.
9. Indebtedness under a Promissory Note dated February 14, 1997,
issued by Honesdale Gas Company, a Subsidiary of the Borrower,
in favor of Xxxxx Bank in the amount of $25,000 as of August
14, 1997.
SCHEDULE 7.2(g)
ASSET SALES
None
SCHEDULE 7.2(i)
SUBSIDIARIES
1. Honesdale Gas Company
2. Penn Gas Development Co.
EXHIBIT "A"
TERM LOAN NOTE
$ Xxxxxx-Xxxxx, Pennsylvania
______________, 1997
This Term Loan Note (the "Note") is executed and delivered under
and pursuant to the terms of that certain Term Loan Agreement dated
August 14, 1997 (together with all extensions, renewals,
amendments, substitutions or replacements, the "Agreement") by and
among PG ENERGY INC., a Pennsylvania corporation (the "Borrower"),
the banks parties thereto (the "Banks") and PNC BANK, NATIONAL
ASSOCIATION, as agent for the Banks (the "Agent").
FOR VALUE RECEIVED, the Borrower hereby promises to pay to the
order of (the "Bank"), at the office of the
Agent at its address set forth in the Agreement, on August 14,
2002, the principal sum of MILLION
DOLLARS ($ ).
Interest on the unpaid principal balance hereof shall be due and
payable and calculated in accordance with the terms of the
Agreement. The interest rate will be adjusted, when necessary and
if appropriate, in accordance with the terms of the Agreement.
Interest payments shall be made at the office of the Agent set
forth in the Agreement.
This Note is one of the Notes referred to in the Agreement. All of
the terms, conditions, covenants, representations and warranties of
the Agreement are incorporated herein by reference as if the same
were fully set forth herein including but not limited to the
provisions thereof relating to the repayment of, prepayment of, and
the acceleration of the maturity of, the indebtedness evidenced by
this Note. All terms used herein as defined terms which are not
defined herein but are defined in the Agreement shall have the
respective meanings herein as are given them in the Agreement.
Upon the occurrence of any Event of Default specified in the
Agreement, the principal hereof and accrued interest hereon may
become forthwith due and payable, all as provided in the Agreement.
In the event of a conflict between the terms of this Note and any
other agreement, the terms of this Note shall control.
Demand, presentation, protest, notice of dishonor and notice of
default are hereby waived.
This Note may be assigned by the Bank (or any other permitted
holder hereof), in whole or in part, at any time and from time to
time, to any person ("Permitted Assignee") in accordance with the
terms and provisions of the Agreement. This Note shall be binding
upon the successors and assigns of the Borrower and shall inure to
the benefit of the successors and the Permitted Assignees of the
Bank.
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the Commonwealth of Pennsylvania
without regard to the principles thereof regarding conflict of
laws.
THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF LUZERNE COUNTY,
PENNSYLVANIA AND THE UNITED STATES DISTRICT COURT FOR THE MIDDLE
DISTRICT OF PENNSYLVANIA AS TO ANY AND ALL MATTERS ARISING OUT OF
OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY,
AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED
OR REGISTERED MAIL DIRECTED TO THE BORROWER AT ITS ADDRESS PROVIDED
FOR IN SECTION 10.6 OF THE AGREEMENT, OR MAY BE MADE AS OTHERWISE
PROVIDED UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE
BORROWER WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY
ACTION INSTITUTED AGAINST IT AS PROVIDED ABOVE, OR BASED ON FORUM
NON CONVENIENS, AND AGREES NOT TO ASSERT ANY DEFENSE OR CLAIM BASED
ON LACK OF JURISDICTION OR VENUE, OR FORUM NON CONVENIENS.
WITNESS the due execution hereof on the date first above written
with intent to be legally bound hereby, and with the further
intention that this Term Loan Note shall constitute a sealed
instrument.
ATTEST: (SEAL) PG ENERGY INC.
By: By:
Name: Name:
Title: Title:
By:
Name:
Title:
EXHIBIT "B-1"
Opinion of House Counsel of the Borrower
August 14, 1997
PNC Bank, National Association
as Agent for the Banks
(as defined below)
[address]
Ladies and Gentlemen:
I am House Counsel of PG Energy Inc., a Pennsylvania
corporation (the "Borrower"). This opinion is being delivered to
you in connection with the execution and delivery of the Term Loan
Agreement dated as of August 14, 1997 (the "Term Loan Agreement")
among the Borrower, the banks parties thereto (the "Banks") and PNC
Bank, National Association, as agent for the Banks (the "Agent")
and the execution and delivery of the Notes issued pursuant
thereto.
This opinion is delivered to you pursuant to Section 6.1(d) of
the Term Loan Agreement. All capitalized terms used herein and not
otherwise defined herein have the respective meanings ascribed to
them in the Term Loan Agreement.
In connection with the transactions contemplated by the Term
Loan Agreement, Xxxxxx Xxxxxxx & Xxxx L.L.P. has acted as special
corporate counsel for the Borrower. As House Counsel of the
Borrower I have made such investigations of law, have examined the
Term Loan Agreement and Notes, and certificates of public officials
and of the Borrower, and have examined corporate documents and
records of the Borrower and have made such examinations and
inquiries as I have deemed necessary or appropriate in connection
with this opinion hereinafter set forth. In rendering this opinion,
I have also relied upon certificates of Official Bodies and, have
assumed the genuineness of signatures of all persons (other than
officers of the Borrower) signing any documents, the authenticity
of all documents submitted to me as originals and the conformity to
original documents of all documents submitted to me as certified,
conformed or photostatic copies.
In rendering this opinion, I have assumed that (x) the
Term Loan Agreement has been duly authorized, executed and
delivered by each Bank and the Agent and (y) the Term Loan
Agreement constitutes the valid and binding obligation of each Bank
and the Agent enforceable against them in accordance with its
terms.
The opinions expressed herein are subject to the following
qualifications:
(i) the enforceability of the Term Loan Agreement
and the Notes is subject to the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors
generally;
(ii) the enforceability of the Term Loan Agreement
and the Notes is subject to the effect of general
principles of equity (regardless of whether enforcement
is considered in proceedings at law or in equity) and to
the discretion of the court before which any proceeding
therefor may be brought (including without limitation the
discretion of a court to grant or limit the right of
specific performance);
(iii) the provisions of the Term Loan Agreement
that permit any Person to take action or make
determinations, or to benefit from indemnities or similar
undertakings, may be subject to requirements that such
action be taken or such determinations be made, or that
any action or inaction by such Person that may give rise
to a request for payment under such an indemnity or
similar undertaking be taken or not taken, on a
reasonable basis and in good faith;
(iv) the indemnities in the Term Loan Agreement
may be unenforceable or limited based upon public policy
considerations or applicable law;
(v) under certain circumstances the requirement
that the provisions of the Term Loan Agreement and the
Notes may be modified or waived only in writing or only
in a specific instance may be unenforceable to the extent
that an oral agreement has been effected or a course of
dealing has occurred modifying such provisions;
(vi) a court may modify or limit contractual
awards of attorneys' fees; and
(vii) the use of the phrase (a) "to my knowledge"
is intended to be limited to my actual knowledge as House
Counsel of the Borrower and (b) "after due inquiry" is
intended to be limited to a review of the subject matter
of the opinions so qualified with appropriate officers of
Borrower and a review of such documents or agreements as
may have been identified by such officers as being
necessary to be reviewed in connection with the subject
matter of such opinions.
Based upon the foregoing, I am of the opinion that:
1. The Borrower is duly organized and is validly existing as
a corporation in good standing under the laws of the Commonwealth
of Pennsylvania, with the corporate power and corporate authority
under the laws of such Commonwealth, to own and operate its
property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged or proposes
to conduct. Except as disclosed in Borrower's or Pennsylvania
Enterprises, Inc.'s (PEI) Form 10-K for the fiscal year ended
December 31, 1996 or Form 10-Q for the quarter ended June 30, 1997
submitted to the Securities and Exchange Commission, to my
knowledge, after due inquiry, is in compliance with all
requirements of the Pennsylvania Public Utility Code, except to the
extent that the failure to comply therewith would not, in the
aggregate, result in a Material Adverse Change.
2. The Borrower has the corporate power and corporate
authority, and the legal right, to make, deliver and perform the
Term Loan Agreement and the Notes and to borrow thereunder and has
taken all necessary corporate action to authorize the borrowings on
the terms and conditions of the Term Loan Agreement and the Notes
and to authorize the execution, delivery and performance of the
Term Loan Agreement and the Notes. Other than the consent of the
Pennsylvania Public Utility Commission, which has been obtained, no
consent or authorization of, filing with or other act by or in
respect of, any Official Body of the Commonwealth of Pennsylvania,
is required by the Borrower in connection with the borrowings or
transactions under the Term Loan Agreement or with the execution,
delivery and performance by the Borrower of the Term Loan Agreement
or the Notes or with the validity or enforceability of the Term
Loan Agreement or the Notes as to or against the Borrower.
3. The Borrower's authorized capital stock consists of
10,000,000 shares of common stock, no par value ("Common Stock"),
of which 3,314,155 shares are issued and outstanding on the date
hereof, and 997,500 shares of preferred stock, $100.00 par value
("Preferred Stock"), of which 172,386 shares are issued and
outstanding. PEI is the record and beneficial owner of all of the
issued and outstanding shares of Common Stock of Borrower, and to
my knowledge, after due inquiry, holds such Common Stock free and
clear of any Lien. All the issued and outstanding shares of
capital stock of the Borrower and PEI are authorized, validly
issued, free of any preemptive rights and, to my knowledge, are
fully paid and nonassessable. There are no options, warrants or
other rights outstanding to purchase any shares of Borrower's
Common Stock.
4. The Term Loan Agreement and each Note has been duly
executed and delivered on behalf of the Borrower. The Term Loan
Agreement and each Note constitutes a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in
accordance with its terms.
5. The obligations of the Borrower under the Term Loan
Agreement and the Notes rank at least pari passu in priority of
payment with all other Indebtedness of the Borrower except
Indebtedness of the Borrower to the extent secured by Permitted
Liens.
6. The execution, delivery and performance by the Borrower
of the Term Loan Agreement and the Notes, the borrowings
thereunder, the use of the proceeds thereof and the other
transactions contemplated by the Term Loan Agreement and the Notes
(i) will not violate, or conflict with (with or without the giving
of notice or the lapse of time, or both), (x) the Articles of
Incorporation, the by-laws or the other organizational documents,
if any, of the Borrower, (y) any law or administrative regulation
of the Commonwealth of Pennsylvania applicable to the Borrower, or
any order, writ, judgment, injunction or decree to which the
Borrower is a party or by which it is bound or to which it is
subject or (z) any material mortgage, deed of trust, lease,
indenture, instrument, note or evidence of indebtedness or other
agreement binding upon the Borrower and (ii) will not result in, or
require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such law or administrative
regulation or any such mortgage, deed of trust, lease, indenture,
instrument, note or evidence of indebtedness or other agreement.
7. Except as disclosed in Borrower's or PEI's Form 10-K for
the fiscal year ended December 31, 1996, or Form 10-Q for the
quarter ended June 30, 1997, submitted to the Securities and
Exchange Commission, to my knowledge, after due inquiry, there are
no judgments outstanding against or actions, suits, proceedings or
investigations pending or threatened against the Borrower or PEI or
any of their respective Subsidiaries at law or equity before any
Official Body which individually or in the aggregate is reasonably
likely to result in any Material Adverse Change. To my knowledge,
after due inquiry, neither the Borrower, PEI nor any of their
respective Subsidiaries is in violation of any order, writ,
injunction or any decree of any Official Body which is reasonably
likely to result in any Material Adverse Change. There is no
action, proceeding, investigation or contested claim pending or to
my knowledge threatened, which questions the validity of the Term
Loan Agreement or the Notes or any transactions contemplated
thereby.
8. The Borrower is not subject to regulation under any State
statute or regulation which limits its ability to incur
Indebtedness.
9. The Borrower has no Subsidiaries at the date hereof other
than as listed in Schedule 7.2(i) to the Term Loan Agreement.
10. The interest rate and other charges provided for in the
Term Loan Agreement and each Note do not violate the usury or other
laws of the Commonwealth of Pennsylvania relating to the maximum
rate of interest or other charges that may be charged, paid or
collected.
I am admitted to practice law in the Commonwealth of
Pennsylvania and do not express any opinion herein concerning the
law of any jurisdiction except the Commonwealth of Pennsylvania.
All of the opinions expressed herein are rendered as of the date
hereof. I assume no obligation to update such opinions to reflect
any facts or circumstances that may hereafter come to my attention
or any changes in the law that may hereafter occur.
This letter is furnished by me solely in connection with the
Term Loan Agreement for your benefit and the benefit of each Bank a
party to the Term Loan Agreement and may not be relied upon for any
other purpose, or furnished to, used by, circulated to, quoted to
or referred to by, any other person without my prior written
consent in each instance.
Very truly yours,
EXHIBIT "B-2"
Opinion of Xxxxxx Xxxxxxx & Xxxx
August 14, 1997
PNC Bank, National Association,
as Agent for the Banks
(as defined below)
[address]
Ladies and Gentlemen:
We have acted as special counsel to PG Energy Inc., a
Pennsylvania corporation (the "Borrower"), in connection with the
execution and delivery of the Term Loan Agreement, dated as of
August 14, 1997 (the "Loan Agreement"), among the Borrower, the
Banks parties thereto (the "Banks") and PNC Bank, National
Association, as agent for the Banks (the "Agent") and the execution
and delivery of the Notes pursuant thereto.
This Opinion Letter is being furnished to you at the
request of the Borrower pursuant to Section 6.1(d) of the Loan
Agreement. All capitalized terms used herein and not otherwise
defined herein have the respective meanings ascribed to them in the
Loan Agreement or the Accord (see below).
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and
this Opinion Letter should be read in conjunction therewith.
The law covered by the opinion set forth below is limited
to the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Public Utility Holding Company Act of 1935, as amended
(the "PUHCA"), the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations under such
statutes.
In rendering the opinion set forth below, we also have
examined such certificates of public officials, corporate records
and documents and other instruments, and have made such other
investigations, as we have deemed necessary in connection with the
opinion hereinafter set forth. As to certain issues of fact
material to such opinion, we have relied upon certificates of
officers of the Borrower and upon the representations of the
Borrower contained in Section 5.1 of the Loan Agreement.
Based upon the foregoing, we are of the opinion that:
1. The Borrower is not an "investment company" or a
company "controlled" by an "investment company," within the meaning
of the Investment Company Act. The Borrower and PEI are presently
exempt, pursuant to Section 3(a) of the PUHCA, from the
requirements of the PUHCA and the rules and regulations thereunder,
other than the requirements of Section 9(a)(2) thereof.
2. No consent or authorization of, filing with or other
act by or in respect of, any Official Body is required to be
obtained or made by the Borrower or PEI under the Securities Act or
the Exchange Act of 1934 in connection with the execution, delivery
and performance by the Borrower of the Loan Agreement and the
Notes, other than ordinary disclosures in filings required to be
made by the Borrower or PEI pursuant to the disclosure requirements
of the Act and the Exchange Act, none of which disclosures are
required to be made prior to the execution and delivery of the Loan
Agreement and the Notes.
In rendering the opinion contained in the last sentence
of paragraph 1, we have assumed that (i) no Person directly or
indirectly owns, controls or holds with power to vote ten percent
(10%) or more of the voting securities (as defined in the PUHCA) of
the Borrower, except PEI, and (ii) no Person directly or indirectly
owns, controls or holds with power to vote ten percent (10%) or
more of the voting securities (as defined in the PUHCA) of PEI.
The opinion expressed herein are furnished by us in
connection with the Loan Agreement solely for your benefit and for
the benefit of each of the Banks and may not be relied upon for any
other purpose, or furnished to, used by, circulated to, quoted to
or referred to, by any other person without our prior written
consent in each instance.
Very truly yours,
Xxxxxx Xxxxxxx & Xxxx
EXHIBIT "C"
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to
Section 7.3(iii) of the Term Loan Agreement dated as of August 14,
1997 (the "Term Loan Agreement"), by and among PG Energy Inc., the
Banks named therein or made parties thereto and PNC Bank, National
Association as the Agent.
1. The undersigned hereby certifies that the
undersigned has reviewed the terms of the Term Loan Agreement and
the Notes and has made, or caused to be made under his supervision,
a review of the transactions and condition of the Borrower and of
Pennsylvania Enterprises, Inc. and its Subsidiaries during the
accounting period covered by the financial statements being
delivered to the Banks along with this Compliance Certificate and:
[(a) Such review has not disclosed the existence
during such accounting period, and the undersigned does not have
knowledge of the existence as of the date hereof, of any condition
or event which constitutes an Event of Default or a Potential Event
of Default [except as set forth in paragraph (b) hereof].]
[(b) The nature of the condition(s) or event(s)
which constitute an Event(s) of Default or Potential Event(s) of
Default is(are) as follows:]
[Existing condition(s) or event(s) to be described]
[(c) The Borrower [is taking] [is planning to take]
the following action with respect to the condition(s) or event(s)
set forth in paragraph (b) above]:
2. The calculations of the financial covenants set for
in Sections 7.2 (o) and 7.2(p) for the accounting period ended
, 199__ are set forth below:
(a) Minimum Interest Coverage
(b) Maximum Leverage Ratio
3. All terms used herein as defined terms which are not
defined herein but are defined in the Term Loan Agreement shall
have the meanings ascribed to them in the Term Loan Agreement.
PG ENERGY INC.
By:
Date: (Name and title of Authorized
Officer of Borrower)
EXHIBIT "D"
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated __________,
199__, among _________________________ (the "Transferor Bank"),
each financial institution executing this Assignment and Assumption
Agreement (each, a "Purchasing Bank"), PG Energy Inc., a
Pennsylvania corporation (the "Borrower")' and PNC Bank, National
Association, as agent for the Banks under the Agreement described
below (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, this Assignment and Assumption Agreement is
being executed and delivered in accordance with Section 10.11 of
that certain Term Loan Agreement dated as of August 14, 1997, among
the Borrower, the Transferor Bank, certain other Banks parties
thereto and the Agent (as from time to time amended, supplemented
or otherwise modified in accordance with the terms thereof, the
"Agreement");
WHEREAS, the Purchasing Bank wishes to become a Bank
party to the Agreement; and
WHEREAS, the Transferor Bank is selling and assigning to
each Purchasing Bank, rights, obligations and commitments under the
Agreement;
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. Upon receipt by the Agent of ten counterparts of
this Assignment and Assumption Agreement to each of which is
attached a fully completed Schedule I, and each of which has been
executed by the Transferor Bank, each Purchasing Bank, the Borrower
and the Agent, the Agent will transmit to the Borrower, the
Transferor Bank and each Purchasing Bank a Transfer Effective
Notice, substantially in the form of Schedule II to this Assignment
and Assumption Agreement (a "Transfer Effective Notice"). Such
Transfer Effective Notice shall set forth, inter alia, the date on
which the transfer effected by this Assignment and Assumption
Agreement shall become effective (the "Transfer Effective Date"),
which date shall be the second Business Day following the date of
such Transfer Effective Notice. From and after the Transfer
Effective Date, each Purchasing Bank shall be a Bank party to the
Agreement for all purposes thereof.
2. At or before 12:00 Noon, local time of the
Transferor Bank on the Transfer Effective Date, the Purchasing Bank
shall pay to the Transferor Bank, in immediately available funds,
an amount equal to the purchase price, as agreed between the
Transferor Bank and such Purchasing Bank (the "Purchase Price") of
the portion being purchased by such Purchasing Bank (such
Purchasing Bank's "Purchased Percentage") of the outstanding Term
Loans and other amounts owing to the Transferor Bank under the
Agreement and the Note. Effective upon receipt by the Transferor
Bank of the Purchase Price from a Purchasing Bank, the Transferor
Bank hereby irrevocably sells, assigns and transfers to such
Purchasing Bank, without recourse, representation or warranty, and
each Purchasing Bank hereby irrevocably purchases, takes and
assumes from the Transferor Bank, such Purchasing Bank's Purchased
Percentage of the presently outstanding Term Loans and other
amounts owing to the Transferor Bank under the Agreement and the
Note together with all instruments, documents and collateral
security pertaining thereto.
3. The Transferor Bank has made arrangements with each
Purchasing Bank with respect to (i) the portion, if any, to be
paid, and the date or dates for payment, by the Transferor Bank to
such Purchasing Bank of any fees heretofore received by the
Transferor Bank pursuant to the Agreement prior to the Transfer
Effective Date and (ii) the portion, if any, to be paid, and the
date or dates for payment, by such Purchasing Bank to the
Transferor Bank of fees or interest received by such Purchasing
Bank pursuant to the Agreement from and after the Transfer
Effective Date.
4. (a) All principal payments that would otherwise be
payable from and after the Transfer Effective Date to or for the
account of the Transferor Bank pursuant to the Agreement and the
Note shall, instead, be payable to or for the account of the
Transferor Bank and the Purchasing Banks, as the case may be, in
accordance with their respective interests as reflected in this
Assignment and Assumption Agreement.
(b) All interest, fees and other amounts that would
otherwise accrue for the account of the Transferor Bank from and
after the Transfer Effective Date pursuant to the Agreement and the
Note shall, instead, accrue for the account of, and be payable to,
the Transferor Bank and the Purchasing Banks, as the case may be,
in accordance with their respective interests as reflected in this
Assignment and Assumption Agreement (unless otherwise modified as
provided in paragraph 3 above). In the event that any amount of
interest, fees or other amounts accruing prior to the Transfer
Effective Date was included in the Purchase Price paid by any
Purchasing Bank, the Transferor Bank and each Purchasing Bank will
make appropriate arrangements for payment by the Transferor Bank to
such Purchasing Bank of such amount upon receipt thereof from the
Borrower.
5. On or prior to the Transfer Effective Date, the
Transferor Bank will deliver to the Agent its Note. On or prior to
the Transfer Effective Date, the Borrower will deliver to the Agent
a Note for each Purchasing Bank and the Transferor Bank, in each
case in principal amounts reflecting, in accordance with the
Agreement, the amounts of their respective Term Loans (as adjusted
pursuant to this Assignment and Assumption Agreement), whereupon
the Agent shall return to the Borrower the Note delivered by the
Transferor to the Agent, which Note shall be marked "Canceled by
Substitution". Each such new Note shall be dated the Funding Date
and there shall be no loss of interest on the surrendered Note.
Promptly after the Transfer Effective Date, the Agent will send to
each of the Transferor Bank and the Purchasing Bank its new Note.
All Notes executed and issued, upon any transfer of Notes shall be
legal, valid and binding obligations of the Borrower, evidencing
the same debt, and entitled to the same security and benefits under
the Agreement as the Notes surrendered for such transfer or
exchange.
6. Concurrently with the execution and delivery hereof,
the Transferor Bank will provide to each Purchasing Bank conformed
copies of all documents delivered to the Transferor Bank on the
Closing Date in satisfaction of the conditions precedent set forth
in the Agreement.
7. Each of the parties to this Assignment and
Assumption Agreement agrees that at any time and from time to time
upon the written request of any other party, it will execute and
deliver such further documents and do such further acts and things
as such other party may reasonably request in order to effect the
purposes of this Assignment and Assumption Agreement.
8. Each of the Transferor Bank and the Purchasing Bank
represents and warrants to the other that (i) it has full power and
legal right to execute and deliver this Assignment and Assumption
Agreement and to perform the provisions of this Assignment and
Assumption Agreement, (ii) the execution, delivery and performance
of this Assignment and Assumption Agreement have been authorized by
all necessary corporate action and (iii) this Assignment and
Assumption Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
9. By executing and delivering this Assignment and
Assumption Agreement, the Transferor Bank and the Purchasing Bank
confirm to and agree with each other and the Agent and the Banks as
follows: (i) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned
hereby free and clear of any adverse claim, the Transferor Bank
makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made
in or in connection with the Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Agreement, the Note or any other instrument or document furnished
pursuant thereto; (ii) the Transferor Bank makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the
Agreement, the Note or any other instrument, document or
certificate furnished pursuant hereto; (iii) the Purchasing Bank
confirms that it has received a copy of the Agreement, together
with copies of the financial statements referred to in Section
5.1(i)(A) of the Agreement, the financial statements delivered
pursuant to Sections 7.3(i) and 7.3(ii) of the Agreement, if any,
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement; (iv) the Purchasing
Bank will, independently and without reliance upon the Agent, the
Transferor Bank or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under
the Agreement; (v) each Purchasing Bank appoints and authorizes the
Agent to take such action as agent on behalf of the Purchasing Bank
and to exercise such powers under the Agreement as are delegated to
the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Article IX of
the Agreement; and (vi) each Purchasing Bank agrees that it will
perform all of its respective obligations as set forth in the
Agreement to be performed by each as a Bank.
10. Schedule I hereto sets forth the revised Term Loan
Amounts and Term Loan Percentages of the Transferor Bank and the
Purchasing Bank as well as administrative information with respect
to each other Bank.
11. This Assignment and Assumption Agreement shall be
governed by, and construed in accordance with, the laws of the
Commonwealth of Pennsylvania. All terms used herein as defined
terms which are not defined herein but are defined in the Agreement
shall have the meaning ascribed to them in the Agreement, unless
the context clearly indicates otherwise. All section references
herein are to the Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be executed by their
respective duly authorized officers on the date set forth above.
,
as Transferor Bank
By:
Name:
Title:
PG ENERGY INC.
as Borrower
By:
Name:
Title:
as a Purchasing Bank
By:
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:
Name:
Title:
SCHEDULE I TO ASSIGNMENT AND ASSUMPTION AGREEMENT
LIST OF OFFICES, ADDRESSES FOR NOTICES AND LOAN AMOUNTS
[Transferor Bank] Revised Term
Loan Amount: $
Revised Term
Loan Percentage: %
[Purchasing Bank] New Term
Loan Amount: $
New Term
Loan Percentage: %
Address for Notices:
Attention:
Telephone: (___) ___-______
Telecopier: (___) ___-______
SCHEDULE II TO ASSIGNMENT AND ASSUMPTION AGREEMENT
[Form of Transfer Effective Notice]
To: PG Energy Inc., as Transferor Bank
and , as Purchasing Bank
The undersigned, as Agent under the Term Loan Agreement, dated as
of August 14, 1997, among PG Energy Inc., as Borrower, the Banks
parties thereto, and PNC Bank, National Association, as Agent,
acknowledges receipt of ten executed counterparts of a completed
Assignment and Assumption Agreement, as described in Schedule I
hereto. Terms defined in such Assignment and Assumption Agreement
are used herein as therein defined.
1. Pursuant to such Assignment and Assumption Agreement, you
are advised that the Transfer Effective Date will be [Insert second
Business Day following date of Transfer Effective Notice.]
2. Pursuant to such Assignment and Assumption Agreement, the
Transferor Bank is required to deliver to the Agent on or before
the Transfer Effective Date its Note.
3. Pursuant to such Assignment and Assumption Agreement, the
Borrower is required to deliver to the Agent on or before the
Transfer Effective Date the following Notes, each dated the Funding
Date:
(a) Note in the face principal amount of $
made payable to [Transferor Bank];
(b) Note in the face principal amount of $
made payable to [Purchasing Bank];
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:
Title:
IDENTIFICATION OF APPLICABLE ASSIGNMENT AND
ASSUMPTION AGREEMENT
(1) Assignment and Assumption Agreement dated as of ____________,
199__, by and among PG Energy Inc., as Borrower,
, as the Transferor Bank, , as the
Purchasing Bank, and PNC Bank, National Association, as Agent.
<-- Codes
<-- advance code $25,000,000 TERM LOANS
TERM LOAN AGREEMENT
by and among
PG ENERGY INC.
and
THE BANKS PARTIES HERETO
and
PNC BANK, NATIONAL ASSOCIATION, as Agent
Dated as of August 14, 1997
<-- Codes
TABLE OF CONTENTS
PAGE
ARTICLE I
CERTAIN DEFINITIONS 1
1.1 Certain Definitions 1
1.2 Construction 14
1.3 Accounting Principles 14
ARTICLE II
TERM LOANS 14
2.1 Term Loans 14
2.2 Use of Proceeds 14
2.3 Notes 15
2.4 Taxes. 15
ARTICLE III
INTEREST RATES 15
3.1 Interest Rate Options 15
(a) Selection of
Interest Rate Options 15
(b) Term Loan
Interest Rate Options 16
(c) Rate Quotations.
16
3.2 Euro-Rate Interest Periods 17
3.3 Interest After Default; Interest on Overdue Amount 17
3.4 Euro-Rate Unascertainable 18
3.5 Failure to Select Euro-Rate Option 19
ARTICLE IV
PAYMENTS 20
4.1 Principal Payment Date 20
4.2 Interest Payment Dates 20
4.3 Payments 20
4.4 Pro Rata Treatment of Banks 21
4.5(A) Voluntary Prepayments 21
(B) Mandatory
Prepayments 22
4.6 Additional Compensation in Certain Circumstances 23
(a) Increased Costs
or Reduced Return Resulting From Taxes, Reserves, Capital
Adequacy Requirements, Expenses, Etc 23
(b) Indemnity 24
4.7 Loan Accounts 25
ARTICLE V
REPRESENTATIONS AND WARRANTIES 25
5.1 Representations and Warranties 25
(a) Organization and
Qualification 25
(b) Capitalization
and Ownership 25
(c) Subsidiaries
25
(d) Power and
Authority 26
(e) Validity and
Binding Effect 26
(f) No Conflict
26
(g) Litigation
26
(h) Title to
Properties 26
(i) Financial
Statements 27
(j) Margin Stock
27
(k) Taxes 27
(l) Consents and
Approvals 28
(m) No Event of
Default; Compliance with Instruments 28
(n) Insurance 28
(o) Compliance with
Laws 28
(p) Investment
Companies; Other Regulations 29
(q) Plans and
Benefit Arrangements 29
(r) Employment
Matters 30
(s) Environmental
Matters 30
(t) Senior Debt
Status 32
ARTICLE VI
CONDITIONS OF LENDING 32
6.1 Closing Conditions 32
6.2 Funding Conditions 34
ARTICLE VII
COVENANTS 35
7.1 Affirmative Covenants 35
(a) Preservation of
Existence, etc. 35
(b) Payment of
Taxes. 35
(c) Maintenance of
Insurance 35
(d) Maintenance of
Properties and Leases 35
(e) Maintenance of
Patents, Trademarks, etc. 36
(f) Visitation
Rights 36
(g) Keeping of
Records and Books of Account 36
(h) Plans and
Benefit Arrangements 36
(i) Compliance with
Laws 36
(j) Use of Proceeds
36
(k) Environmental
Laws 37
(l) Utility Act
37
(m) Senior Debt
Status 37
7.2 Negative Covenants 37
(a) Indebtedness
37
(b) Liens 38
(c) Guaranties
38
(d) Loans,
Acquisitions and Investments 38
(e) Dividends and
Related Distributions 39
(f) Liquidations,
Mergers and Consolidations 39
(g) Dispositions of
Assets or Subsidiaries 40
(h) Affiliate
Transactions 40
(i) Subsidiaries,
Partnerships and Joint Ventures 41
(j) Continuation of
or Change in Business 41
(k) Plans and
Benefit Arrangements 41
(l) Fiscal Year
42
(m) Issuance of
Stock 42
(n) Changes in
Organizational Documents 42
(o) Minimum Interest
Coverage Ratio 42
(p) Maximum Leverage
Ratio 42
7.3 Reporting Requirements 42
7.4 Notices Regarding Plans and Benefit Arrangements 45
ARTICLE VIII
DEFAULT 46
8.1 Events of Default 46
8.2 Consequences of Event of Default 49
ARTICLE IX
AGENT 50
9.1 Appointment 50
9.2 Delegation of Duties 50
9.3 Nature of Duties; Independent Credit Investigation 51
9.4Actions in Discretion of Agent; Instructions from the Banks 51
9.5Reimbursement and Indemnification of Agent by the Borrower 52
9.6 Exculpatory Provisions 52
9.7 Reimbursement and Indemnification of Agent by Banks 53
9.8 Reliance by Agent 53
9.9 Notice of Default 54
9.10 Notices 54
9.11 Banks in Their Individual Capacities 54
9.12 Holders of Notes 54
9.13 Equalization of Banks 54
9.14 Successor Agent 55
9.15 Agent's Fee 55
9.16 Calculations 55
9.17 Beneficiaries 56
ARTICLE X
MISCELLANEOUS 56
10.1 Modifications Amendments or Waivers 56
10.2No Implied Waivers; Cumulative Remedies; Writing Required 56
10.3Reimbursement and Indemnification of Agent and Banks by the
Borrower; axes 57
10.4 Holidays 58
10.5 Funding by Branch, Subsidiary or Affiliate 58
(a) Notional Funding
58
(b) Actual Funding
58
10.6 Notices 59
10.7 Severability 59
10.8 Governing Law 59
10.9 Prior Understanding 59
10.10 Duration; Survival 59
10.11 Successors and Assigns 60
10.12 Confidentiality 62
10.13 Counterparts 63
10.14 Agent's or Bank's Consent 63
10.15 Exceptions 63
10.16 Consent to Forum; Waiver of Jury Trial 63
SCHEDULE 1.1(a)
TERM LOAN AMOUNT OF BANKS 68
SCHEDULE 1.1(b)
PERMITTED LIENS 69
SCHEDULE 5.1(l)
CONSENTS AND APPROVALS 71
SCHEDULE 5.1(q)
EMPLOYEE BENEFIT PLAN DISCLOSURES 72
SCHEDULE 5.1(s)
ENVIRONMENTAL DISCLOSURES 73
SCHEDULE 7.2(a)
EXISTING INDEBTEDNESS 74
SCHEDULE 7.2(g)
ASSET SALES 75
SCHEDULE 7.2(i)
SUBSIDIARIES 76
EXHIBIT "A"
TERM LOAN NOTE 1
EXHIBIT "B-1"
Opinion of House Counsel of the Borrower 1
EXHIBIT "B-2"
Opinion of Xxxxxx Xxxxxxx & Xxxx 1
EXHIBIT "C"
COMPLIANCE CERTIFICATE 1
EXHIBIT "D"
ASSIGNMENT AND ASSUMPTION AGREEMENT 1
SCHEDULE I TO ASSIGNMENT AND ASSUMPTION AGREEMENT
LIST OF OFFICES, ADDRESSES FOR NOTICES AND LOAN AMOUNTS 1
SCHEDULE II TO ASSIGNMENT AND ASSUMPTION AGREEMENT
[Form of Transfer Effective Notice] 1
