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1455377
PG Energy Inc.
$25,000,000
6.92% Senior Notes due September 30, 2004
________________
Note Purchase Agreement
________________
Dated September 30, 1997
--
Table of Contents
Section Heading Page
Section 1. Authorization of Notes 1
Section 2. Sale and Purchase of Notes 1
Section 3. Closing 2
Section 4. Conditions to Closing 2
Section 4.1. Representations and Warranties 2
Section 4.2. Performance; No Default 2
Section 4.3. Compliance Certificates 2
Section 4.4. Opinions of Counsel 3
Section 4.5. Purchase Permitted by Applicable Law, etc 3
Section 4.6. Sale of Other Notes 3
Section 4.7. Payment of Special Counsel Fees 3
Section 4.8. Private Placement Number 3
Section 4.9. Changes in Corporate Structure 3
Section 4.10. Governmental Approval. 3
Section 4.11. ERISA Certificate 3
Section 4.12. Proceedings and Documents 4
Section 5. Representations and Warranties of the Company 4
Section 5.1. Organization; Power and Authority 4
Section 5.2. Authorization, etc 4
Section 5.3. Disclosure 4
Section 5.4. Organization and Ownership of Shares of
Subsidiaries 5
Section 5.5. Financial Statements 5
Section 5.6. Compliance with Laws, Other Instruments, etc 5
Section 5.7. Governmental Authorizations, etc 6
Section 5.8. Litigation; Observance of Statutes and Orders
6
Section 5.9. Taxes 6
Section 5.10. Title to Property; Leases 7
Section 5.11. Licenses, Permits, etc 7
Section 5.12. Compliance with ERISA 7
Section 5.13. Private Offering by the Company 8
Section 5.14. Use of Proceeds; Margin Regulations 8
Section 5.15. Existing Debt 8
Section 5.16. Foreign Assets Control Regulations, etc 8
Section 5.17. Status under Certain Statutes 9
Section 5.18. Environmental Matters 9
Section 6. Representations of the Purchaser 10
Section 6.1. Purchase for Investment 10
Section 6.2. Source of Funds 10
Section 7. Information as to Company 12
Section 7.1. Financial and Business Information 12
Section 7.2. Officer's Certificate 14
Section 7.3. Inspection 14
Section 8. Prepayment of the Notes 15
Section 8.1. Prepayments 15
Section 8.2. Optional Prepayments with Make-Whole Amount 15
Section 8.3. Change in Control 15
Section 8.4. Restricted Event 17
Section 8.5. Allocation of Partial Prepayments 20
Section 8.6. Maturity; Surrender, etc 20
Section 8.7. Purchase of Notes 20
Section 8.8. Make-Whole Amount 20
Section 9. Affirmative Covenants 22
Section 9.1. Compliance with Law 22
Section 9.2. Insurance 22
Section 9.3. Maintenance of Properties 22
Section 9.4. Payment of Taxes 22
Section 9.5. Corporate Existence, etc 23
Section 10. Negative Covenants 23
Section 10.1. Fixed Charges Coverage Ratio 23
Section 10.2. Incurrence of Consolidated Funded Debt 23
Section 10.3. Liens 24
Section 10.4. Consolidated Net Worth 26
Section 10.5. Restricted Investments 26
Section 10.6. Sale-and-Leasebacks 26
Section 10.7. Line of Business 27
Section 10.8. Transactions with Affiliates 27
Section 10.9. Guaranties 27
Section 11. Events of Default 27
Section 12. Remedies on Default, Etc 29
Section 12.1. Acceleration 29
Section 12.2. Other Remedies 30
Section 12.3. Rescission 30
Section 12.4. No Waivers or Election of Remedies, Expenses, etc
30
Section 13. Registration; Exchange; Substitution of Notes 31
Section 13.1. Registration of Notes 31
Section 13.2. Transfer and Exchange of Notes 31
Section 13.3. Replacement of Notes 32
Section 14. Payments on Notes 32
Section 14.1. Place of Payment 32
Section 14.2. Home Office Payment 32
Section 15. Expenses, Etc 33
Section 15.1. Transaction Expenses 33
Section 15.2. Survival 33
Section 16. Survival of Representations and Warranties; Entire
Agreement 33
Section 17. Amendment and Waiver 34
Section 17.1. Requirements 34
Section 17.2. Solicitation of Holders of Notes 34
Section 17.3. Binding Effect, etc 34
Section 17.4. Notes Held by Company, etc 35
Section 18. Notices 35
Section 19. Reproduction of Documents 35
Section 20. Confidential Information 36
Section 21. Substitution of Purchaser 37
Section 22. Miscellaneous 37
Section 22.1. Successors and Assigns 37
Section 22.2. Payments Due on Non-Business Days 37
Section 22.3. Severability 37
Section 22.4. Construction 37
Section 22.5. Headings 38
Section 22.6. Counterparts 38
Section 22.7. Governing Law 38
Schedule A _ Information Relating To PurchasersSchedule B _
Defined TermsSchedule 4.9 _ Changes in Corporate
StructureSchedule 5.3 _ Disclosure MaterialsSchedule 5.4 _
Organization and Ownership of Shares of SubsidiariesSchedule 5.5 _
Financial StatementsSchedule 5.8 _ Certain LitigationSchedule
5.11 _ Licenses, Permits, Etc.Schedule 5.15 _ Existing Debt;
Investments of the Company
Schedule 5.18 _ Certain Environmental MattersExhibit 1 _ Form
of 6.92% Senior Note due September 30, 2004Exhibit 4.4(a) _ Form
of Opinion of Special Counsel to the Company
Exhibit 4.4(b) _ Form of Opinion of House Counsel to the
CompanyExhibit 4.4(c) _ Form of Opinion of Special Counsel to
the Purchasers
--
PG Energy Inc.
One PEI Center
Xxxxxx-Xxxxx, PA 18711-0601
6.92% Senior Notes due September 30, 2004
September 30, 1997
To each of the Purchasers listed in
the attached Schedule A:
Ladies and Gentlemen:
PG Energy Inc., a Pennsylvania corporation (the "Company"),
agrees with you as follows:
.c.Section 1. Authorization of Notes;.
The Company will authorize the issue and sale of $25,000,000
aggregate principal amount of its 6.92% Senior Notes due September
30, 2004 (the "Notes", such term to include any such notes issued in
substitution therefor pursuant to Section 13 of this Agreement or the
Other Agreements (as hereinafter defined)). The Notes shall be
substantially in the form set out in Exhibit 1, with such changes
therefrom, if any, as may be approved by you and the Company.
Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
.c.Section 2. Sale and Purchase of Notes;.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A at the
purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other
purchasers named in Schedule A (the "Other Purchasers"), providing
for the sale at such Closing to each of the Other Purchasers of Notes
in the principal amount specified opposite its name in Schedule A.
Your obligation hereunder and the obligations of the Other Purchasers
under the Other Agreements are several and not joint obligations and
you shall have no obligation under any Other Agreement and no
liability to any Person for the performance or nonperformance by any
Other Purchaser thereunder.
.c.Section 3. Closing;.
The sale and purchase of the Notes to be purchased by you and
the Other Purchasers shall occur at the offices of Xxxxxx Xxxxxxx &
Xxxx LLP, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
a.m. New York time, at a closing (the "Closing") on September 30,
1997 or on such other Business Day thereafter on or prior to October
15, 1997 as may be agreed upon by the Company and you and the Other
Purchasers. At the Closing the Company will deliver to you the Notes
to be purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least $500,000 as you may
request) dated the date of the Closing and registered in your name
(or in the name of your nominee), against delivery by you to the
Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available
funds for the account of the Company to account number 3509-6183 at
CoreStates Bank, Philadelphia, Pennsylvania, (ABA# 000000000). If at
the Closing the Company shall fail to tender such Notes to you as
provided above in this Section 3, or any of the conditions specified
in Section 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights you may have by
reason of such failure or such nonfulfillment.
.c.Section 4. Conditions to Closing;.
Your obligation to purchase and pay for the Notes to be sold to
you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
.c2.Section 4.1. Representations and Warranties;. The
representations and warranties of the Company in this Agreement shall
be correct when made and at the time of the Closing.
.c2.'Section 4.2. Performance; No Default';. The Company
shall have performed and complied in all material respects with all
agreements and conditions contained in this Agreement required to be
performed or complied with by it prior to or at the Closing, and
after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section 5.14),
no Default or Event of Default shall have occurred and be continuing.
.c2.Section 4.3. Compliance Certificates;.
(a) Officer's Certificate. The Company shall have
delivered to you
an Officer's Certificate, dated the date of the Closing,
certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(b) Secretary's Certificate. The Company shall have
delivered to
you a certificate certifying as to the resolutions attached
thereto and
other corporate proceedings relating to the authorization,
execution and
delivery of the Notes and the Agreements.
.c2.Section 4.4. Opinions of Counsel;. You shall have
received opinions in form and substance satisfactory to you, dated
the date of the Closing (a) from Xxxxxx Xxxxxxx & Xxxx LLP, special
counsel for the Company, covering the matters set forth in Exhibit
4.4(a), (b) from Xxxxxxx X. Xxxxxx, house counsel of the Company
covering the matters set forth in Exhibit 4.4(b) and (c) from Xxxxxxx
and Xxxxxx, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(c).
.c2.Section 4.5. Purchase Permitted by Applicable Law, etc;.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which
you are subject, without recourse to provisions (such as Section
1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies without restriction as to the
character of the particular investment, (ii) not violate any
applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve
System) and (iii) not subject you to any tax, penalty or liability
under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof.
.c2.Section 4.6. Sale of Other Notes;. Contemporaneously
with the Closing the Company shall sell to the Other Purchasers and
the Other Purchasers shall purchase, the Notes to be purchased by
them at the Closing as specified in Schedule A.
.c2.Section 4.7. Payment of Special Counsel Fees;. Without
limiting the provisions of Section 15.1, the Company shall have paid
on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in
a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing.
.c2.Section 4.8. Private Placement Number;. A Private
Placement number issued by Standard & Poor's CUSIP Service Bureau (in
cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for
the Notes.
.c2.Section 4.9. Changes in Corporate Structure;. Except as
specified in Schedule 4.9, the Company shall not have changed its
jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial
part of the liabilities of any other entity, at any time following
the date of the most recent financial statements referred to in
Schedule 5.5.
.c2.Section 4.10. Governmental Approval. ; The Pennsylvania
Public Utility Commission shall have entered an order authorizing the
sale of the Notes by the Company to the Purchasers and such order
shall be final and not subject to appeal.
.c2.Section 4.11. ERISA Certificate;. If you shall have made
the disclosures referred to in Sections 6.2(b), (c) or (e), you shall
have received the certificate from the Company described in the last
paragraph of Section 6.2 and such certificate shall state that (i)
the Company is neither a party in interest nor a "disqualified
person" (as defined in Section 4975(e)(2) of the Code), with respect
to any plan identified pursuant to Sections 6.2(b) or (e), or (ii)
with respect to any plan, identified pursuant to Section 6.2(c),
neither the Company nor any "affiliate" (as defined in Section V(c)
of the QPAM Exemption) has, at such time or during the immediately
preceding one year, exercised the authority to appoint or terminate
said QPAM as manager of the assets of any plan identified in writing
pursuant to Section 6.2(c) or to negotiate the terms of said XXXX's
management agreement on behalf of any such identified plans.
.c2.Section 4.12. Proceedings and Documents;. All corporate
and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your
special counsel, and you and your special counsel shall have received
all such counterpart originals or certified or other copies of such
documents as you or they may reasonably request.
.c.Section 5. Representations and Warranties of the Company;.
The Company represents and warrants to you that:
.c2.'Section 5.1. Organization; Power and Authority';. The
Company is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation,
and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to
transact the business it transacts and proposes to transact, to
execute and deliver this Agreement and the Other Agreements and the
Notes and to perform the provisions hereof and thereof.
.c2.Section 5.2. Authorization, etc;. This Agreement, the
Other Agreements and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this
Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or
limiting the right of specific performance and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
.c2.Section 5.3. Disclosure;. The Company, through its
agent, PNC Capital Markets, Inc., has delivered to you and each Other
Purchaser a copy of a Private Placement Memorandum, dated July, 1997
(the "Memorandum"), relating to the transactions contemplated hereby.
Except as disclosed in Schedule 5.3, this Agreement, the Memorandum,
the documents, certificates or other writings identified in Schedule
5.3 and the financial statements listed in Schedule 5.5 (such
financial statements being hereinafter referred to as the "SEC
Reports"), taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make
the statements therein regarding the Company (excluding Pennsylvania
Enterprises, Inc. and its subsidiaries other than the Company and its
Subsidiaries) not misleading in light of the circumstances under
which they were made. Except as disclosed in the Memorandum or as
expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 1996,
there has been no change in the financial condition, operations,
business or properties of the Company or any of its Subsidiaries
except changes that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
.c2.Section 5.4. Organization and Ownership of Shares of
Subsidiaries;. (a) Schedule 5.4 is a complete and correct list of
the Company's Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar
equity interests outstanding owned by the Company and each other
Subsidiary.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued,
are fully paid and nonassessable and are owned by the Company or
another Subsidiary free and clear of any Lien (other than Liens
permitted by Section 10.3 and except as otherwise disclosed in
Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation
or other legal entity duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation or other legal entity and is
in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business
it transacts and proposes to transact.
.c2.Section 5.5. Financial Statements;. The Company has
delivered to each Purchaser copies of the financial statements of the
Company and its Subsidiaries listed on Schedule 5.5. All of said
financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective periods
so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments).
.c2.Section 5.6. Compliance with Laws, Other Instruments,
etc;. The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach
of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Subsidiary
under, any indenture, mortgage, deed of trust, or loan agreement,
pursuant to which indebtedness for borrowed money in excess of
$1,000,000 is outstanding or any corporate charter or by-law, or any
other Material agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any
of their respective properties may be bound or affected, (ii)
conflict with or result in a breach of any of the material terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (iii) violate any material provision of
any statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary, which contraventions,
breaches, defaults, liens, conflicts or violations, individually or
in the aggregate, would reasonably be expected to have a Material
Adverse Effect.
.c2.Section 5.7. Governmental Authorizations, etc;. Except
for the approval of the Pennsylvania Public Utility Commission, which
has been obtained pursuant to an order dated July 10, 1997, and which
is final and not subject to appeal, no consent, approval or
authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution,
delivery or performance by the Company of this Agreement or the Notes
except ordinary disclosures in filings required to be made by the
Company pursuant to the disclosure requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934.
.c2.'Section 5.8. Litigation; Observance of Statutes and
Orders';. (a) Except as disclosed in Schedule 5.8 or in the SEC
Reports, there are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against or involving the
Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or
before or by any Governmental Authority that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect.
(b) Except as disclosed in Schedule 5.8 or in the SEC Reports,
neither the Company nor any Subsidiary is in default under any order,
judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule
or regulation (other than Environmental Laws as described in Section
5.18) of any Governmental Authority, which default or violation,
individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
.c2.Section 5.9. Taxes;. The Company and its Subsidiaries
have filed all income tax returns that are required to have been
filed in any jurisdiction, and have paid all taxes shown to be due
and payable on such returns and all other taxes and assessments
payable by them, to the extent such taxes and assessments have become
due and payable and before they have become delinquent, except for
any taxes and assessments (i) the amount of which is not individually
or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by
appropriate proceedings or (iii) with respect to which the Company or
a Subsidiary, as the case may be, has established adequate reserves
in accordance with GAAP. The Federal income tax liabilities of the
Company and its Subsidiaries have been determined by the Internal
Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1992.
.c2.'Section 5.10. Title to Property; Leases';. The Company
and its Subsidiaries have good title to their respective Material
properties, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported
to have been acquired by the Company or any Subsidiary after said
date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this
Agreement, except for those defects in title and Liens that,
individually or in the aggregate, would not have a Material Adverse
Effect. All Material leases are valid and subsisting and are in full
force and effect in all material respects.
.c2.Section 5.11. Licenses, Permits, etc;. Except as
disclosed in Schedule 5.11, the Company and its Subsidiaries own or
possess all licenses, permits, franchises, approvals, authorizations,
patents, copyrights, service marks, trademarks and trade names, or
rights thereto, that are Material, without known conflict with the
rights of others, except for those conflicts that, individually or in
the aggregate, would not have a Material Adverse Effect.
.c2.Section 5.12. Compliance with ERISA;. (a) The Company and
each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company
nor any ERISA Affiliate has incurred any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of
ERISA), and no event, transaction or condition has occurred or exists
that would reasonably be expected to result in the incurrence of any
such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate, in either case pursuant to Title
I or IV of ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined
as of the end of such Plan's most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in
such Plan's most recent actuarial valuation report, did not exceed
the aggregate current value of the assets of such Plan allocable to
such benefit liabilities by more than $5,000,000 in the case of any
single Plan and by more than $5,000,000 in the aggregate for all
Plans. The term "benefit liabilities" has the meaning specified in
Section 4001 of ERISA and the terms "current value" and "present
value" have the meanings specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are
Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Company's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No.
106, without regard to liabilities attributable to continuation
coverage mandated by section 4980B of the Code) of the Company and
its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant to
section 4975(c)(1)(A)-(D) of the Code. The representation by the
Company in the first sentence of this Section 5.12(e) is made in
reliance upon and subject to the accuracy of your representation in
Section 6.2 as to the sources of the funds to be used to pay the
purchase price of the Notes to be purchased by you.
.c2.Section 5.13. Private Offering by the Company;. Neither
the Company nor anyone acting on its behalf has offered the Notes or
any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect
thereof with, any Person other than you, the Other Purchasers and not
more than 33 other Institutional Investors, each of which has been
offered the Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Notes to the
registration requirements of Section 5 of the Securities Act.
.c2.'Section 5.14. Use of Proceeds; Margin Regulations';. The
Company will apply the proceeds of the sale of the Notes to repay
outstanding Debt. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of
buying or carrying any margin stock within the meaning of Regulation
G of the Board of Governors of the Federal Reserve System (12 CFR
207), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve
any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). As used in this Section, the terms "margin stock" and
"purpose of buying or carrying" shall have the meanings assigned to
them in said Regulation G.
.c2.Section 5.15. Existing Debt;. Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all
outstanding Debt of the Company and its Subsidiaries as of September
15, 1997, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or
maturities of the Debt of the Company or its Subsidiaries. Neither
the Company nor any Subsidiary is in default and no waiver of default
is currently in effect, in the payment of any principal or interest
on any Debt of the Company or such Subsidiary and no event or
condition exists with respect to any Debt of the Company or any
Subsidiary the outstanding principal amount of which exceeds
$1,000,000 that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt
to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
.c2.Section 5.16. Foreign Assets Control Regulations, etc;.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating
thereto.
.c2.Section 5.17. Status under Certain Statutes;. Neither the
Company nor any Subsidiary is subject to regulation under the
Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 1935, as amended, except for Section 9(a)(2)
thereof, the ICC Termination Act of 1995, as amended, or the Federal
Power Act, as amended.
.c2.Section 5.18. Environmental Matters;. Except as disclosed
on Schedule 5.18 hereto or as described in the SEC Reports:
(i) Except for conditions, violations or failures which
individually
and in the aggregate are not reasonably likely to have a
Material Adverse
Effect, there are no circumstances at, on or under the Real
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 Real Property or, to the Company's knowledge, without
any
inquiry, at, on or under adjacent property, that prevent
compliance with
the Environmental Laws at the Real Property.
(ii) Neither the Real Property nor any structures,
improvements,
equipment, fixtures, activities or facilities thereon or
thereunder
contain or use Regulated Substances except in compliance with
the
Environmental Laws, other than such containment or use which
individually
or in the aggregate is not reasonably likely to have any
Material Adverse
Effect. There are no processes, facilities, operations,
equipment or any
other activities at, on or under the Real Property, or, to the
Company's
knowledge, without any inquiry, at, on or under adjacent
property, that
currently result in the release of Regulated Substances onto the
Real
Property in violation of the Environmental Laws, except to the
extent that
such releases are not likely to result in a Material Adverse
Change.
(iii) 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 Real Property that are not in
compliance
with applicable 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 have a Material
Adverse
Effect, 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 Real
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 the Environmental Laws is not reasonably likely,
either
individually or in the aggregate, to have a Material Adverse
Effect.
(iv) The Company 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
Company and each
of its Subsidiaries as presently conducted, other than those
with respect
to which the failure to comply with the Environmental Laws is
not
reasonably likely, either individually or in the aggregate, to
have a
Material Adverse Effect. The Company and each of its
Subsidiaries have,
to the Company's knowledge, submitted all material notices,
reports and
other filings required by the Environmental Laws to be submitted
to a
governmental body which pertain to past and current operations
on the Real
Property.
(v) Except for instances which individually and in the
aggregate are
not likely to have a Material Adverse Effect, all past and
present on-site
generation, storage, processing, treatment, recycling,
reclamation or
disposal of Regulated Substances at, on, or under the Real
Property and
all off-site transportation, storage, processing, treatment,
recycling,
reclamation or disposal of Regulated Substances have been done
in
accordance with the Environmental Laws.
.c.Section 6. Representations of the Purchaser;.
.c2.Section 6.1. Purchase for Investment;. You represent
that you are an "accredited investor" as defined in Rule 501(a) of
Regulation D of the Securities Act and that you are purchasing the
Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that
the disposition of your or their property shall at all times be
within your or their control. You acknowledge (and each transferee
of a Note, by accepting a Note, will be deemed to have acknowledged)
that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available,
except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required
to register the Notes.
.c2.Section 6.2. Source of Funds;. You represent (and each
transferee of a Note, by accepting a Note, will be deemed to have
represented and warranted to the Company as if it were a purchaser
hereunder) that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be
used by you to pay the purchase price of the Notes to be purchased by
you hereunder:
(a) the Source is an "insurance company general account"
within the
meaning of Department of Labor Prohibited Transaction Exemption
("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit
plan,
treating as a single plan, all plans maintained by the same
employer or
employee organization, with respect to which the amount of the
general
account reserves and liabilities for all contracts held by or on
behalf of
such plan, exceeds ten percent (10%) of the total reserves and
liabilities
of such general account (exclusive of separate account
liabilities) plus
surplus, as set forth in the NAIC Annual Statement filed with
your state
of domicile; or
(b) the Source is either (i) an insurance company pooled
separate
account, within the meaning of PTE 90-1 (issued January 29,
1990), or
(ii) a bank collective investment fund, within the meaning of
the PTE
91-38 (issued July 12, 1991) and, except as you have disclosed
to the
Company in writing pursuant to this paragraph (b), no employee
benefit
plan or group of plans maintained by the same employer or
employee
organization beneficially owns more than 10% of all assets
allocated to
such pooled separate account or collective investment fund; or
(c) (i) the Source constitutes assets of an "investment
fund"
(within the meaning of Part V of the QPAM Exemption) managed by
a
"qualified professional asset manager" or "QPAM" (within the
meaning of
Part V of the QPAM Exemption), (ii) no employee benefit plan's
assets that
are included in such investment fund, when combined with the
assets of all
other employee benefit plans established or maintained by the
same
employer or by an affiliate (within the meaning of Section
V(c)(1) of the
QPAM Exemption) of such employer or by the same employee
organization and
managed by such QPAM, exceed 20% of the total client assets
managed by
such QPAM, (iii) the conditions of Part I(c) and (g) of the QPAM
Exemption
are satisfied, (iv) neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest
in the
Company, and (v) (y) the identity of such QPAM and (z) the names
of all
employee benefit plans whose assets are included in such
investment fund
have been disclosed to the Company in writing pursuant to this
paragraph
(c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate
account or trust fund comprised of one or more employee benefit
plans,
each of which has been identified to the Company in writing
pursuant to
this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall
have the respective meanings assigned to such terms in Section 3 of
ERISA.
If you or any prospective transferee of a Note identifies a plan
pursuant to paragraphs (b), (c) or (e) above, the Company shall
deliver a certificate on the Closing Date, with respect to you and on
or prior to the date of any transfer of any Note, with respect to any
prospective transferee, which certificate shall state (x) whether it
is a party in interest or a "disqualified, person" (as defined in
Section 4975(e)(2) of the Code), with respect to any plan identified
pursuant to paragraphs (b) or (e) above, or (y) with respect to any
plan, identified pursuant to paragraph (c) above, whether it or any
"affiliate" (as defined in Section V(c) of the QPAM Exemption) has,
at such time or during the immediately preceding one year, exercised
the authority to appoint or terminate said QPAM as manager of the
assets of any plan identified in writing pursuant to paragraph (c)
above or to negotiate the terms of said XXXX's management agreement
on behalf of any such identified plans.
.c.Section 7. Information as to Company;.
.c2.Section 7.1. Financial and Business Information;. The
Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements _ within 60 days after the end of
each
quarterly fiscal period in each fiscal year of the Company
(other than the
last quarterly fiscal period of each such fiscal year), a copy
of,
(i) a consolidated balance sheet of the Company and
its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries,
for such quarter and (in the case of the second and third
quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for
the
corresponding periods in the previous fiscal year, all in
reasonable
detail, prepared in accordance with GAAP (except as noted
therein)
applicable to quarterly financial statements generally, and
certified by a
Senior Financial Officer as fairly presenting, in all material
respects,
the financial position of the companies being reported on and
their
results of operations and cash flows, subject to changes
resulting from
year-end adjustments;
(b) Annual Statements _ within 105 days after the end of
each fiscal
year of the Company, a copy of,
(i) a consolidated balance sheet of the Company and
its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries,
for such year,
setting forth in each case in comparative form the figures for
the
previous fiscal year, all in reasonable detail, prepared in
accordance
with GAAP, and accompanied by an opinion thereon of independent
certified
public accountants of recognized national standing, which
opinion shall
state that such financial statements present fairly, in all
material
respects, the financial position of the companies being reported
upon and
their results of operations and cash flows and have been
prepared in
conformity with GAAP, and that the examination of such
accountants in
connection with such financial statements has been made in
accordance with
generally accepted auditing standards, and that such audit
provides a
reasonable basis for such opinion in the circumstances;
(c) SEC and Other Reports _ promptly upon their becoming
available,
one copy of (i) each financial statement, report, notice or
proxy
statement sent by the Company or any Subsidiary to public
securities
holders generally, and (ii) each regular or periodic report,
each
registration statement that shall have become effective (without
exhibits
except as expressly requested by such holder), and each final
prospectus
and all amendments thereto filed by the Company or any
Subsidiary with the
Securities and Exchange Commission;
(d) Notice of Default or Event of Default _ promptly, and
in any
event within five days after a Responsible Officer becoming
aware of the
existence of any Default or Event of Default, a written notice
specifying
the nature and period of existence thereof and what action the
Company is
taking or proposes to take with respect thereto;
(e) ERISA Matters _ promptly, and in any event within five
days
after a Responsible Officer becoming aware of any of the
following, a
written notice setting forth the nature thereof and the action,
if any,
that the Company or an ERISA Affiliate proposes to take with
respect
thereto:
(i) with respect to any Plan, any reportable event,
as defined
in section 4043(b) of ERISA and the regulations thereunder,
for which
notice thereof has not been waived pursuant to such
regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or
the
threatening by the PBGC of the institution of, proceedings
under
section 4042 of ERISA for the termination of, or the
appointment of a
trustee to administer, any Plan, or the receipt by the
Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that
such action has
been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that
could result in
the incurrence of any liability by the Company or any ERISA
Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions
of the Code relating to employee benefit plans, or in the
imposition of
any Lien on any of the rights, properties or assets of the
Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or
excise tax provisions, if such liability or Lien, taken
together with any
other such liabilities or Liens then existing, would
reasonably be
expected to have a Material Adverse Effect; and
(f) Requested Information _ with reasonable promptness,
such other
data and information relating to the business, operations,
affairs,
financial condition, assets or properties of the Company or any
of its
Subsidiaries or relating to the ability of the Company to
perform its oblig
ations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
.c2.Section 7.2. Officer's Certificate;. Each set of
financial statements delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance _ the information (including
detailed
calculations) required in order to establish whether the Company
was in
compliance with the requirements of Section 10.1 through Section
10.7
hereof, inclusive, during the quarterly or annual period covered
by the sta
tements then being furnished (including with respect to each
such Section,
where applicable, the calculations of the maximum or minimum
amount, ratio
or percentage, as the case may be, permissible under the terms
of such
Sections, and the calculation of the amount, ratio or percentage
then in
existence); and
(b) Event of Default _ a statement that such officer has
reviewed
the relevant terms hereof and has made, or caused to be made,
under his or
her supervision, a review of the transactions and conditions of
the
Company and its Subsidiaries from the beginning of the quarterly
or annual
period covered by the statements then being furnished to the
date of the
certificate and that such review shall not have disclosed the
existence
during such period of any condition or event that constitutes a
Default or
an Event of Default or, if any such condition or event existed
or exists
(including, without limitation, any such event or condition
resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of
existence thereof
and what action the Company shall have taken or proposes to take
with
respect thereto.
.c2.Section 7.3. Inspection;. The Company shall permit the
representatives of each holder of Notes that is an Institutional
Investor:
(a) No Default _ if no Default or Event of Default then
exists, at
the expense of such holder and upon reasonable prior notice to
the
Company, to visit the principal executive office of the Company,
to
discuss the affairs, finances and accounts of the Company and
its Su
bsidiaries with the Company's officers, and, with the consent of
the
Company (which consent will not be unreasonably withheld) to
visit the
other offices and properties of the Company and each Subsidiary,
all at
such reasonable times and as often as may be reasonably
requested in
writing; and
(b) Default _ if a Default or Event of Default then
exists, at the
expense of the Company to visit and inspect any of the offices
or
properties of the Company or any Subsidiary, to examine all
their
respective books of account, records, reports and other papers,
to make
copies and extracts therefrom, and to discuss their respective
affairs,
finances and accounts with their respective officers and
independent
public accountants (and by this provision the Company authorizes
said
accountants to discuss the affairs, finances and accounts of the
Company
and its Subsidiaries), all at such times and as often as may be
requested.
.c.Section 8. Prepayment of the Notes;.
.c2.Section 8.1. Prepayments;. The entire outstanding
principal amount of the Notes shall be due on September 30, 2004.
Except as set forth in Section 8.2, the Notes may not be prepaid
prior to maturity at the option of the Company.
.c2.Section 8.2. Optional Prepayments with Make-Whole
Amount;. The Company may, at its option, upon notice as provided
below, prepay at any time all, or from time to time any part of, the
Notes, in a principal amount not less than 10% of the aggregate
principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, plus
the Make-Whole Amount determined for the prepayment date with respect
to such principal amount. The Company will give each holder of Notes
written notice of each optional prepayment under this Section 8.2 not
less than 30 days and not more than 60 days prior to the date fixed
for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date,
the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.5), and the interest to be
paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior
Financial Officer as to the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer specifying the calculation of such Make-
Whole Amount as of the specified prepayment date.
.c2.Section 8.3. Change in Control;.
(a) Notice of Change in Control or Control Event. The Company
will, within 5 Business Days after any Responsible Officer has
knowledge of the occurrence of any Change in Control or Control
Event, give written notice of such Change in Control or Control Event
to each holder of Notes. Such notice shall contain and constitute an
offer to prepay Notes as described in subparagraph (b) of this
Section 8.3 and shall be accompanied by the certificate described in
subparagraph (f) of this Section 8.3.
(b) Offer to Prepay Notes. The offer to prepay Notes
contemplated by subparagraph (a) of this Section 8.3 shall be an
offer to prepay, in accordance with and subject to this Section 8.3,
all, but not less than all, the Notes held by each holder (in this
case only, "holder" in respect of any Note registered in the name of
a nominee for a disclosed beneficial owner shall mean such beneficial
owner) on a date specified in such offer (the "Proposed Prepayment
Date"). Such date shall be not less than 30 days and not more than
60 days after the date of such offer (if the Proposed Prepayment Date
shall not be specified in such offer, the Proposed Prepayment Date
shall be the 30th day after the date of such offer).
(c) Acceptance. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such
acceptance to be delivered to the Company at least 10 days prior to
the Proposed Prepayment Date. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this Section 8.3 shall
be deemed to constitute an acceptance of such offer by such holder.
(d) Prepayment. Prepayment of the Notes to be prepaid pursuant
to this Section 8.3 shall be at 100% of the principal amount of such
Notes, plus the Make-Whole Amount determined for the date of
prepayment with respect to such principal amount, together with
interest on such Notes accrued to the date of prepayment. On the
second Business Day preceding the date of prepayment, the Company
shall deliver to each holder of Notes being prepaid a statement
showing the Make-Whole Amount due in connection with such prepayment
and setting forth the details of the computation of such amount. The
prepayment shall be made on the Proposed Prepayment Date except as
provided in subparagraph (e) of this Section 8.3.
(e) Deferral Pending Change in Control. The obligation of the
Company to prepay Notes pursuant to the offer required by
subparagraph (a) and accepted in accordance with subparagraph (c) of
this Section 8.3 is subject to the occurrence of the Change in
Control in respect of which such offer and acceptances shall have
been made. In the event that such Change in Control does not occur
on or prior to the Proposed Prepayment Date in respect thereof, the
prepayment shall be deferred until and shall be made on the date on
which such Change in Control occurs. The Company shall keep each
holder of Notes reasonably and timely informed of (i) any such
deferral of the date of prepayment, (ii) the date on which such
Change in Control and the prepayment are expected to occur, and (iii)
any determination by the Company that efforts to effect such Change
in Control have ceased or been abandoned (in which case the offers
and acceptances made pursuant to this Section 8.3 in respect of such
Change in Control shall be deemed rescinded).
(f) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 8.3 shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated the
date of such offer, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this Section 8.3; (iii) the
principal amount of each Note offered to be prepaid; (iv) the
estimated Make-Whole Amount, if any, due in connection with such
prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation; (v)
the interest that would be due on each Note offered to be prepaid,
accrued to the Proposed Prepayment Date; (vi) that the conditions of
this Section 8.3 have been fulfilled; and (vii) in reasonable detail,
the nature and date or proposed date of the Change in Control.
(g) "Change in Control" Defined. "Change in Control" means any
event after which any person (as such term is used in section 13(d)
and section 14(d)(2) of the Exchange Act as in effect on the date of
the Closing) or related persons constituting a group (as such term is
used in Rule 13d-5 under the Exchange Act), other than Pennsylvania
Enterprises, Inc., become the "beneficial owners" (as such term is
used in Rule 13d-3 under the Exchange Act as in effect on the date of
the Closing), directly or indirectly, of more than 50% of the total
voting power of all classes then outstanding of the Company's voting
stock.
(h) "Control Event" Defined. "Control Event" means a public
announcement by the Company of any of the following events:
(i) the execution by the Company or any of its
Subsidiaries or
Affiliates of any agreement or letter of intent with respect to
any
proposed transaction or event or series of transactions or
events which,
individually or in the aggregate, may reasonably be expected to
result in
a Change in Control,
(ii) the execution of any written agreement which, when
fully
performed by the parties thereto, would result in a Change in
Control, or
(iii) the making of any written offer by any person (as
such term is
used in section 13(d) and section 14(d)(2) of the Exchange Act
as in
effect on the date of the Closing) or related persons
constituting a group
(as such term is used in Rule 13d-5 under the Exchange Act as in
effect on
the date of the Closing) to the holders of the common stock of
the
Company, which offer, if accepted by the requisite number of
holders,
would result in a Change in Control.
.c2.Section 8.4. Restricted Event;.
(a) Condition to Restricted Event. The Company will not take
any action that consummates or finalizes a Restricted Event unless
(i) at least 30 days prior to such action it shall have given to each
holder of Notes written notice containing and constituting an offer
to prepay Notes as described in subparagraph (b) of this Section 8.4,
accompanied by the certificate described in subparagraph (f) of this
Section 8.4, and (ii) contemporaneously with such action, it prepays
all Notes required to be prepaid in accordance with this Section 8.4.
(b) Offer to Prepay Notes. The offer to prepay Notes
contemplated by subparagraph (a) of this Section 8.4 shall be an
offer to prepay, in accordance with and subject to this Section 8.4,
all, but not less than all, the Notes held by each holder (in this
case only, "holder" in respect of any Note registered in the name of
a nominee for a disclosed beneficial owner shall mean such beneficial
owner) on a date specified in such offer (the "Proposed Prepayment
Date") which shall be not less than 30 days and not more than 60 days
after the date of such offer.
(c) Acceptance. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.4 by causing a notice of such
acceptance to be delivered to the Company at least 10 days prior to
the Proposed Prepayment Date. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this Section 8.4 shall
be deemed to constitute an acceptance of such offer by such holder.
(d) Prepayment. Prepayment of the Notes to be prepaid pursuant
to this Section 8.4 shall be at 100% of the principal amount of such
Notes, plus the Make-Whole Amount determined for the date of
prepayment with respect to such principal amount, together with
interest on such Notes accrued to the date of prepayment. On the
second Business Day preceding the date of prepayment, the Company
shall deliver to each holder of Notes being prepaid a statement
showing the Make-Whole Amount due in connection with such prepayment
and setting forth the details of the computation of such amount. The
prepayment shall be made on the Proposed Prepayment Date except as
provided in subparagraph (e) of this Section 8.4.
(e) Deferral Pending Restricted Event. The obligation of the
Company to prepay Notes pursuant to the offers required by
subparagraph (a) and accepted in accordance with subparagraph (c) of
this Section 8.4 is subject to the occurrence of the Restricted Event
in respect of which such offers and acceptances shall have been made.
In the event that such Restricted Event does not occur on or prior to
the Proposed Prepayment Date in respect thereof, the prepayment shall
be deferred until and shall be made on the date on which such
Restricted Event occurs. The Company shall keep each holder of Notes
reasonably and timely informed of (i) any such deferral of the date
of prepayment, (ii) the date on which such Restricted Event and the
prepayment are expected to occur, and (iii) any determination by the
Company that efforts to effect such Restricted Event have ceased or
been abandoned (in which case the offers and acceptances made
pursuant to this Section 8.4 in respect of such Restricted Event
shall be deemed rescinded).
(f) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 8.4 shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated the
date of such offer, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this Section 8.4; (iii) the
principal amount of each Note offered to be prepaid; (iv) the
estimated Make-Whole Amount, if any, due in connection with such
prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation; (v)
the interest that would be due on each Note offered to be prepaid,
accrued to the Proposed Prepayment Date; (vi) that the conditions of
this Section 8.4 have been fulfilled; and (vii) in reasonable detail,
the nature and date or proposed date of the Restricted Event.
(g) "Restricted Event" Defined. "Restricted Event" means any
Restricted Merger and any Restricted Asset Disposition.
(h) "Restricted Merger" Defined. "Restricted Merger" means any
consolidation or merger of the Company or any Subsidiary with any
other corporation or the conveyance, transfer or lease of
substantially all of its assets in a single transaction or series of
transactions to any Person (except that a Subsidiary of the Company
may (x) consolidate with or merge with, or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to, the Company or another Subsidiary of the Company and
(y) convey, transfer or lease all of its assets in a transaction
which is not a Restricted Asset Disposition), provided that the
consolidation or merger of the Company with, or the conveyance,
transfer or lease of substantially all of the assets of the Company
in a single transaction or series of transactions to, any Person
shall not constitute a Restricted Merger so long as:
(1) the successor formed by such consolidation or the
survivor of
such merger or the Person that acquires by conveyance, transfer
or lease
substantially all of the assets of the Company as an entirety,
as the case
may be (the "Successor Corporation"), shall be a solvent
corporation
organized and existing under the laws of the United States of
America, any
State thereof or the District of Columbia;
(2) if the Company is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of
Notes its
assumption of the due and punctual performance and observance of
each
covenant and condition of this Agreement and the Notes (pursuant
to such
agreements and instruments as shall be reasonably satisfactory
to the
Required Holders), and the Company shall have caused to be
delivered to
each holder of Notes an opinion of nationally recognized
independent
counsel, or other independent counsel reasonably satisfactory to
the
Required Holders, to the effect that all agreements or
instruments
effecting such assumption are enforceable in accordance with
their terms
and comply with the terms hereof; and
(3) immediately after giving effect to such transaction
(x) no
Default or Event of Default would exist and (y) the Successor
Corporation
could incur $1 of additional Consolidated Funded Debt pursuant
to Section
10.2(3).
(i) "Restricted Asset Disposition" Defined. "Restricted Asset
Disposition" means each Asset Disposition by the Company or any of
its Subsidiaries unless:
(1) in the good faith opinion of the Company, the Asset
Disposition
is in exchange for consideration having a Fair Market Value at
least equal
to that of the property exchanged and is in the best interest of
the
Company or such Subsidiary; and
(2) immediately after giving effect to the Asset
Disposition, no
Default or Event of Default would exist; and
(3) immediately after giving effect to the Asset
Disposition, either
(x) the Disposition Value of all property that was the subject
of any
Asset Disposition occurring in the same transaction or a series
of related
transactions would not exceed 10% of Consolidated Assets as of
the end of
the then most recently ended fiscal year of the Company, or (y)
the
Disposition Value of all property that was the subject of any
Asset
Disposition occurring on or after the Closing Date would not
exceed 25% of
Consolidated Assets as of the end of the then most recently
ended fiscal
year of the Company.
If the Net Proceeds Amount for any Transfer is applied to a Debt
Prepayment Application or a Property Reinvestment Application within
30 days after such Transfer, then such Transfer, for the purpose of
determining whether a Restricted Asset Disposition shall have
occurred as of any date, shall be deemed not to be an Asset
Disposition.
.c2.Section 8.5. Allocation of Partial Prepayments;. In the
case of each partial prepayment of the Notes (excluding prepayments
pursuant to Sections 8.3 and 8.4), the principal amount of the Notes
to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called
for prepayment.
.c2.'Section 8.6. Maturity; Surrender, etc';. In the case of
each prepayment of Notes pursuant to this Section 8, the principal
amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest
on such principal amount accrued to such date and the applicable Make-
Whole Amount, if any. From and after such date, unless the Company
shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to accrue.
Any Note paid or prepaid in full shall be surrendered to the Company
and canceled and shall not be reissued, and no Note shall be issued
in lieu of any prepaid principal amount of any Note.
.c2.Section 8.7. Purchase of Notes;. The Company will not
and will not permit any Affiliate to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding
Notes except (a) upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes or (b)
pursuant to an offer to purchase made by the Company or an Affiliate
pro rata to the holders of all Notes at the time outstanding upon the
same terms and conditions. Any such offer shall provide each holder
with sufficient information to enable it to make an informed decision
with respect to such offer, and shall remain open for at least 10
Business Days. If the holders of more than 50% of the principal
amount of the Notes then outstanding accept such offer, the Company
shall promptly notify the remaining holders of such fact and the
expiration date for the acceptance by holders of Notes of such offer
shall be extended by the number of days necessary to give each such
remaining holder at least 5 Business Days from its receipt of such
notice to accept such offer. The Company will promptly cancel all
Notes acquired by it or any Affiliate pursuant to any payment,
prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for
any such Notes.
.c2.Section 8.8. Make-Whole Amount;. The term "Make-Whole
Amount" means, with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount
may in no event be less than zero. For the purposes of determining
the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to
Sections 8.2, 8.3
or 8.4 or has become or is declared to be immediately due and
payable
pursuant to Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called
Principal
of any Note, the amount obtained by discounting all Remaining
Scheduled
Payments with respect to such Called Principal from their
respective
scheduled due dates to the Settlement Date with respect to such
Called
Principal, in accordance with accepted financial practice and at
a
discount factor (applied on the same periodic basis as that on
which
interest on the Notes is payable) equal to the Reinvestment
Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal
of any Note, .50% over the yield to maturity implied by (i) the
yields
reported, as of 10:00 A.M. (New York City time) on the second
Business Day
preceding the Settlement Date with respect to such Called
Principal, on
the display designated as "Page 678" on the Telerate Access
Service (or
such other display as may replace Page 678 on the Telerate
Access Service)
for actively traded U.S. Treasury securities having a maturity
equal to
the Remaining Average Life of such Called Principal as of such
Settlement
Date, or (ii) if such yields are not reported as of such time or
the
yields reported as of such time are not ascertainable, the
Treasury
Constant Maturity Series Yields reported, for the latest day for
which such
yields have been so reported as of the second Business Day
preceding the
Settlement Date with respect to such Called Principal, in
Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication)
for actively traded U.S. Treasury securities having a constant
maturity
equal to the Remaining Average Life of such Called Principal as
of such
Settlement Date. Such implied yield will be determined, if
necessary, by
(a) converting U.S. Treasury bill quotations to bond-equivalent
yields in
accordance with accepted financial practice and (b)
interpolating linearly
between (1) the actively traded U.S. Treasury security with the
duration
closest to and greater than the Remaining Average Life and (2)
the
actively traded U.S. Treasury security with the duration closest
to and
less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-
twelfth
year) obtained by dividing (i) such Called Principal into (ii)
the sum of
the products obtained by multiplying (a) the principal component
of each
Remaining Scheduled Payment with respect to such Called
Principal by
(b) the number of years (calculated to the nearest one-twelfth
year) that
will elapse between the Settlement Date with respect to such
Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called
Principal of any Note, all payments of such Called Principal and
interest
thereon that would be due after the Settlement Date with respect
to such
Called Principal if no payment of such Called Principal were
made prior to
its scheduled due date, provided that if such Settlement Date is
not a
date on which interest payments are due to be made under the
terms of the
Notes, then the amount of the next succeeding scheduled interest
payment
will be reduced by the amount of interest accrued to such
Settlement Date
and required to be paid on such Settlement Date pursuant to
Sections 8.2,
8.3, 8.4 or 12.1.
"Settlement Date" means, with respect to the Called
Principal of
any Note, the date on which such Called Principal is to be
prepaid
pursuant to Sections 8.2, 8.3 or 8.4 or has become or is
declared to be
immediately due and payable pursuant to Section 12.1, as the
context
requires.
.c.Section 9. Affirmative Covenants;.
The Company covenants that so long as any of the Notes are
outstanding:
.c2.Section 9.1. Compliance with Law;. The Company will and
will cause each of its Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each of them
is subject, including, without limitation, Environmental Laws, and
will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary
to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to
ensure that non-compliance with such laws, ordinances or governmental
rules or regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other governmental
authorizations would not reasonably be expected, individually or in
the aggregate, to have a materially adverse effect on the business,
operations, affairs, financial condition, properties or assets of the
Company and its Subsidiaries taken as a whole.
.c2.Section 9.2. Insurance;. The Company will and will cause
each of its Subsidiaries to maintain, with insurers that it believes
are financially sound and reputable, insurance with respect to their
respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a
similar business and similarly situated.
.c2.Section 9.3. Maintenance of Properties;. The Company
will and will cause each of its Subsidiaries to maintain and keep, or
cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and
tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not
prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance would not,
individually or in the aggregate, reasonably be expected to have a
materially adverse effect on the business, operations, affairs,
financial condition, properties or assets of the Company and its
Subsidiaries taken as a whole.
.c2.Section 9.4. Payment of Taxes;. The Company will and
will cause each of its Subsidiaries to file all income tax or similar
tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and
all other taxes, assessments, governmental charges, or levies payable
by any of them, to the extent such taxes and assessments have become
due and payable and before they have become delinquent, provided that
neither the Company nor any Subsidiary need pay any such tax or
assessment if (i) the amount, applicability or validity thereof is
contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, (ii) the Company or a
Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of the Company or such Subsidiary or (iii) the
nonpayment of all such taxes and assessments in the aggregate would
not reasonably be expected to have a materially adverse effect on the
business, operations, affairs, financial condition, properties or
assets of the Company and its Subsidiaries taken as a whole.
.c2.Section 9.5. Corporate Existence, etc;. The Company will
at all times preserve and keep in full force and effect its corporate
existence. Subject to Sections 10.5 and 10.6, the Company will at
all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries (unless merged into the Company
or a Subsidiary) and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise would not,
individually or in the aggregate, have a materially adverse effect on
the business, operations, affairs, financial condition, properties or
assets of the Company and its Subsidiaries taken as a whole.
.c.Section 10. Negative Covenants;.
The Company covenants that so long as any of the Notes are
outstanding:
.c2.Section 10.1. Fixed Charges Coverage Ratio;. The Company
will not, at any time, permit the Fixed Charges Coverage Ratio to be
less than 1.25 to 1.
.c2.Section 10.2. Incurrence of Consolidated Funded Debt;.
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Consolidated
Funded Debt, except:
(1) Consolidated Funded Debt evidenced by the Notes;
(2) Consolidated Funded Debt of the Company and its
Subsidiaries
outstanding as of the date of this Agreement and reflected on
Schedule 5.15; and
(3) Consolidated Funded Debt of the Company; provided that
on the
date the Company or such Subsidiary becomes liable with respect
to any
such Debt and immediately after giving effect thereto and the
concurrent
retirement of any other Debt,
(a) no Default or Event of Default exists,
(b) Consolidated Funded Debt does not exceed 65% of
Consolidated Total Capitalization, and
(c) in the case of Consolidated Funded Debt of
Subsidiaries
(excluding Acquired Subsidiary Debt), the aggregate unpaid
principal
amount of (x) such Consolidated Funded Debt of Subsidiaries
(excluding
Acquired Subsidiary Debt) and (y) all Debt of the Company
and its
Subsidiaries secured by Liens permitted by Section 10.3(j)
shall not
exceed 10% of Consolidated Total Capitalization.
For the purposes of this Section 10.2, any Person becoming a
Subsidiary after the date hereof shall be deemed, at the time it
becomes a Subsidiary, to have incurred all of its then outstanding
Debt, and any Person extending, renewing or refunding any Debt shall
be deemed to have incurred such Debt at the time of such extension,
renewal or refunding.
.c2.Section 10.3. Liens;. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency
or otherwise) any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in respect
of goods or accounts receivable) of the Company or any such
Subsidiary, whether now owned or held or hereafter acquired, or any
income or profits therefrom or assign or otherwise convey any right
to receive income or profits (unless it makes, or causes to be made,
effective provision whereby the Notes will be equally and ratably
secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to
the Required Holders), except:
(a) Liens for taxes, assessments or other governmental
charges which
are not yet due and payable or the payment of which is not at
the time
required by Section 9.4;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in
each
case, incurred in the ordinary course of business for sums not
yet due and
payable or the payment of which is not at the time required by
Section 9.1;
(c) Liens (other than any Lien imposed by ERISA) incurred
or
deposits made in the ordinary course of business (i) in
connection with
workers' compensation, unemployment insurance and other types of
social
security or retirement benefits, or (ii) to secure (or to obtain
letters
of credit that secure) the performance of tenders, statutory
obligations,
surety bonds, appeal bonds, bids, leases (other than Capital
Leases),
performance bonds, purchase, construction or sales contracts and
other
similar obligations, in each case not incurred or made in
connection with
the borrowing of money, the obtaining of advances or credit or
the payment
of the deferred purchase price of property;
(d) any attachment or judgment Lien, unless the judgment
it secures
shall not, within 30 days after the entry thereof, have been
discharged or
execution thereof stayed pending appeal, or shall not have been
discharged
within 30 days after the expiration of any such stay;
(e) leases or subleases granted to others, easements,
rights-of-way,
restrictions, defects and irregularities of title, and other
similar
charges or encumbrances, in each case incidental to, and not
interfering
with, the ordinary conduct of the business of the Company or any
of its
Subsidiaries, provided that such Liens do not, in the aggregate,
materially detract from the value of such property;
(f) Liens existing on the date of this Agreement and
securing the
Debt of the Company and its Subsidiaries referred to in Schedule
5.15 and
which is outstanding on the date of this Agreement including
first
mortgage bonds in the aggregate principal amount of $55,000,000
outstanding under the Indenture dated as of March 15, 1946 from
the
Company (formerly known as Scranton _ Spring Brook Water Service
Company)
to First Trust New York, National Association, as Trustee, as
supplemented
from time to time;
(g) any Lien created to secure all or any part of the
purchase
price, or to secure Debt incurred or assumed to pay all or any
part of the
purchase price or cost of construction, of real and/or tangible
property
(or any improvement thereon) acquired or constructed by the
Company or a
Subsidiary after the date of the Closing, provided that
(i) any such Lien shall extend solely to the item or
items of
such property (or improvement thereon) so acquired or
constructed and, if
required by the terms of the instrument originally creating
such Lien,
other property (or improvement thereon) which is an
improvement to or is
acquired for specific use in connection with such acquired
or constructed
property (or improvement thereon) or which is real property
being improved
by such acquired or constructed property (or improvement
thereon),
(ii) the principal amount of the Debt secured by any
such Lien
shall at no time exceed an amount equal to the cost to the
Company or such
Subsidiary of the property (or improvement thereon) so
acquired or
constructed, and
(iii) any such Lien shall be created
contemporaneously with, or
within 180 days after, the acquisition or construction of
such property;
(h) any Lien existing on property of a Person immediately
prior to
its being consolidated with or merged into the Company or a
Subsidiary or
its becoming a Subsidiary, or any Lien existing on any property
acquired
by the Company or any Subsidiary at the time such property is so
acquired
(whether or not the Debt secured thereby shall have been
assumed), provided
that (i) no such Lien shall have been created or assumed in
contemplation
of such consolidation or merger or such Person's becoming a
Subsidiary or
such acquisition of property, and (ii) each such Lien shall
extend solely
to the item or items of property so acquired and, if required by
the terms
of the instrument originally creating such Lien, other property
which is
an improvement to or is acquired for specific use in connection
with such
acquired property;
(i) any Lien renewing, extending or refunding any Lien
permitted by
paragraphs (f), (g) or (h) of this Section 10.3, provided that
(i) the
principal amount of Debt secured by such Lien immediately prior
to such
extension, renewal or refunding is not increased or the maturity
thereof
reduced, (ii) such Lien is not extended to any other property,
(iii) immediately after such extension, renewal or refunding no
Default or
Event of Default would exist and in the case of Funded Debt, the
incurrence of such Debt is permitted by Section 10.2(3); and
(j) other Liens not otherwise permitted by paragraphs (f)
through
(i), provided that the sum of (x) the aggregate principal amount
of Debt
of the Company and its Subsidiaries secured by Liens permitted
by this
paragraph (j), and (y) the aggregate unpaid principal amount of
unsecured
Consolidated Funded Debt (excluding Acquired Subsidiary Debt) of
Subsidiaries shall not at any time exceed 10% of Consolidated
Total
Capitalization.
.c2.Section 10.4. Consolidated Net Worth;. The Company will
not, at any time, permit Consolidated Net Worth to be less than the
sum of (a) $75,000,000, plus (b) an aggregate amount equal to 20% of
its Consolidated Net Income (but, in each case, only if a positive
number) for each completed fiscal year beginning with the fiscal year
ended December 31, 1997.
.c2.Section 10.5. Restricted Investments;.
(a) Limitation. The Company will not, and will not permit any
of its Subsidiaries to, declare, make or authorize any Restricted
Investment unless immediately after giving effect to such action:
(i) the aggregate value of all Restricted Investments of
the Company
and its Subsidiaries (valued immediately after such action)
would not
exceed 10% of Consolidated Net Worth; and
(ii) no Default or Event of Default would exist.
(b) Investments of Subsidiaries. Each Person which becomes a
Subsidiary of the Company after the date of the Closing will be
deemed to have made, on the date such Person becomes a Subsidiary of
the Company, all Restricted Investments of such Person in existence
on such date. Investments in any Person that ceases to be a
Subsidiary of the Company after the date of the Closing (but in which
the Company or another Subsidiary continues to maintain an
Investment) will be deemed to have been made on the date on which
such Person ceases to be a Subsidiary of the Company.
.c2.Section 10.6. Sale-and-Leasebacks;. The Company will not,
and will not permit any Subsidiary to, enter into any Sale-and-
Leaseback Transaction unless
(a) the Company or such Subsidiary shall have received
cash in an
amount not less than the Fair Market Value of the property which
is
Transferred in such Sale-and-Leaseback Transaction;
(b) immediately after giving effect thereto no Default or
Event of
Default would exist; and
(c) the Net Proceeds Amount received by the Company or
such
Subsidiary in respect of such Sale-and-Leaseback Transaction is
applied
within 90 days of the consummation thereof to a Debt Prepayment
Application or a Property Reinvestment Application.
.c2.Section 10.7. Line of Business;. The Company will not,
and will not permit any of its Subsidiaries to, engage in any
business if, as a result, the general nature of the business in which
the Company and its Subsidiaries, taken as a whole, would then be
engaged would be substantially changed from the general nature of the
business in which the Company and its Subsidiaries, taken as a whole,
are engaged on the date of this Agreement as described in the
Memorandum.
.c2.Section 10.8. Transactions with Affiliates;. The Company
will not and will not permit any Subsidiary to enter into directly or
indirectly any Material transaction or Material group of related
transactions (including without limitation the purchase, lease, sale
or exchange of properties of any kind or the rendering of any
service) with any Affiliate (other than the Company or another
Subsidiary), except pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Subsidiary than would
be obtainable in a comparable arm's-length transaction with a Person
not an Affiliate.
.c2.Section 10.9. Guaranties;. The Company will not, and will
not permit any Subsidiary to, become or be liable in respect of any
Guaranty except Guaranties by the Company which are limited in amount
to a stated maximum dollar exposure or which constitute Guaranties of
obligations incurred by any Subsidiary which will not violate the
provisions of this Agreement.
.c.Section 11. Events of Default;.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal
or
Make-Whole Amount, if any, on any Note when the same becomes due
and
payable, whether at maturity or at a date fixed for prepayment
or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note
for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or
compliance with
any term contained in Sections 10.1 through 10.6 which default
continues
for more than five Business Days; or
(d) the Company defaults in the performance of or
compliance with
any term contained herein (other than those referred to in
paragraphs (a),
(b) and (c) of this Section 11) and such default is not remedied
within 30
Business Days after the earlier of (i) a Responsible Officer
obtaining
actual knowledge of such default and (ii) the Company receiving
written
notice of such default from any holder of a Note (any such
written notice
to be identified as a "notice of default" and to refer
specifically to
this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or
on behalf
of the Company or by any officer of the Company in this
Agreement or in
any writing furnished in connection with the transactions
contemplated
hereby proves to have been false or incorrect in any material
respect on
the date as of which made; or
(f) (i) the Company or any Significant Subsidiary is in
default (as
principal or as guarantor or other surety) in the payment of any
principal
of or premium or make-whole amount or interest on any Debt that
is
outstanding in an aggregate principal amount of at least
$5,000,000 beyond
the lesser of (x) 30 Business Days, or (y) any period of grace
or cure
period provided with respect thereto and which entitles the
trustee or
holder of such Debt to accelerate the maturity thereof, or (ii)
the
Company or any Significant Subsidiary is in default in the
performance of
or compliance with any term of any evidence of any Debt in an
aggregate
outstanding principal amount of at least $5,000,000 or of any
mortgage,
indenture or other agreement relating thereto or any other
condition
exists, and such default shall continue beyond the lesser of (x)
30
Business Days, or (y) any period of grace or cure period
provided with
respect thereto and which entitles the trustee or holder of such
Debt to
accelerate the maturity thereof; or
(g) the Company or any Significant Subsidiary (i) is
generally not
paying, or admits in writing its inability to pay, its debts as
they
become due, (ii) files, or consents by answer or otherwise to
the filing
against it of, a petition for relief or reorganization or
arrangement or
any other petition in bankruptcy, for liquidation or to take
advantage of
any bankruptcy, insolvency, reorganization, moratorium or other
similar
law of any jurisdiction, (iii) makes a general assignment for
the benefit
of its creditors, (iv) consents to the appointment of a
custodian,
receiver, trustee or other officer with similar powers with
respect to it
or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) the Board
of
Directors of the Company authorizes any of the action described
in clauses
(ii), (iii) or (iv) of this paragraph (g); or
(h) a court or governmental authority of competent
jurisdiction
enters an order appointing, without consent by the Company or
any of its
Significant Subsidiaries, a custodian, receiver, trustee or
other officer
with similar powers with respect to it or with respect to any
substantial
part of its property, or constituting an order for relief or
approving a
petition for relief or reorganization or any other petition in
bankruptcy
or for liquidation or to take advantage of any bankruptcy or
insolvency
law of any jurisdiction, or ordering the dissolution, winding-up
or
liquidation of the Company or any of its Significant
Subsidiaries, or any
such petition shall be filed against the Company or any of its
Significant
Subsidiaries and such petition shall continue unstayed,
undismissed and in
effect for 60 Business Days; or
(i) a final judgment or judgments for the payment of money
for an
amount aggregating in excess of 5% of consolidated assets of the
Company
and its Subsidiaries are rendered against one or more of the
Company and
its Significant Subsidiaries by a court having jurisdiction in
the
premises and which judgments are not, within 30 Business Days
after entry
thereof, bonded, discharged or stayed by appeal or otherwise, or
are not
discharged within 60 Business Days after the expiration of such
stay; or
(j) If (i) any Plan shall fail to satisfy the minimum
funding
standards of ERISA or the Code for any plan year or part thereof
or a
waiver of such standards or extension of any amortization period
is sought
or granted under section 412 of the Code, (ii) a notice of
intent to
terminate any Plan shall have been or is reasonably expected to
be filed
with the PBGC or the PBGC shall have instituted proceedings
under ERISA
section 4042 to terminate or appoint a trustee to administer any
Plan or
the PBGC shall have notified the Company or any ERISA Affiliate
that a
Plan may become a subject of any such proceedings, (iii) the
Company or
any ERISA Affiliate shall have incurred or is reasonably
expected to incur
any liability pursuant to Title I or IV of ERISA or the penalty
or excise
tax provisions of the Code relating to employee benefit plans,
(iv) the
Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, or
(v) the Company or any Subsidiary establishes or amends any
employee
welfare benefit plan that provides post-employment welfare
benefits in a
manner that would increase the liability of the Company or any
Subsidiary
thereunder; and any such event or events described in clauses
(i) through
(v) above, either individually or together with any other such
event or
events, would reasonably be expected to have a Material Adverse
Effect.
As used in Section 11(j), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.
.c.Section 12. Remedies on Default, Etc;.
.c2.Section 12.1. Acceleration;. (a) If an Event of Default
with respect to the Company described in paragraph (g) or (h) of
Section 11 (other than an Event of Default described in clause (i) of
paragraph (g) or described in clause (vi) of paragraph (g) by virtue
of the fact that such clause encompasses clause (i) of paragraph (g))
has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of at least 51% in principal amount
of the Notes at the time outstanding may at any time at its or their
option, by notice or notices to the Company, declare all the Notes
then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders
of Notes at the time outstanding affected by such Event of Default
may at any time, at its or their option, by notice or notices to the
Company, declare all the Notes held by it or them to be immediately
due and payable.
Upon any Note's becoming due and payable under this Section
12.1, whether automatically or by declaration, such Note will
forthwith mature and the entire unpaid principal amount of such Note,
plus (x) all accrued and unpaid interest thereon and (y) the Make-
Whole Amount determined in respect of such principal amount (to the
full extent permitted by applicable law), shall all be immediately
due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived.
.c2.Section 12.2. Other Remedies;. If any Default or Event of
Default has occurred and is continuing, and irrespective of whether
any Notes have become or have been declared immediately due and
payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or
otherwise.
.c2.Section 12.3. Rescission;. At any time after any Notes
have been declared due and payable pursuant to clause (b) or (c) of
Section 12.1, the holders of not less than 51% in principal amount of
the Notes then outstanding, by written notice to the Company, may
rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal
of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and
all interest on such overdue principal and Make-Whole Amount, if any,
and (to the extent permitted by applicable law) any overdue interest
in respect of the Notes, at the Default Rate, (b) all Events of
Default and Defaults, other than non-payment of amounts that have
become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or
decree has been entered for the payment of any monies due pursuant
hereto or to the Notes. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.
.c2.Section 12.4. No Waivers or Election of Remedies,
Expenses, etc;. No course of dealing and no delay on the part of any
holder of any Note in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such holder's
rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under
Section 15, the Company will pay to the holder of each Note on demand
such further amount as shall be sufficient to cover all costs and
expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
.c.'Section 13. Registration; Exchange; Substitution of Notes';.
.c2.Section 13.1. Registration of Notes;. The Company shall
keep at its principal executive office a register for the
registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof
and the name and address of each transferee of one or more Notes
shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be
registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company
shall give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the
names and addresses of all registered holders of Notes.
.c2.Section 13.2. Transfer and Exchange of Notes;. Upon
surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of
a surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in
writing and accompanied by the address for notices of each transferee
of such Note or part thereof), the Company shall execute and deliver,
at the Company's expense (except as provided below), one or more new
Notes (as requested by the holder thereof) in exchange therefor, in
an aggregate principal amount equal to the unpaid principal amount of
the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially in the
form of Exhibit 1. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require
payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall
not be transferred in denominations of less than $500,000, provided
that if necessary to enable the registration of transfer by a holder
of its entire holding of Notes, one Note may be in a denomination of
less than $500,000. Any transferee of a Note shall, by its
acceptance of such Note, be deemed to have made the same
representations and acknowledgments to the Company regarding the
purchase of the Note as the original purchasers made pursuant to
Section 6.2, provided, however, that such transferee will not be
deemed to have chosen the options set forth in Sections 6.2(b), (c)
or (e) unless such transferee shall have made the disclosure referred
to therein at least ten Business Days prior to its acceptance of such
Note and shall have received prior to such acceptance of such Note
the certificate provided for in the last paragraph of Section 6.2 and
such certificate shall contain the statement set forth in Section
5.12(e); and provided, further, that such transferee will not be
deemed to have chosen an option set forth in Sections 6.2(b), (c) or
(e) unless the applicable Class Exemption referred to therein remains
in effect at that time. The Company shall exercise reasonable due
diligence as is necessary to respond to any such disclosure, provided
that, if the Company shall not respond within ten Business Days
following receipt of such disclosure, it shall be deemed to have made
the statement set forth in Section 5.12(e).
.c2.Section 13.3. Replacement of Notes;. Upon receipt by the
Company of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which
evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss,
theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity
reasonably satisfactory to it (provided that if the holder of
such Note
is, or is a nominee for, an original Purchaser or another holder
of a Note
with a minimum net worth of at least $10,000,000, such Person's
own
unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed
or mutilated Note or dated the date of such lost, stolen, destroyed
or mutilated Note if no interest shall have been paid thereon.
.c.Section 14. Payments on Notes;.
.c2.Section 14.1. Place of Payment;. Subject to Section 14.2,
payments of principal, Make-Whole Amount, if any, and interest
becoming due and payable on the Notes shall be made in Xxxxxx-Xxxxx,
Pennsylvania at the principal office of PG Energy Inc. in such
jurisdiction. The Company may at any time, by notice to each holder
of a Note, change the place of payment of the Notes so long as such
place of payment shall be either the principal office of the Company
in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
.c2.Section 14.2. Home Office Payment;. So long as you or
your nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary,
the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and
at the address specified for such purpose below your name in Schedule
A, or by such other method or at such other address as you shall have
from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the
making of any notation thereon, except that upon written request of
the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such
Note for cancellation, reasonably promptly after any such request, to
the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by you
or your nominee you will, at your election, either endorse thereon
the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company
in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of
any Note purchased by you under this Agreement and that has made the
same agreement relating to such Note as you have made in this Section
14.2.
.c.Section 15. Expenses, Etc;.
.c2.Section 15.1. Transaction Expenses;. Whether or not the
transactions contemplated hereby are consummated, the Company will
pay all reasonable costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required,
local or other counsel, provided that in no event shall the Company
be required to pay the charges and disbursements of more than one of
each such counsel representing holders) incurred by you and each
Other Purchaser or holder of a Note in connection with such
transactions and in connection with any amendments, waivers or
consents under or in respect of this Agreement or the Notes (whether
or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) reasonable costs and expenses
incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the
Notes, or by reason of being a holder of any Note, and (b) reasonable
costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes, provided that in
no event shall the Company be required to pay the charges and
disbursements of more than one of each such counsel representing
holders. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees,
costs or expenses if any, of brokers and finders (other than those
retained by you).
.c2.Section 15.2. Survival;. The obligations of the Company
under this Section 15 will survive the payment or transfer of any
Note, the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.
.c.'Section 16. Survival of Representations and Warranties;
Entire
Agreement';.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes,
the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon
by any subsequent holder of a Note, regardless of any investigation
made at any time by or on behalf of you or any other holder of a
Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this
Agreement (excluding any forward-looking statements or projections)
shall be deemed representations and warranties of the Company under
this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between
you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
.c.Section 17. Amendment and Waiver;.
.c2.Section 17.1. Requirements;. This Agreement and the Notes
may be amended, and the observance of any term hereof or of the Notes
may be waived (either retroactively or prospectively), with (and only
with) the written consent of the Company and the Required Holders,
except that (a) no amendment or waiver of any of the provisions of
Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is
used therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of
any prepayment or payment of principal of, or reduce the rate or
change the time of payment or method of computation of interest or of
the Make-Whole Amount on, the Notes, (ii) change the percentage of
the principal amount of the Notes the holders of which are required
to consent to any such amendment or waiver, or (iii) amend any of
Sections 8, 11(a), 11(b), 12, 17 or 20.
.c2.Section 17.2. Solicitation of Holders of Notes;.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a
decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes.
The Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of
this Section 17 to each holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of supplemental
or additional interest, fee or otherwise, or grant any security, to
any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of
any of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
.c2.Section 17.3. Binding Effect, etc;. Any amendment or
waiver consented to as provided in this Section 17 applies equally to
all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether
such Note has been marked to indicate such amendment or waiver. No
such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No course
of dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note. As
used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or
supplemented.
.c2.Section 17.4. Notes Held by Company, etc;. Solely for the
purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent
to be given under this Agreement or the Notes, or have directed the
taking of any action provided herein or in the Notes to be taken upon
the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly
or indirectly owned by the Company or any of its Affiliates shall be
deemed not to be outstanding.
.c.Section 18. Notices;.
All notices and communications provided for hereunder shall be
in writing and sent (a) by telefacsimile if the sender on the same
day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid), or (c) by a
recognized overnight delivery service (with charges prepaid). Any
such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified
for such communications in Schedule A, or at such other address
as you or
it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such
address as such other holder shall have specified to the Company
in
writing, or
(iii) if to the Company, to the Company at its address
set forth at
the beginning hereof to the attention of Chief Financial
Officer, or at
such other address as the Company shall have specified to the
holder of
each Note in writing.
Notices under this Section 18 will be deemed given only when actually
received.
.c.Section 19. Reproduction of Documents;.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by you at the Closing
(except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished
to you, may be reproduced by you by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process
and you may destroy any original document so reproduced. The Company
agrees and stipulates that, to the extent permitted by applicable
law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and
any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This Section
19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could
contest the original, or from introducing evidence to demonstrate the
inaccuracy of any such reproduction.
.c.Section 20. Confidential Information;.
For the purposes of this Section 20, "Confidential Information"
means information delivered to you by or on behalf of the Company or
any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature
and that was clearly marked or labeled or otherwise adequately
identified when received by you as being confidential information of
the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to
you prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by you or any person acting
on your behalf, (c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary or (d) constitutes
financial statements delivered to you under Section 7.1 that are
otherwise publicly available. You will maintain the confidentiality
of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or
disclose Confidential Information to (i) your directors, officers,
employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by your Notes); provided that you shall reasonably
believe that such Persons shall abide by the restrictions of this
Section 20 as if such Person were a party to this Agreement, (ii)
your financial advisors and other professional advisors acting in the
course of their respective duties who agree to hold confidential the
Confidential Information substantially in accordance with the terms
of this Section 20, (iii) any other holder of any Note, (iv) any bona
fide prospective transferee, who is an Institutional Investor to
which you sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to
its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which you offer
to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) to the extent
necessary to comply with the request of (x) any federal or state
regulatory authority having jurisdiction over you, (y) the National
Association of Insurance Commissioners or any similar organization,
or any nationally recognized rating agency that requires access to
information about your investment portfolio, or (z) any other Person
to which such delivery or disclosure may be necessary or appropriate
(1) to effect compliance with any law, rule, regulation or order
applicable to you, (2) in response to any subpoena or other legal
process, (3) in connection with any litigation to which you are a
party or (4) if an Event of Default has occurred and is continuing,
to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under your Notes and this
Agreement. Each holder of a Note, by its acceptance of a Note, will
be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with
the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such
holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
.c.Section 21. Substitution of Purchaser;.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which notice
shall be signed by both you and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain
a confirmation by such Affiliate of the accuracy with respect to it
of the representations set forth in Section 6. Upon receipt of such
notice, wherever the word "you" is used in this Agreement (other than
in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so
substituted as a purchaser hereunder and such Affiliate thereafter
transfers to you all of the Notes then held by such Affiliate, upon
receipt by the Company of notice of such transfer, wherever the word
"you" is used in this Agreement (other than in this Section 21), such
word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder
of the Notes under this Agreement.
.c.Section 22. Miscellaneous;.
.c2.Section 22.1. Successors and Assigns;. All covenants and
other agreements contained in this Agreement by or on behalf of any
of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
.c2.Section 22.2. Payments Due on Non-Business Days;.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or
interest on any Note that is due on a date other than a Business Day
shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest
payable on such next succeeding Business Day.
.c2.Section 22.3. Severability;. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall (to the full extent permitted by law) not
invalidate or render unenforceable such provision in any other
jurisdiction.
.c2.Section 22.4. Construction;. Each covenant contained
herein shall be construed (absent express provision to the contrary)
as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly
or indirectly by such Person.
.c2.Section 22.5. Headings;. 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.
.c2.Section 22.6. Counterparts;. This Agreement may be
executed in any number of counterparts, each of which shall be an
original but all of which together shall constitute one instrument.
Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties
hereto.
.c2.Section 22.7. Governing Law;. This Agreement shall be
construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other
than such State.
* * * * *
If you are in agreement with the foregoing, please sign the form
of agreement on the accompanying counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a
binding agreement between you and the Company.
Very truly yours,
PG Energy Inc.
By
Its
The foregoing is hereby
agreed to as of the
date thereof.
[Variation]
A-
Schedule A(to Note Purchase Agreement)
Information Relating to Purchasers
Purchaser
Principal Amount of Notes to Be Purchased
Great-West Life & Annuity Insurance Company $8,500,000
0000 Xxxx Xxxxxxx Xxxx 0X0
Xxxxxxxxx, Xxxxxxxx 00000
Attn: U.S. Private Placements
Facsimile: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying
each payment as "6.92% Senior Notes due September 30, 2004 of PG
Energy Inc., PPN 69332L A* 8, principal or interest and confirmation
of principal balance") to:
Norwest Bank Minnesota/Trust Clearing
ABA #000-000-000
NWMPLS/Trust Clearing
Account Number: 00-00-000
Attn: Account #00000000
Notices
All notices of payments, on or in respect of the Notes and written
confirmation of each such payment to:
Norwest Bank Minnesota, N.A.
000 Xxxxxxxxx Xxx., Xxxxxxxxx Xxxx., 0xx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 55479-0047
Attn: Income Collections
All notices and communications other than those in respect to
payments to be addressed as first provided.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Purchaser
Principal Amount of Notes to Be Purchased
United of Omaha Life Insurance Company $8,500,000
Mutual of Omaha Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Investment Division
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying
each payment as "6.92% Senior Notes due September 30, 2004 of PG
Energy Inc., PPN 69332L A* 8, principal or interest") to:
First Bank, N.A.
ABA #0000-0000-0
00xx & Xxxxxx Xxxxxxx
Xxxxx, Xxxxxxxx 00000
for credit to: United of Omaha Life Insurance Company
Account Number 0-0000000-0000
Notices
All notices and communications, to be addressed as first provided
above, except notices with respect to payment and written
confirmation of each such payment, to be addressed:
Attention: Investments/Securities Accounting
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-322111.
Purchaser
Principal Amount of Notes to Be Purchased
(Two Notes)
American United Life Insurance Company $3,000,000
One American Square and
Post Office Box 368 $2,000,000
Indianapolis, Indiana 46206
Attention: Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying
each payment as "6.92% Senior Notes due September 30, 2004 of PG
Energy Inc., PPN 69332L A* 8" and identifying the breakdown of
principal and interest and the payment date) to:
Bank of New York (ABA #000000000)
BNF:IOC 566 Attn P&I
Xxx Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Window A
for credit to: American United Life Insurance Company
Account Number 186683/AUL
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Purchaser
Principal Amount of Notes to Be Purchased
Indianapolis Life Insurance Company $2,000,000
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Securities Department
Fax: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying
each payment as "6.92% Senior Notes due September 30, 2004 of PG
Energy Inc., PPN 69332L A* 8, principal or interest") to:
The Bank of New York
New York, New York 10286
BNF: IOC 566
ABA #000000000
For credit to: Indianapolis Life Insurance Company
Account #177862
Notices
All notices of payment, on or in respect of the Notes and written
confirmation of each such payment to:
Indianapolis Life Insurance Company/#177862
c/o The Bank of New York
Attention: P&I Department
P. O. Box 19266
Newark, New Jersey 07195
All notices and communications other than those in respect to
payments to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Purchaser
Principal Amount of Notes to Be Purchased
IL Annuity and Insurance Company $1,000,000
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Securities Department
Fax: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying
each payment as "6.92% Senior Notes due September 30, 2004 of PG
Energy Inc., PPN 69332L A* 8, principal or interest") to:
The Bank of New York
New York, New York 10286
BNF: IOC 566
ABA #000000000
For credit to: IL Annuity and Insurance Company-Transamerica
Trust
Account #177832
Notices
All notices of payment, on or in respect of the Notes and written
confirmation of each such payment to:
IL Annuity and Insurance Company-Transamerica Trust/#177832
c/o The Bank of New York
Attention: P&I Department
P. O. Box 19266
Newark, New Jersey 07195
All notices and communications other than those in respect to
payments to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Schedule 4.9
(to Note Purchase Agreement)
Defined Terms
As used herein, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such
term:
"Acquired Subsidiary Debt" shall mean Debt of a Person
outstanding immediately prior to its being consolidated with or
merged into a Subsidiary or its becoming a Subsidiary (including
renewals, extensions and refinancings of such Debt without increase
in principal amount thereof) provided that such Debt shall not have
been created or assumed in contemplation of such consolidation or
merger.
"Affiliate" means, at any time, and with respect to any Person,
any other Person that at such time directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under
common Control with, such first Person. As used in this definition,
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Subsidiary to the Company or a
Wholly-Owned
Subsidiary;
(ii) Transfer from the Company to a Wholly-Owned
Subsidiary;
and
(iii) Transfer from the Company to a Subsidiary
(other than a
Wholly-Owned Subsidiary) or from a Subsidiary to another
Subsidiary (other
than a Wholly-Owned Subsidiary), which in either case is
for Fair Market
Value,
so long as immediately before and immediately after the
consummation
of any such Transfer and after giving effect thereto, no Default
or Event
of Default exists; and
(b) any Transfer made in the ordinary course of business
and
involving only property that is either (i) inventory held for
sale or (ii)
equipment, fixtures, supplies or materials no longer required in
the
operation of the business of the Company or any of its
Subsidiaries or
that is obsolete; and
(c) any Transfer of property in a Sale-and-Leaseback
Transaction
permitted by Section 10.6.
"Business Day" means (a) for the purposes of Section 8.8 only,
any day other than a Saturday, a Sunday or a day on which commercial
banks in New York City are required or authorized to be closed, and
(b) for the purposes of any other provision of this Agreement, any
day other than a Saturday, a Sunday or a day on which commercial
banks in New York, New York or Xxxxxx-Xxxxx, Pennsylvania are
required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and
a Capital Lease, the amount of the obligation of such Person as the
lessee under such Capital Lease which would, in accordance with GAAP,
appear as a liability on a balance sheet of such Person.
"Change in Control" has the meaning set forth in Section 8.3.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder
from time to time.
"Company" means PG Energy Inc., a Pennsylvania corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Assets" means, at any time, the total assets of
the Company and its Subsidiaries which would be shown as assets on a
consolidated balance sheet of the Company and its Subsidiaries as of
such time prepared in accordance with GAAP, after eliminating all
amounts properly attributable to Minority Interests, if any, in the
stock and surplus of Subsidiaries.
"Consolidated Funded Debt" means, as of any date of
determination, the total of all Funded Debt of the Company and its
Subsidiaries outstanding on such date, after eliminating all
offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the
Company and its Subsidiaries in accordance with GAAP.
"Consolidated Income Available for Fixed Charges" means, with
respect to any period, Consolidated Net Income for such period plus
all amounts deducted in the computation thereof on account of (a)
Fixed Charges for such period and (b) taxes imposed on or measured by
income or excess profits during such period.
"Consolidated Net Income" means, with reference to any period,
the net income (or loss) of the Company and its Subsidiaries for such
period (taken as a cumulative whole), as determined in accordance
with GAAP, after eliminating all offsetting debits and credits
between the Company and its Subsidiaries and all other items required
to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Subsidiaries in
accordance with GAAP; provided that any net income or gain or loss
arising during such period on account of extraordinary items or
discontinued operations or the disposition thereof shall be excluded
from the determination of Consolidated Net Income.
"Consolidated Net Worth" means, at any time,
(a) the sum of (i) the par value (or value stated on the
books of
the corporation) of the capital stock (but excluding treasury
stock and
capital stock subscribed and unissued) of the Company and its
Subsidiaries
plus (ii) the amount of the paid-in capital and retained
earnings of the
Company and its Subsidiaries, in each case as such amounts would
be shown
on a consolidated balance sheet of the Company and its
Subsidiaries as of
such time prepared in accordance with GAAP, minus
(b) to the extent included in clause (a), all amounts
properly
attributable to Minority Interests, if any, in the stock and
surplus of
Subsidiaries.
"Consolidated Total Capitalization" means, at any time, the sum
of Consolidated Net Worth and Consolidated Funded Debt.
"Control Event" has the meaning set forth in Section 8.3.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property
acquired by such Person (excluding accounts payable arising in
the
ordinary course of business but including, without limitation,
all
liabilities created or arising under any conditional sale or
other title
retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien
with
respect to any property owned by such Person (whether or not it
has
assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to
liabilities of a
type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of
the character described in clauses (a) through (e) to the extent such
Person remains legally liable in respect thereof notwithstanding that
any such obligation is deemed to be extinguished under GAAP.
"Debt Prepayment Application" means, with respect to any
Transfer of property, the application by the Company or its
Subsidiaries of cash in an amount equal to the Net Proceeds Amount
with respect to such Transfer to pay Senior Funded Debt of the
Company (other than Senior Funded Debt owing to the Company, any of
its Subsidiaries or any Affiliate and Senior Funded Debt in respect
of any revolving credit or similar credit facility providing the
Company or any of its Subsidiaries with the right to obtain loans or
other extensions of credit from time to time, except to the extent
that in connection with such payment of Senior Funded Debt the
availability of credit under such credit facility is permanently
reduced by an amount not less than the amount of such proceeds
applied to the payment of such Senior Funded Debt).
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
"Default Rate" means 8.92% per annum.
"Disposition Value" means, at any time, with respect to any
property
(a) in the case of property that does not constitute
Subsidiary
Stock, the book value thereof, valued at the time of such
disposition in
good faith by the Company, and
(b) in the case of property that constitutes Subsidiary
Stock, an
amount equal to that percentage of book value of the assets of
the
Subsidiary that issued such stock as is equal to the percentage
that the
book value of such Subsidiary Stock represents of the book value
of all of
the outstanding capital stock of such Subsidiary (assuming, in
making such
calculations, that all Securities convertible into such capital
stock are
so converted and giving full effect to all transactions that
would occur
or be required in connection with such conversion) determined at
the time
of the disposition thereof, in good faith by the Company.
"Environmental Conditions" means 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
Real Property.
"Environmental Laws" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any
materials into the environment, including but not limited to those
related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the
Company under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in
an arm's-length sale at such time between an informed and willing
buyer and an informed and willing seller (neither being under a
compulsion to buy or sell).
"Fixed Charges" means, with respect to any period, the sum of
(a) Interest Charges for such period and (b) Lease Rentals for such
period.
"Fixed Charges Coverage Ratio" means, at any time, the ratio of
(a) Consolidated Income Available for Fixed Charges for the period of
four consecutive fiscal quarters ending on, or most recently ended
prior to, such time to (b) Fixed Charges for such period.
"Funded Debt" means, with respect to any Person, all Debt of
such Person which by its terms or by the terms of any instrument or
agreement relating thereto matures, or which is otherwise payable or
unpaid, one year or more from, or is directly or indirectly renewable
or extendible at the option of the obligor in respect thereof to a
date one year or more (including, without limitation, an option of
such obligor under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of one year or
more) from, the date of determination thereof.
"GAAP" means generally accepted accounting principles as in
effect at the relevant time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction
over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial,
regulatory or administrative functions of, or pertaining to, any
such
government.
"Guaranty" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or
other obligation of any other Person in any manner, whether directly
or indirectly, including (without limitation) obligations incurred
through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of
such indebtedness or obligation, or (ii) to maintain any working
capital
or other balance sheet condition or any income statement
condition of any
other Person or otherwise to advance or make available funds for
the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or
services
primarily for the purpose of assuring the owner of such
indebtedness or
obligation of the ability of any other Person to make payment of
the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the
obligor under any Guaranty, the indebtedness or other obligations
that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"holder" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the
Company pursuant to Section 13.1.
"Institutional Investor" means (a) any original purchaser of a
Note, (b) any holder of a Note holding more than 5% of the aggregate
principal amount of the Notes then outstanding, and (c) any bank,
trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance
company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form.
"Interest Charges" means, with respect to any period
(eliminating all offsetting debits and credits between the Company
and its Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of
the Company and its Subsidiaries in accordance with GAAP), all
interest in respect of Funded Debt of the Company and its
Subsidiaries (including imputed interest on Capital Lease
Obligations) deducted in determining Consolidated Net Income for such
period, together with all interest capitalized or deferred during
such period and not deducted in determining Consolidated Net Income
for such period.
"Investment" means any investment, made in cash or by delivery
of property, by the Company or any of its Subsidiaries (i) in any
Person, whether by acquisition of stock, indebtedness or other
obligation or Security, or by loan, Guaranty, advance, capital
contribution or otherwise, or (ii) in any property.
"Lease Rentals" means, with respect to any period, the sum of
the minimum amount of rental and other obligations required to be
paid during such period by the Company or any Subsidiary as lessee
under all leases of real or personal property (other than Capital
Leases), excluding any amounts required to be paid by the lessee
(whether or not therein designated as rental or additional rental)
(a) which are on account of maintenance and repairs, insurance,
taxes, assessments, water rates and similar charges, or (b) which
are based on profits, revenues or sales realized by the lessee from
the leased property or otherwise based on the performance of the
lessee.
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any
interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other title
retention agreement or Capital Lease, upon or with respect to any
real property or asset of such Person.
"Make-Whole Amount" is defined in Section 8.8.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets, or properties of
the Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or
properties of the Company and its Subsidiaries taken as a whole, or
(b) the ability of the Company to perform its obligations under this
Agreement and the Notes, or (c) the validity or enforceability of
this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Minority Interest" means any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by
law) that are not owned by the Company and/or one of its
Subsidiaries. Minority Interests shall be valued in accordance with
GAAP.
"Multiemployer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Net Proceeds Amount" means, with respect to any Transfer of any
Property by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at
the Fair
Market Value of such consideration at the time of the
consummation of such
Transfer) received by such Person in respect of such Transfer,
minus
(b) all ordinary and reasonable out-of-pocket costs and
expenses
actually incurred by such Person in connection with such
Transfer.
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization,
or a government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within
the preceding five years, have been made or required to be made, by
the Company or any ERISA Affiliate or with respect to which the
Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a
corporation that is preferred over any other class of capital stock
of such corporation as to the payment of dividends or the payment of
any amount upon liquidation or dissolution of such corporation.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or
intangible, xxxxxx or inchoate.
"Property Reinvestment Application" means, with respect to any
Transfer of property, the satisfaction of each of the following
conditions:
(a) an amount equal to the Net Proceeds Amount with
respect to such
Transfer shall have been applied to the acquisition by the
Company, or any
of its Subsidiaries making such Transfer, of property that upon
such
acquisition is unencumbered by any Lien (other than Liens
described in
subparagraphs (a) through (e), inclusive, of Section 10.3) and
that
(i) constitutes property that is (x) property
classifiable
under GAAP as non-current to the extent that such proceeds
are derived
from the transfer of property that was properly
classifiable as
non-current, and otherwise properly classifiable as either
current or
non-current, and (y) to be used in the ordinary course of
business of the
Company and the Subsidiaries, or
(ii) constitutes equity interests of a Person that
shall be, on
or prior to the time of such acquisition, a Subsidiary of
the Company, and
that shall invest the proceeds of such acquisition in
property of the
nature described in the immediately preceding clause (i);
and
(b) the Company shall have delivered a certificate of a
Responsible
Officer of the Company to each holder of a Note referring to
Section 8.4
or Section 10.6, as the case may be, and identifying the
property that was
the subject of such Transfer, the Disposition Value of such
property, and
the nature, terms, amount and application of the proceeds from
the
Transfer.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-
14 issued by the United States Department of Labor.
"Real Property" means all real property, both owned and leased,
of the Company.
"Regulated Substances" means any substance, the generation,
processing, distribution, treatment, storage, disposal, transport,
recycling, reclamation, use, reuse or other management or
mismanagement of which is regulated by the Environmental Laws.
"Required Holders" means, at any time, the holders of at least
51% in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its
Affiliates).
"Responsible Officer" means any Senior Financial Officer and any
other officer of the Company with responsibility for the
administration of the relevant portion of this agreement.
"Restricted Disposition" is defined in Section 8.4.
"Restricted Event" is defined in Section 8.4.
"Restricted Investments" means all Investments except the
following:
(a) property to be used in the ordinary course of business
of the
Company and its Subsidiaries;
(b) current assets arising from the sale of goods and
services in
the ordinary course of business of the Company and its
Subsidiaries;
(c) Investments in one or more Subsidiaries or any Person
that
concurrently with such Investment becomes a Subsidiary;
(d) Investments existing on the date of the Closing and
disclosed in
Schedule 5.15;
(e) Investments in United States Governmental Securities,
provided
that such obligations mature within 365 days from the date of
acquisition
thereof;
(f) Investments in certificates of deposit or banker's
acceptances
issued by an Acceptable Bank, provided that such obligations
mature within
365 days from the date of acquisition thereof;
(g) Investments in commercial paper given the highest
rating by a
credit rating agency of recognized national standing and
maturing not more
than 270 days from the date of creation thereof;
(h) Investments in Repurchase Agreements; and
(i) Investments in tax-exempt obligations of any state of
the United
States of America, or any municipality of any such state, in
each case
rated "AA" or better by S&P, "Aa2" or better by Moody's or an
equivalent
rating by any other credit rating agency of recognized national
standing,
provided that such obligations mature within 365 days from the
date of
acquisition thereof.
As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(x) the amount at which such Restricted Investment is
shown on the
books of the Company or any of its Subsidiaries (or zero if such
Restricted Investment is not shown on any such books); and
(y) either
(i) in the case of any Guaranty of the obligation of
any
Person, the amount which the Company or any of its
Subsidiaries has paid
on account of such obligation less any recoupment by the
Company or such
Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment,
the excess
of (x) the greater of (A) the amount originally entered on
the books of
the Company or any of its Subsidiaries with respect thereto
and (B) the
cost thereof to the Company or its Subsidiary over (y) any
return of
capital (after income taxes applicable thereto) upon such
Restricted
Investment through the sale or other liquidation thereof or
part thereof
or otherwise.
As used in this definition of "Restricted Investments":
"Acceptable Bank" means any bank or trust company (i) which
is
organized under the laws of the United States of America or any
State
thereof, (ii) which has capital, surplus and undivided profits
aggregating
at least $250,000,000, and (iii) whose long-term unsecured debt
obligations (or the long-term unsecured debt obligations of the
bank
holding company owning all of the capital stock of such bank or
trust
company) shall have been given a rating of "A" or better by S&P,
"A2" or
better by Moody's or an equivalent rating by any other credit
rating
agency of recognized national standing.
"Acceptable Broker-Dealer" means any Person other than a
natural
person (i) which is registered as a broker or dealer pursuant to
the
Exchange Act and (ii) whose long-term unsecured debt obligations
shall
have been given a rating of "A" or better by S&P, "A2" or better
by
Moody's or an equivalent rating by any other credit rating
agency of
recognized national standing.
"Xxxxx'x" means Xxxxx'x Investors Service, Inc.
"Repurchase Agreement" means any written agreement
(a) that provides for (i) the transfer of one or more
United
States Governmental Securities in an aggregate principal
amount at least
equal to the amount of the Transfer Price (defined below)
to the Company
or any of its Subsidiaries from an Acceptable Bank or an
Acceptable
Broker-Dealer against a transfer of funds (the "Transfer
Price") by the
Company or such Subsidiary to such Acceptable Bank or
Acceptable
Broker-Dealer, and (ii) a simultaneous agreement by the
Company or such
Subsidiary, in connection with such transfer of funds, to
transfer to such
Acceptable Bank or Acceptable Broker-Dealer the same or
substantially
similar United States Governmental Securities for a price
not less than
the Transfer Price plus a reasonable return thereon at a
date certain not
later than 365 days after such transfer of funds,
(b) in respect of which the Company or such
Subsidiary shall
have the right, whether by contract or pursuant to
applicable law, to
liquidate such agreement upon the occurrence of any default
thereunder, and
(c) in connection with which the Company or such
Subsidiary, or
an agent thereof, shall have taken all action required by
applicable law
or regulations to perfect a Lien in such United States
Governmental
Securities.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc.
"United States Governmental Security" means any direct
obligation of, or obligation guaranteed by, the United States of
America,
or any agency controlled or supervised by or acting as an
instrumentality
of the United States of America pursuant to authority granted by
the
Congress of the United States of America, so long as such
obligation or
guarantee shall have the benefit of the full faith and credit of
the
United States of America which shall have been pledged pursuant
to
authority granted by the Congress of the United States of
America.
"Restricted Merger" is defined in Section 8.4.
"Sale-and-Leaseback Transaction" means a transaction or series
of transactions pursuant to which the Company or any Subsidiary shall
sell or transfer to any Person (other than the Company or a
Subsidiary) any property, whether now owned or hereafter acquired,
and, as part of the same transaction or series of transactions, the
Company or any Subsidiary shall rent or lease as lessee (other than
pursuant to a Capital Lease), or similarly acquire the right to
possession or use of, such property or one or more properties which
it intends to use for the same purpose or purposes as such property.
"SEC Reports" has the meaning set forth in Section 5.3.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Security" has the meaning set forth in section 2(1) of the
Securities Act of 1933, as amended.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the
Company.
"Senior Funded Debt" means (a) any Funded Debt of the Company
(other than Subordinated Debt) and (b) any Funded Debt of any
Subsidiary.
"Significant Subsidiary" means at any time any Subsidiary that
would at such time constitute a "significant subsidiary" (as such
term is defined in Regulation SX of the Securities and Exchange
Commission as in effect on the date of the Closing) of the Company.
"Subordinated Debt" means any debt that is in any manner
subordinated in right of payment or security in any respect to Debt
evidenced by the Notes.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one or
more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it
or them (as a group) ordinarily, in the absence of contingencies, to
elect a majority of the directors (or Persons performing similar
functions) of such entity, and any partnership or joint venture if
more than a 50% interest in the profits or capital thereof is owned
by such Person or one or more of its Subsidiaries or such Person and
one or more of its Subsidiaries (unless such partnership can and does
ordinarily take major business actions without the prior approval of
such Person or one or more of its Subsidiaries). Unless the context
otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"Subsidiary Stock" means, with respect to any person, the stock
(or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Subsidiary of such
Person.
"Transfer" means, with respect to any Person, any transaction in
which such Person sells, conveys, transfers or leases (as lessor) any
of its property, including, without limitation, Subsidiary Stock. For
purposes of determining the application of the Net Proceeds Amount in
respect of any Transfer, the Company may designate any Transfer as
one or more separate Transfers each yielding a separate Net Proceeds
Amount. In any such case, the Disposition Value of any property
subject to each such separate Transfer shall be determined by ratably
allocating the aggregate Disposition Value attributable to all
property subject to all such separate Transfers to each such separate
Transfer on a proportionate basis.
"Wholly-Owned Subsidiary" means any Subsidiary of the Company
all of the equity interests (except director's qualifying shares) and
voting interests and Debt of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries.
Schedule 4.9
(to Note Purchase Agreement)
Changes in Corporate Structure
None
Schedule 5.3
(to Note Purchase Agreement)
Disclosure Materials
None
Schedule 5.4
(to Note Purchase Agreement)
Organization and Ownership of Shares of Subsidiaries
Name
Jurisdiction of Organization
Percentage of Capital
Stock and Equity
Interests Owned by
the Company
Honesdale Gas Company
Commonwealth of Pennsylvania
100%
Penn Gas Development Co.
Commonwealth of Pennsylvania
100%
Schedule 5.5
(to Note Purchase Agreement)
Financial Statements
1. Annual Report of the Company on Form 10-K for the fiscal year
ended December 31, 1996.
2. Annual Report of the Company for the fiscal year ended December
31, 1995.
3. Quarterly Report of the Company on Form 10-Q for the fiscal
quarter ended March 31, 1997.
4. Quarterly Report of the Company on Form 10-Q for the fiscal
quarter ended June 30, 1997.
Schedule 5.8
(to Note Purchase Agreement)
Certain Litigation
None
Schedule 5.11
(to Note Purchase Agreement)
Licenses, Permits, Etc.
None
2
Schedule 5.15
(to Note Purchase Agreement)
Existing Debt; Investments of the Company
Existing Debt
1. Indebtedness under the Indenture of Mortgage and Deed of Trust
dated as of March 15, 1946, from the Company (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 September 15, 1997.
2. Indebtedness under a Promissory Note dated April 8, 1997, issued
by the Company in favor of Mellon Bank, N.A., in the amount of
$4,000,000 as of September 15, 1997.
3. Indebtedness under a Promissory Note dated May 30, 1996, as
amended, issued by the Company in favor of PNC Bank, National
Association, in the amount of $14,000,000 as of September 15, 1997.
4. Indebtedness under a Promissory Note dated March 25, 1997,
issued by the Company in favor of First Union National Bank, National
Association, in the amount of $5,000,000 as of September 15, 1997.
5. Indebtedness under a Promissory Note dated July 3, 1997, issued
by the Company in favor of CoreStates Bank, N.A. in the amount of
$8,800,000 as of September 15, 1997.
6. Indebtedness under a Promissory Note dated May 28, 1997, issued
by the Company in favor of Fleet Bank in the amount of $4,500,000 as
of September 15, 1997.
7. Indebtedness under a Promissory Note dated June 24, 1997, issued
by the Company in favor of First Heritage Bank in the amount of
$1,500,000 as of September 15, 1997.
8. Indebtedness under a Promissory Note dated August 1, 1997,
issued by the Company in favor of Penn Security Bank & Trust Company
in the amount of $1,000,000 as of September 15, 1997.
9. Indebtedness under a Promissory Note dated August 22, 1996,
issued by the Company in favor of Pennsylvania Enterprises, Inc., in
the amount of $24,700,000 as of September 15, 1997.
10. Indebtedness in the amount of $25,000,000 as of September 15,
1997, issued by the Company under Term Loan Notes executed and
delivered pursuant to a Term Loan Agreement by and among the Company
and the Banks parties thereto, dated as of August 14, 1997.
11. Indebtedness under a Promissory Note dated February 14, 1997,
issued by Honesdale Gas Company, a Subsidiary of the Company, in
favor of Xxxxx Bank in the amount of $100,000 as of September 15,
1997.
Existing Investments
None
B-
Schedule 5.18(to Note Purchase Agreement)
Certain Environmental Matters
None
E-1-
Exhibit 1(to Note Purchase Agreement)
PG Energy Inc.6.92% Senior Note due September 30, 2004
No. [_______] [Date]$[__________] PPN 69332L A* 8
For Value Received, the undersigned, PG Energy Inc. (herein
called the "Company"), a corporation organized and existing under the
laws of the Commonwealth of Pennsylvania, hereby promises to pay to
____________________________________ or registered assigns, the
principal sum of ______________________________ Dollars on September
30, 2004 with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate
of 6.92% per annum from the date hereof, payable semiannually, on the
thirtieth day of March and September in each year, commencing with
the March or September next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any
overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as
aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum equal to 8.92%.
Payments of principal of, interest on and any Make-Whole Amount
with respect to this Note are to be made in lawful money of the
United States of America at the principal office of the Company in
Xxxxxx-Xxxxx, Pennsylvania or at such other place as the Company
shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated
as of September 30, 1997 (as from time to time amended, the "Note
Purchase Agreements"), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance hereof,
(i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase
Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment
and for all other purposes, and the Company will not be affected by
any notice to the contrary.
This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the
Note Purchase Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the
price (including any applicable Make-Whole Amount) and with the
effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance with the
law of the State of New York excluding choice-of-law principles of
the law of such State that would require the application of the laws
of a jurisdiction other than such State.
PG Energy Inc.
By
Title:
Exhibit 4.4(a)-
(to Note Agreement)
Exhibit 4.4(a)(to Note Agreement)
Form of Opinion of Special Counselto the Company
The closing opinion of Xxxxxx Xxxxxxx & Xxxx LLP, counsel to the
Company, which is called for by Section 4.4 of the Note Purchase
Agreements, shall be dated the date of Closing and addressed to the
Purchasers, shall be satisfactory in scope and form to each Purchaser
and shall be to the effect that:
1. The execution, issuance, sale and delivery of the Note
Purchase
Agreements and the Notes under the circumstances contemplated by
the Note
Purchase Agreements do not, under existing law, require the
registration
or qualification of the Notes under the Securities Act of 1933,
as amended
(the "Securities Act"), or the Securities Exchange Act of 1934,
as amended
(the "Exchange Act"), or the qualification of an indenture under
the Trust
Indenture Act of 1939, as amended, other than ordinary
disclosures in
filings required to be made by the Company pursuant to the
disclosure
requirements of the Securities Act and the Exchange Act, none of
which
disclosures are required to be made prior to the execution and
delivery of
the Note Purchase Agreements and the Notes.
2. The Company is a subsidiary company of a holding
company, as such
terms are defined in the Public Utility Holding Company Act of
1935 (the
"PUHCA"). The Company is exempt from regulation pursuant to
Section
3(a)(1) of the Act, except for Section 9(a)(2) thereof. The
issuance by
the Company of the Notes does not require that a declaration
with respect
thereto shall have become effective under Section 7 of PUHCA,
nor other
authorization or approval of the Securities and Exchange
Commission under
PUHCA.
3. The Company is not an "investment company" or a
company
"controlled" by an "investment company", within the meaning of
the
Investment Company Act of 1940, as amended.
The opinion of Xxxxxx Xxxxxxx & Xxxx LLP shall cover such other
matters relating to the sale of the Notes as each Purchaser may
reasonably request. With respect to matters of fact on which such
opinion is based, such counsel shall be entitled to rely on
appropriate certificates of public officials and other officers of
the Company.
Exhibit 4.4(b)-
(to the Note Agreement)
Exhibit 4.4(b)(to Note Agreement)
Form of Opinion of House Counselto the Company
The closing opinion of Xxxxxxx X. Xxxxxx, counsel to the
Company, which is called for by Section 4.4 of the Note Purchase
Agreements, shall be dated the date of Closing and addressed to the
Purchasers, shall be satisfactory in scope and form to each Purchaser
and shall be to the effect that:
1. The Company is a corporation, duly incorporated,
validly existing
and in good standing under the laws of the Commonwealth of
Pennsylvania,
has the corporate power and the corporate authority to execute
and perform
the Note Purchase Agreements and to issue the Notes and has the
full
corporate power and the corporate authority to conduct the
activities in
which it is now engaged and is duly licensed or qualified and is
in good
standing as a foreign corporation in each jurisdiction in which
the
character of the properties owned or leased by it or the nature
of the
business transacted by it makes such licensing or qualification
necessary
except in jurisdictions where the failure to be so qualified or
licensed
would not have a material adverse affect on the business of the
Company.
2. Each Subsidiary is a corporation duly organized,
validly existing
and in good standing under the laws of its jurisdiction of
incorporation
and is duly licensed or qualified and is in good standing in
each
jurisdiction in which the character of the properties owned or
leased by
it or the nature of the business transacted by it makes such
licensing or
qualification necessary except in jurisdictions where the
failure to be so
qualified or licensed would not have a material adverse affect
on the
business of such Subsidiary, and all of the issued and
outstanding shares
of capital stock of each such Subsidiary have been duly issued,
are fully
paid and non-assessable and are owned by the Company, by one or
more
Subsidiaries, or by the Company and one or more Subsidiaries.
3. Each Note Purchase Agreement has been duly authorized
by all
necessary corporate action on the part of the Company, has been
duly
executed and delivered by the Company and constitutes the legal,
valid and
binding contract of the Company enforceable in accordance with
its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and
similar laws
affecting creditors' rights generally or limiting the right of
specific
performance, and general principles of equity (regardless of
whether the
application of such principles is considered in a proceeding in
equity or
at law).
4. The Notes have been duly authorized by all necessary
corporate
action on the part of the Company, have been duly executed and
delivered
by the Company and constitute the legal, valid and binding
obligations of
the Company enforceable in accordance with their terms, subject
to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting
creditors' rights generally, or limiting the right of specific
performance
and general principles of equity (regardless of whether the
application of
such principles is considered in a proceeding in equity or at
law).
5. Neither the issuance of the Notes nor the application
of the
proceeds of the sale of the Notes will violate or result in a
violation of
Section 7 of the Exchange Act or any regulation issued pursuant
thereto,
including, without limitation, Regulation G, T or X of the Board
of
Governors of the Federal Reserve System.
6. Except for the approval of the Pennsylvania Public
Utility
Commission, which has been obtained pursuant to an order dated
July 10,
1997, and which is final and not subject to appeal, no approval,
consent
or withholding of objection on the part of, or filing,
registration or
qualification with, any governmental body of the Commonwealth of
Pennsylvania is necessary in connection with the execution and
delivery of
the Note Purchase Agreements or the Notes.
7. The issuance and sale of the Notes and the execution,
delivery
and performance by the Company of the Note Purchase Agreements
do not
conflict with or result in any breach of any of the provisions
of or
constitute a default under or result in the creation or
imposition of any
Lien upon any of the property of the Company pursuant to the
provisions of
the Articles of Incorporation or By-laws of the Company or any
material
agreement or other instrument known to such counsel to which the
Company
is a party or by which the Company may be bound.
8. There are no actions, suits or proceedings pending or,
to the
knowledge of such counsel after due inquiry, threatened against
or
affecting the Company or any Subsidiary in any court or before
any
governmental authority or arbitration board or tribunal which,
if
adversely determined, would be reasonably likely to have a
materially
adverse effect on the properties, business or financial
condition of the
Company and its Subsidiaries, taken as a whole, or the ability
of the
Company to perform its obligations under the Note Purchase
Agreements and
the Notes or on the legality, validity or enforceability of the
Company's
obligations under the Note Purchase Agreements or the Notes.
The opinion of Xxxxxxx X. Sunday shall cover such other matters
relating to the sale of the Notes as each Purchaser may reasonably
request. With respect to matters of fact on which such opinion is
based, such counsel shall be entitled to rely on appropriate
certificates of public officials and other officers of the Company.
Exhibit 4.4(c)-
(to Note Agreement)
Exhibit 4.4(c)
(to Note Agreement)
Form of Opinion of Special Counselto the Purchasers
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to
the Purchasers, called for by Section 4.4 of the Note Purchase
Agreements, shall be dated the date of Closing and addressed to each
Purchaser, shall be satisfactory in form and substance to each
Purchaser and shall be to the effect that:
1. The Company is a corporation, validly existing and in
good
standing under the laws of the Commonwealth of Pennsylvania and
has the
corporate power and the corporate authority to execute and
deliver the
Note Purchase Agreements and to issue the Notes.
2. Each Note Purchase Agreement has been duly authorized
by all
necessary corporate action on the part of the Company, has been
duly
executed and delivered by the Company and constitutes the legal,
valid and
binding contract of the Company enforceable in accordance with
its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and
similar laws
affecting creditors' rights generally, and general principles of
equity
(regardless of whether the application of such principles is
considered in
a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate
action on the part of the Company, and the Notes being delivered
on the
date hereof have been duly executed and delivered by the Company
and
constitute the legal, valid and binding obligations of the
Company
enforceable in accordance with their terms, subject to
bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting
creditors'
rights generally, and general principles of equity (regardless
of whether
the application of such principles is considered in a proceeding
in equity
or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do
not, under
existing law, require the registration of the Notes under the
Securities
Act of 1933, as amended, or the qualification of an indenture
under the
Trust Indenture Act of 1939, as amended.
The opinion of Xxxxxxx and Xxxxxx shall also state that the
opinions of Xxxxxx Xxxxxxx & Xxxx LLP, special counsel to the
Company, and Xxxxxxx X. Xxxxxx, house counsel to the Company, are
satisfactory in scope and form to Xxxxxxx and Xxxxxx and that, in
their opinion, the Purchasers are justified in relying thereon.
With respect to matters of fact upon which such opinion is
based, Xxxxxxx and Xxxxxx may rely on appropriate certificates of
public officials and officers of the Company and upon representations
of the Company and the Purchasers delivered in connection with the
issuance and sale of the Notes.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx
and Xxxxxx may rely, as to matters referred to in paragraph 1, solely
upon an examination of the Articles of Incorporation certified by,
and a certificate of good standing of the Company from, the Secretary
of State of the Commonwealth of Pennsylvania, the By-laws of the
Company and the general business corporation law of the Commonwealth
of Pennsylvania. The opinion of Xxxxxxx and Xxxxxx is limited to the
laws of the State of New York, the general business corporation law
of the Commonwealth of Pennsylvania and the Federal laws of the
United States.
