Exhibit 4.24
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") dated as of October
25, 2002, by and among PHILADELPHIA SUBURBAN CORPORATION, a Pennsylvania
corporation (the "Borrower"), the several banks and other financial institutions
from time to time parties to this Agreement (the "Banks"), and PNC BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent
(in such capacity, the "Agent").
BACKGROUND
The Borrower has requested that the Banks make Loans (that
term and certain other terms are defined in Section 1.1 hereof) to the Borrower,
and the Banks severally have agreed to make such Loans on the terms and
conditions herein contained. Proceeds of the Loans will be used by the Borrower
to purchase certain of its issued and outstanding Capital Stock from one or more
of the Vivendi Entities.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements herein set forth and for other consideration,
the receipt and sufficiency of which is hereby acknowledged and intending to be
legally bound hereby, covenant and agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate": any Person (other than a Subsidiary, or an
officer, director or employee of the Borrower who would not be an
Affiliate but for such Person's status as an officer, director and/or
employee) which, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, the Borrower, and any member, director, officer or
employee of any such Person or any Subsidiary of the Borrower. For
purposes of this definition, "control" shall mean the power, directly
or indirectly, either to (i) vote 5% or more of the securities having
ordinary voting power for the election of directors of such Person or
(ii) direct or in effect cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Assignment and Acceptance": an assignment and acceptance
entered into by a Bank and an assignee, and acknowledged by the Agent,
in the form of Exhibit B or such other form as shall be approved by
the Agent.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/100th of 1%) equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus one half of one percent
(0.5%). If for any reason the Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the definition of such term, the Base
Rate shall be determined without regard to clause (b) of the first
sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, as the case may be.
"Base Rate Loan": any portion of a Loan bearing interest at a
rate determined by reference to the Base Rate.
"Borrower": as defined in the heading of this Agreement.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in Philadelphia, Pennsylvania are
authorized or required by law to close; provided, however, that, when
used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London Interbank Market.
"Capital Lease": at any time, a lease with respect to which
the lessee is required to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated and whether newly issued or
reissued from treasury shares) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Change of Control": an event or series of events by which (a)
any "person" or "group" (as such terms are defined in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder), is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under such
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire
without condition, other than passage of time, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 25% of the total voting power of the then
outstanding Voting Stock of the Borrower, or (b) from and after the
date hereof, individuals who on the date hereof constitute the Board of
Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by
the shareholders of the Borrower was approved by a vote of a majority
of the directors then still in office who were either directors on the
date hereof or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board
of Directors of the Borrower then in office.
"Closing": as defined in Section 4.2.
"Closing Date": as defined in Section 4.2.
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"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment": as to any Bank, the obligation of such Bank to
make a Loan to the Borrower hereunder in the principal amount not to
exceed the amount set forth opposite such Bank's name on Schedule I.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Consolidated EBIT": for any period, Consolidated Net Income
for such period, plus the amount of income taxes and interest expense
deducted from earnings in determining such Consolidated Net Income.
"Consolidated Funded Debt": at any time, all Debt of the
Borrower determined on a consolidated basis consisting of, without
duplication (a) borrowed money Debt, including without limitation
capitalized lease obligations; (b) reimbursement obligations in respect
of letters of credit, bank guarantees and the like; and (c) Debt in the
nature of a Contingent Obligation, whether or not required to be
reflected on a balance sheet of the Borrower in accordance with GAAP.
"Consolidated Interest Expense": for any period, the amount of
cash interest expense deducted from earnings of the Borrower in
determining Consolidated Net Income for such period in accordance with
GAAP.
"Consolidated Net Income": for any fiscal period, net earnings
(or loss) after income and other taxes computed on the basis of income
of the Borrower for such period determined on a consolidated basis in
accordance with GAAP, but excluding:
(a) the amount of any extraordinary items included in
such calculation of net earnings (or loss);
(b) any gain or loss resulting from the write-up or
write-off of fixed assets;
(c) earnings of any Subsidiary accrued prior to the
date it became a Subsidiary;
(d) earnings of any Person, substantially all assets
of which have been acquired in any manner, realized by such
Person prior to the date of such acquisition; and
(e) any gain arising from the acquisition of any
Securities of the Borrower or any Subsidiary thereof.
"Consolidated Shareholders' Equity": at a particular date, the
net book value of the shareholders' equity of the Borrower as would be
shown on a consolidated balance sheet at such time determined in
accordance with GAAP.
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"Contingent Obligation": with respect to any Person (for the
purpose of this definition, the "Obligor") any obligation (except the
endorsement in the ordinary course of business of instruments for
deposit or collection) of the Obligor guaranteeing or in effect
guaranteeing any indebtedness of any other Person (for the purpose of
this definition, the "Primary Obligor") in any manner, whether directly
or indirectly, including (without limitation) indebtedness incurred
through an agreement, contingent or otherwise, by the Obligor:
(a) to purchase such indebtedness of the Primary
Obligor or any Property or assets constituting security
therefor;
(b) to advance or supply funds
(i) for the purpose of payment of
such indebtedness (except to the extent such
indebtedness otherwise appears on Borrower's
balance sheet as indebtedness), or
(ii) to maintain working capital or
other balance sheet condition or any income
statement condition of the Primary Obligor
or otherwise to advance or make available
funds for the purchase or payment of such
indebtedness or obligation; or
(c) to lease Property or to purchase Securities or
other Property or services primarily for the purpose of
assuring the owner of such indebtedness or obligation of the
ability of the Primary Obligor to make payment of the
indebtedness or obligation.
For purposes of computing the amount of any Contingent Obligation, in
connection with any computation of indebtedness or other liability, it
shall be assumed that, without duplication, the indebtedness or other
liabilities of the Primary Obligor that are the subject of such
Contingent Obligation are direct obligations of the issuer of such
Obligation.
"Contractual Obligation": as to any Person, any provision of
any Security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Debt": with respect to any Person, at any time, without
duplication, all of (i) its liabilities for borrowed money, (ii)
liabilities secured by any Lien existing on property owned by such
Person (whether or not such liabilities have been assumed), (iii) its
liabilities in respect to Capital Leases; (iv) its liabilities under
Contingent Obligations; and (v) all other obligations which are
required by GAAP to be shown as liabilities on its balance sheet but
excluding (x) deferred taxes and other deferred or long-term
liabilities and other amounts not in respect of borrowed money; (y) the
aggregate amount of accounts receivable sold, factored or otherwise
transferred for value without recourse (other than for breach of
representations) and (z) current trade accounts payable incurred in the
ordinary course of business.
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"Debt to Capitalization Ratio" for any period, the ratio of
(i) Consolidated Funded Debt to (ii) Total Capitalization.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition precedent therein set forth, has been
satisfied.
"Distribution": in respect of any corporation, (a) dividends,
distributions or other payments on account of any capital stock of the
corporation (except distributions in common stock of such corporation);
(b) the redemption or acquisition of such stock or of warrants, rights
or other options to purchase such stock (except when solely in exchange
for common stock of such corporation); and (c) any payment on account
of, or the setting apart of any assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other
acquisition of any share of any class of capital stock of such
corporation or any warrants or options to purchase any such stock.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or binding requirements of any Governmental
Authority, or binding Requirement of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Base Rate": with respect to any Eurodollar Loans
for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to the rate determined by
the Agent in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the
London interbank offered rates of interest per annum for Dollars set
forth on Telerate display page 3750 or such other display page on the
Telerate System as may replace such page to evidence the average of
rates quoted by banks designated by the British Bankers' Association
(or appropriate successor, or if the British Bankers' Association or
its successor ceases to provide such quotes, a comparable replacement
determined by the Agent), for an amount approximately equal in
principal amount to the amount of such Eurodollar Loans.
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"Eurodollar Loan": any portion of a Loan bearing interest at a
rate determined by reference to the Eurodollar Rate in accordance with
the provisions of Section 2.
"Eurodollar Rate": with respect to each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined in
accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
--------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Fees": as defined in subsection 2.3(a).
"GAAP": at any time with respect to the determination of the
character or amount of any asset or liability or item of income or
expense, or any consolidation or other accounting computation,
generally accepted accounting principles as applied to the public
utility industry, as such principles shall be in effect on the date of,
or at the end of the period covered by, the financial statements from
which such asset, liability, item of income, or item of expense, is
derived, or, in the case of any such computation, as in effect on the
date when such computation is required to be determined, subject to
Section 1.3(b).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Coverage Ratio": at the date of determination, the
ratio of Consolidated EBIT to Consolidated Interest Expense, in each
case for the prior four (4) consecutive fiscal quarters.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each month, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period and the
last day of such Interest Period.
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"Interest Period": with respect to any Eurodollar Loan:
(a) initially the period commencing on the conversion
date with respect to such Eurodollar Loan and ending one, three or six
months thereafter, as selected by the Borrower in its notice of
conversion, given with respect thereto; and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest Period
with respect thereto;
provided that, the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month;
(iii) an Interest Period that otherwise would extend
beyond the Maturity Date shall end on the Maturity Date; and
(iv) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Eurodollar Loan.
"Investments": investments (by loan or extension of credit,
purchase, advance, guaranty, capital contribution or otherwise) made in
cash or by delivery of Property, by the Borrower (i) in any Person,
whether by acquisition of stock or other ownership interest,
indebtedness or other obligation or Security, or by loan, advance or
capital contribution, or (ii) in any Property or (iii) any agreement to
do any of the foregoing.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"Loan": the term loan made by each Bank to the Borrower
pursuant to Section 2.1 hereof and "Loans" shall be the collective
reference to all such term loans.
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"Loan Documents": this Agreement and the Notes and any other
instruments, certificates or documents delivered or contemplated to be
delivered hereunder or in connection herewith.
"Material Adverse Effect": a material adverse effect on (a)
the validity or enforceability of this Agreement or any other Loan
Document, (b) the business, prospects, Property, assets, financial
condition, results of operations or prospects of the Borrower, (c) the
ability of the Borrower duly and punctually to pay its Debts and
perform its obligations hereunder, or (d) the ability of the Agent or
any of the Banks, to the extent permitted, to enforce their legal
remedies pursuant to this Agreement or any other Loan Document.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls, and
ureaformaldehyde insulation.
"Maturity Date": October 24, 2003.
"Moody's": Xxxxx'x Investors Service, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a) (3) of ERISA.
"Net Proceeds": (a) with respect to the sale or issuance of
any Capital Stock by the Borrower, the net amount equal to (i) the
aggregate amount received in cash in connection with such sale or
issuance minus (ii) the reasonable fees, commissions and other
out-of-pocket expenses incurred by the Borrower in connection with such
sale or issuance; and (b) with respect to the incurrence by the
Borrower of any indebtedness for borrowed money (other than under
operating lines of credit), the net amount equal to (i) the aggregate
amount received in cash from the incurrence of such indebtedness minus
(ii) the sum of (A) the principal amount of any Debt which is promptly
repaid in connection with such incurrence (i.e., a refinancing) and (B)
the reasonable fees, commissions and other out-of-pocket expenses
incurred by the Borrower payable in connection with such incurrence to
Persons other than an Affiliate of the Borrower.
"Note": a promissory note of the Borrower in the form of
Exhibit A issued to a Bank, as the same may be amended, supplemented or
otherwise modified from time to time and "Notes" shall be the
collective reference to all such promissory notes issued to the Banks.
"Participant": as defined in Section 9.6(f).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": an acquisition by the Borrower of the
stock or assets of a Person engaged in businesses similar or incidental
or ancillary to Borrower's or any Subsidiary's existing business,
provided that at least 30 days prior to the consummation of any such
acquisition for which cash consideration paid by the Borrower
(including the assumption of Debt in connection therewith) exceeds
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$25,000,000, no Default or Event of Default shall exist or would exist
if such acquisition were consummated on such date (assuming for
purposes of the covenants contained in Section 6.1 that pro forma
adjustments are made to the financial statements of the Borrower
reflecting such acquisition; provided, that historical EBIT of the
Person to be acquired (or the assets of which are to be acquired) shall
be included for purposes of calculating such covenant compliance only
if historical financial statements of such Person are received by the
Agent at least 30 days prior to the consummation of such acquisition),
and the Borrower shall have delivered to the Agent a certificate of a
Responsible Officer showing calculations in reasonable detail
demonstrating such pro forma compliance with the covenants contained in
Section 6.1, and provided further, that any such acquisition for which
cash consideration paid by the Borrower (including the assumption of
Debt in connection therewith) exceeds $50,000,000, shall also have been
consented to by the Required Banks.
"Permitted Investments": Investments in:
(a) one or more Subsidiaries thereof;
(b) current assets arising from the sale or purchase
of goods and services in the ordinary course of business of
the Borrower;
(c) direct obligations of the United States of
America, or any agency or instrumentality thereof or
obligations guaranteed by the United States of America,
provided that such obligations mature within one (1) year from
the date of acquisition thereof;
(d) certificates of deposit, time deposits or
banker's acceptances, maturing within one (1) year from the
date of acquisition, with banks or trust companies organized
under the laws of the United States, the unsecured long-term
debt obligations of which are rated "A3" or higher by Moody's
or "A-" or higher by S&P, and issued, or in the case of
banker's acceptance, accepted, by a bank or trust company
having capital, surplus and undivided profits aggregating at
least $250,000,000;
(e) commercial paper given the highest rating by
either S&P or Moody's maturing not more than 270 days from the
date of creation thereof;
(f) mutual funds registered with the Securities and
Exchange Commission under the Investment Company Act of 1940
that hold themselves out as "money market funds"; and
(g) other loans, advances and investments not
exceeding in the aggregate $2,000,000 at any one time
outstanding.
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"Person": an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"PNC": PNC Bank, National Association, a national banking
association.
"Prime Rate": the rate of interest per annum announced from
time to time by PNC as its prime rate in effect at its principal office
in Philadelphia, Pennsylvania; each change in the Prime Rate shall be
effective on the date such change is announced as effective.
"Property": any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Pro-Rata Percentage": as to any Bank at any time, the
proportion (expressed as a percentage) that such Bank's Commitment
bears to the Total Commitment or, at any time after the Loans have been
made, the percentage which the amount of such Bank's outstanding Loan
constitutes of the aggregate amount of the Loans of the Banks then
outstanding.
"Purchase Agreement": that certain Registration and Stock
Purchase Agreement dated as of July 8, 2002, between the Borrower and
the Vivendi Entities, as the same may be amended, supplemented or
otherwise modified from time to time.
"Purchase Money Security Interest": Liens upon tangible
personal property securing loans to the Borrower or deferred payments
by the Borrower for the purchase of such tangible personal property, in
each case securing amounts which do not exceed the purchase price of
the property subject to such security interests.
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, except to the extent that notice thereof has been
waived by the PBGC.
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"Required Banks": at any time, (a) Banks whose Pro-Rata
Percentages aggregate at least 66 2/3%, or (b) if there are only two
Banks which have outstanding Loans, both Banks.
"Requirement of Law": as to any Person, the Certificate of
Incorporation, By-Laws, Operating Agreement or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case binding upon such Person or any of
its property or to which such Person or any of its property is subject.
"Responsible Officer": the chief financial officer, treasurer
or controller of the Borrower.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Security": "security" as defined in Section 2(1) of the
Securities Act of 1933, as amended.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": as to any Person, as of the time of determination,
the financial condition under which the following conditions are
satisfied:
(a) the fair market value of the assets of such
Person will exceed the debts and liabilities, subordinated,
contingent or otherwise, of such Person; and
(b) the present fair saleable value of the Property
of such Person will be greater than the amount that will be
required to pay the probable liability of such Person on its
debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute
and matured; and
(c) such Person will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and
(d) such Person will not have unreasonably small
capital with which to conduct the businesses in which it is
engaged as such businesses are then conducted and are proposed
to be conducted after the date thereof.
"Subordinated Debt": at any time, all Debt of the Borrower
subordinated to all of the obligations of the Borrower to the Banks on
terms satisfactory to the Banks.
"Subsidiary": as to any Person, (i) any corporation, limited
liability company, company or trust of which 50% or more (by number of
shares or number of votes) of the outstanding capital stock, interests,
shares or similar items of beneficial interest normally entitled to
vote for the election of one or more directors, managers or trustees
(regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly or indirectly by such
person or one or more of such Person's Subsidiaries, or any partnership
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of which such Person is a general partner or of which 50% or more of
the partnership interests is at the time directly or indirectly owned
by such Person or one or more of such Person's Subsidiaries, and (ii)
any corporation, company, trust, partnership or other entity which is
controlled or capable of being controlled by such Person or one or more
of such Person's subsidiaries. Unless otherwise indicated, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary of the Borrower.
"Total Capitalization": at any period, the sum of (i)
Consolidated Shareholders' Equity plus (ii) Consolidated Funded Debt.
"Total Commitment": at any time, the aggregate amount of the
Banks' Commitments, as in effect at such time.
"Tranche": the collective reference to Eurodollar Loans whose
Interest Periods begin on the same date and end on the same later date.
"Vivendi Entities": Vivendi Environnement S.A., a French
corporation, Vivendi Water S.A., a French corporation and Vivendi North
America Company, a Delaware corporation.
"Voting Stock": capital stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the directors (or
Persons performing similar functions) and, as applicable, any equity,
participation or ownership interests in any partnership, business
trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture or any other Person which
interests are similar by analogy to capital stock or ownership rights
giving rise to voting or governance rights.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the Notes or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
1.3 Construction. (a) Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole, "or" has the inclusive meaning
represented by the phrase "and/or," and "including" has the meaning represented
by the phrase "including without limitation." References in this Agreement to
"determination" of or by the Agent or the Banks shall be deemed to include good
faith estimates by the Agent or the Banks (in the case of quantitative
determinations) and good faith beliefs by the Agent or the Banks (in the case of
qualitative determinations). Whenever the Agent or the Banks are granted the
right herein to act in their sole discretion or to grant or withhold consent
such right shall be exercised in good faith, except as otherwise provided
herein. Except as otherwise expressly provided, all references herein to the
"knowledge of" or "best knowledge of" the Borrower shall be deemed to refer to
the knowledge of a Responsible Officer thereof. The words "hereof," "herein,"
12
"hereunder", "hereby" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
section and other headings contained in this Agreement and the Table of Contents
preceding this Agreement are for reference purposes only and shall not control
or affect the construction of this Agreement or the interpretation thereof in
any respect. Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
(b) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate). As used herein and in the Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and any Subsidiary thereof not defined in subsection 1.1 and
accounting terms partly defined in subsection 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP. In the event that
any future change in GAAP, without more, materially affects the Borrower's
compliance with any financial covenant herein, the Borrower, the Banks and the
Agent shall use their best efforts to modify such covenant in order to account
for such change and to secure for the Banks the intended benefits of such
covenant.
SECTION 2. THE LOANS
2.1 Loans. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank, severally and not
jointly, agrees to make a Loan to the Borrower in the amount of such Bank's
Commitment; provided, however, that the failure of any Bank to make its Loan
shall not in itself relieve any other Bank of its obligation to lend hereunder
(it being understood, however, that no Bank shall be responsible for the failure
of any other Bank to make a Loan required to be made by such other Bank). The
Loans shall initially be Base Rate Loans, provided that they may be converted to
Eurodollar Loans in accordance with the provisions of this Agreement. Each Loan
shall be made on the Closing Date. Each Bank's Commitment shall terminate upon
the making of its Loan and the Borrower may not reborrow any amount of the Loan
which has been repaid.
2.2 General Provisions Regarding Loans. (a) Each Bank shall make the
Loan to be made by it hereunder on the Closing Date by wire transfer of
immediately available funds to the Agent in Philadelphia, Pennsylvania, not
later than 1:00 p.m., Philadelphia time, and the Agent shall by 3:00 p.m.,
Philadelphia time, credit the amounts so received to the general deposit account
of the Borrower with the Agent or, if the Loans shall not occur on such date
because any condition precedent herein specified shall not have been met, return
the amounts so received to the respective Banks. Unless the Agent shall have
received notice from a Bank prior to the Closing Date that such Bank will not
make available to the Agent such Bank's Loan, the Agent may assume that such
Bank has made such Loan available to the Agent on the Closing Date in accordance
with this paragraph (c) and the Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Bank shall not have made such Loan available to the Agent,
such Bank and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent at (i) in the case of the Borrower, the interest
rate applicable at the time to the Loans and (ii) in the case of such Bank, the
Federal Funds Effective Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount shall constitute such Bank's Loan for purposes
of this Agreement.
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(b) All conversions and continuations of Loans hereunder and
all selections of Interest Periods hereunder shall be in such amounts and be
made pursuant to such elections so that, after giving effect thereto, (A) the
aggregate principal amount of the portion of the Loans comprising each Tranche
of Eurodollar Loans shall be equal to $500,000 or a whole multiple of $100,000
in excess thereof and (B) the Borrower shall not have outstanding at any one
time more than in the aggregate five (5) separate Tranches of Eurodollar Loans.
2.3 Fees. (a) The Borrower agrees to pay to the Agent for its own
account administrative and other fees at the times and in the amounts as the
Agent and the Borrower may agree from time to time (collectively, the "Fees").
(b) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent. Once paid, none of the Fees shall be refundable
under any circumstances.
2.4 Notes; Repayment of Loans. The Loan made by each Bank shall be
evidenced by a single Note duly executed on behalf of the Borrower, dated the
Closing Date, in substantially the form attached hereto as Exhibit A with the
blanks appropriately filled, payable to such Bank in a principal amount equal to
the Loan made by such Bank. Each Note shall bear interest from the date thereof
on the outstanding principal balance thereof as set forth in Section 2.5. Each
Bank shall, and is hereby authorized by the Borrower to, endorse on the schedule
attached to the relevant Note held by such Bank (or on a continuation of such
schedule attached to each such Note and made a part thereof), or otherwise to
record in such Bank's internal records, an appropriate notation evidencing the
date and amount of the Loan of such Bank, each payment or prepayment of
principal of the Loan, and the other information provided for on such schedule;
provided, however, that the failure of any Bank to make such a notation or any
error therein shall not in any manner affect the obligation of the Borrower to
repay the Loan made by such Bank in accordance with the terms of the relevant
Note. The outstanding principal balance of each Loan, as evidenced by the
relevant Note, shall be payable on the Maturity Date and is subject to optional
and mandatory prepayment as provided in Section 2.7.
2.5 Interest on Loans. (a) Subject to the provisions of Section 2.6,
each Base Rate Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be) at a
rate per annum equal to the Base Rate.
(b) Subject to the provisions of Section 2.6, each Eurodollar
Loan shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal to the Eurodollar
Rate for the Interest Period in effect for such Eurodollar Loan plus one hundred
basis points (1.00%).
(c) Interest on each Loan shall be payable on each Interest
Payment Date applicable to such Loan; provided that, interest accruing on
overdue amounts pursuant to Section 2.6 shall be payable on demand as provided
in the Notes. The Eurodollar Rate and the Base Rate shall be determined by the
Agent, and such determination shall be conclusive absent error.
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2.6 Default Rate; Additional Interest; Alternate Rate of Interest. (a)
To the extent not contrary to any Requirement of Law, upon the occurrence and
during the continuation of an Event of Default, any principal, past due
interest, fee or other amount outstanding hereunder shall, at the option of the
Required Banks, bear interest for each day thereafter until paid in full (after
as well as before judgment) at a rate per annum which shall be equal to two
percent (2%) above the Base Rate (but in no event shall any such rate exceed the
maximum rate permitted by any Requirement of Law). The Borrower acknowledges
that such increased interest rate reflects, among other things, the fact that
such loans or other amounts have become a substantially greater risk given their
default status and that the Banks are entitled to additional compensation for
such risk.
(b) In the event, and on each occasion, that on the day two
Business Days prior to the commencement of any Interest Period for a Eurodollar
Loan, the Agent shall have determined (which determination absent manifest error
shall be conclusive and binding upon the Borrower) that dollar deposits in the
principal amount of such Eurodollar Loan are not generally available in the
London Interbank Market, or that the rate at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to the Banks of
making or maintaining the principal amount of such Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for ascertaining the
Eurodollar Rate, the Agent shall, as soon as practicable thereafter, give
written, telegraphic or telephonic notice of such determination to the Borrower
and the Banks, and any request by the Borrower for a Eurodollar Loan or for
conversion to or maintenance of a Eurodollar Loan pursuant to the terms of this
Agreement shall be deemed a request for a Base Rate Loan. After such notice
shall have been given and until the circumstances giving rise to such notice no
longer exist, each request for a Eurodollar Loan shall be deemed to be a request
for a Base Rate Loan. Each determination by the Agent hereunder shall be
conclusive absent manifest error.
2.7 Optional and Mandatory Prepayments of Loans. (a) The Borrower shall
have the right at any time and from time to time to prepay the Loans, in whole
or in part, without premium or penalty (but in any event subject to Section
2.11), upon prior written, telecopy or telephonic notice to the Agent given no
later than 11:00 a.m., Philadelphia time, one Business Day before any proposed
prepayment; provided, however, that each such partial prepayment of Loans shall
be in the principal amount of at least $500,000 or in whole multiples of
$100,000 in excess thereof.
(b) Promptly upon receipt by the Borrower of any Net Proceeds
from the issuance of Capital Stock of the Borrower or the incurrence by the
Borrower of indebtedness for borrowed money (other than under operating lines of
credit), the Borrower shall pay to the Agent 100% of such Net Proceeds. Such
payments shall be applied by the Agent to the prepayment of the Loans then
outstanding, without premium or penalty (but in any event subject to Section
2.11). The Borrower shall give the Agent no later than 11:00 a.m., Philadelphia
time, one Business Day's prior written, telecopy or telephonic notice of each
prepayment pursuant to this clause (b) setting forth the date and expected
amount thereof. All prepayments of the Loans under this clause (b) shall be
applied to Base Rate Loans then outstanding and the balance, if any, shall be
applied to Eurodollar Loans then outstanding, with payments applied to
Eurodollar Loans being applied in order of next maturing Interest Periods.
15
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of the Loans to be prepaid, shall be irrevocable
and shall commit the Borrower to prepay such Loans (or portion thereof) by the
amount stated therein. All prepayments under this Section on other than Base
Rate Loans shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment. No prepayments of the Loans, whether
optional or mandatory, may be reborrowed by the Borrower.
2.8 Illegality. Notwithstanding any other provision herein, if any
change in any Requirement of Law or in the interpretation or application thereof
shall make it unlawful for any Bank to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Bank hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate
Loans to Eurodollar Loans shall forthwith be cancelled and (b) the portion of
such Bank's Loan then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loan or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Bank such amounts, if any, as may be
required pursuant to Section 2.11.
2.9 Requirements of Law. (a) In the event that any change in any
Requirement of Law or in the interpretation, or application thereof or
compliance by any Bank with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Bank to any tax of any
kind whatsoever with respect to this Agreement, any Note or any
Eurodollar Loan made by it, or change the basis of taxation of payments
to such Bank in respect thereof (except for taxes covered by Section
2.12 and changes in the rate of tax on the overall net income, gross
receipts or revenue of such Bank);
(ii) shall impose, modify or hold applicable
any reserve, special deposit or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Bank which is not otherwise included in
the determination of the interest rate on such Eurodollar Loan
hereunder; or
(iii) shall impose on such Bank any other
condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank reasonably deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or to reduce any amount
receivable hereunder in respect thereof then, in any such case, the Borrower
shall as promptly as practicable pay such Bank, upon its demand, any additional
amounts necessary to compensate such Bank for such increased cost or reduced
amount receivable; provided, that the Borrower shall not be liable for any such
amounts incurred by such Bank more than 180 days prior to the date of such
Bank's notification to the Borrower. If any Bank becomes entitled to claim any
additional amounts pursuant to this subsection, it shall as promptly as
practicable notify the Borrower, through the Agent, of the event by reason of
which it has become so entitled. A certificate describing in reasonable detail
the determination of any additional amounts payable pursuant to this subsection
submitted by such Bank, through the Agent, to the Borrower shall be conclusive
in the absence of manifest error. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder. If any amount is refunded to such Bank, such Bank will reimburse
Borrower for amounts paid in respect of the refunded amount.
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(b) In the event that any Bank shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Bank
or such corporation could have achieved but for such change or compliance
(taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount reasonably deemed by such Bank to be
material, then from time to time, after submission as promptly as practicable by
such Bank to the Borrower (with a copy to the Agent) of a written request
therefor, the Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
(c) Each Bank agrees that it will use reasonable efforts in
order to avoid or to minimize, as the case may be, the payment by the Borrower
of any additional amount under subsections 2.9(a) and (b); provided, however,
that no Bank shall be obligated to incur any expense, cost or other amount in
connection with utilizing such reasonable efforts. Notwithstanding any other
provision of this Section 2.9, no Bank shall apply the provisions of subsections
2.9(a) or (b) hereof with respect to the Borrower if it shall not at the time be
the general policy or practice of the Bank exercising its rights hereunder to
apply the provisions similar to those of this Section 2.9 to other Borrower in
substantially similar circumstances under substantially comparable provisions of
other credit agreements.
2.10 Taxes. (a) All payments made by the Borrower under this Agreement
and the Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding, in the case of the Agent and each Bank, net
income taxes and franchise or gross receipts taxes (imposed in lieu of net
income taxes) imposed on the Agent or such Bank, as the case may be, as a result
of a present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and the Agent or such Bank or any political
subdivision or taxing authority thereof or therein (all such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"). Except as provided in Section 2.10(c) and the
penultimate sentence of this Section 2.10(a), if any Taxes are required to be
withheld from any amounts payable to the Agent or any Bank hereunder or under
the Notes, the amounts so payable to the Agent or such Bank shall be increased
to the extent necessary to yield to the Agent or such Bank (after payment of all
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement and the Notes. Whenever any Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Bank, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Taxes when
due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Banks for any incremental taxes, interest or
penalties that may become payable by the Agent or any Bank as a result of any
such failure. If as a result of a payment by the Borrower of Taxes pursuant to
this subsection a Bank receives a tax benefit or tax savings such as by
receiving a credit against, refund of, or reduction in Taxes which such Bank
would not have received but for the payment by the Borrower of Taxes pursuant to
this subsection, then such Bank shall promptly pay to the Borrower the amount of
such credit, refund, reduction or any other similar item. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
17
(b) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to the
Borrower and the Agent (i) two duly completed copies of United States Internal
Revenue Service Form W-8ECI or W-8BEN or successor applicable form, as the case
may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form. Each such Bank also agrees to deliver to the Borrower and the
Agent two further copies of the said Form W-8ECI or W-8BEN and Form W-8 or W-9,
or successor applicable forms or other manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, and such extensions or renewals
thereof as may reasonably be requested by the Borrower or the Agent, unless in
any such case an event (including, without limitation, any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank so advises the Borrower and the Agent. Such Bank shall
certify (i) in the case of a Form W-8ECI or W-8BEN, that it is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup withholding tax.
Each Bank shall deliver to the Borrower and the Agent, with respect to Taxes
imposed by any Governmental Authority other than the United States of America,
similar forms, if available (or the information that would be contained in
similar forms if such forms were available), to the forms which are required to
be provided under this subsection with respect to Taxes of the United States of
America.
(c) The Borrower shall not be required to pay any additional
amounts to the Agent or any Bank in respect of payments of United States
withholding tax or other Taxes made by the Borrower which are consistent with
the forms and information delivered to the Borrower and the Agent or if the
payment of such amounts would not have arisen but for a failure by the Agent or
such Bank to comply with the requirements of subsection 2.10(b) or the Agent or
such Bank did not timely deliver to the Borrower the forms listed or described
in subsection 2.10(b) or did not take such other steps as reasonably may be
available to it under applicable tax laws and any applicable tax treaty or
convention to obtain an exemption from, or reduction (to the lowest applicable
rate) of, such United States withholding tax and other Taxes or, if such steps
were taken, the information was not timely and duly delivered to Borrower.
2.11 Indemnity. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from any loss or expense which such Bank may sustain or incur
as a consequence of (a) default by the Borrower in payment when due of the
principal amount of or interest on any Eurodollar Loan, (b) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (c) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (d) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto, including, without limitation, in each case, any such loss or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate the deposits from which such funds were obtained. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
18
2.12 Pro Rata Treatment, etc. Except as required under Section 2.8,
each Borrowing, each payment or prepayment of principal of the Loans, each
payment of interest on the Loans, and each conversion of Loans shall be made pro
rata among the Banks in accordance with their respective Pro-Rata Percentages.
2.13 Payments. (a) The Borrower shall make each payment (including
principal of or interest on any Loan or any Fees or other amounts) hereunder not
later than 12:00 (noon), Philadelphia time, on the date when due in Dollars to
the Agent at its offices at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or
at such other place as may be designated by the Agent, in immediately available
funds.
(b) Whenever any payment (including principal of or interest
on any Loan or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
2.14 Conversion and Continuation Options. The Borrower shall have the
right at any time upon prior irrevocable notice to the Agent (i) not later than
11:00 a.m., Philadelphia time, on the Business Day of conversion, to convert any
Eurodollar Loan to a Base Rate Loan, (ii) not later than 11:00 a.m.,
Philadelphia time, three Business Days prior to conversion or continuation, (y)
to convert any Base Rate Loan into a Eurodollar Loan, or (z) to continue any
Eurodollar Loan as a Eurodollar Loan for any additional Interest Period, and
(iii) not later than 11:00 a.m., Philadelphia time, three Business Days prior to
conversion, to convert the Interest Period with respect to any Eurodollar Loan
to another permissible Interest Period, subject in each case to the following:
(a) a Eurodollar Loan may not be converted at a time other
than the last day of the Interest Period applicable thereto;
(b) any portion of a Loan maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar Loan;
(c) no Eurodollar Loan may be continued as such and no Base
Rate Loan may be converted to a Eurodollar Loan when any Default or Event of
Default has occurred and is continuing;
(d) any portion of a Eurodollar Loan that cannot be converted
into or continued as a Eurodollar Loan by reason of paragraph 2.14(b) or 2.14(c)
automatically shall be converted at the end of the Interest Period in effect for
such Loan to a Base Rate Loan;
19
(e) if by the third Business Day prior to the last day of any
Interest Period for Eurodollar Loans, the Borrower has failed to give notice of
conversion or continuation as described in this subsection, the Agent shall give
notice thereof to the Banks and such portion of the Loans shall be automatically
converted to Base Rate Loans on the last day of such then expiring Interest
Period; and
(f) each request by the Borrower to convert or continue any
portion of a Loan shall constitute a representation and warranty that each of
the representations and warranties made by the Borrower herein is true and
correct in all material respects on and as of such date as if made on and as of
such date.
Accrued interest on a Loan (or portion thereof) being converted shall be paid by
the Borrower at the time of conversion.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement, and to make
the Loans, the Borrower hereby represents and warrants to the Agent and each
Bank that:
3.1 Financial Condition. (a) The audited consolidated balance sheet of
the Borrower and its Subsidiaries as at December 31, 2001 and the related
consolidated statements of income and of cash flows for the fiscal year ended on
such date, and the consolidated balance sheet as at June 30, 2002 and the
statements of income and cash flow of the Borrower and its Subsidiaries for the
six month period ended June 30, 2002, copies of all of which have heretofore
been furnished to each Bank, present fairly the consolidated financial condition
of the Borrower as at such dates, and the consolidated results of its operations
and its consolidated cash flows for the periods covered thereby. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved. Neither the Borrower nor any of its Subsidiaries had, at the
date of the most recent balance sheet referred to above, any material Contingent
Obligation, liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is required by GAAP to be
but is not reflected in the foregoing statements or in the notes thereto.
(b) (i) As of the Closing Date and after giving effect to this
Agreement and the Loans to be made on the Closing Date, the Borrower is
Solvent.
(ii) The Borrower does not intend to incur debts beyond
its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it and the timing of
the amounts of cash to be payable on or in respect of its Debt.
3.2 No Adverse Change. Since December 31, 2001, there has been no
development or event which has had a Material Adverse Effect.
3.3 Existence; Compliance with Law. The Borrower (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign entity and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified would not, in the aggregate, have a Material Adverse Effect and (d) is
in compliance with all Requirements of Law the non-compliance with which would
have a Material Adverse Effect.
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3.4 Corporate Power; Authorization; Enforceable Obligations. The
Borrower has the corporate power, authority, and legal right, to make, deliver
and perform this Agreement, the Notes, the other Loan Documents to which it is a
party and the Purchase Agreement and to borrow hereunder and has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement and the Notes and to authorize the execution,
delivery and performance of this Agreement, the Notes, the other Loan Documents
to which it is a party and the Purchase Agreement. No consent or authorization
of, filing with or other act by or in respect of, any Governmental Authority or
any other Person (including stockholders and creditors of the Borrower) is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement, the Notes,
the other Loan Documents or the Purchase Agreement. This Agreement and the
Purchase Agreement have been, and each Note and other Loan Document will be,
duly executed and delivered on behalf of the Borrower. Each of this Agreement
and the Purchase Agreement constitutes, and each Note and other Loan Document
when executed and delivered will constitute, a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents and the Purchase Agreement by
the Borrower, the borrowings hereunder and the use of the proceeds thereof and
the purchase by the Borrower of its Capital Stock pursuant to the Purchase
Agreement will not violate any Requirement of Law or Contractual Obligation of
the Borrower or of any of the Subsidiaries and will not result in, or require,
the creation or imposition of any Lien on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.
3.6 No Material Litigation. Except as set forth on Schedule 3.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened against the Borrower or against any of the properties or revenues of
the Borrower or against any Plan (a) with respect to this Agreement, the Notes
or the other Loan Documents or any of the transactions contemplated hereby, or
(b) as to which there is a reasonable likelihood of an adverse determination and
which, if adversely determined, would have a Material Adverse Effect.
3.7 No Default. The Borrower is not in default under or with respect to
any of its Contractual Obligations, including without limitation, those under
the Purchase Agreement, in any respect which would have a Material Adverse
Effect. No Event of Default has occurred and is continuing.
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3.8 Taxes. The Borrower has filed or caused to be filed all tax returns
which are required to be filed (or has obtained authorized extensions for such
filings) and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the
Borrower, as the case may be); no material tax Lien has been filed against the
Borrower, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charges.
3.9 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or for any purpose which
violates the provisions of Regulation U. If requested by any Bank or the Agent,
the Borrower will furnish to the Agent and each Bank a statement to the
foregoing effect in conformity with the requirements of FR Form U-l referred to
in said Regulation U. No part of the proceeds of the Loans hereunder will be
used for any purpose which violates, or which is inconsistent with, the
provisions of Regulation X.
3.10 ERISA. (a) Each Plan has complied in all respects with the
applicable provisions of ERISA and the Code, except to the extent that failure
to so comply would not have a Material Adverse Effect. No prohibited transaction
or accumulated funding deficiency (each as defined in subsection 7(h)) or
Reportable Event has occurred with respect to any Single Employer Plan which
would have a Material Adverse Effect, except as disclosed on Schedule 3.10.
(b) The present value of all accrued benefits under each
Single Employer Plan maintained by the Borrower or a Commonly Controlled Entity
(based on those assumptions used to fund the Plans), as calculated on a
termination basis, did not, as of the last annual valuation date, exceed the
value of the assets of the Plans allocable to such benefits by an amount which
exceeds $1,000,000 or which would have a Material Adverse Effect.
(c) Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan for which
any liability remains unsatisfied which would exceed $500,000 or which, together
with liabilities referred in subsections (b) and (d) hereof, would exceed
$1,000,000 or which in either event would have a Material Adverse Effect, and
neither the Borrower nor any Commonly Controlled Entity would become subject
under ERISA to any liability which would exceed $250,000 or which, together with
other liabilities referred in subsections (b) and (d) hereof or this subsection
(c), would exceed $500,000 or which in either event would have a Material
Adverse Effect if the Borrower or such Commonly Controlled Entity were to
withdraw completely from any Multiemployer Plan as of the valuation date most
closely preceding the date this representation is made or deemed made. To the
best of the Borrower's knowledge, such Multiemployer Plans are neither in
Reorganization as defined in Section 4241 of ERISA nor Insolvent.
(d) The present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and the
employees participating) of the liability of the Borrower and each Commonly
Controlled Entity for post-retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount (i) which exceeds the amount
being recovered by the Borrower to cover such deficiency amortized over a twenty
year period as part of its revenue requirement as most recently approved by the
Pennsylvania Public Utility Commission or (ii) which together with liabilities
referred to in subsections (b) and (c) hereof would have a Material Adverse
Effect.
22
3.11 Investment Company Act; Public Utility Holding Company Act. Except
as set forth on Schedule 3.11, the Borrower is not (a) an "investment company",
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended; (b) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of either a
"holding company" or a "subsidiary company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (c) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.
3.12 Purpose of Loans. The proceeds of the Loans shall be used by the
Borrower solely to purchase the Capital Stock of the Borrower from one or more
of the Vivendi Entities pursuant to and in accordance with the terms of the
Purchase Agreement, a true and correct copy of which has been delivered to the
Agent.
3.13 Environmental Matters. To the best knowledge of the Borrower,
except as may be disclosed on Schedule 3.13 and except to the extent that the
aggregate cost of any remediation or other expense to the Borrower as a
consequence of the failure of any of the following representations to be true
and correct does not exceed $1,000,000, each of the representations and
warranties set forth in paragraphs (a) through (e) of this subsection is true
and correct with respect to each parcel of real property owned or operated by
the Borrower (the "Properties"):
(a) the Properties do not contain, and have not previously
contained, in, on, or under, including, without limitation, the soil and
groundwater thereunder, any Materials of Environmental Concern in concentrations
which violate Environmental Laws;
(b) the Properties and all operations and facilities at the
Properties are in compliance with Environmental Laws in all material respects,
and there is no Materials of Environmental Concern contamination or violation of
any Environmental Law which would materially interfere with the continued
operation of any of the Properties or materially impair the fair saleable value
of any thereof;
(c) the Borrower has not received any written complaint,
notice of violation, alleged violation, investigation or advisory action or of
potential liability or of potential responsibility regarding a violation of
Environmental Law or permit compliance with regard to the Properties, nor is the
Borrower aware that any Governmental Authority is contemplating delivering to
the Borrower any such notice;
(d) Materials of Environmental Concern have not been
generated, treated, stored, disposed of, at, on or under any of the Properties,
nor have any Materials of Environmental Concern been transferred from the
Properties to any other location except in either case in the ordinary course of
business of the Borrower and in material compliance with all Environmental Laws;
and
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(e) there are no governmental, administrative actions or
judicial proceedings pending or contemplated under any Environmental Laws to
which the Borrower or any of its Subsidiaries is or will be named as a party
with respect to the Properties, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any of the Properties.
3.14 Patents, Trademarks, etc. The Borrower has obtained and holds in
full force and effects all patents, trademarks, servicemarks, trade names,
copyrights or licenses therefor and other such rights, free from burdensome
restrictions, which are necessary for the operation of its business as presently
conducted. To the Borrower's best knowledge, no material product, process,
method, substance, part or other material presently sold by or employed by the
Borrower in connection with such business infringes any patent, trademark,
service xxxx, trade name, copyright, license or other right owned by any other
Person so as to have a Material Adverse Effect. There is not pending or, to the
Borrower's knowledge, threatened any claim or litigation against or affecting
the Borrower contesting its right to sell or use any such product, process,
method, substance, part or other material.
3.15 Ownership of Property. The Borrower has good and marketable fee
simple title to or valid leasehold interests in all real property owned or
leased by the Borrower (except in the case of certain properties not material to
its business as to which its title was obtained by quit-claim or special
warranty deed), and good title to all of its personal property subject to no
Lien of any kind except Liens permitted hereby. The Borrower enjoys peaceful and
undisturbed possession under all of its respective material leases.
3.16 Licenses, etc. The Borrower has obtained and holds in full force
and effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of its business as presently
conducted.
3.17 No Burdensome Restrictions. The Borrower is not a party to any
agreement or instrument or subject to any other Contractual Obligation or any
charter or corporate restriction or any provision of any applicable law, rule or
regulation which, to the best of the Borrower's knowledge, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
3.18 Labor Matters. The Borrower has not suffered any strikes,
walkouts, work stoppages or other material labor difficulty within the last five
years and to the best of the Borrower's knowledge, there are none now
threatened.
3.19 Partnerships. Except as disclosed on Schedule 3.19, as of the
Closing Date, the Borrower is not a partner in any partnership or in any joint
venture.
3.20 No Material Misstatements. To the best of the Borrower's
knowledge, no information, report, financial statement, exhibit or schedule
furnished by or on behalf of the Borrower to the Agent or any Bank in connection
with the negotiation of this Agreement or any Note or other Loan Document or
included therein contains any misstatement of fact, or omitted or omits to state
any fact necessary to make the statements therein not misleading, where such
misstatement or omission would in the Borrower's judgment be material to the
interests of the Banks with respect to the Borrower's performance of its
obligations hereunder.
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All of the foregoing representations and warranties shall survive the
execution and delivery of the Notes and the making by the Banks of the Loans
hereunder.
SECTION 4. CONDITIONS PRECEDENT; CLOSING
4.1 Conditions to Closing. The agreement of each Bank to enter into
this Agreement and make its Loan hereunder is subject to the satisfaction,
immediately prior to or concurrently with such Loan, of the following conditions
precedent:
(a) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower,
with a counterpart for each Bank, and (ii) for the account of each Bank, a Note
conforming to the requirements hereof and executed by a duly authorized officer
of the Borrower.
(b) Corporate Proceedings of the Borrower. The Agent shall
have received a copy of the resolutions or other corporate proceedings or
action, in form and substance satisfactory to the Agent, taken on behalf of the
Borrower authorizing (i) the execution, delivery and performance of this
Agreement, the Notes, the other Loan Documents to which it is a party and the
Purchase Agreement, and (ii) the borrowings contemplated hereunder, certified by
a Responsible Officer of the Borrower as of the Closing Date, which certificate
shall state that such resolutions, or other proceedings or action thereby
certified have not been amended, modified, revoked or rescinded and shall be in
form and substance satisfactory to the Agent.
(c) Representations and Warranties True; No Default. The
representations and warranties of the Borrower contained in Section 3 hereof
shall be true and accurate on and as of the Closing Date in all material
respects with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
relate solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times referred to
therein), and the Borrower shall have performed and complied with all covenants
and conditions hereof; and no Event of Default or Default under this Agreement
shall have occurred and be continuing or shall exist.
(d) Corporate Documents. The Agent shall have received, with a
counterpart for each Bank, true and complete copies of (i) the articles of
incorporation and bylaws of the Borrower, certified as of the Closing Date as
complete and correct copies thereof by a Responsible Officer of the Borrower;
and (ii) good standing certificates issued by the Secretaries of State (or the
equivalent thereof) of each state in which the Borrower has been formed or is
required to be qualified to transact business no earlier than thirty days prior
to the Closing Date.
(e) Incumbency. The Agent shall have received a written
certificate dated the Closing Date by a Responsible Officer of the Borrower as
to the names and signatures of the officers of the Borrower authorized to sign
this Agreement and the other Loan Documents. The Agent may conclusively rely on
such certificate until it shall receive a further certificate by a Responsible
Officer of the Borrower amending such prior certificate.
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(f) Fees. The Borrower shall have paid or caused to be paid to
the Agent (i) all Fees then due hereunder and (ii) all other fees and expenses
due and payable hereunder on or before the Closing Date (if then invoiced),
including without limitation the reasonable fees and expenses of counsel to the
Agent.
(g) Legal Opinion. The Agent shall have received, with a
counterpart for each Bank, the executed legal opinion of the Executive Vice
President, General Counsel and Secretary of the Borrower, addressed to the Banks
and satisfactory in form and substance to the Agent and its counsel covering
such matters incident to the transactions contemplated by this Agreement and the
Purchase Agreement as the Agent may reasonably require. The Borrower hereby
directs such counsel to deliver such opinion, upon which the Banks and the Agent
may rely.
(h) No Material Adverse Change. There shall be no material
adverse change in the business, operations, Property, prospects or financial or
other condition of the Borrower nor any material change in the management of the
Borrower or an event which would cause or constitute a Material Adverse Effect;
and there shall be delivered to the Agent for the benefit of each Bank a
certificate dated the Closing Date and signed on behalf of the Borrower by a
Responsible Officer to each such effect.
(i) No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of this Agreement or the consummation
of the transactions contemplated hereby or which, in the Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or by the Purchase Agreement.
(j) Evidence of Insurance. The Borrower shall have provided to
each of the Banks copies of the evidence of insurance required by subsection
5.5(b).
(k) Evidence of Regulatory Approval. The Borrower shall have
provided to the Agent a copy of each and every authorization, permit, consent,
and approval of and other actions by, and notice to and filing with, every
Governmental Authority which is required to be obtained or made by the Borrower
for the due execution, delivery and performance of this Agreement and the other
Loan Documents, if any.
(l) Purchase Agreement. All conditions for the purchase of the
Capital Stock of the Borrower pursuant to the Purchase Agreement, including any
and all required approvals of any Governmental Authority, shall have been
satisfied and the Agent shall have received evidence satisfactory to it that
such purchase has been consummated simultaneously with the making of the Loans.
(m) Additional Documents. The Agent shall have received such
additional documents, certificates and information as the Agent may require
pursuant to the provisions hereof or as the Agent may otherwise reasonably
request.
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4.2 Closing. The closing (the "Closing") of the transactions
contemplated hereby shall take place at the offices of Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, LLP, commencing at 10:00 a.m., Philadelphia time, on October 25, 2002
or such other place or date as to which the Agent, the Banks and the Borrower
shall agree. The date on which the Closing shall be completed is referred to
herein as the "Closing Date".
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Note remains
outstanding and unpaid or any other amount is owing to any Bank or the Agent
hereunder, the Borrower shall:
5.1 Financial Statements. Furnish to each Bank (i) within 60 days after
the end of each of the first three fiscal quarters of each fiscal year a
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
each such fiscal quarter and statements of income for the period from the
beginning of such fiscal year to the end of such fiscal quarter, and (ii) within
120 days after the end of each fiscal year a consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of each fiscal year and statements
of income, statements of retained earnings and cash flow for such fiscal year.
All financial statements will be prepared in accordance with GAAP applied on a
basis consistently maintained throughout the period involved and with the prior
periods, such annual financial statements to be certified by independent
certified public accountants selected by the Borrower and reasonably acceptable
to the Agent, without any exception or qualification arising out of the
restricted or limited nature of the examination made by such accountants.
5.2 Certificates; Other Information. Furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1, a certificate on behalf of the Borrower executed
by a Responsible Officer, (i) showing in detail the calculations supporting such
statements in respect of Section 6.1; and (ii) stating that, to the best of his
or her knowledge, the Borrower during such period has kept, observed, performed
and fulfilled each and every covenant and condition contained in this Agreement
and in the Notes and the other Loan Documents applicable to it and that he or
she obtained no knowledge of any Default or Event of Default except as
specifically indicated; and
(b) promptly, such forecasts and additional financial and
other information as any Bank or the Agent may from time to time reasonably
request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except (x) in the case of indebtedness other
than that described in subsection 7.1(f), when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or (y) where the failure so to pay such indebtedness is in the
normal course of the Borrower's business as now conducted and would not have a
Material Adverse Effect.
5.4 Conduct of Business and Maintenance of Existence. Subject to
Section 6.4 hereof, continue to engage in business of the same general type as
now conducted by it and preserve, renew and keep in full force and effect its
corporate existence and, except to the extent that failure to do so would not
have a Material Adverse Effect, take all reasonable action to maintain all
rights, privileges, trademarks, trade names, licenses, franchises and other
27
authorizations necessary or desirable in the normal conduct of its business;
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith would not reasonably be expected to
have, in the aggregate, a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Maintain in good repair,
working order and condition (ordinary wear and tear excepted) in accordance with
the general practice of other businesses of similar character and size, all of
those properties material or necessary to its business, and from time to time
make or cause to be made all appropriate repairs, renewals or replacements
thereof.
(b) Insure its properties and assets against loss or damage by
fire and such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, worker's compensation,
public liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary. The Borrower shall deliver at the
request of the Agent from time to time a summary schedule indicating all
insurance then in force with respect to the Borrower.
5.6 Inspection of Property; Books and Records; Discussions. (a) Permit
any of the officers or authorized employees or representatives of the Agent or
any of the Banks to visit and inspect during normal business hours any of its
properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts (including those of its
Affiliates) with its officers, all in such detail and at such times and as often
as any of the Banks may reasonably request, provided that each Bank shall
provide the Borrower and the Agent with reasonable notice prior to any visit or
inspection. In the event Required Banks desire to conduct an audit of the
Borrower (to which the Borrower hereby consents), such Banks shall make a
reasonable effort to conduct such audit contemporaneously with any audit to be
performed by the Agent.
(b) Maintain and keep proper books of record and account which
enable the Borrower to issue financial statements in accordance with GAAP and as
otherwise required by applicable Requirements of Law, and in which full, true
and correct entries shall be made in all material respects of all its dealings
and business and financial affairs.
5.7 Notices. Promptly, upon the Borrower becoming aware, give notice to
the Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower, including, without limitation, the Purchase
Agreement, or (ii) litigation, investigation or proceeding which may exist at
any time between the Borrower and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may be, would have a
Material Adverse Effect;
28
(c) any litigation or proceeding which, if adversely
determined, would have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Single Employer Plan, or
any withdrawal from, or the termination, Reorganization or Insolvency of any
Multiemployer Plan which may, individually or in the aggregate, result in a
liability which would have a Material Adverse Effect or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower or any
Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any Single
Employer Plan in a distress termination under Section 4041(c) of ERISA or
Multiemployer Plan; and
(e) an event which has had a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of the
Borrower, executed on its behalf by a Responsible Officer, setting forth details
of the occurrence referred to therein and stating what action the Borrower
propose to take with respect thereto.
5.8 Environmental Laws. (a) Comply with, and require compliance by all
tenants and to the extent possible, all subtenants, if any, with, all
Environmental Laws and obtain and comply with and maintain, and require that all
tenants and to the extent possible, all subtenants obtain and comply with and
maintain, any and all licenses, approvals, registrations or permits required by
Environmental Laws except to the extent that failure to so comply or obtain or
maintain such documents would not have a Material Adverse Effect.
(b) Except as set forth in Schedule 3.13, comply with all
lawful and binding orders and directives of all Governmental Authorities
respecting Environmental Laws except to the extent that failure to so comply
would not have a Material Adverse Effect.
(c) Defend, indemnify and hold harmless the Agent and the
Banks, and their respective employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of or noncompliance with any Environmental Laws applicable to the real property
owned or operated by the Borrower, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
attorneys' and consultants' fees, investigation and laboratory fees, court costs
and litigation expenses, except to the extent that any of the foregoing arise
out of the negligence or willful misconduct of any of the foregoing enumerated
parties.
5.9 Taxes. Pay when due all taxes, assessments and governmental charges
imposed upon it or any of its properties or that it is required to withhold and
pay over, except where contested in good faith and where adequate reserves have
been set aside to the extent required under GAAP.
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SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Note remains
outstanding and unpaid or any other amount is owing to any Bank or the Agent
hereunder, the Borrower shall not directly or indirectly:
6.1 Financial Covenants.
(a) Debt to Capitalization Ratio. Permit as of the end of any
fiscal quarter the Debt to Capitalization Ratio to be greater than sixty five
percent (65%).
(b) Interest Coverage Ratio. Permit as of the end of any
fiscal quarter the Interest Coverage Ratio to be less than 2.0 to 1.
6.2 Limitation on Debt. At any time incur, create, assume, or suffer to
exist any Debt except:
(i) amounts outstanding hereunder as Loans;
(ii) Debt existing as of the date hereof described on
Schedule 6.2 (including any extensions or renewals or refinancings
thereof provided there is no increase in the amount thereof or other
significant change in the terms thereof);
(iii) Subordinated Debt;
(iv) Debt to commercial banks under lines of credit
in an aggregate outstanding amount of up to $37,000,000;
(v) intercompany indebtedness to the extent permitted
by Section 6.8; and
(vi) other indebtedness incurred in the ordinary
course of business for the purchase of capital assets.
6.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, including, without
limitation, the stock of its Subsidiaries, whether now owned or hereafter
acquired, except for:
(a) The following (i) if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed or (ii) if a final judgment is entered and such judgment is discharged
within thirty (30) days of entry, and in either case they do not materially
impair the ability of the Borrower to perform its obligations hereunder or under
the other Loan Documents:
(A) Claims or Liens for taxes, assessments
or charges due and payable and subject to interest or penalty, provided
that the Borrower maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings
to foreclose any such Lien;
30
(B) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property including any attachment
of personal or real property or other legal process prior to
adjudication of a dispute on the merits; and
(C) Claims or Liens of mechanics,
materialmen, warehousemen, carriers, or other statutory nonconsensual
Liens;
(b) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(c) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business of the Borrower;
(d) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not interfere with the
ordinary conduct of the business of the Borrower;
(e) Liens which were in existence on the date hereof and shown
on Schedule 6.3 and replacements, extensions or replacements thereof;
(f) Liens on assets acquired by the Borrower in acquisitions
permitted by Section 6.6 (which liens were in existence at the time of such
acquisitions);
(g) Liens upon real property, which property was acquired
after the Closing Date by the Borrower, each of which Liens existed on such
property before the time of its acquisition or was created to finance, refinance
or refund the cost (including the cost of construction) of the respective
property; provided, however, that no such Lien shall extend to or cover any
accounts receivable or inventory under any circumstances or any property of the
Borrower other than the respective property so acquired and improvements
thereon, and the principal amount of indebtedness secured by any such Lien shall
not exceed the fair market value of the respective property at the time it was
acquired;
(h) Capital Leases as and to the extent permitted under this
Agreement; and
(i) Purchase Money Security Interests in capital equipment
purchased in the ordinary course of business.
6.4 Limitations on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation); and
31
(b) any corporation or limited liability company may be merged
or consolidated with or into the Borrower in connection with a Permitted
Acquisition in accordance with Section 6.6 in which the continuing or surviving
entity is the Borrower;
provided that, immediately after each such transaction and after giving effect
thereto, the Borrower is in compliance with this Agreement and no Default or
Event of Default shall be in existence or result from such transaction.
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, accounts receivable and leasehold interests and Capital
Stock or other equity interests in any Subsidiary), whether now owned or
hereafter acquired, except:
(i) the sale, transfer or other disposition of
obsolete or worn out property in the ordinary course of business;
(ii) the sale or lease of inventory or other assets,
or the licensing of intellectual property, in each case in the ordinary
course of business;
(iii) any sale, transfer or lease of assets (i) which
are replaced by like-kind assets or (ii) the proceeds of the sale of
which are used within one-hundred and twenty (120) days of such sale to
purchase like-kind assets;
(iv) any sale, transfer or lease of assets the
proceeds of the sale of which are used to prepay the Loans; and
(v) in addition to the above subsections 6.5(a)(i)
through 6.5(a)(iv), inclusive, any such conveyances, sales, leases,
assignments, transfers or other disposals, the aggregate amount of
which for any fiscal year does not exceed 5% of the Borrower's
Consolidated Shareholders' Equity as at the end of the immediately
preceding fiscal year.
6.6 Limitation on Acquisitions, Investments, Loans and Advances.
Purchase, hold or acquire beneficially any stock, other securities or evidences
of indebtedness of, or all or a substantial amount of the assets of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or acquire any interest whatsoever in, any other Person, except:
(a) extensions of trade credit to customers in the ordinary
course of business;
(b) Permitted Investments;
(c) loans and advances to or other investments in any
Wholly-Owned Subsidiary;
(d) loans and advances to employees of the Borrower for travel
and entertainment expenses in the ordinary course of business; and
(e) Permitted Acquisitions.
32
6.7 No Negative Pledge or Other Restrictions.(a) Enter into any
agreement after the date hereof with any Person other than the Agent on behalf
of the Banks pursuant to which the Borrower covenants or agrees to a prohibition
upon creating, incurring, or suffering any Lien upon any of its properties,
assets or revenues, whether now owned or hereafter acquired, except in
connection with a Capital Lease or Purchase Money Security Interest, in which
case such agreement shall be permitted but only with respect to the specific
asset or assets subject to such Capital Lease or Purchase Money Security
Interest or
(b) Permit any Subsidiary to enter into any agreement after
the date hereof with any Person pursuant to which such Subsidiary agrees to any
limitation or restriction on its ability to declare and pay dividends or
otherwise make Distributions directly or indirectly to the Borrower in respect
of the Capital Stock of such Subsidiary owned directly or indirectly by the
Borrower.
6.8 Transactions with Affiliates. Except as expressly permitted in this
Agreement, directly or indirectly enter into any transaction or arrangement
whatsoever or make any payment to or otherwise deal with any Affiliate, except
(i) as to all of the foregoing, in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's business and upon fair and reasonable
terms no less favorable to the Borrower than would be obtained in a comparable
arm's length transaction with a Person not an Affiliate of the Borrower, and
(ii) intercompany loans among the Borrower and its Subsidiaries in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's or any
such Subsidiary's business.
6.9 Sale and Leaseback. Except if reasonably contemporaneous with the
Borrower's purchase, enter into any arrangement with any Person providing for
the leasing by the Borrower of real or personal property which has been or is to
be sold or transferred by such Borrower to such Person or to any other Person to
whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of such Borrower.
6.10 Fiscal Year. Permit its Fiscal Year to end on a day other than
December 31.
6.11 Continuation of or Change in Business. Discontinue any substantial
part, or change the nature of, the existing business activities of the Borrower,
or engage in any business either directly or through any Subsidiary except for
businesses in which the Borrower is engaged on the date of this Agreement and
any business activities directly related, similar or incidental or ancillary to
such existing businesses.
SECTION 7. EVENTS OF DEFAULT
7.1 Events of Default. If any of the following events shall occur and
be continuing:
(a) The Borrower shall fail to pay when due any principal of
any Note, or shall fail to pay within five (5) days after the date when due any
interest, Fees or other amount payable hereunder; or
(b) Any representation or warranty made or deemed made by the
Borrower herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement shall prove to have been incorrect in
any material respect on or as of the date made or deemed made; or
33
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 6; or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this Agreement (other than as
provided in paragraphs (a), (b) or (c) of this Section 7.1) or any other Loan
Document, and such default shall continue unremedied for a period of thirty (30)
days after notice of such default is given by the Agent; or
(e) One or more judgments or decrees shall be entered against
the Borrower involving in the aggregate a liability (not paid or fully covered
by insurance) of $1,000,000 or more and all such judgments or decrees shall not
have been vacated, discharged, settled, satisfied or paid, or stayed or bonded
pending appeal, within thirty (30) days from the entry thereof; or
(f) The Borrower or any of its Subsidiaries shall (i) default
in the payment of any amount due under any Debt of the Borrower or any such
Subsidiary in excess of $1,000,000 in the aggregate (other than the Notes),
beyond the period of grace, if any, provided in the instrument or agreement
under which such Debt was created; or (ii) default in the observance or
performance of any other agreement contained in any such Debt or in any
instrument or agreement evidencing, securing or relating thereto beyond any
applicable notice and grace period, or any other event shall occur the effect of
which default or other event is to cause, or to permit the holder or holders or
beneficiary or beneficiaries of such Debt (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause such Debt to
become due and payable prior to its stated maturity or any such Debt is declared
to be due and payable prior to its stated maturity unless such default, event or
declaration referred to in this subparagraph (ii) is waived or cured to the
satisfaction of such other party as demonstrated to the satisfaction of the
Agent by the Borrower prior to the Agent taking any action under Section 7.2 in
respect of such occurrence; or
(g) (i) The Borrower shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or the Borrower shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Borrower any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for a period of sixty (60) days; or (iii) there shall be commenced against the
Borrower any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process on a claim in excess of
$1,000,000 against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days from the
entry thereof; or (iv) the Borrower shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
34
(h) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
institution of proceedings is, in the reasonable opinion of the Required Banks,
likely to result in the termination by action of the PBGC or any court of such
Plan for purposes of Title IV of ERISA, or (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA; and in each case in clauses (i)
through (iv) above, such event or condition, together with all other such events
or conditions, if any would have a Material Adverse Effect; or
(i) Any Change of Control shall occur; or
(j) Any of the Loan Documents shall cease to be legal, valid
and binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged and thereby deprive or deny the
Banks and the Agent the intended benefits thereof or they shall thereby cease
substantially to have the rights, titles, interests, remedies, powers or
privileges intended to be created thereby; or
(k) A notice of lien or assessment in excess of $1,000,000 is
filed of record with respect to all or any part of the Borrower's assets having
a value of at least that amount by the United States, or any department, agency
or instrumentality thereof, or by any state, county, municipal, or other
governmental agency, including, without limitation, the PBGC, becomes payable
and the same is not paid, vacated, bonded or stayed pending appeal within thirty
(30) days after the same becomes payable; or
(l) The Borrower ceases to be Solvent; or
(m) Except as otherwise permitted in this Agreement, the
Borrower ceases to conduct its business as contemplated or the Borrower is
enjoined, restrained or in any way prevented by court order from conducting all
or any material part of its business so as to cause or result in a Material
Adverse Effect, and such injunction, restraint or other preventive order is not
dismissed within thirty (30) days after the entry thereof.
7.2 Remedies. (a) If an Event of Default specified under subsections
7.1 (a) through (f) or (h) through (m) shall occur and be continuing, the Banks
shall be under no further obligation to make Loans hereunder, and the Agent upon
the request of the Required Banks shall, by written notice to the Borrower,
declare the unpaid principal amount of the Notes then outstanding and all
interest accrued thereon, any unpaid fees and all other obligations of the
Borrower to the Banks hereunder and thereunder to be forthwith due and payable,
and the same shall thereupon become and be immediately due and payable to the
Agent for the benefit of each Bank without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived.
35
(b) If an Event of Default specified under subsections 7.1(g)
hereof shall occur, the unpaid principal amount of the Notes then outstanding
and all interest accrued thereon, any unpaid fees and all other obligations of
the Borrower to the Banks hereunder and thereunder shall be immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived.
(c) If an Event of Default shall occur and be continuing, any
Bank to whom any obligation is owed by the Borrower hereunder or under any other
Loan Document or any participant of such Bank which has agreed in writing to be
bound by the provisions of Section 9.6 hereof and any branch, subsidiary or
Affiliate of such Bank or Participant shall have the right, in addition to all
other rights and remedies available to it, without notice to the Borrower, to
set-off against and apply to the then unpaid balance of all the Loans and all
other obligations of the Borrower hereunder or under any other Loan Document any
debt owing to, and any other funds held in any manner for the account of, the
Borrower by such Bank or participant or by such branch, Subsidiary or Affiliate,
including, without limitation, all funds in all deposit accounts (whether time
or demand, general or special, provisionally credited or finally credited, or
otherwise) now or hereafter maintained by the Borrower for its own account (but
not including funds held in custodian or trust accounts or other accounts
established solely for the benefit of parties other than the Borrower) with such
Bank or Participant or such branch, Subsidiary or Affiliate. Such right shall
exist whether or not any Bank or the Agent shall have made any demand under this
Agreement or any other Loan Document, whether or not such debt owing to or funds
held for the account of the Borrower is or are matured or unmatured and
regardless of the existence or adequacy of any collateral, guaranty or any other
security, right or remedy available to any Bank or the Agent.
(d) Notwithstanding any provision herein to the contrary or in
the other Loan Documents, any proceeds received by the Agent from any payment
made by the Borrower under this Agreement or the other Loan Documents after the
occurrence of an Event of Default, or received by the Agent from the
foreclosure, sale, lease, collection upon, realization of or other disposition
of any collateral which may have been provided to the Agent for the obligations
of the Borrower hereunder after the occurrence of an Event of Default (including
without limitation insurance proceeds), shall be applied by the Agent as
follows, unless otherwise agreed by all the Banks:
(i) first, to reimburse the Agent for out-of-pocket
costs, expenses and disbursements, including without limitation
reasonable attorneys' fees and legal expenses, incurred by the Agent in
connection with collection of any obligations of the Borrower under any
of the Loan Documents;
(ii) second, to accrued and unpaid interest on the
Loans;
(iii) third, to the principal amount of the Loans
then outstanding;
(iv) fourth, to fees payable under this Agreement or
any of the other Loan Documents (ratably according to the respective
amounts then outstanding);
36
(v) fifth, to the repayment of all other indebtedness
then due and unpaid of the Borrower to the Banks incurred under this
Agreement or any of the other Loan Documents, whether of principal,
interest, fees, expenses or otherwise (ratably according to the
respective amounts then outstanding); and
(vi) the balance, if any, as required by law.
(e) Each Bank agrees that (i) if at any time it shall receive
the proceeds of any collateral or any proceeds thereof or (ii) if after the
occurrence of an Event of Default it shall receive any payment on account of the
Loans or any other amounts owing hereunder or under the other Loan Documents (in
either case other than through application by the Agent in accordance with
subsection 7.2(d)), it shall promptly turn the same over to the Agent for
application in accordance with the terms of subsection 7.2(d).
(f) In addition to the other rights and remedies contained in
this Agreement or in the other Loan Documents, the Loans shall, at the Required
Banks' option, bear the interest rates provided in Section 2.6 hereof.
(g) In addition to all of the rights and remedies contained in
this Agreement or in any of the other Loan Documents, the Agent shall have all
of the rights and remedies under applicable Law, all of which rights and
remedies shall be cumulative and non-exclusive, to the extent permitted by Law.
The Agent may, and upon the request of the Required Banks shall, exercise all
post-default rights granted to it and the Banks under the Loan Documents or
applicable Law.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and appoints
PNC as the Agent of such Bank under this Agreement. Each such Bank irrevocably
authorizes the Agent, as the agent for such Bank to take such action on its
behalf under the provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent. The Agent
agrees to act as the Agent on behalf of the Banks to the extent provided in this
Agreement.
8.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to engage and pay for the advice and services of counsel concerning all matters
pertaining to such duties. The Agent shall not be responsible to the Banks for
the negligence or misconduct of any agents or attorneys in-fact selected by it
with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable to any of the Banks for any action lawfully taken or omitted to be taken
by them or such Person under or in connection with this Agreement (except for
their or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
37
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the Notes or the
other Loan Documents or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or the
other Loan Documents, or to inspect the properties, books or records of the
Borrower.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first receive such advice or
concurrence of the Required Banks as they deem appropriate or they shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement, the Notes and the other Loan
Documents in accordance with a request of the Required Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Banks and all future holders of the Notes.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
they have received notice from a Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Banks. The Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Banks; provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Banks.
8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
38
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Pro-Rata Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement, the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this Section 8.7 shall survive the payment of the Notes and all
other amounts payable hereunder.
8.8 Agent in its Individual Capacity. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower as though it was not the Agent hereunder. With respect to its
Loans made or renewed by it and any Note issued to it, the Agent shall have the
same rights and powers under this Agreement as any Bank and may exercise the
same as though it were not the Agent, and the terms "Bank" and "Banks" shall
include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon sixty (60)
days' notice to the Banks and the Borrower. If such Agent shall resign as Agent
under this Agreement, then the Required Banks shall appoint from among the Banks
a successor agent for the Banks, which appointment shall be subject to the
approval of the Borrower (which approval shall not be unreasonably withheld),
whereupon such successor agent shall succeed to the rights, powers and duties of
an Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement or any holders of the
Notes. After any retiring Agent's resignation as Agent, the provisions of this
Section 8.9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
8.10 Beneficiaries. Except as expressly provided herein, the provisions
of this Section 8 are solely for the benefit of the Agent and the Banks, and the
Borrower shall not have any rights to rely on or enforce any of the provisions
hereof. In performing their functions and duties under this Agreement the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for the Borrower.
39
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Note or any
other Loan Document, nor any terms hereof of thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the written consent of the Required Banks, the Agent and the
Borrower may, from time to time, enter into written amendments, supplements or
modifications hereto and to the Notes and the other Loan Documents for the
purpose of adding any provisions to this Agreement or the Notes or the other
Loan Documents or changing in any manner the rights of the Banks or of the
Borrower hereunder or thereunder or waiving, on such terms and conditions as the
Agent may specify in such instrument, any of the requirements of this Agreement
or the Notes or the other Loan Documents or any Default or Event of Default and
its consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall directly or indirectly (a) reduce the amount or
extend the maturity of any Note or any installment thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce any Fees payable to
any Bank hereunder, or change the duration or amount of any Bank's Commitment,
in each case without the consent of the Bank affected thereby or (b) amend,
modify or waive any provision of this Section 9.1 or reduce the percentages
specified in the definition of Required Banks or consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement, the Notes and the other Loan Documents, in each case without the
written consent of all the Banks or (c) amend, modify or waive any provision of
Section 8 without the written consent of the then Agent. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Banks and shall be binding upon the Borrower, the Banks, the Agent and all
future holders of the Notes. In the case of any waiver, the Borrower, the Banks
and the Agent shall be restored to their former position and rights hereunder
and under the outstanding Notes, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including
electronic transmission, facsimile transmission or posting on a secured web
site), and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of facsimile
transmission notice, when sent during normal business hours with electronic
confirmation or otherwise when received, or in the case of electronic
transmission, when received and in the case of posting on a secured web site,
upon receipt of (i) notice of such posting and (ii) rights to access such web
site, addressed as follows in the case of the Borrower and the Agent, and as set
forth in Schedule I in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
the Borrower: Philadelphia Suburban Corporation
000 X. Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxx,
Vice President and Treasurer
Facsimile: (000) 000-0000
40
with a copy to: Philadelphia Suburban Corporation
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxxx
Executive Vice President,
General Counsel and
Secretary
(provided that failure to send a
copy of any notice to said counsel
shall in no way affect, limit or
invalidate any notice sent to the
Borrower or the exercise of any of
the Banks' or the Agent's rights or
remedies pursuant to a notice sent
to the Borrower.)
The Agent: PNC Bank, National Association
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xx.
Facsimile: (000) 000-0000
and
PNC Agency Services
One PNC Plaza
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
provided that any notice, request or demand to or upon the Agent, the Swing Line
Bank or the Banks pursuant to Sections 2.1 or 2.7 shall not be effective until
received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Notes and the other Loan Documents.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Agent for all of its reasonable out-of-pocket costs and expenses
incurred in connection with any amendment, supplement or modification to this
Agreement, the Notes, the other Loan Documents and any other documents prepared
in connection therewith, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent (which counsel may or may not include
41
employees of the Agent), (b) to pay or reimburse each Bank and the Agent for all
of their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, reasonable fees and
disbursements of counsel to the Agent (which counsel may or may not include
employees of the Agent) and to the several Banks, and (c) to pay, indemnify, and
hold each Bank and the Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other similar taxes, if any (other than Taxes
expressly excluded from the definition of Taxes in Section 2.10 and Taxes for
which the Borrower has no liability under subsection 2.10(c)) which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the Notes, the other Loan Documents, and any such
other documents, and (d) to pay, indemnify, and hold each Bank and the Agent
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, and, incident to a Default or Event of Default, the performance and
administration, of this Agreement, the Notes, the other Loan Documents and any
such other documents or the transactions contemplated hereby or thereby or any
action taken or omitted under or in connection with any of the foregoing (all
the foregoing, collectively, the "indemnified liabilities"), provided, that the
Borrower shall have no obligation hereunder to the Agent or any Bank with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of the Agent or any such Bank. The Borrower shall be given notice of
any claim for indemnified liabilities and shall be afforded a reasonable
opportunity to participate in the defense, compromise or settlement thereof. The
agreements in this subsection shall survive repayment of the Notes and all other
amounts payable hereunder.
9.6 Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party, and all covenants, promises and agreements
by or on behalf of the Borrower, the Agent or the Banks that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns. The Borrower may not assign or transfer any of its
rights or obligations under this Agreement or the other Loan Documents without
the prior written consent of each Bank.
(b) Each Bank may, in accordance with applicable law, assign
all or a portion of its interests, rights and obligations under this Agreement
and the other Loan Documents (including the Loan at the time owing to it and the
Note held by it); provided, however, that (i) each such assignment shall be to a
Bank or Affiliate thereof, or, with the consent of the Agent and, prior to the
occurrence of an Event of Default, of the Borrower (which consent shall not be
unreasonably withheld or delayed) to one or more banks or other financial
institutions; (ii) the amount of each such assignment shall not be less than the
lesser of $5,000,000 and the outstanding principal amount of such Bank's Loan;
and (iii) the parties to each such assignment shall execute and deliver to the
Agent an Assignment and Acceptance, together with the Note subject to such
assignment and a processing and recordation fee of $3,500 (except in the case of
an assignment by any Bank to one of its Affiliates). Upon acceptance and
42
recording pursuant to paragraph (d) of this Section 9.6, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Bank under this Agreement and (B) the assigning Bank thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.9, 2.10, 2.11
and 9.5 (to the extent that such Bank's entitlement to such benefits arose out
of such Bank's position as a Bank prior to the applicable assignment)).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Bank thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby, free and clear of any adverse claim, and
that the outstanding balances of its Loan, without giving effect to assignments
thereof which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents, or any other instrument or document furnished pursuant hereto or
thereto, or the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.1 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Agent, such assigning Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(d) The Agent shall maintain at its offices in Philadelphia,
Pennsylvania a copy of each Assignment and Acceptance and the names and
addresses of the Banks, and the principal amount of the Loan owing to each Bank
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of error and the Borrower, the
Agent and the Banks may treat each person whose name is recorded in the Register
pursuant to the terms hereof as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
any Bank, at any reasonable time and from time to time upon reasonable prior
notice.
43
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Bank and an assignee together with the Note
subject to such assignment, the processing and recordation fee referred to in
paragraph (b) above, the Agent shall (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Banks. Within five Business Days after receipt of
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for the surrendered original Note, (x) a new Note to the
order of such assignee in an amount equal to the portion of the outstanding Loan
purchased by it pursuant to such Assignment and Acceptance and, (y) if the
assigning Bank has retained a portion of the Loan, a new Note to the order of
such assigning Bank in a principal amount equal to the portion of the
outstanding Loan retained by it. Such new Notes shall be dated the date of the
surrendered Note which it replaces and shall otherwise be in substantially the
form of Exhibit A hereto. Canceled Notes shall be returned to the Borrower.
(f) Each Bank may without the consent of the Borrower or the
Agent sell participations to one or more banks or other entities (each a
"Participant") in all or a portion of its rights and obligations under this
Agreement (including all or a portion of the Loan owing to it and the Note held
by it); provided, however, that (i) such Bank's obligations under this Agreement
shall remain unchanged, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Bank
shall remain the holder of any such Note for all purposes under this Agreement,
(iv) the Borrower, the Agent and the other Banks shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, (v) in any proceeding under the Bankruptcy
Code such Bank shall be, to the extent permitted by law, the sole representative
with respect to the obligations held in the name of such Bank whether for its
own account or for the account of any Participant and (vi) such Bank shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loan and to approve any amendment, modification or waiver of any provision of
this Agreement or the Note held by such Bank other than any such amendment,
modification or waiver with respect to any Loan or Commitment in which such
Participant has an interest and which is described in subsection 9.1(a) hereof.
(g) If amounts outstanding under this Agreement and the Notes
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement or any Note, provided that in purchasing such participation such
Participant shall be deemed to have agreed to share with the Banks the proceeds
thereof as provided in Section 9.8. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.9, 2.10, 2.11 and
9.5 with respect to its participation in the Loan outstanding from time to time;
provided, that no Participant shall be entitled to receive any greater amount
pursuant to such Sections than the Bank selling the participation would have
been entitled to receive in respect of the amount of the participation
transferred by such Bank to such Participant had no such transfer occurred.
(h) If any Participant is organized under the laws of any
jurisdiction other than the United States or any state thereof, the Bank selling
the participation, concurrently with the sale of a participating interest to
such Participant, shall cause such Participant (i) to represent to the Bank
selling the participation (for the benefit of such Bank, the other Banks, the
Agent and the Borrower) that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the Borrower or the Bank selling the
44
participation with respect to any payments to be made to such Participant in
respect of its participation in the Loan and (ii) to agree (for the benefit of
such Bank, the other Banks, the Agent and Borrower) that it will deliver the tax
forms and other documents required to be delivered pursuant to Section 2.10 and
comply from time to time with all applicable U.S. laws and regulations with
respect to withholding tax exemptions.
(i) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Note issued to it to a Federal Reserve Bank;
provided that no such assignment shall release a Bank from any of its
obligations hereunder.
9.7 Confidentiality. The Banks agree that they will maintain all
information and financial statements provided to them or otherwise obtained by
them with respect to the Borrower and its Subsidiaries confidential and that
they will not disclose the same or use it for any purposes; provided that
nothing herein shall prevent any Bank from disclosing any such information (a)
to the Agent or any other Bank, (b) to any prospective assignee or participant
in connection with any assignment or participation of Loans permitted by this
Agreement, (c) to its employees, directors, agents, attorneys, accountants and
other professional advisers, provided that any such person is advised by such
Bank that such information is subject to the confidentiality limitations of this
Section, (d) upon the request or demand of any Governmental Authority having
jurisdiction over such Bank, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, provided that the Borrower has (unless prohibited by the
terms of any such order or requirement) been advised at least ten (10) days (or
if such is not possible or practicable, such lesser number of days as is
possible or practicable under the circumstances) prior to such disclosure of the
existence of such order or requirement, (f) which has been publicly disclosed
other than in breach of this Agreement, or (g) in connection with the exercise
of any remedy hereunder or under the Notes.
9.8 Adjustments; Set-off. (a) If any Bank (a "benefited Bank") shall at
any time receive any payment of all or part of its Loan, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
subsection 7(g), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Bank, if any, in respect of such other
Bank's Loan, or interest thereon, being paid in respect of Loans being repaid
simultaneously therewith or Loans required hereby to be paid proportionately,
such benefited Bank shall purchase for cash from the other Banks such portion of
each such other Bank's Loan, or shall provide such other Banks with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Bank to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Banks; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
benefited Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Bank so purchasing a portion of another Bank's Loan
may exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank were the direct
holder of such portion.
45
(b) In addition to any rights and remedies of the Banks
provided by law, upon the occurrence of an Event of Default, each Bank shall
have the right, without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by applicable law, upon
any amount becoming due and payable by the Borrower hereunder or under the Notes
(whether at the stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Bank to or for the credit or the account of the Borrower. Each
Bank agrees promptly to notify the Borrower and the Agent after any such set-off
and application made by such Bank, that the failure to give such notice shall
not affect the validity of such set-off and application.
9.9 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and each of the Banks.
9.10 Severability. Any provision of this Agreement which 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 not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 Integration. This Agreement represents the agreement of the
Borrower, the Agent and the Banks with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the Agent
or any Bank relative to subject matter hereof not expressly set forth or
referred to herein or in the Notes or the other Loan Documents.
9.12 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS HAVE BEEN EXECUTED IN THE COMMONWEALTH OF PENNSYLVANIA AND SAID
DOCUMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, THE
NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA.
9.13 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, the Notes or the other Loan Documents, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the Commonwealth of
Pennsylvania, the courts of the United States of America for the Eastern
District of Pennsylvania, and appellate courts from any thereof;
46
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at the address set forth in Section 9.2 for the Borrower or at such
other address of which the Agent shall have been notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction.
9.14 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Notes and the other Loan
Documents;
(b) neither the Agent nor any Bank has any fiduciary
relationship to the Borrower, and the relationship between the Agent and the
Banks, on one hand, and the Borrower, on the other hand, is solely that of
debtor and creditor; and
(c) no joint venture exists among the Banks or between the
Borrower and the Banks.
9.15 WAIVERS OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written. PHILADELPHIA SUBURBAN CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Title: Senior Vice President-Finance and
Chief Financial Officer
PNC BANK, NATIONAL ASSOCIATION,
as Agent and as a Bank
By: /s/ Xxxxxxxx Xxxxxx
------------------------------------
Title: Vice President
47
Exhibit 4.24
Schedule I
Bank and Commitment Information
Bank Commitment
---- ----------
PNC Bank, National Association $22,000,000
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xx.
Exhibit 4.24
Schedule 3.6
Existing Litigation
None
Exhibit 4.24
Schedule 3.10
ERISA Matters
None
Exhibit 4.24
Schedule 3.11
Regulatory Approvals
None
Exhibit 4.24
Schedule 3.13
Environmental Matters
None
Exhibit 4.24
Schedule 3.19
Interests in Partnerships
None
Exhibit 4.24
Schedule 6.2
Permitted Debt
Contingent Obligations
----------------------
Guaranty and Suretyship Agreement between the Borrower and the Pennsylvania
Infrastructure Investment Authority ("PENNVEST") dated March 12, 2002
securing payment of a loan from PENNVEST to Little Washington
Wastewater Company in the amount of $2,102,612.71.
Guaranty and Suretyship Agreement between the Borrower and PENNVEST dated March
12, 2002 securing payment of a loan from PENNVEST to Little Washington
Wastewater Company in the amount of $3,004,780.71.
Exhibit 4.24
Schedule 6.3
Existing Liens
None
Exhibit 4.24
EXHIBIT A
NOTE
$________________ Philadelphia, Pennsylvania
October __, 2002
FOR VALUE RECEIVED, the undersigned, PHILADELPHIA SUBURBAN CORPORATION
(the "Borrower"), hereby promises to pay to the order of ___________________
(the "Bank"), at the office of PNC Bank, National Association (the "Agent"), at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, on the Maturity Date, the lesser of
the principal sum of ___________ ___________ Dollars ($__________) and the
aggregate unpaid principal amount of the Loan made by the Bank to the Borrower
pursuant to Section 2.1 of the Credit Agreement dated as of October 25, 2002,
among the Borrower, the Banks party thereto and the Agent (as amended, modified,
extended or restated from time to time, the "Agreement"), in lawful money of the
United States of America in same day funds, and to pay interest from the date
hereof on such principal amount from time to time outstanding, in like funds, at
said office, at a rate or rates per annum and payable on the dates determined
pursuant to the Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at the rate or rates determined as set forth in the Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedule attached hereto and made
a part hereof, or on a continuation thereof which shall be attached hereto and
made a part hereof, or otherwise recorded by such holder in its internal
records; provided, however, that the failure of the holder hereof to make such a
notation or any error in such a notation shall not in any manner affect the
obligations of the Borrower to make payments of principal and interest in
accordance with the terms of this Note and the Agreement.
This Note is one of the Notes referred to in, evidences indebtedness
incurred under, and is entitled to the benefits of the Agreement. The Agreement,
among other things, contains provisions for the acceleration of the maturity
hereof upon the happening of certain events, for optional and mandatory
prepayments of the principal hereof prior to the maturity hereof, for a higher
rate of interest hereunder after an Event of Default and for the amendment or
waiver of certain provisions of the Agreement, all upon the terms and conditions
therein specified. This Note shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania and any applicable laws of the
United States of America. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Agreement.
PHILADELPHIA SUBURBAN CORPORATION
By:_______________________________
Name:
Title:
A-1
Loans and Payments
Unpaid Name of
Payments Principal Person
Amount of Interest Interest Balance of Making
Date Loan Rate Period Principal Interest Note Notation
---- --------- -------- -------- --------- -------- ---------- --------
A-2
EXHIBIT B
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October 25, 2002
(as amended, modified, extended or restated from time to time, the "Agreement"),
among Philadelphia Suburban Corporation (the "Borrower"), the banks party
thereto (the "Banks") and PNC Bank, National Association, as Agent. Terms
defined in the Agreement are used herein with the same meanings.
________________ (the "Assignor") and ________________ (the "Assignee")
hereby agree as follows:
The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth on Schedule A
attached hereto, the interests set forth on Schedule A (the "Assigned Interest")
in the Assignor's rights and obligations under the Agreement, including, without
limitation, the interests set forth on Schedule A in the Loan owing to the
Assignor which is outstanding on the Effective Date, together with unpaid
interest accrued on the assigned Loan to the Effective Date and the amount, if
any, set forth on Schedule A of the Fees accrued to the Effective Date for the
account of the Assignor. Each of the Assignor and the Assignee hereby makes and
agrees to be bound by all the representations, warranties and agreements set
forth in Section 9.6(c) of the Agreement, a copy of which has been received by
each such party. From and after the Effective Date (i) the Assignee shall be a
party to and be bound by the provisions of the Agreement and, to the extent of
the interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and under the Agreement or any other document
issued in connection therewith and (ii) the Assignor shall, to the extent of the
interests assigned by this Assignment and Acceptance, relinquish its rights and
be released from its obligations under this Agreement.
This Assignment and Acceptance is being delivered to the Agent together
with (i) the Note evidencing the Loan included in the Assigned Interest, (ii) if
the Assignee is organized under the laws of a jurisdiction outside the United
States, the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's exemption from withholding taxes with
respect to all payments to be made to the Assignee under the Agreement or such
other documents as are necessary to indicate that all such payments are subject
to such tax at a rate reduced by an applicable tax treaty, all duly completed
and executed by such Assignee, and (iii) a processing and recordation fee of
$3,500, if required.
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
B-1
The terms set forth above and on Schedule A attached hereto are hereby
agreed to as of the date hereof.
______________________, as Assignor
By:________________________________
Name:
Title:
_____________________, as Assignee
By:________________________________
Name:
Title:
Acknowledged:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:________________________________
Name:
Title:
Consented to:
PHILADELPHIA SUBURBAN CORPORATION
By:________________________________
Name:
Title:
B-2
Exhibit 4.24
SCHEDULE A
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
___________________________________
___________________________________
Attention: ________________________
Telecopy: _________________________
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):____________________
Principal Amount of Loan Assigned Pro-Percentage of Loans Assigned
--------------------------------- --------------------------------
$ %
Exhibit 4.24
================================================================================
CREDIT AGREEMENT
among
PHILADELPHIA SUBURBAN CORPORATION
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION
as Agent
Dated as of October 25, 2002
$22,000,000
================================================================================
Exhibit 4.24
Table of Contents Page
SECTION 1. DEFINITIONS.................................................................................1
1.1 Defined Terms.........................................................................1
1.2 Other Definitional Provisions........................................................12
1.3 Construction.........................................................................12
SECTION 2. THE LOANS..................................................................................13
2.1 Loans................................................................................13
2.2 General Provisions Regarding Loans...................................................13
2.3 Fees.................................................................................14
2.4 Notes; Repayment of Loans............................................................14
2.5 Interest on Loans....................................................................14
2.6 Default Rate; Additional Interest; Alternate Rate of Interest........................15
2.7 Optional and Mandatory Prepayments of Loans..........................................15
2.8 Illegality...........................................................................16
2.9 Requirements of Law..................................................................16
2.10 Taxes................................................................................17
2.11 Indemnity............................................................................18
2.12 Pro Rata Treatment, etc..............................................................19
2.13 Payments.............................................................................19
2.14 Conversion and Continuation Options..................................................19
SECTION 3. REPRESENTATIONS AND WARRANTIES.............................................................20
3.1 Financial Condition..................................................................20
3.2 No Adverse Change....................................................................20
3.3 Existence; Compliance with Law.......................................................20
3.4 Corporate Power; Authorization; Enforceable Obligations..............................21
3.5 No Legal Bar.........................................................................21
3.6 No Material Litigation...............................................................21
3.7 No Default...........................................................................21
3.8 Taxes................................................................................22
3.9 Federal Regulations..................................................................22
3.10 ERISA................................................................................22
3.11 Investment Company Act; Public Utility Holding Company Act...........................23
3.12 Purpose of Loans.....................................................................23
3.13 Environmental Matters................................................................23
3.14 Patents, Trademarks, etc.............................................................24
3.15 Ownership of Property................................................................24
3.16 Licenses, etc........................................................................24
3.17 No Burdensome Restrictions...........................................................24
3.18 Labor Matters........................................................................24
3.19 Partnerships.........................................................................24
3.20 No Material Misstatements............................................................24
SECTION 4. CONDITIONS PRECEDENT; CLOSING..............................................................25
4.1 Conditions to Closing................................................................25
4.2 Closing..............................................................................27
i
SECTION 5. AFFIRMATIVE COVENANTS......................................................................27
5.1 Financial Statements.................................................................27
5.2 Certificates; Other Information. Furnish to each Bank:..............................27
5.3 Payment of Obligations...............................................................27
5.4 Conduct of Business and Maintenance of Existence.....................................27
5.5 Maintenance of Property; Insurance...................................................28
5.6 Inspection of Property; Books and Records; Discussions...............................28
5.7 Notices..............................................................................28
5.8 Environmental Laws...................................................................29
5.9 Taxes................................................................................29
SECTION 6. NEGATIVE COVENANTS.........................................................................30
6.1 Financial Covenants..................................................................30
6.2 Limitation on Debt...................................................................30
6.3 Limitation on Liens..................................................................30
6.4 Limitations on Fundamental Changes...................................................31
6.5 Limitation on Sale of Assets.........................................................32
6.6 Limitation on Acquisitions, Investments, Loans and Advances..........................32
6.7 No Negative Pledge or Other Restrictions.............................................33
6.8 Transactions with Affiliates.........................................................33
6.9 Sale and Leaseback...................................................................33
6.10 Fiscal Year..........................................................................33
6.11 Continuation of or Change in Business................................................33
SECTION 7. EVENTS OF DEFAULT..........................................................................33
7.1 Events of Default....................................................................33
7.2 Remedies.............................................................................35
SECTION 8. THE AGENT..................................................................................37
8.1 Appointment..........................................................................37
8.2 Delegation of Duties.................................................................37
8.3 Exculpatory Provisions...............................................................37
8.4 Reliance by Agent....................................................................38
8.5 Notice of Default....................................................................38
8.6 Non-Reliance on Agent and Other Banks................................................38
8.7 Indemnification......................................................................39
8.8 Agent in its Individual Capacity.....................................................39
8.9 Successor Agent......................................................................39
8.10 Beneficiaries........................................................................39
SECTION 9. MISCELLANEOUS..............................................................................40
9.1 Amendments and Waivers...............................................................40
9.2 Notices..............................................................................40
9.3 No Waiver; Cumulative Remedies.......................................................41
9.4 Survival of Representations and Warranties...........................................41
9.5 Payment of Expenses and Taxes........................................................41
9.6 Successors and Assigns...............................................................42
9.7 Confidentiality......................................................................45
9.8 Adjustments; Set-off.................................................................45
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9.9 Counterparts.........................................................................46
9.10 Severability.........................................................................46
9.11 Integration..........................................................................46
9.12 GOVERNING LAW........................................................................46
9.13 Submission To Jurisdiction; Waivers..................................................46
9.14 Acknowledgments......................................................................47
9.15 WAIVERS OF JURY TRIAL................................................................47
SCHEDULES
SCHEDULE I Bank and Commitment Information
SCHEDULE 3.6 Existing Litigation
SCHEDULE 3.10 ERISA Matters
SCHEDULE 3.11 Regulatory Approvals
SCHEDULE 3.13 Environmental Matters
SCHEDULE 3.19 Interests in Partnerships
SCHEDULE 6.2 Permitted Debt
SCHEDULE 6.3 Existing Liens
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Assignment and Acceptance
iii
NOTE
$22,000,000 Philadelphia, Pennsylvania
October 25, 2002
FOR VALUE RECEIVED, the undersigned, PHILADELPHIA SUBURBAN CORPORATION
(the "Borrower"), hereby promises to pay to the order of PNC BANK, NATIONAL
ASSOCIATION (the "Bank"), at the office of PNC Bank, National Association (the
"Agent"), at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, on the Maturity Date,
the lesser of the principal sum of Twenty Two Million Dollars ($22,000,000) and
the aggregate unpaid principal amount of the Loan made by the Bank to the
Borrower pursuant to Section 2.1 of the Credit Agreement dated as of October 25,
2002, among the Borrower, the Banks party thereto and the Agent (as amended,
modified, extended or restated from time to time, the "Agreement"), in lawful
money of the United States of America in same day funds, and to pay interest
from the date hereof on such principal amount from time to time outstanding, in
like funds, at said office, at a rate or rates per annum and payable on the
dates determined pursuant to the Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at the rate or rates determined as set forth in the Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedule attached hereto and made
a part hereof, or on a continuation thereof which shall be attached hereto and
made a part hereof, or otherwise recorded by such holder in its internal
records; provided, however, that the failure of the holder hereof to make such a
notation or any error in such a notation shall not in any manner affect the
obligations of the Borrower to make payments of principal and interest in
accordance with the terms of this Note and the Agreement.
This Note is one of the Notes referred to in, evidences indebtedness
incurred under, and is entitled to the benefits of the Agreement. The Agreement,
among other things, contains provisions for the acceleration of the maturity
hereof upon the happening of certain events, for optional and mandatory
prepayments of the principal hereof prior to the maturity hereof, for a higher
rate of interest hereunder after an Event of Default and for the amendment or
waiver of certain provisions of the Agreement, all upon the terms and conditions
therein specified. This
Note shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania and any applicable laws of the United States of
America. Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Agreement.
PHILADELPHIA SUBURBAN CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President - Finance and
Chief Financial Officer
2
Loans and Payments
Unpaid Name of
Payments Principal Person
Amount of Interest Interest Balance of Making
Date Loan Rate Period Principal Interest Note Notation
---- --------- ------- -------- --------- -------- ---------- --------
3
