REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT Between THE YORK WATER COMPANY and PNC BANK, NATIONAL ASSOCIATION Dated as of May 1, 2008
Between
THE
YORK WATER COMPANY
and
PNC
BANK, NATIONAL ASSOCIATION
Dated
as of
May 1,
2008
$12,000,000
Pennsylvania
Economic Development Financing Authority
Exempt
Facilities Revenue Refunding Bonds,
Series A
of 2008
(The
York Water Company Project)
TABLE
OF CONTENTS
ARTICLE I
DEFINITIONS
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Section
1.01 Definitions.
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Section
1.02 Accounting Principles.
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Section
1.03 Rules of Construction.
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Section
1.04 Incorporation of
Recitals.
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ARTICLE
II LETTER OF CREDIT AND REIMBURSEMENT
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Section
2.01 Issuance of Letter of
Credit.
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Section
2.02 Reimbursement and Other
Payments.
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Section
2.03 Transfer; Reduction;
Reinstatement.
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Section
2.04 Nature of Obligations.
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Section
2.05 Indemnification.
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ARTICLE
III SECURITY
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Section
3.01 Security and Subrogation under
Indenture.
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Section
3.02 Pledge of Rights to Certain Funds and
Investments.
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Section
3.03 Pledged Bonds.
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ARTICLE
IV CONDITIONS PRECEDENT
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Section
4.01 Closing Fee.
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Section
4.02 Documentation.
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Section
4.03 Issuance of Bonds.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
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Section
5.01 Existence.
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Section
5.02 Power, Authorization and No
Conflicts.
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Section
5.03 Governmental and Other
Approvals.
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Section
5.04 Validity, Binding Effect and
Enforceability.
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Section
5.05 No Litigation.
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Section
5.06 No Violations.
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Section
5.07 Reserved.
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Section
5.08 No Liens.
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Section
5.09 Reserved.
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Section
5.10 Financial Condition; No Material Adverse
Change.
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Section
5.11 Plans and Benefit
Arrangements.
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Section
5.12 Environmental
Compliance.
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Section
5.13 Disclosure.
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Section
5.14 Anti-Terrorism Laws.
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Section
5.15 Incorporation of Representations and Warranties by
Reference.
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Section
5.16 Use of Proceeds; Margin Stock; Section 20
Subsidiaries.
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Section
5.17 Material Adverse Change.
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Section
5.18 Condition of and Title to Assets; Status of
Leases.
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Section
5.19 Insurance.
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Section
5.20 Taxes.
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Section
5.21 No Event of Default; Compliance with
Instruments.
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Section
5.22 Patents, Trademarks, Copyrights, Licenses,
Etc.
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ARTICLE
VI GENERAL COVENANTS
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Section
6.01 Maintenance of
Existence.
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Section
6.02 Compliance with Laws,
Etc.
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Section
6.03 Maintenance of
Insurance.
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Section
6.04 Compliance with Bond Documents and Other
Contracts.
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Section
6.05 Visitation Rights.
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Section
6.06 Keeping of Books.
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Section
6.07 Maintenance of
Properties.
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Section
6.08 Reporting Requirements.
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Section
6.09 Consent Under Bond
Documents.
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Section
6.10 Reserved.
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Section
6.11 Payment of Indebtedness.
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Section
6.12 Environmental Covenants.
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Section
6.13 Financial Covenants.
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Section
6.14 Payments of Taxes and Other
Charges.
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Section
6.15 Reserved.
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Section
6.16 Reserved.
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Section
6.17 ERISA.
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Section
6.18 Amendments to Bond
Documents.
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Section
6.19 Liens and Encumbrances.
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Section
6.20 Change in Business.
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Section
6.21 Limitation on Optional
Calls.
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Section
6.22 Reserved.
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Section
6.23 Anti-Terrorism Laws.
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ARTICLE
VII RESERVED
ARTICLE
VIII DEFAULTS AND REMEDIES
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Section
8.01 Defaults.
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Section
8.02 Remedies.
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Section
8.03 Waivers; Consents.
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Section
8.04 No Waiver; Remedies
Cumulative.
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Section
8.05 Set-Off.
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ARTICLE
IX GENERAL PROVISIONS
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Section
9.01 Notices.
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Section
9.02 Successors and Assigns.
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Section
9.03 Survival of Covenants.
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Section
9.04 Counterparts.
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Section
9.05 Costs, Expenses and
Taxes.
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Section
9.06 Amendments and Waivers.
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Section
9.07 Severability; Interest
Limitation.
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Section
9.08 Complete Agreement.
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Section
9.09 Participation.
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Section
9.10 Governing Law and
Jurisdiction.
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Section
9.11 Headings.
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Section
9.12 WAIVER OF JURY
TRIAL.
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EXHIBITS
A Form
of Letter of Credit
B Requirements
for Opinions of Counsel
THIS
REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT (this "Agreement"), made as of the
1st day of May, 2008, between THE YORK WATER COMPANY (the
"Borrower"), a
corporation organized and existing under the laws of the Commonwealth of
Pennsylvania, and PNC BANK,
NATIONAL ASSOCIATION (the "Bank"), a national banking
association.
RECITALS:
A. The
Pennsylvania Economic Development Financing Authority (the "Issuer") has issued its Exempt
Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water
Company Project) in the aggregate principal amount of $12,000,000 (the "Bonds") under a Trust
Indenture dated as of May 1, 2008 (the "Indenture") between the Issuer
and Manufacturers and Traders Trust Company, as Trustee (including any successor
trustee, the "Trustee").
B. Pursuant
to a Loan Agreement dated as of May 1, 2008 between the Issuer and the
Borrower (the "Loan
Agreement"), the proceeds of the Bonds are being applied to refund the
Issuer's previously issued Exempt Facilities Revenue Bonds Series B of 2004
(The York Water Company Project) in the outstanding principal amount of
$12,000,000. Under the Loan Agreement, the Borrower is obligated to
make loan payments to the Trustee in amounts and at the times corresponding to
the debt service and other payments required in respect of the
Bonds.
C. In
order to facilitate the issuance and sale of the Bonds and to enhance the
marketability of the Bonds and thereby achieve interest cost savings and other
savings to the Borrower, the Borrower has asked the Bank to issue its
Irrevocable Letter of Credit (together with any substitute letter of credit
issued pursuant to the terms hereof, the "Letter of Credit") to the
Trustee for the account of the Borrower authorizing the Trustee to make one or
more draws on the Bank up to an aggregate of $12,185,425 (as reduced and
reinstated from time to time in accordance with the provisions of the Letter of
Credit, the "Letter of Credit
Amount"), of which originally (i) $12,000,000 shall be in respect of
principal of the Bonds (as more fully defined in Section 1.01, the "Principal Component", and
(ii) $185,425 (as more fully defined in Section 1.01, the "Interest Component") shall be
in respect of accrued interest on the Bonds. The purpose of the
Letter of Credit is to provide funds for the payment of principal of and
interest on the Bonds and the purchase price of Bonds which have been tendered
pursuant to the tender option provisions thereof and of the Indenture to the
extent remarketing proceeds or other funds are not available therefor in
accordance with the provisions of the Indenture.
D. The
Bank is willing to issue the Letter of Credit upon the terms and conditions
hereinafter set forth.
NOW THEREFORE, in
consideration of the foregoing and the undertakings herein set forth and
intending to be legally bound, the Borrower and the Bank hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions.
(a) Terms
Defined in Recitals. In this Agreement
(except as otherwise expressly provided for or unless the context otherwise
requires), the following terms have the meanings specified in the foregoing
recitals:
Agreement
Bank
Bonds
Borrower
Indenture
Interest
Component
Issuer
Letter of
Credit
Letter of
Credit Amount
Loan
Agreement
Principal
Component
Trustee
(b) Other
Defined Terms. The following
terms shall have the meanings specified in this Article, unless the context
otherwise requires:
"Affiliate" means (i) any
Person included with the Borrower in a controlled group of corporations within
the meaning of Section 414(b) of the Code and (ii) any trade or
business (whether or not incorporated or for-profit) which is under common
control with the Borrower within the meaning of Section 414(c) of the
Code.
"Alternate Credit Facility"
shall have the meaning assigned to such term in the Indenture.
"Anti-Terrorism Laws" shall
mean any Laws relating to terrorism or money laundering, including Executive
Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the
Bank Secrecy Act, and the Laws administered by the United States Treasury
Department's Office of Foreign Asset Control (as any of the foregoing Laws may
from time to time be amended, renewed, extended, or replaced).
"Authorized Person" means the
President and Chief Executive Officer or the Chief Financial Officer and
Treasurer of the Borrower.
"Bank Documents" means this
Agreement, the Letter of Credit and any other agreements or instruments relating
to this Agreement or the Letter of Credit.
"Base Rate" shall mean a
fluctuating rate of interest per annum, calculated on the basis of a 360-day
year, and the actual number of days, equal to the higher of the Prime Rate or
the Overnight Effective Federal Funds Rate for such day plus .50%.
"Benefit Arrangement" shall
mean at any time an "employee benefit plan," within the meaning of
Section 3(3) of ERISA, which is neither a Plan nor a Multiemployer Plan and
which is maintained, sponsored or otherwise contributed to by any member of the
ERISA Group.
"Blocked Person" shall have the
meaning ascribed to such term in Section 5.14.
"Bond Documents" means the
Bonds, the Indenture, the Letter of Credit, the Loan Agreement, the Remarketing
Agreement and any other agreements or instruments relating thereto.
"Business Day" means any day
other than (i) a Saturday or Sunday, (ii) a day on which commercial
banking institutions in Pittsburgh, Pennsylvania or in any other city where
either the principal corporate trust office of the Trustee or the office of the
Bank at which drafts are to be presented under the Letter of Credit is located
are required or authorized by law (including executive order) to close or on
which any such office is closed for reasons not related to financial condition,
or (iii) a day on which the New York Stock Exchange is closed.
"Code" means the Internal
Revenue Code of 1986 and the rules and regulations thereunder, including any
amendments and successor provisions thereto.
"Contamination" means the
uncontained presence of Hazardous Substances at the Borrower's Facilities, or
arising from the Premises, which may require remediation under any applicable
Law.
"Date of Issuance" means the
date on which the Letter of Credit is issued upon request of the Borrower
pursuant to Section 2.01.
"Default" means any event or
occurrence that, with the giving of notice, the passage of time or both, would
become an Event of Default.
"Default Rate" shall mean a
fluctuating rate of interest equal to the Base Rate plus two (2%) percent per
annum.
"Drawing" has the meaning
assigned to that term in the Letter of Credit.
"Drawing Date" means the date
on which the Bank honors a Drawing.
"Environmental Complaint" shall
mean any written complaint setting forth a cause of action for personal or
property damage, natural resource damage or equitable relief, order, notice of
violation, citation, request for information issued pursuant to any
Environmental Laws by an Official Body, subpoena or other written notice of any
type relating to, arising out of, or issued pursuant to, any of the
Environmental Laws or any Environmental Conditions, as the case may
be.
"Environmental Conditions"
shall mean any conditions of the environment, including the workplace, the
ocean, natural resources (including flora or fauna), soil, surface water,
groundwater, any actual or potential drinking water supply sources, substrata or
the ambient air, relating to or arising out of, or caused by, the use, handling,
storage, treatment, recycling, generation, transportation, release, spilling,
leaking, pumping, emptying, discharging, injecting, escaping, leaching,
disposal, dumping, threatened release or other management or mismanagement of
Regulated Substances resulting from the use of, or operations on, any
Premises.
"Environmental Laws" means all
provisions of Laws, permits, licenses, awards and standards promulgated by any
Official Body relating to pollution or protection of human health or the
environment or employee safety in the work place.
"ERISA" means the Employee
Retirement Income Security Act of 1974, as it may from time to time be amended,
supplemented or otherwise modified, or any successor legislation, and the rules
and regulations thereunder.
"ERISA Group" shall mean, at
any time, the Borrower and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control and
all other entities which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.
"Event of Default" shall have
the meaning assigned to such term in Section 8.01.
"Executive Order No. 13224"
shall mean the Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
"Expiration Date" has the
meaning assigned to such term in the Letter of Credit.
"Final Payment Drawing" has the
meaning assigned to such term in the Letter of Credit.
"Financial Statements" means
the Borrower's consolidated and consolidating balance sheets and statements of
income and cash flows for the year or quarter prepared in accordance with GAAP
on a basis consistent with prior years, unless specifically noted
thereon.
"Fiscal Year" means the annual
accounting year of the Borrower, which currently begins on January 1 in
each calendar year.
"Funded Debt" shall have the
meaning set forth in Section 6.13.
"GAAP" means generally accepted
accounting principles consistently applied on a consistent basis both as to
classification of items and amounts.
"Indebtedness" means
individually and collectively (i) all obligations and indebtedness of the
Borrower for borrowed money including but not limited to the Obligations;
(ii) all obligations of the Borrower evidenced by bonds, debentures, notes,
or similar instruments; (iii) all obligations of the Borrower under
conditional sale or other title retention agreements relating to property
purchased by the Borrower; (iv) all obligations of the Borrower issued or
assumed as the deferred purchase price of property or services; (v) all
obligations of the Borrower under capitalized leases; (vi) all obligations
of the Borrower with respect to letters of credit (including the Letter of
Credit), whether matured or contingent; (vii) all obligations of the
Borrower under any agreement or arrangement designed to provide protection
against fluctuations in interest rates; (viii) all obligations of others
secured by any Lien on property or assets owned or acquired by the Borrower,
whether or not the obligations secured thereby have been assumed; and
(ix) all guaranties of the Borrower; provided, however, that
"Indebtedness" shall not include the Borrower's accounts payable incurred in the
ordinary course of business if those accounts payable do not constitute
obligations to repay borrowed money.
"Indemnified Party" shall have
the meaning assigned to such term in Section 2.05.
"Ineligible Securities" shall
mean any security which may not be underwritten or dealt in by member banks of
the Federal Reserve System under Section 16 of the Banking Act of 1933 (12
U.S.C. Section 24, Seventh), as amended.
"Interest Component" shall have
the meaning assigned to such term in the Letter of Credit.
"Interest Trigger Date" shall
have the meaning assigned to such term in Section 2.02(b)(i).
"Interest Drawing" shall have
the meaning assigned to such term in the Letter of Credit.
"Law" means any law, statute,
rule, regulation, treaty, ordinance, order, writ, injunction, decree, judgment,
guideline, directive or decision of any Official Body, including any
Environmental Law, whether in existence on the date hereof or whether issued,
enacted or adopted after the date hereof, and any change therein or in the
interpretation or application thereof following the date hereof.
"Letter of Credit Fee" shall
have the meaning set forth in Section 2.02(d).
"LIBOR" shall mean, for each
Reset Date, the interest rate per annum determined by the Bank by dividing (i)
the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute
Bloomberg page that displays rates at which US dollar deposits are offered by
leading banks in the London interbank deposit market), or the rate which is
quoted by another source selected by the Bank which has been approved by the
British Bankers’ Association as an authorized information vendor for the purpose
of displaying rates at which US dollar deposits are offered by leading banks in
the London interbank deposit market (an "Alternate Source"), at
approximately 11:00 a.m., London time, two (2) Business Days prior to such Reset
Date, as the one (1) month London
interbank offered rate for U.S. Dollars commencing on such Reset Date (or if
there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1
(or any substitute page) or any Alternate Source, a comparable replacement rate
determined by the Bank at such time (which determination shall be conclusive
absent manifest error)), by (ii) a number equal to 1.00 minus the LIBOR
Reserve Percentage. LIBOR shall be adjusted on and as of
(a) each Reset Date, and (b) the effective date of any change in the
LIBOR Reserve Percentage. The Bank shall give prompt notice to the
Borrower of LIBOR as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
"LIBOR Reserve Percentage"
shall mean the maximum effective percentage in effect on such day as prescribed
by the Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency
liabilities").
"Lien" means any mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any capitalized lease
having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction).
"Liquidity Drawing" has the
meaning assigned to such term in the Letter of Credit.
"Liquidity Period" means the
period beginning on the date hereof and terminating on the first to occur of
(i) the Expiration Date, or (ii) the first date on which there are no
longer any Bonds Outstanding other than Bonds secured by an Alternate Credit
Facility.
"Material Adverse Change" means
any set of circumstances or events which (i) has or could reasonably be
expected to have any material adverse effect whatsoever upon the validity or
enforceability of any of the Transaction Documents, (ii) is or could
reasonably be expected to be material and adverse to the business, properties,
assets, financial condition, results of operations or prospects of the Borrower,
(iii) impairs materially or could reasonably be expected to impair
materially the ability of the Borrower to duly and punctually pay or perform the
Obligations, or (iv) impairs materially or could reasonably be expected to
impair materially the ability of the Bank to enforce the Bank's legal remedies
pursuant to any of the Bank Documents.
"Multiemployer Plan" shall mean
any employee benefit plan which is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA and to which the Borrower or any member of the
ERISA Group is then making or accruing an obligation to make contributions or,
within the preceding five Plan years, has made or had an obligation to make such
contributions.
"Multiple Employer Plan" shall
mean a Plan which has two or more contributing sponsors (including the Borrower
or any member of the ERISA Group) at least two of whom are not under common
control, as such a plan is described in Sections 4063 and 4064 of
ERISA.
"Net Income" shall have the
meaning given it in Section 6.13.
"Obligations" means all loans,
advances, debts, liabilities, obligations, covenants and duties owing from the
Borrower to the Bank or to any other direct or indirect subsidiary of The PNC
Financial Services Group, Inc., of every kind or nature, present or future
(including any interest accruing thereon after maturity, or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
including those evidenced by or described in the Bank Documents, whether or not
evidenced by any note, guaranty or other instrument, whether arising under any
agreement, instrument or document, whether or not for the payment of money,
whether arising by reason of an extension of credit, opening of a letter of
credit, loan, equipment lease or guarantee, under any interest or currency swap,
future, option or other interest rate protection or similar agreement, or in any
other manner, whether arising out of overdrafts on deposit or other accounts or
electronic funds transfers (whether through automated clearing houses or
otherwise) or out of the Bank's non-receipt of or inability to collect funds or
otherwise not being made whole in connection with depository transfer check or
other similar arrangements, whether direct or indirect (including those acquired
by assignment or participation), absolute or contingent, joint or several, due
or to become due, now existing or hereafter arising, and any amendments,
extensions, renewals or increases and all costs and expenses of the Bank
incurred in the documentation, negotiation, modification, enforcement,
collection or otherwise in connection with any of the foregoing, including
reasonable attorney's fees and expenses.
"Official Body" means any
national, federal, state, local or other government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Outstanding" when applied to
the Bonds shall have the meaning assigned to such term in the
Indenture.
"Overnight Effective Federal Funds
Rate" for any day shall mean the rate per annum (based on a year of 360
days and actual days elapsed and rounded to the nearest 1/100 of 1%) announced
by the Federal Reserve Bank of New York (or any successor) on such day as being
the weighted average of the rates on overnight federal funds transactions
arranged by federal funds brokers on the previous trading day, as computed and
announced by such Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and announced the weighted
average it refers to as the "Federal Funds Effective Rate" as of the date of
this Agreement, provided, if such Federal Reserve Bank (or its successor) does
not announce such rate on any day, the "Federal Funds Effective Rate" for such
day shall be the Federal Funds Effective Rate for the last day on which such
rate was announced.
"Participating Banks" shall
have the meaning assigned to such term in Section 9.09.
"PBGC" means the Pension
Benefit Guaranty Corporation established pursuant to ERISA.
"Permitted Liens"
means:
(i) Liens
in favor of the Bank; and
(ii) Excepted
Encumbrances as defined in the Loan Agreement.
"Person" shall mean any
individual, sole proprietorship, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization,
association, joint venture, Official Body or agency thereof, or any other
entity.
"Plan" shall mean at any time
an employee pension benefit plan (including a Multiple Employer Plan, but not a
Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained by any entity which was at such time a
member of the ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.
"Pledged Bonds" means any Bonds
delivered to or for the account of the Bank in connection with a Liquidity
Drawing under the Letter of Credit.
"Premises" shall mean any real
property owned or leased by the Borrower.
"Prime Rate" means the rate of
interest publicly announced by the Bank from time to time as the Prime Rate of
the Bank effective in Pittsburgh, Pennsylvania, adjusted as of the date of an
announcement in Pittsburgh, Pennsylvania of any change in such Prime
Rate. The Prime Rate is determined from time to time by the Bank as a
means of pricing some loans to its borrowers and neither is tied to any external
rate of interest or index, nor necessarily reflects the lowest rate of interest
actually charged by the Bank to any particular class or category of
customer. If and when the Prime Rate changes, the rate of interest
with respect to any amounts hereunder to which the Prime Rate applies will
change automatically without notice to the Borrower, effective on the date of
any such change.
"Principal Component" shall
have the meaning assigned to such term in the Letter of Credit.
"Principal Drawing" shall have
the meaning assigned to such term in the Letter of Credit.
"Prohibited Transaction" shall
mean any prohibited transaction as defined in Section 4975 of the Internal
Revenue Code or Section 406 of ERISA for which neither an individual nor a
class exemption has been issued by the United States Department of
Labor.
"Regulated Substances" means
any substance, including any solid, liquid, semisolid, gaseous, thermal,
thoriated or radioactive material, refuse, garbage, wastes, chemicals, petroleum
products, by-products, coproducts, impurities, dust, scrap, heavy metals,
defined as a "hazardous substance," "pollutant," "pollution," "contaminant,"
"hazardous or toxic substance," "extremely hazardous substance," "toxic
chemical," "toxic waste," "hazardous waste," "industrial waste," "residual
waste," "solid waste," "municipal waste," "mixed waste," "infectious waste,"
"chemotherapeutic waste," "medical waste," or regulated substance or any related
materials, substances or wastes as now or hereafter defined pursuant to any
Environmental Laws or other directives of any Official Body, the generation,
manufacture, extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental
Laws.
"Remarketing Agent" means PNC
Capital Markets LLC, and any successor in such capacity pursuant to the
Indenture.
"Remarketing Agreement" means
the Remarketing Agent's agreement with the Borrower to perform its duties as
Remarketing Agent under the Indenture.
"Reset Date" shall mean (i) an
Interest Trigger Date, and (ii) subject to the proviso below, the first day of
every month thereafter, provided that: (a) if
any such day is not a Business Day, then the first succeeding day that is a
Business Day shall instead apply, unless that day falls in the next succeeding
calendar month, in which case the next preceding day that is a Business Day
shall instead apply, and (b) if any such day is a day of a calendar month for
which there is no numerically corresponding day in certain other months (each, a
"Non-Conforming Month"),
then any Reset Date that falls within a Non-Conforming Month shall be the last
day of such Non-Conforming Month.
"Scheduled Expiration Date" has
the meaning assigned to such term in the Letter of Credit.
"Section 20
Subsidiary" means the Subsidiary of
the bank holding company controlling the Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
"State" means the Commonwealth
of Pennsylvania.
"Transaction Documents" means the Bank Documents
and the Bond Documents, and all extensions, renewals, amendments, substitutions
and replacements to and of any of the foregoing.
"Uniform Commercial Code" means
the Uniform Commercial Code as adopted and in effect from time to time in the
State, except when the provisions of the Uniform Commercial Code as adopted in
another jurisdiction are applicable due to the location of any Collateral in
such other jurisdiction.
"USA Patriot Act" shall mean
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has
been, or shall hereafter be, renewed, extended, amended or
replaced.
Section
1.02 Accounting
Principles
. Except
as otherwise provided in this Agreement, all computations and determinations as
to accounting or financial matters and all financial statements to be delivered
pursuant to this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP; provided, however,
that all accounting terms used in Article VI shall have the meaning given to
such terms under GAAP as in effect on the date hereof applied on a basis
consistent with those used in preparing the Financial Statements referred to in
Section 6.08. In the event of any change after the date hereof
in GAAP, and if such change would result in the inability to determine
compliance with the financial covenants (if any) set forth in Article VI based
upon the Borrower's regularly prepared financial statements by reason of the
preceding sentence, then the parties hereto agree to endeavor, in good faith, to
agree upon an amendment to this Agreement that would adjust such financial
covenants in a manner that would not affect the substance thereof, but would
allow compliance therewith to be determined in accordance with the Borrower's
financial statements at that time.
Section
1.03 Rules of
Construction.
(i) Except as
otherwise specified, all references in any Bank Document (A) to any Person
shall be deemed to include such Person's heirs, executors, administrators,
successors and assigns, (B) to any Law shall be deemed references to such
Law as the same may have been or may be amended, supplemented or replaced from
time to time, and (C) to any Transaction Document defined or referred to
herein shall be deemed references to such Transaction Document as the terms
thereof may have been or may be amended, supplemented, waived or otherwise
modified from time to time.
(ii) When used
in any Bank Document, the words "herein", "hereof" and "hereunder" and words of
similar import shall refer to such Bank Document as a whole and not to any
particular provision of such Bank Document, and the words "Article", "Section",
"Subsection", "Schedule", "Exhibit" and "Annex" shall refer to Articles,
Sections and Subsections of, and Schedules, Exhibits and Annexes to, such Bank
Document, unless otherwise specified.
(iii) When used
in any Bank Document, the word "including" means "including without
limitation".
(iv) Whenever
the context so requires, in all Bank Documents the use of or reference to any
gender includes the masculine, feminine and neuter genders, and all terms used
in the singular shall have comparable meanings when used in the plural, and vice
versa.
(v) All
references in any Bank Document to any time of the day shall be references to
Eastern standard time or Eastern daylight savings time, as in effect in the
State on such day.
Section
1.04 Incorporation of
Recitals.
The
recitals at the beginning of this Agreement or any other Bank Documents are
incorporated into and made a material part of this Agreement or such other Bank
Document, as the case may be.
ARTICLE
II
LETTER
OF CREDIT AND REIMBURSEMENT
Section
2.01 Issuance
of Letter of Credit.
The
Borrower hereby requests the Bank to issue the Letter of Credit to the
Trustee. Subject to the conditions precedent hereinafter set forth,
the Bank will issue to the Trustee pursuant to the request of the Borrower, on
the date of execution and delivery of this Agreement, the Letter of Credit in
the Letter of Credit Amount and substantially in the form attached hereto as
Exhibit A. The
Interest Component of the Letter of Credit has been established on the basis of
47 days' interest on the Bonds and a 365-day year, at an assumed maximum
interest rate of 12% per annum. The Letter of Credit shall be
effective on the Date of Issuance and shall expire at 5:00 p.m. on the
Expiration Date. On or prior to the initial anniversary date of the
Letter of Credit and on each anniversary date thereafter, the Bank may elect, at
its sole option, to extend the Scheduled Expiration Date with respect to the
Letter of Credit for one (1) additional year, it being understood that the Bank
shall have no obligation to grant any such extension. The Bank shall
notify the Borrower, in writing, at least ninety (90) days prior to the
Scheduled Expiration Date in the event the Bank does not grant any such
extension. Any such extension shall be subject to the mutual
agreement of the Borrower and the Bank as to any fees to be applicable to the
period of extension. All Drawings will be paid with the Bank's own
funds.
Section
2.02 Reimbursement and Other
Payments.
(a) Reimbursement. The
Borrower hereby agrees to pay or cause to be paid to the Bank:
(i) a sum
equal to each amount drawn under the Letter of Credit by an Interest Drawing or
a Principal Drawing (in each case for interest or principal due on the Bonds
other than by reason of a Liquidity Drawing), on the same Business Day after
such Drawing is honored;
(ii) a sum
equal to each amount drawn against the Interest Component of the Letter of
Credit Amount by a Liquidity Drawing (A) in the case of any such amount
drawn on an Interest Payment Date (as defined in the Indenture) of the Bonds
being purchased with the proceeds of such Liquidity Drawing on the same Business
Day after such Drawing is honored, and (B) in all other cases, on the first
to occur of (1) the fourteenth (14) month anniversary of the date on which
said Drawing is honored, (2) the date on which the Bonds purchased with the
proceeds of such Liquidity Drawing, after the Bank has honored such Drawing, are
remarketed by the Remarketing Agent and the proceeds thereof delivered to the
Trustee, (3) the date on which the Bonds purchased with the proceeds of
such Liquidity Drawing are redeemed or otherwise paid in full, (4) the date
the Liquidity Period terminates, or (5) the occurrence of an Event of
Default;
(iii) a sum
equal to each amount drawn against the Principal Component of the Letter of
Credit Amount by a Liquidity Drawing, on the first to occur of (A) the
fourteenth (14) month anniversary of the date of which said Drawing is honored,
(B) the date on which the Bonds purchased with the proceeds of such
Liquidity Drawing, after the Bank has honored such Drawing, are remarketed by
the Remarketing Agent and the proceeds thereof are delivered to the Trustee,
(C) the date on which the Bonds purchased with the proceeds of Liquidity
Drawing, after the Bank has honored such Drawing, are redeemed or otherwise paid
in full, (D) the date the Liquidity Period terminates, or (E) the
occurrence of an Event of Default; and
(iv) a sum
equal to each amount drawn under the Letter of Credit by Final Payment drawing,
on the same Business Day after such Drawing is honored.
The Bank
agrees to give telephonic notice to the Borrower on the day that the Bank
receives notice from the Trustee for each Drawing.
(b) Interest; Default
Rate
(i) All sums
payable to the Bank under Section 2.02(a) shall bear interest, from the
Drawing Date until such sums are paid in full (it being understood and agreed
that any sum paid to the Bank after 3:00 p.m. on a Business Day shall bear
interest as if it was paid at 9:00 a.m. on the next following Business Day), at
a fluctuating rate per annum (computed for the actual number of days elapsed,
based on a 360 day year) equal to the Base Rate; provided that any sum
payable to the Bank under subparagraph (ii) (B) or (iii) of Section 2.02(a)
which is outstanding in excess of five (5) days (the "Interest Trigger Date") shall
thereafter bear interest at a fluctuating rate per annum (computed for the
actual number of days elapsed, based on a 360 day year) equal to the lesser of
(i) the Base Rate or (ii) LIBOR in effect on each Reset Date plus one
and one half percent (1.5%), as determined by the Bank on the Interest Trigger
Date, until such sum or interest and all other amounts due and payable under
this Agreement have been paid in full. Interest accruing pursuant to
this Section 2.02(b) shall be due and payable on the first Business Day of
each calendar month after the Drawing Date and on the date the respective sum is
paid. All payments under Sections 2.02(a) and 2.02(b) shall be
applied first to the payment of interest due and payable under this
Section 2.02(b) and then to the reduction of the principal balance of sums
due and payable under Section 2.02(a).
(ii) Upon the
occurrence and during the continuance of an Event of Default, (a) any sum
payable to the Bank hereunder shall bear interest at the Default Rate, and
(b) the Letter of Credit Fee shall be increased to two and three quarters
of one percent (2.75%) per annum. The Default Rate and the increased
Letter of Credit Fee payable hereunder shall accrue before and after any
judgment has been entered. The Borrower acknowledges that the
increased Letter of Credit Fee and the Default Rate provided for herein reflect,
among other things, the fact that, upon default, the Letter of Credit shall have
become a substantially greater risk given its default status and that the Bank
is entitled to additional compensation for such risk.
(c) Closing
Fee. On the date of execution hereof, the Borrower shall pay
to the Bank a closing fee of $5,000.
(d) Commitment
Fees. On June 1, 2008 and monthly in arrears on the first day
of each month thereafter so long as any credit remains available to the Trustee
under the Letter of Credit and on the Expiration Date or in the event the
Borrower obtains an Alternate Credit Facility, the Borrower shall pay to the
Bank, upon receipt of the Bank's invoice therefor, a Letter of Credit
commitment fee (the "Letter of
Credit Fee") computed at the rate of three quarters of one percent (.75%)
per annum on the average daily Letter of Credit Amount during the preceding
month (or portion thereof in the case of the first such payment and in the case
of a termination of the Letter of Credit on a day other than the last day of a
month); provided that for
purposes of computing such average daily Letter of Credit Amount the Letter of
Credit Amount shall be treated as having been reinstated with respect to
Interest Drawings on the day the Bank received reimbursement therefor, unless
the Bank has given written notice to the Trustee pursuant to paragraph 5 of the
Letter of Credit that such reinstatement shall not
occur. Computations of Letter of Credit commitment fees under this
Section shall be for the actual number of days in the applicable period, based
on a 360 day year.
(e) Transaction
and Transfer Charges and Expenses. The Borrower shall pay to
the Bank all reasonable transaction charges that the Bank may make for Drawings
under the Letter of Credit, including without limitation a negotiation/payment
fee of $100. Such transaction charges shall be payable monthly at the
same times as the fees described in Section 2.02(d) hereof are payable,
upon submission to the Borrower by the Bank of the Bank's ▇▇▇▇
therefor. In addition, the Borrower shall pay to the Bank on demand
any and all reasonable charges and expenses which the Bank may pay or incur
relative to the Letter of Credit including without limitation a billing fee of
$50 (not applicable if a direct deposit account of the Borrower is debited by
the Bank), and an amendment fee of $100. The Borrower shall pay to
the Bank upon each transfer of the Letter of Credit in accordance with its terms
a transfer fee equal to $500, together with any and all costs and expenses of
the Bank incurred in connection with such transfer.
(f) Increased
Costs.
(i) If after
the date of this Agreement any enactment, promulgation or adoption of or change
in any applicable foreign or domestic law, treaty regulation or rule or in the
interpretation or administration thereof by any Official Body charged with the
interpretation or administration thereof, or compliance by the Bank with any
guideline, request or directive issued after the date hereof (whether or not
having the force of law) of any such Official Body, shall either
(A) impose, modify or deem applicable any reserve, special deposit,
capital, compulsory loan, FDIC insurance assessment or similar requirement
(including without limitation a guideline, request or directive which affects
the manner in which the Bank allocates capital resources to its commitments,
including its obligations under this Agreement and the Letter of Credit),
(B) subject the Bank to any tax, deduction or withholding or change the
basis of taxation of the Bank (other than a change in a rate of tax based on
overall net income of the Bank), (C) cause or deem letters of credit to be
assets held by the Bank and/or deposits on its books, or (D) impose on the
Bank any other condition regarding this Agreement or the Letter of Credit, and
the result of any event referred to in clause (A), (B), (C) or (D) of this
sentence shall be to increase the direct or indirect cost to the Bank of issuing
or maintaining the Letter of Credit or the Bank's obligations under this
Agreement or to reduce the amounts receivable by the Bank hereunder or to reduce
the rate of return on the capital of the Bank in connection with this Agreement
(which increase in costs, reduction in amounts receivable or reduction in rate
of return shall be determined by the Bank's reasonable allocation of such cost
increase, reduction in amounts receivable or reduction in rate of return
resulting from such event), then within ten (10) Business Days after written
demand by the Bank, the Borrower shall pay to the Bank, from time to time as
specified by the Bank, additional amounts that in the aggregate shall be
sufficient to compensate the Bank for such increased cost, reduction in amounts
receivable or reduction in rate of return. A certificate as to such
increased cost, reduction in amounts receivable or reduction in rate of return
submitted by the Bank to the Borrower setting forth the Bank's calculation
thereof, shall in absence of manifest error, be conclusive and binding for all
purposes.
(ii) If after
the date of this Agreement the Bank shall have determined that any enactment,
promulgation or adoption of or change in any applicable foreign or domestic law,
regulation, rule or guideline regarding capital adequacy, or in the
interpretation or administration thereof, by any Official Body charged with the
interpretation or administration thereof, or compliance by the Bank (or any
controlling affiliate) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law and whether or not
failure to comply thereunder would be unlawful) of any such Official Body,
affects or would affect the amount of capital required or expected to be
maintained by the Bank (or any controlling affiliate) and the Bank determines,
on the basis of reasonable allocations, that the amount of such capital is
increased by or is based on its issuance or maintenance of the Letter of Credit
or the Bank's obligations under this Agreement, then, within ten (10) Business
Days after demand by the Bank, the Borrower shall pay to the Bank, from time to
time as specified by the Bank, additional amounts sufficient to compensate the
Bank therefor. A certificate as to such additional amounts submitted
to the Borrower by the Bank setting forth the Bank's calculation thereof, shall,
in the absence of manifest error, be conclusive and binding for all
purposes.
(iii) In
addition, the Borrower agrees to indemnify the Bank against any liabilities,
losses or expenses (including, without limitation, loss of margin, any loss or
expense sustained or incurred in liquidating or employing deposits from third
parties, and any loss or expense incurred in connection with funds acquired to
effect, fund or maintain any amounts hereunder (or any part thereof) bearing
interest based on LIBOR) which the Bank sustains or incurs as a consequence of
either (i) the Borrower’s failure to make a payment on the due date thereof,
(ii) the Borrower’s revocation (expressly, by later inconsistent notices or
otherwise) in whole or in part of any notice given to Bank to request, convert,
renew or prepay any amounts bearing interest based on LIBOR, or (iii) the
Borrower’s payment or prepayment (whether voluntary, after acceleration of
obligations hereunder or otherwise) or conversion of any amounts bearing
interest based on LIBOR on a day other than the regularly scheduled due date
therefor. A notice as to any amounts payable pursuant to this
paragraph given to the Borrower by the Bank shall, in the absence of manifest
error, be conclusive and shall be payable upon demand. The Borrower’s
indemnification obligations hereunder shall survive the payment in full of all
amounts payable hereunder.
(g) LIBOR
Unascertainable. If the Bank determines (which determination
shall be final and conclusive) that, by reason of circumstances affecting the
eurodollar market generally, deposits in dollars (in the applicable amounts) are
not being offered to banks in the eurodollar market for the selected term, or
adequate means do not exist for ascertaining LIBOR, then the Bank shall give
notice thereof to the Borrower. Thereafter, until the Bank notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, (a) the availability of LIBOR shall be suspended, and (b) the interest
rate for all amounts outstanding under this Agreement to which LIBOR would
otherwise apply shall be converted on the next succeeding Reset Date to a rate
of interest per annum equal to the Base Rate.
In
addition, if, after the date of this Agreement, the Bank shall determine (which
determination shall be final and conclusive) that any enactment, promulgation or
adoption of or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by a governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Bank to make or maintain or fund loans based on LIBOR, the Bank shall notify the
Borrower. Upon receipt of such notice, until the Bank notifies the
Borrower that the circumstances giving rise to such determination no longer
apply, (a) the availability of LIBOR shall be suspended, and (b) the interest
rate on all amounts outstanding under this Agreement shall be converted to the
Base Rate either (i) on the next succeeding Reset Date if the Bank may lawfully
continue to maintain or fund loans based on LIBOR to such day, or
(ii) immediately if the Bank may not lawfully continue to maintain or fund
loans based on LIBOR.
(h) General
Interest Accrual; Place of Payment. Except as otherwise
provided in Section 2.02(a) or (b), all payments to the Bank under this
Agreement shall be accompanied by interest thereon, from the date such payments
become due until they are paid in full, at a fluctuating rate per annum
(computed for the actual number of days elapsed, based on a 360-day year) equal
to the sum of the Base Rate; provided during the
existence of any Event of Default, any amount which is due and payable to the
Bank under this Agreement shall thereafter bear interest at a fluctuating rate
per annum (computed for the actual number of days elapsed, based on a 360-day
year) equal to the Default Rate. All payments by the Borrower to the
Bank under this Agreement shall be made in lawful currency of the United States
at the Bank at 3rd Floor, Firstside Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Attention: Trade Services Operations, or at such other address and to the
attention of such other person as the Bank may stipulate by written notice to
the Borrower, or by a wire transfer in immediately available funds from the
Borrower to the Bank in accordance with written wire instructions given to the
Borrower by the Bank. All reimbursement payments under
Section 2.02(a) shall be made in immediately available funds.
Section
2.03 Transfer; Reduction;
Reinstatement.
(a) Transfer. The
Letter of Credit may be transferred in accordance with paragraph 8 of the Letter
of Credit.
(b) Reduction. The
Letter of Credit Amount and the respective Principal Component and Interest
Component thereof shall be automatically reduced as specified in paragraph 5 of
the Letter of Credit. With respect to any reductions of the Letter of
Credit Amount pursuant to the terms of the Letter of Credit as a result of Bonds
ceasing to be Outstanding, the Bank shall have the right, at its option, to
require the Trustee to promptly surrender the outstanding Letter of Credit to
the Bank and to accept in substitution therefor a letter of credit in the form
of Exhibit
A attached hereto, dated the date of such substitution, for an amount
equal to the Letter of Credit Amount as so reduced, but otherwise having terms
identical to the then outstanding Letter of Credit.
(c) Reinstatement. In the event of
an Interest Drawing under the Letter of Credit, the Interest Component of the
Letter of Credit Amount shall, as provided in paragraph 5(a) of the Letter of
Credit and subject to the conditions therein set forth, be automatically
reinstated by an amount equal to the amount of such drawing. In the
event of a Liquidity Drawing under the Letter of Credit, the Principal Component
and Interest Component of the Letter of Credit Amount shall, as provided in
paragraph 5(b) of the Letter of Credit, be reinstated with respect to such
drawing (A) automatically when and to the extent that (i) the Bank has
received reimbursement for such drawing in immediately available funds (or the
Trustee has received immediately available funds which, pursuant to
Section 2B.1(g) or Section 2B.2(f) of the Indenture, as applicable, the
Trustee will immediately remit to the Bank as reimbursement for such drawing),
and (ii) the Trustee has delivered a certificate to the Bank in respect of
such reinstatement in the form required by paragraph 5(b) of the Letter of
Credit, or (B) when and to the extent the Bank, at its option, upon the
Borrower's request, advises the Trustee in writing that such reinstatement shall
occur, it being understood that the Bank shall have no obligation to grant any
such reinstatement except as set forth in clause (A) of this
sentence.
Section
2.04 Nature of
Obligations.
(a) The
Borrower's obligations to the Bank under this Agreement are absolute,
unconditional, and irrevocable, and shall be payable in accordance with the
terms hereof irrespective of any one or more of the following
circumstances:
(i) the form,
validity, sufficiency, accuracy, enforceability, genuineness, or effect, or any
lack thereof, of the Letter of Credit or any draft, this Agreement, any other
Bank Document, or any other document, instrument, or agreement presented in
connection with or relating to any of the foregoing, including any signatures or
endorsements thereon, even if any such documents, instruments, or agreements
should in fact prove to be invalid, insufficient, inaccurate, fraudulent, or
forged and even if the Bank or any of its correspondents shall have been
notified thereof;
(ii) any
failure of any draft to bear reference or adequate reference to the Letter of
Credit or of any document to accompany a draft or any failure to forward any
document separately from a related draft;
(iii) errors,
omissions, interruptions, or delays in transmission or delivery of the Letter of
Credit, draft, message, document, or advice, whether transmitted by courier,
mail, or hand, or by facsimile, cable, telex, telegraph, or other
telecommunication, or otherwise, whether or not encrypted;
(iv) errors in
interpretation of technical terms or in translation, and the Bank and its
correspondents may transmit terms of the Letter of Credit and related documents
and drafts without translation;
(v) any claim
or basis for a claim for breach of warranty by the Borrower or the Bank against
any beneficiary of the Letter of Credit or the existence of any claim, setoff,
defense, or other right that the Borrower may have at any time against any
beneficiary or any successor thereof, any transferee of the Letter of Credit,
the Bank or any correspondent or agent thereof, or any other Person, whether in
connection with the underlying transaction or any unrelated transaction or other
matter;
(vi) any
payment or other honor by the Bank against a draft or other document presented
under the Letter of Credit containing one or more material or consequential
discrepancies which causes such presentation to not comply substantially with
the terms or conditions of the Letter of Credit and the Bank has notified the
Borrower (orally or in writing by facsimile transmission or otherwise) of such
discrepancy unless (A) the Bank receives from the Borrower notice in
writing, within one (1) Business Day after the Borrower received notice of the
discrepancy from the Bank, of the Borrower's objection to such discrepancy, and
(B) the Borrower takes all reasonable steps to mitigate any
loss;
(vii) any
failure of the Bank to issue the Letter of Credit in the form requested by the
Borrower, unless the Bank receives written notice from the Borrower of such
failure within one (1) Business Day after the Borrower shall have received (by
facsimile transmission or otherwise) a copy of the Letter of Credit and such
error is material and consequential;
(viii) any
payment or other honor under the Letter of Credit that is made after the
expiration thereof if such date of expiration occurs during a force majeure
affecting the office of the Bank or the office of any other bank through which
payment is to be made under such Letter of Credit; or
(ix) any
action or inaction, including failure or compulsion to pay or accept a draft,
taken or suffered by the Bank or any of its correspondents in connection with
the Letter of Credit, draft, document, or property and resulting from any
censorship, law, regulation, order, control, restriction, or the like rightfully
or wrongly exercised by any de facto or de jure domestic or
foreign Official Body or other purported authority or from any other cause
beyond the Bank's control or the control of the Bank's correspondents or their
respective agents, or for any loss or damage to the Borrower or anyone else or
to any property of the Borrower or anyone else resulting from any such failure
to pay or accept.
(b) The Bank
is authorized to honor any draft without regard to, and without any duty on the
Bank's part to inquire into, any underlying transaction or any disputes or
controversies between Borrower and any beneficiary of the Letter of Credit or
any other Person or the respective rights, duties, or liabilities of any of them
or whether any facts or occurrences represented in any of the documents
presented under the Letter of Credit are true or correct or whether any draft or
document related to the Letter of Credit is forged or fraudulent or whether
honor of a presentation under the Letter of Credit would facilitate a fraud or
misrepresentation, notwithstanding that the Bank may have assisted the Borrower
in the preparation of the wording of the Letter of Credit or any drafts or other
documents required to be presented thereunder or that the Bank may be aware of
any underlying transaction or familiar with any of the parties
thereto.
(c) The
Borrower is responsible to the Bank for all obligations imposed upon the Bank
with respect to the Letter of Credit and all related drafts and
documents. The Borrower agrees that any action, inaction, or omission
by the Bank, any correspondent of the Bank, or their respective agents under or
in connection with the Letter of Credit or any related drafts or documents shall
be binding on the Borrower, shall not diminish or impair any obligations of the
Borrower hereunder, and shall not put the Bank or the Bank's correspondent or
their respective agents under any resulting liability to the Borrower in the
absence of gross negligence or willful misconduct. Without limiting
the generality of the foregoing, the Bank and each of the Bank's correspondents
and their respective agents:
(i) may rely
on any oral, telephonic, telegraphic, facsimile, electronic, written, or other
communication believed in good faith by the Bank, any correspondent of the Bank,
or any agent of either to have been authorized or given by or on behalf of the
Borrower;
(ii) shall not
be responsible for the identity or authority of any signer or the form,
accuracy, genuineness, falsification, or legal effect of any draft or other
document presented under the Letter of Credit if such draft or document appears
on its face to be in order;
(iii) shall not
be responsible for any acts or omissions by or the solvency of any beneficiary
of the Letter of Credit or any other Person having any role in any underlying
transaction relating to the Letter of Credit;
(iv) may
accept or pay, as complying with the terms and conditions of the Letter of
Credit, any draft or other document appearing on its face substantially to
comply with the terms and conditions of the Letter of Credit;
(v) may
disregard (A) any requirement stated in the Letter of Credit that any draft
or other document be presented to it at a particular hour or place, and
(B) any discrepancies in any presentation under the Letter of Credit that
do not reflect a reduction in the value of any beneficiary's performance to the
Borrower in the related underlying transaction;
(vi) may
accept as a draft any written or electronic demand or request for payment or
honor under the Letter of Credit regardless of the legal sufficiency of such
demand or request as a negotiable instrument;
(vii) shall not
be responsible for the effectiveness or suitability of the Letter of Credit for
any purpose of the Borrower or for any acts or omissions of the users of the
Letter of Credit;
(viii) shall not
be liable to the Borrower for any consequential, punitive, or special damages,
or for any damages resulting from any change in the value of any goods or other
property to which an underlying transaction relates;
(ix) may honor
a previously dishonored presentation under the Letter of Credit, whether
pursuant to court order, to settle or compromise any claim that it wrongfully
dishonored, or otherwise, and shall be entitled to reimbursement to the same
extent as if it had initially honored, plus reimbursement of any interest paid
by it;
(x) may
honor, upon receipt, any drawing that is payable upon presentation of a
statement advising negotiation or payment (even if such statement indicates that
a draft or other document is being separately delivered) and shall not be liable
for any failure of any draft or other document to arrive or to conform in any
way with the draft or other document referred to in the statement or any
underlying contract; and
(xi) may pay
any paying or negotiating bank (designated or permitted by the Letter of Credit)
claiming that it rightfully honored under the laws or practices of the place
where it is located.
(d) In the
event the Borrower or any other Person seeks to forestall or enjoin the honoring
by the Bank of a presentation under the Letter of Credit, the Bank shall have no
obligation to delay or refuse to honor the presentation until validly so ordered
by a court of competent jurisdiction, and all costs and expenses of the Bank
relating thereto (including reasonable attorneys' fees and other related
expenses) shall be borne by the Borrower notwithstanding what party
prevails in any such action.
(e) Neither
the Bank nor any correspondent of the Bank nor any of their respective agents
shall be responsible or liable to the Borrower for or as a result of any of the
circumstances described in this Section 2.04, and the Borrower assumes all
risks and responsibility for each of the circumstances addressed in this
Section 2.04.
Section
2.05 Indemnification.
(a) The
Borrower shall indemnify and hold the Bank, any parent entity of the Bank, the
Bank's and such parent's affiliates and subsidiaries, and each of their
respective agent, officers, directors, shareholders, and employees (each, an
"Indemnified Party")
harmless from and against any and all claims, liabilities, losses, damages,
taxes (excluding taxes imposed on the net income of any Indemnified Party),
fees, duties, levies, imposts deductions, charges, withholdings, penalties,
interest, judgments, costs, and expenses, including reasonable attorneys' fees
and related costs (including those fees and costs of counsel employed by the
Indemnified Parties), that may be incurred by or asserted or awarded against any
Indemnified Party, in any case arising out of or in connection or by reason of,
or in connection with the preparation for a defense of, any investigation,
litigation, or proceeding arising out of or in connection with or by reason
of:
(i) The
Letter of Credit, any draft, any underlying transaction, or this Agreement or
any other Bank Documents;
(ii) any
payment or action taken in connection with the Letter of Credit (including any
action or proceeding seeking to restrain any drawing under the Letter of Credit
or to compel or restrain the payment of any amount or the taking of any other
action under the Letter of Credit or any Bank Document or to obtain similar
relief (including by way of interpleader, declaratory judgment, attachment, or
otherwise) and regardless who is the prevailing party in any such action or
proceeding;
(iii) the
enforcement of the Bank Documents or the collection or sale of any property or
other collateral, or any act or omission in connection therewith;
(iv) any
occurrence or circumstance described in Section 2.04 hereof or any breach
by the Borrower of any representation, warranty, covenant, term or condition in
or the occurrence of an Event of Default under any Bank Document, the Loan
Agreement or the Bond Documents; and
(v) any act
or omission of any de
jure or de facto
Official Body or other cause beyond the control of the Bank, except to the
extent such claim, liability, loss, damage, tax (excluding taxes imposed on the
net income of the Bank), fees, duties, levies, imposts, deductions, charges,
withholdings, penalty, interest, judgment, cost, or expense is found by a final
judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Bank.
(b) The Bank
shall have no liability to the Borrower or any other Person as a result of any
tender of Bonds resulting from any reduction of the credit rating of the Bank or
any deterioration in the Bank's financial condition, and the Borrower hereby
indemnities and holds harmless each Indemnified Party from any and all claims,
damages, losses, liabilities, costs or expenses relating to the Borrower or the
Bonds which any Indemnified Party may incur in connection
therewith. No reduction on the credit rating of the Bank or
deterioration in the Bank's financial condition shall reduce or in any way
diminish the obligations of the Borrower to the Bank under this Agreement and
the other Bank Documents, including without limitation the Borrower's obligation
to pay Letter of Credit commitment fees to the Bank and to reimburse the Bank
for any drawing under the Letter of Credit.
(c) Nothing
in this Section 2.05 is intended to limit the Borrower's reimbursement
obligations contained in Section 2.02(a). The obligations of the
Borrower under this Section 2.05 shall survive the termination of this
Agreement.
ARTICLE
III
SECURITY
Section
3.01 Security and Subrogation
under Indenture.
The
Borrower and the Bank intend that (a) the Bank will have the security and
benefit of the Bond Documents as provided in the Indenture and (b) in the
event of one or more draws under the Letter of Credit and the application
thereof to the payment of Bonds, the Bank will be subrogated pro tanto to the rights of
the Trustee and the holders of such Bonds under the Bond Documents and in and to
all funds (except redemption funds) and security held by the Trustee under the
Indenture for the payment of the principal of and interest on such Bonds,
including without limitation all loan funds, construction funds, project funds,
escrow funds, revenue funds, operation funds, debt service funds, reserve funds
and other funds (except redemption funds) and securities and other instruments
comprising investments thereof. In addition, the Bank shall have any and all
other subrogation rights available to the Bank at law and in
equity.
Section
3.02 Pledge of Rights to Certain
Funds and Investments.
To
secure the Borrower's obligations to the Bank under this Agreement, the Borrower
hereby pledges to the Bank, and grants to the Bank a security interest in, all
of the Borrower's right, title and interest in and to all funds (except
redemption funds) and investments thereof now or hereafter held by the Trustee
under the Indenture as security for the payment of the Bonds, including without
limitation any and all loan funds, construction funds, project funds, escrow
funds, revenue funds, operations funds, debt service funds, reserve funds and
other funds and securities and other instruments comprising investments thereof
and interest and other income derived therefrom held as security for the payment
of the Bonds, such pledge, assignment and grant being under and subject only to
the rights of the Trustee under the Indenture. The Borrower covenants
and agrees that it will defend the Bank's rights and security interests created
by this Section against the claims and demands of all Persons. In
addition to its other rights and remedies under the Transaction Documents, the
Bank shall have all the rights and remedies of a secured party under the Uniform
Commercial Code or other applicable law with respect to the security interests
created by this Section. The Bank's rights under this Section are in
addition to, and not in lieu of, its rights described in
Section 3.01.
Section
3.03 Pledged
Bonds.
(a) Pledge. To
secure the Borrower's obligations to the Bank under this Agreement and the Bank
Documents, the Borrower hereby pledges and assigns to the Bank, and grants to
the Bank a security interest in, all of the Borrower's right, title and
interest, now owned or hereafter acquired, in and to any and all unremarketed
Pledged Bonds (together with all income therefrom and proceeds thereof)
purchased pursuant to the Indenture with the proceeds of a Liquidity Drawing
presented under the Letter of Credit for which neither (i) full
reimbursement has been made to the Bank nor (ii) the Trustee holds
sufficient funds which, pursuant to the Indenture, the Trustee is required to
apply on behalf of the Borrower to reimburse the Bank in full for such Liquidity
Drawing on the date such Liquidity Drawing is paid by the Bank. Such
unremarketed Pledged Bonds shall be pledged to the Bank, registered in its name
as pledgee of the Borrower and delivered to and held by the Trustee as agent for
the Bank under this Section 3.03 or, at the option of the Bank by written
notice to the Borrower and the Trustee, the Pledged Bonds specified in such
notice shall be delivered to and held by the Bank; provided that, if the
Pledged Bonds are held in uncertificated form pursuant to an agreement with the
Depository Trust Company, or a successor securities depository, then such pledge
to the Bank shall be recorded in the registration books maintained by the
Trustee and in the records of ownership maintained by the securities depository
and any participant through which such Pledged Bonds are held.
(b) Pledged
Bond Payments. Any principal of and
interest on Pledged Bonds which becomes due and payable (including any due-bills
received upon purchase thereof pursuant to the record date provisions of the
Indenture or the Bonds) shall be paid to the Bank. All sums of money
so paid to the Bank in respect of Pledged Bonds shall be credited against the
obligation of the Borrower to reimburse the Bank, with interest, under
Section 2.02(a) for the amount drawn under a Liquidity Drawing to fund the
purchase of such Pledged Bonds pursuant to the Indenture.
(c) Release
of Pledged Bonds. If the Borrower pays or causes to be paid in
full its obligation under Section 2.02(a) for the reimbursement of the
amount (or allocable portion thereof) drawn with a Liquidity Drawing to fund the
purchase of Pledged Bonds pursuant to Article 2B of the Indenture (or if the
Trustee has received immediately available funds which, pursuant to
Section 2B.1(g) or 2B.2(f) of the Indenture, the Trustee is required to pay
over promptly to the Bank in an amount sufficient to pay the Borrower's
reimbursement obligation under Section 2.02(a) with respect to the amount
drawn with such Liquidity Drawing to fund the purchase of such Pledged Bonds),
and provided no Default or Event of Default has occurred and is continuing, the
Bank will release from the pledge of this Agreement and will deliver, or cause
its agent to deliver, such Pledged Bonds (if held in certificated form) to such
Person or Persons as the Trustee or the Borrower may direct. An
amount equal to the principal of, plus accrued interest on, such Pledged Bonds
shall be presumed (absent notice to the contrary) to be an "amount sufficient" for
purposes of this Section 3.03(c) and, upon receipt of such amount by the
Trustee for payment to the Bank as aforesaid, the Trustee shall be authorized,
upon receipt of the Bank's written confirmation of the reinstatement of the
Letter of Credit relating to the Pledged Bonds, to deliver such Pledged Bonds as
aforesaid free from the pledge of this Agreement.
(d) No
Liability of Bank. The Bank shall not be liable for failure to
collect or realize upon the obligations secured by the Pledged Bonds or any
collateral security or guarantee therefor, or any part thereof, or for any delay
in so doing, and the Bank shall not be under any obligation to take any action
whatsoever with regard thereto.
(e) Representations;
Rights and Remedies. The Borrower represents and warrants to
the Bank that the pledge, assignment and delivery of Pledged Bonds pursuant to
this Section 3.03 will create a valid first lien on and a first perfected
security interest in, all right, title and interest of the Borrower in and to
the Pledged Bonds, and the proceeds thereof. The Borrower covenants and agrees
that it will defend the Bank's right, title and security interest in and to the
Pledged Bonds and the proceeds thereof against the claims and demands of all
persons. In addition to its other rights and remedies under the
Transaction Documents, the Bank shall have the rights and remedies of a secured
party under the Uniform Commercial Code or other applicable law with respect to
the security interests created by this Section.
ARTICLE
IV
CONDITIONS
PRECEDENT
The
obligation of the Bank to issue the Letter of Credit and enter into the Bank
Documents is subject to the receipt of or satisfaction of each of the following
documents, matters and conditions, all of which must be satisfactory to the Bank
in form and substance:
Section
4.01 Closing
Fee.
On
the date of execution and delivery hereof, the Borrower shall pay to the Bank
the Letter of Credit closing fee due pursuant to
Section 2.02(c).
Section
4.02 Documentation.
The
Bank shall have received each of the following, in form and substance
satisfactory to the Bank:
(a) Bank
Documents. Fully-executed copies of each of the Bank
Documents, and all schedules thereto prepared by the
Borrower;
(b) Bond
Documents. True and correct copies of the executed Bond
Documents and all documentation delivered in connection therewith;
(c) Formation
and Authorization Documents. For the Borrower
the following formation and authorization documents:
(i) Corporate
Resolutions. A copy, duly certified as true, correct, complete
and in effect by its secretary or assistant secretary as of the date hereof, of
resolutions of its board of directors authorizing the transactions described in
the Transaction Documents and the execution and delivery of and performance
under the Transaction Documents and all other documents required to accomplish
and implement the foregoing;
(ii) Articles of
Incorporation. A copy of its articles and/or certificate of
Incorporation and all amendments, duly certified as of a recent date by the
Secretary of State of the state of its incorporation;
(iii) Good Standing
Certificates. A good standing certificate issued as of a
recent date by the Secretary of State of the state of its
incorporation;
(iv) Bylaws. A
copy of its bylaws and all amendments, certified as true, complete, correct and
in effect by its secretary or assistant secretary; and
(v) Incumbency
Certificate. An incumbency certificate executed by its
secretary or assistant secretary dated as of the date hereof certifying the
names and offices held by the officers of such corporation who are authorized on
behalf of such corporation to execute the Bank Documents to be executed by it,
together with true signatures of such officers.
(d) Closing
Certificate. A certificate of
an Authorized Person dated as of the date of execution and delivery hereof
stating that (i) the representations and warranties contained in
Article V and in the other Bank Documents are true and correct,
(ii) no Default or Event of Default has occurred and is continuing, and
(iii) no Material Adverse Change has occurred and is
continuing;
(e) Lien
Searches. Results of
Uniform Commercial Code, judgment and lien searches for the Borrower, with
results satisfactory to the Bank;
(f) Opinion
of Borrower's Counsel. An opinion of
▇▇▇▇▇▇ ▇▇▇▇▇, counsel to the Borrower, which opinion may be issued, where
indicated, in reasonable reliance upon certifications, opinions and other
documentation derived from Official Bodies and others having particular access
to materials and information necessary to reach the conclusions expressed in
such opinion, covering the matters described in Exhibit
B hereto;
(g) Other
Opinions. Opinions of ▇▇▇▇
▇▇▇▇▇ LLP, bond counsel, and of the Office of Chief Counsel of the Pennsylvania
Department of Community and Economic Development, each addressed to the Bank,
covering such matters as to the Issuer and the Bond Documents as the Bank may
reasonably request;
(h) Issuer's
Certificate. A certificate or
certificates of the officers of the Issuer covering such matters as to the
Issuer and the Bond Documents as the Bank may reasonably request;
(i) Financial
Statements. Audited Financial Statements of
the Borrower for the Fiscal Year ended December 31, 2007.
(j) Consents. All
consents of Official Bodies which are required in connection with the
transactions contemplated by the Transaction Documents;
(k) Other
Conditions. Such other documents, certificates, approvals,
assurances and opinions as are listed in the closing memorandum filed with the
Trustee in connection with the issuance of the Bonds, or as listed on a closing
checklist prepared by the Bank's counsel, or as the Bank or its counsel may
reasonably request; and
(l) Payment
of Fees. Payment of all fees due to the Bank on the date
hereof, if any, and payment of all fees and out-of-pocket costs incurred by the
Bank's counsel in connection herewith.
Section
4.03 Issuance
of Bonds.
On
the date of execution and delivery hereof, all conditions precedent to the
issuance and original sale of the Bonds shall have been satisfied and the Bonds
shall have been duly issued and delivered. The Bonds shall provide
for amortization as set forth in the Indenture.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
To induce
the Bank to enter into this Agreement and issue the Letter of Credit, the
Borrower hereby makes the following representations and warranties to the Bank,
all of which shall be continuing in nature and shall survive the execution and
delivery of this Agreement and the issuance of the Letter of
Credit:
Section
5.01 Existence.
The
Borrower is a corporation, duly organized, validly existing and in good standing
under the laws of the State. The Borrower has all necessary permits,
licenses, certifications and qualifications to conduct its business as it is
presently being conducted, and has complied in all material respects with all
applicable requirements of all Official Bodies, to operate its facilities as
they are presently being operated.
Section
5.02 Power, Authorization and No
Conflicts.
The
execution, delivery and performance by the Borrower of the Transaction Documents
are within the Borrower's powers, have been duly authorized by all necessary
corporate action of the Borrower and do not contravene the Articles of
Incorporation or bylaws of the Borrower or any Law or judgment
applicable to the Borrower or any agreement, contractual or other restriction
binding on or affecting the Borrower or any of its properties.
Section
5.03 Governmental and Other
Approvals.
No
authorization, approval or other action by, and no notice to or filing with, any
Official Body is required for the due execution, delivery and performance by the
Borrower of the Transaction Documents, except such as have been
obtained.
Section
5.04 Validity, Binding Effect and
Enforceability.
The
Transaction Documents are the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their terms,
subject to the application by a court of general principles of equity and to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally or limiting the right of
specific performance.
Section
5.05 No
Litigation.
There
is no pending action or proceeding before any Official Body against or involving
the Borrower and, to the best knowledge of the Borrower, there is no threatened
action or proceeding affecting the Borrower before any Official Body which has
resulted in, or may reasonably be expected to result in, a Material Adverse
Change.
Section
5.06 No
Violations.
The
Borrower is not in any material way in breach of or in default under
(a) any applicable Law of any Official Body or any applicable judgment or
decree or (b) any loan agreement, indenture, lease, sublease, bond, note,
resolution, agreement or other agreement or instrument to which it is a party or
otherwise bound or subject, and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would constitute an
event of default under any such instrument except for violations, if any, which
the Borrower has disclosed to the Bank in writing, is proceeding in good faith
to remove or correct and which have not and are not reasonably expected to
result in a Material Adverse Change. The Borrower has no knowledge of
any violation, nor is there any notice or other record of any violation, of any
zoning, subdivision, environmental, building or other statute, ordinance,
regulation, restrictive covenant or other restriction applicable to the Premises
except for violations, if any, which the Borrower has disclosed to the Bank in
writing, is proceeding in good faith to remove or correct and which have not and
are not reasonably expected to result in a Material Adverse Change.
Section
5.07 Reserved.
Section
5.08 No
Liens.
There
exist no Liens against the Premises (including statutory and other Liens of
mechanics, workmen, contractors, subcontractors, suppliers, taxing authorities
and others) or any personal property of the Borrower, except for Permitted
Liens; and the Borrower has not made a contract or arrangement of any kind, the
performance of which by the other party thereto could give rise to a Lien on the
Premises by operation of law or otherwise, except for Permitted
Liens.
Section
5.09 Reserved.
Section
5.10 Financial
Condition; No Material Adverse Change.
(a) Annual
Financial Statements. The balance sheet of the Borrower as of
December 31, 2007 and the related statements of income and changes in
financial position of the Borrower for the Fiscal Year then ended (i) have
been prepared in accordance with GAAP, (ii) have been examined by ▇▇▇▇▇
▇▇▇▇▇▇ Company, LLP, Certified Public Accountants, (iii) are complete and
correct and present fairly the financial condition and results of operations of
the Borrower as of and for the period covered thereby, and (iv) accurately
reflect all liabilities, including contingent liabilities, of the Borrower as of
the date thereof.
(b) Interim
Financial Statements. The balance sheet of the Borrower as of
March 31, 2008 and the related statement of income for the three (3) months
ended March 31, 2008 (i) have been prepared in accordance with GAAP,
(ii) are complete and correct and present fairly the financial condition
and results of operations of the Borrower as of March 31, 2008 and for the
period covered thereby, and (iii) accurately reflect all liabilities,
including contingent liabilities, of the Borrower as of the date
thereof.
(c) Material
Adverse Changes. Since December 31, 2007, the Borrower has conducted
its operations in the ordinary course of business, and no Material Adverse
Change has occurred.
Section
5.11 Plans and
Benefit Arrangements.
(a) The
Borrower and each other member of the ERISA Group are in compliance in all
material respects with any applicable provisions of ERISA with respect to all
Benefit Arrangements, Plans and Multiemployer Plans. There has been
no Prohibited Transaction with respect to any Benefit Arrangement or any Plan
or, to the best knowledge of the Borrower, with respect to any Multiemployer
Plan or Multiple Employer Plan, which could result in any material liability of
the Borrower or any other member of the ERISA Group. The Borrower and
all other members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to
each Plan and Multiemployer Plan, the Borrower and each other member of the
ERISA Group (i) have fulfilled in all material respects their obligations
under the minimum funding standards of ERISA, (ii) have not incurred any
liability to the PBGC, and (iii) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of
ERISA.
(b) To the
best of the Borrower's knowledge, each Multiemployer Plan and Multiple Employer
Plan is able to pay benefits thereunder when due.
(c) Neither
the Borrower nor any other member of the ERISA Group has instituted or intends
to institute proceedings to terminate any Plan.
(d) No event
requiring notice to the PBGC under Section 302(f)(4)(A) of ERISA has
occurred or is reasonably expected to occur with respect to any Plan, and no
amendment with respect to which security is required under Section 307 of
ERISA has been made or is reasonably expected to be made to any
Plan.
(e) The
aggregate actuarial present value of all accumulated benefit obligations
(whether or not vested) under each Plan, as disclosed in, and as of the date of,
the most recent actuarial report for such Plan, does not exceed the aggregate
fair market value of the assets of such Plan.
(f) Neither
the Borrower nor any other member of the ERISA Group has incurred or reasonably
expects to incur any material withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower
nor any other member of the ERISA Group has been notified by any Multiemployer
Plan or Multiple Employer Plan that such Multiemployer Plan or Multiple Employer
Plan has been terminated within the meaning of Title IV of ERISA and, to the
best knowledge of the Borrower, no Multiemployer Plan or Multiple Employer Plan
is reasonably expected to be reorganized or terminated, within the meaning of
Title IV of ERISA.
(g) To the
extent that any Benefit Arrangement is insured, the Borrower and all other
members of the ERISA Group have paid when due all premiums required to be paid
for all periods through the Closing Date. To the extent that any
Benefit Arrangement is funded other than with insurance, the Borrower and all
other members of the ERISA Group have made when due all contributions required
to be paid for all periods through the Closing Date.
(h) All
Plans, Benefit Arrangements and Multiemployer Plans have been administered in
accordance with their terms and applicable Law.
Section
5.12 Environmental
Compliance.
(a) The
Borrower has not received any Environmental Complaint from any Official Body or
private Person alleging that the Borrower or any prior or subsequent owner of
any of the Borrower's Facilities is a potentially responsible party under the
Comprehensive Environmental Response, Cleanup and Liability Act, 42 U.S.C.
§ 9601 et seq., and the Borrower has no reason to believe that such an
Environmental Complaint might be received. There are no pending or,
to the Borrower's knowledge, threatened Environmental Complaints relating to any
prior or subsequent owner of the Premises pertaining to, or arising out of, any
Environmental Conditions.
(b) There are
no circumstances at, on or under the Premises that constitute a breach of or
non-compliance with any of the Environmental Laws, and there are no past or
present Environmental Conditions at, on or under any of the Premises or, to the
Borrower's knowledge, at, on or under adjacent property, that prevent compliance
with the Environmental Laws at the Premises.
(c) Neither
the Premises nor any structures, improvements, equipment, fixtures, activities
or facilities thereon or thereunder contain or use Regulated Substances except
in compliance with Environmental Laws. There are no processes,
facilities, operations, equipment or other activities at, on or under the
Premises, or, to the Borrower's knowledge, at, on or under adjacent property,
that currently result in the release or threatened release of Regulated
Substances onto any of the Premises, except to the extent that such releases or
threatened releases are not a breach of or otherwise not a violation of the
Environmental Laws.
(d) There are
no aboveground storage tanks, underground storage tanks or underground piping
associated with such tanks, used for the management of Regulated Substances at,
on or under the Premises that (i) do not have, to the extent required by
Environmental Laws, a full operational secondary containment system in place,
and (ii) are not otherwise in compliance with all Environmental
Laws. There are no abandoned underground storage tanks or underground
piping associated with such tanks, previously used for the management of
Regulated Substances at, on or under any of the Premises that have not either
been closed in place in accordance with Environmental Laws or removed in
compliance with all applicable Environmental Laws and no contamination
associated with the use of such tanks exists on any of the Premises that is not
in compliance with Environmental Laws.
(e) The
Borrower has all material permits, licenses, authorizations, plans and approvals
necessary under the Environmental Laws for the conduct of its business as
presently conducted. The Borrower has submitted all material notices,
reports and other filings required by the Environmental Laws to be submitted to
an Official Body which pertain to past and current operations on the
Premises.
(f) All past
and present on-site generation, storage, processing, treatment, recycling,
reclamation, disposal or other use or management of Regulated Substances at, on,
or under any of the Premises and all off-site transportation, storage,
processing, treatment, recycling, reclamation, disposal or other use or
management of Regulated Substances have been done in accordance with the
Environmental Laws.
Section
5.13 Disclosure.
None
of the Transaction Documents contains any untrue statement of a material fact
respecting the Borrower or omits to state a material fact respecting the
Borrower necessary in order to make the statements contained herein and therein,
in the light of the circumstances in which they were made, not
misleading. There is no fact known to the Borrower which has resulted
in or which may reasonably be expected to result in a Material Adverse Change
which has not been set forth in the Bank Documents or in the other documents,
certificates and statements furnished to the Bank by or on behalf of the
Borrower prior to the date of execution and delivery of this Agreement in
connection with the transactions contemplated hereby.
Section
5.14 Anti-Terrorism
Laws.
(a) General. Neither the
Borrower nor any subsidiary of the Borrower is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
(b) Executive
Order No. 13224. Neither the Borrower nor any subsidiary of
the Borrower, or their respective agents acting or benefiting in any capacity in
connection with the Letter of Credit or other transactions hereunder, is any of
the following (each a "Blocked
Person"):
(i) a Person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order No. 13224;
(ii) a Person
owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, the Executive
Order No. 13224;
(iii) a Person
or entity with which the Bank is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;
(iv) a Person
or entity that commits, threatens or conspires to commit or supports "terrorism"
as defined in the Executive Order No. 13224;
(v) a Person
or entity that is named as a "specially designated national" on the most current
list published by the United States Treasury Department Office of Foreign Asset
Control at its official website or any replacement website or other replacement
official publication of such list, or
(vi) a person
or entity who is affiliated or associated with a person or entity listed
above.
Neither
the Borrower nor, to the knowledge of the Borrower, any of its agents acting in
any capacity in connection with the Letter of Credit or other transactions
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to the Executive
Order No. 13224.
Section
5.15 Incorporation of
Representations and Warranties by Reference.
The
Borrower hereby makes to the Bank the same representations and warranties as are
made by the Borrower and set forth in the Bank Documents and Bond Documents,
which representations and warranties, as well as the related defined terms
contained therein, are hereby incorporated by reference with the same effect as
if each and every such representation and warranty and defined term were set
forth herein in its entirety. No amendment to such representations
and warranties or defined terms made pursuant thereto shall be effective to
amend such representations and warranties and defined terms as incorporated by
reference herein without the consent of the Bank.
Section
5.16 Use of
Proceeds; Margin Stock; Section 20 Subsidiaries.
(a) General. The
Borrower intends to use the proceeds from the sale of the Bonds in accordance
with the terms of the Bond Documents.
(b) Margin
Stock. The Borrower does not engage or intend to engage
principally, or as one of its important activities, in the business of extending
credit for the purpose, immediately, incidentally or ultimately, of purchasing
or carrying margin stock (within the meaning of Regulation U). No
part of the proceeds of any Loan has been or will be used, immediately,
incidentally or ultimately, to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
to refund indebtedness originally incurred for such purpose, or for any purpose
which entails a violation of or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve
System. The Borrower does not hold or intend to hold margin stock in
such amounts that more than twenty-five percent (25%) of the reasonable value of
the assets of the Borrower are or will be represented by margin
stock.
(c) Section 20
Subsidiaries. The Borrower does not intend to use and shall
not use any portion of the proceeds of the Bonds, directly or indirectly
(i) knowingly to purchase any Ineligible Securities from a Section 20
Subsidiary during any period in which such Section 20 Subsidiary makes a
market in such Ineligible Securities, (ii) knowingly to purchase during the
underwriting or placement period Ineligible Securities being underwritten or
privately placed by a Section 20 Subsidiary, or (iii) to make payments
of principal or interest on Ineligible Securities underwritten or privately
placed by a Section 20 Subsidiary and issued by or for the benefit of the
Borrower or any Affiliate of the Borrower.
Section
5.17 Material
Adverse Change.
Since
the date of the most recent Financial Statements delivered to the Bank, there
has been no Material Adverse Change.
Section
5.18 Condition
of and Title to Assets; Status of Leases.
The
Borrower has good title to its properties, assets and leases. As of
the date hereof none of the assets of the Borrower are subject to any Lien
except for existing Permitted Liens. All of the assets and properties
of the Borrower that are necessary for the operation of its businesses are in
good working condition, ordinary wear and tear excepted, and are able to serve
the functions for which they are currently being used. The Borrower
is not in default under, and to the best of its knowledge no other party thereto
is in default under, any material lease to which the Borrower is a
party.
Section
5.19 Insurance.
The
Borrower currently maintains insurance which meets or exceeds the requirements
of Section 6.03 and the applicable insurance requirements set forth in the
other Bank Documents, and such insurance is provided by reputable and
financially sound insurers and is of such types and at least in such amounts as
are customarily carried, and insures against such risks as are customarily
insured against, by similar businesses similarly situated and owning, leasing
and operating similar properties to those owned, leased and operated by the
Borrower. All of such insurance policies are valid and in full force
and effect. No notice has been given or claim made, and, to the
Borrower's knowledge, no grounds exist to cancel or avoid any of such policies
or to reduce the coverage provided thereby.
Section
5.20 Taxes.
All
federal, state, local and other tax returns required to have been filed by the
Borrower have been filed, and payment or adequate provision has been made for
the payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. There are no agreements or
waivers extending the statutory period of limitations applicable to any federal
income tax return of the Borrower for any period.
Section
5.21 No Event
of Default; Compliance with Instruments.
No
Default or Event of Default has occurred and is continuing, or will occur or
exist after giving effect to the extensions of credit to be made pursuant to any
of the Transaction Documents. The Borrower is not in violation of
(i) any term of its certificate of incorporation, bylaws, certificate of
limited partnership, partnership agreement, certificate of formation, limited
liability company agreement or other organizational documents or (ii) any
agreement or instrument to which it is a party or by which it or any of its
properties may be subject or bound where such violation has resulted in or may
be reasonably likely to result in a Material Adverse Change.
Section
5.22 Patents, Trademarks,
Copyrights, Licenses, Etc.
The
Borrower owns or possesses all the material patents, trademarks, service marks,
trade names, copyrights, licenses, registrations, franchises, permits and rights
necessary to own and operate its properties and to carry on its business as
presently conducted and planned to be conducted, without known possible, alleged
or actual conflict with the rights of others.
ARTICLE
VI
GENERAL
COVENANTS
So long
as any amount is available under the Letter of Credit, the Liquidity Period has
not terminated or any amount is due and owing to the Bank hereunder, the
Borrower covenants that, except to the extent the Bank shall otherwise consent
in writing, each of the following covenants shall be performed and complied with
by the Borrower:
Section
6.01 Maintenance
of Existence.
The
Borrower will maintain its existence, rights and privileges and its
qualification to do business in the State.
Section
6.02 Compliance with Laws,
Etc.
The
Borrower will comply in all material respects with all applicable Laws of any
Official Body, except for any such Laws which the Borrower is contesting in good
faith by appropriate proceedings and the noncompliance with which during such
contest would not result in a Material Adverse Change if the result of such
contest were adverse to the Borrower.
Section
6.03 Maintenance
of Insurance.
The
Borrower will maintain at all times adequate insurance to the satisfaction of
the Bank with insurers acceptable to the Bank against such risks of loss as are
customarily insured against and in amounts customarily carried by persons
owning, leasing or operating similar properties, including, but not limited to,
fire and theft and extended coverage insurance in an amount at least equal to
the total full insurable value of the Borrower's insurable property, provided
that the amount of such insurance shall at all times be sufficient to prevent
the Borrower from becoming a co- insurer under the terms of any insurance
policy. Each such insurance policy covering properties, if any,
pledged as collateral for the Borrower's obligations hereunder shall have a long
form lender's loss payable endorsement in favor of the Bank, providing for at
least thirty (30) days written notice to the Bank prior to cancellation and, in
this regard, the Borrower shall cause a certificate of insurance to be delivered
to the Bank prior to the issuance of the Letter of Credit and no later than
thirty (30) days prior to the expiration of any such insurance
coverage. The Borrower will also keep itself adequately insured at
all times against liability on account of injury to persons or property and
comply with the insurance provisions of all applicable workers' compensation
laws and will effect all such insurance under valid and enforceable policies
issued by insurers of recognized responsibility.
Section
6.04 Compliance
with Bond Documents and Other Contracts.
The
Borrower will comply with all of its covenants and agreements under the Bond
Documents, as the same may hereafter be amended or supplemented from time to
time, and comply with, or cause to be complied with, all material requirements
and conditions of all material contracts and insurance policies which relate to
the Borrower.
Section
6.05 Visitation
Rights.
The
Borrower will, at any reasonable time and from time to time, permit the Bank or
its agents or representatives to examine and make copies of an abstracts from
the records and books of account of, and visit the properties of, the Borrower,
and to discuss the affairs, finances and accounts of the Borrower with the
officers and accountants of the Borrower.
Section
6.06 Keeping
of Books.
The
Borrower will keep proper books of record and account, in which full and correct
entries shall be made of financial transactions and the assets and operations of
the Borrower in accordance with GAAP, and have a complete audit of such books of
record and account made by certified public accountants acceptable to the Bank
for each Fiscal Year.
Section
6.07 Maintenance
of Properties.
The
Borrower will maintain and preserve all of its properties in good working order
and condition, ordinary wear and tear excepted; not permit, commit or suffer any
waste of any of its properties; not use or permit the use of any of its
properties for any unlawful purpose or permit any nuisance to exist
thereon.
Section
6.08 Reporting
Requirements.
The
Borrower will furnish or cause to be furnished to the Bank the following in form
satisfactory to the Bank:
(a) Quarterly
Financial Statements. As soon as available and in any event within
forty-five (45) days after the end of the first three quarters of each Fiscal
Year of the Borrower:
(i) the
Borrower's Financial Statements for the quarter, together with comparative
figures for the corresponding period of the prior year, certified, subject to
ordinary and usual year-end adjustment, by the chief financial officer of the
Borrower;
(ii) a
computation by a financial officer of the Borrower as of the end of such fiscal
quarter and for the twelve (12) month period then ended of the Borrower's
compliance with the financial covenants in Section 6.13, certified and by
such officer to be accurate and complete and made in accordance with this
Agreement; and
(iii) a
certificate signed by an officer of the Borrower stating that (A) during
such fiscal quarter the Borrower has delivered and performed all of its
covenants and agreements set forth in the Transaction Documents, except as
disclosed in such certificate, and (B) no Default or Event of Default has
occurred and is continuing, except as disclosed in such
certificate.
(b) Annual
Financial Statements. As soon as available and in any event within one
hundred twenty (120) days after the close of each Fiscal Year of the
Borrower:
(i) the
Borrower's Financial Statements and tax returns for the year, together with
statements of changes in consolidated financial position certified without
qualification as to scope, by a certified public accountant acceptable to the
Bank;
(ii) computations
by a financial officer of the Borrower as of the end of such Fiscal
Year and for such Fiscal Year of the Borrower's compliance with the terms of
Section 6.13, certified by such officer to be accurate and complete and
made in accordance with this Agreement; and.
(iii) a
certificate signed by an officer of the Borrower stating that (A) during
such Fiscal Year the Borrower has observed and performed all of its covenants
and agreements set forth in this Agreement and the Bond Documents, except as
disclosed in such certificate, and (B) neither any Event of Default nor any
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default has occurred or is continuing, except as
disclosed in such certificate.
(c) Management
Letters. Upon receipt thereof by the Borrower, copies of any letter or
report with respect to the management, operations or properties of the Borrower
submitted to the Borrower by its accountants in connection with any annual or
interim audit of the Borrower's accounts, and a copy of any written response of
the Borrower to any such letter or report;
(d) Notice of
Litigation and Proceedings. As soon as possible and in any event within
thirty (30) days after receipt of notice thereof, notice of any pending or
threatened litigation, investigation or other proceeding involving the Borrower
(i) which could result in a Material Adverse Change or (ii) wherein
the potential damages, in the reasonable judgment of the Borrower based upon the
advice of counsel experienced in such matters, are not fully covered by the
insurance policies maintained by the Borrower (except for the deductible amounts
applicable to such policies);
(e) Notice of
Material Adverse Change. As soon as possible, notice of any Material
Adverse Change;
(f) Notice of
Default. As soon as possible and in any event within fifteen (15) days
after the occurrence of any Default or Event of Default, a statement of an
officer of the Borrower setting forth the details of such Default or Event of
Default and the action which the Borrower has or is taking or proposes to take
with respect thereto; and
(g) Other
Information. Such other information respecting the operations and
properties, financial or otherwise, of the Borrower as the Bank may from time to
time reasonably request.
Section
6.09 Consent
Under Bond Documents.
The
Borrower will obtain the consent of the Bank whenever the consent of the Trustee
is required to be obtained under the Bond Documents.
Section
6.10 Reserved.
Section
6.11 Payment
of Indebtedness.
The
Borrower will make full and timely payment of the principal of and interest on
all Indebtedness of the Borrower, whether now existing or hereafter arising, and
comply in all material respects with all covenants and agreements set forth in
agreements evidencing Indebtedness of the Borrower.
Section
6.12 Environmental
Covenants.
The
Borrower will cause all activities at the Premises during the term of this
Agreement to be conducted in compliance with all Environmental
Laws. The Borrower will cause permits, licenses or approvals to be
obtained and will cause all notifications to be made, as required by
Environmental Laws, and will, at all times, cause compliance with the terms and
conditions of any such approvals or notifications. During the term of
this Agreement, if requested by the Bank, the Borrower will provide to the Bank
copies of (i) applications or other materials submitted to any Official
Body in compliance with Environmental Laws, (ii) any notifications
submitted to any Person pursuant to Environmental Laws, (iii) any permit,
license, approval, amendment or modification thereto granted pursuant to
Environmental Laws, (iv) any record or manifest required to be maintained
pursuant to Environmental Laws, and (v) any correspondence, notice of
violation, summons, order, complaint or other document received by the Borrower,
its lessees, sublessees or assigns, pertaining to compliance with any
Environmental Laws.
Section
6.13 Financial
Covenants.
At
all times during the term hereof, the Borrower shall comply with the following
financial covenants:
(a) Minimum
Equity to Capitalization Ratio. The
Borrower will maintain a ratio of shareholders' equity in Borrower divided by
the sum of shareholders' equity in Borrower plus Funded Debt, all as determined
and consolidated in accordance with GAAP, of not less than 38%, as of the end of
each fiscal quarter for the quarter then ending.
(b) Minimum
Interest Coverage Ratio.
The Borrower will maintain a ratio of the sum of Net Income plus interest
expense plus income tax expense divided by interest expense, all as determined
and consolidated in accordance with GAAP, of not less than 1.80 to 1.00, as of
the end of each fiscal quarter for the four (4) quarters then
ending.
For
purposes of this Section 6.13, the following terms shall have the following
meanings:
(i) "Net Income" means, with
respect to a specified twelve (12) month period, all operating and nonoperating
income, less all operating and non-operating expenses, including depreciation,
amortization and interest expenses, as determined and consolidated in accordance
with GAAP. In calculating Net Income, there shall be excluded
extraordinary gains and losses, any revenues and expenses from disposition of
capital assets and insurance policies (other than business interruption
insurance proceeds) and condemnation awards).
(ii) "Funded Debt" shall mean all
obligations for the payment of money, incurred, assumed or guaranteed by the
Borrower, whether due and payable in all events, or upon the performance of
work, the possession of property as lessee or the rendering of services by
others, including the Bonds.
Section
6.14 Payments
of Taxes and Other Charges.
The
Borrower will pay or cause to be paid all taxes, assessments and other
governmental charges to which the Borrower or its properties are or shall be
subject before such charges become delinquent, except that no such charge need
be paid for so long as its validity or amount shall be contested in good faith
by appropriate proceedings duly prosecuted and the Borrower shall have set up on
its books such reserve with respect thereto as shall be dictated by sound
accounting practices.
Section
6.15 Reserved.
Section
6.16 Reserved.
Section
6.17 ERISA.
The
Borrower shall not:
(a) fail to
satisfy the minimum funding requirements of ERISA and the Internal Revenue Code
with respect to any Plan;
(b) request a
minimum funding waiver from the Internal Revenue Service with respect to any
Plan;
(c) engage in
a Prohibited Transaction with any Plan, Benefit Arrangement or Multiemployer
Plan which, alone or in conjunction with any other circumstances or set of
circumstances resulting in liability under ERISA, would constitute a Material
Adverse Change;
(d) permit
the aggregate actuarial present value of all accumulated benefit obligations
(whether or not vested) under each Plan, as disclosed in the most recent
actuarial report completed with respect to such Plan, to exceed, as of any
actuarial valuation date, the fair market value of the assets of such
Plan;
(e) fail to
make when due any contribution to any Multiemployer Plan that the Borrower or
any member of the ERISA Group may be required to make under any agreement
relating to such Multiemployer Plan, or any Law pertaining thereto;
(f) withdraw
(completely or partially) from any Multiemployer Plan or withdraw (or be deemed
under Section 4062(e) of ERISA to withdraw) from any Multiple Employer
Plan, where any such withdrawal is likely to result in a material liability of
the Borrower or any member of the ERISA Group;
(g) terminate,
or institute proceedings to terminate, any Plan, where such termination is
likely to result in a material liability to the Borrower or any member of the
ERISA Group;
(h) make any
amendment to any Plan with respect to which security is required under
Section 307 of ERISA; or
(i) fail to
give any and all notices and make all disclosures and governmental filings
required under ERISA or the Internal Revenue Code, where such failure is likely
to result in a material adverse change.
Section
6.18 Amendments
to Bond Documents.
The
Borrower will not consent to or enter into any amendment of, supplement to or
replacement of the Bond Documents without the consent of the Bank.
Section
6.19 Liens and
Encumbrances.
The
Borrower will not create, assume, incur or suffer to exist any Liens with
respect to any of its property or assets, whether real, personal, mixed, or
tangible or intangible, and whether now owned or hereafter acquired, or upon any
income or profits therefrom, except Permitted Liens, provided the foregoing
restriction shall not apply to or prevent (a) the pledges or deposits
described in Section 6.10(a)(1), (3) and (4) of the Loan Agreement or
(b) any judgment in the course of appeal or otherwise in contest or stay of
legal proceedings, which judgment or stay is secured by sufficient bond or
security.
Section
6.20 Change in
Business.
The
Borrower will not make or permit any material change in the nature of its
business as carried on as of the date hereof.
Section
6.21 Limitation
on Optional Calls.
The
Borrower will not exercise its rights under the Bond Documents to direct the
Issuer to call the Bonds for any optional redemption thereof, unless the
Borrower first demonstrates to the reasonable satisfaction of the Bank that at
the time of such redemption the Bank will be fully reimbursed for all drawings
on the Letter of Credit in connection with such redemption.
Section
6.22 Reserved.
Section
6.23 Anti-Terrorism
Laws.
The
Borrower and its Affiliates and agents shall not (i) conduct any business
or engage in any transaction or dealing with any Blocked Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order No. 13224; or (iii) engage in or conspire to engage
in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism
Law. The Borrower shall deliver to the Bank any certification or
other reasonable evidence requested from time to time by the Bank in its sole
discretion, confirming the Borrower's compliance with this
Section 6.23.
ARTICLE
VII
RESERVED
ARTICLE
VIII
DEFAULTS
AND REMEDIES
Section
8.01 Defaults.
Each
of the following shall constitute an event of default hereunder ("Event of
Default"):
(a) Certain
Payments Under Agreement. Failure by the Borrower to make or
cause to be made when due any payment under this Agreement as
(i) reimbursement for a Drawing, (ii) a Letter of Credit commitment
fee, or (iii) interest on any such Drawing or commitment fee;
(b) Other
Payments Under Bank Documents. Failure by the Borrower to make
any other payment within ten (10) days of the date when it is due under this
Agreement or any other Bank Document;
(c) Certain
Covenants. Failure by the Borrower to perform or comply with
its covenants contained in Section 6.05 (Visitation Rights) or
Section 6.13 (Financial Covenants);
(d) Other
Covenants. Failure by the Borrower to perform or comply with
any of the other terms or conditions contained in any Bank Document and
continuance of such failure for thirty (30) days after the earlier of
written notice from the Bank to the Borrower, or such longer period to which
Bank may agree in the case of a default not curable by the exercise of due
diligence within such thirty (30) day period, or the Borrower has knowledge that
such failure has occurred, provided that the
Borrower shall have commenced to cure such default within such thirty (30)
day period and shall complete such cure as quickly as reasonably possible with
the exercise of due diligence;
(e) Representations
and Warranties. Any of the representations or warranties of the Borrower
set forth in any Bank Document or any other document furnished to the Bank
pursuant to the terms hereof is false or misleading in any material
respect;
(f) Invalidity,
Etc. Any material provision of any Bank Document shall at any time for
any reason cease to be valid and binding on the Borrower or shall be declared to
be null and void, or shall be violative of any applicable Law relating to a
maximum amount of interest permitted to be contracted for, charged or received,
or the validity or enforceability thereof shall be contested by the Borrower or
any Official Body, or the Borrower shall deny that it has any or further
liability or obligation under any Bank Document;
(g) Events of
Default Under Other Transaction Documents. The occurrence of an Event of
Default as defined in the Indenture or the Loan Agreement;
(h) Bankruptcy,
Insolvency, Etc. The Borrower shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or the like of the Borrower or of
property of the Borrower, or (ii) admit in writing the inability of the
Borrower, to pay its debts generally as they become due, or (iii) make a
general assignment for the benefit of creditors, or (iv) be adjudicated a
bankrupt or insolvent, or (v) commence a voluntary case under the United
States Bankruptcy Code or file a voluntary petition or answer seeking
reorganization, an arrangement with creditors or an order for relief or seeking
to take advantage of any insolvency law or file an answer admitting the material
allegations of a petition filed against the Borrower in any bankruptcy,
reorganization or insolvency proceeding, or action of the Borrower shall be
taken for the purpose of effecting any of the foregoing, or (vi) have
instituted against it, if without the application, approval or consent of the
Borrower, a proceeding in any court of competent jurisdiction, under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
in respect of the Borrower an order for relief or an adjudication in bankruptcy,
reorganization, dissolution, winding up or liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of the Borrower or of all
or any substantial part of the assets of the Borrower or other like relief in
respect thereof under any bankruptcy or insolvency law, and, if such proceeding
is being contested by the Borrower in good faith, the same shall (A) result
in the entry of an order for relief or any such adjudication or appointment or
(B) remain undismissed and undischarged for a period of sixty (60)
days;
(i) Dissolution;
Cessation of Business. The Borrower
terminates its existence, ceases to exist, dissolves, permanently ceases
operations or abandons the operation of any of its material businesses or
facilities.
(j) Litigation
and Proceedings. Any litigation or administrative or other proceeding
ensues, and is not dismissed within thirty (30) days, involving the Borrower or
any instrument, contract or document delivered to the Bank in compliance with
this Agreement, and the adverse result of such litigation or proceeding would,
in the Bank's reasonable opinion, result in a Material Adverse
Change;
(k) Reserved.
(l) Reserved.
(m) Insurance.
The Borrower fails to maintain in full force and effect any of the hazard or
other insurance required pursuant to this Agreement and the other Bank Documents
and continuance of such failure for ten (10) days;
(n) ERISA
Matters. There occurs a "reportable event" or a "prohibited transaction"
on the part of the Borrower under ERISA which remains uncured for a period of
thirty (30) days;
(o) Tax
Liens. A tax Lien shall be levied against the Borrower or its property,
and the Borrower shall not satisfy such tax Lien within five (5) days of such
levy, or the Borrower shall fail to promptly and diligently contest the validity
or amount of such tax Lien in good faith by appropriate
proceedings;
(p) Judgments.
The entry of a final judgment in an amount in excess of $500,000 against the
Borrower and the failure of the Borrower to discharge such judgment within ten
(10) days of the entry thereof;
(q) Other
Indebtedness. A default with respect to any other Indebtedness in excess
of $500,000 in the aggregate of the Borrower, if the effect of such default is
to cause or permit the acceleration of such Indebtedness;
(r) Other
Agreements with Bank. The occurrence of a default under any other
agreement between the Borrower and the Bank; or
(s) Material
Adverse Change. The occurrence of any Material Adverse
Change.
Section
8.02 Remedies.
If
an Event of Default has occurred and is continuing uncured, the Bank may at its
option take all or any of the following actions:
(a) Notify
the Trustee of such Event of Default, direct the Trustee to declare an Event of
Default, as defined in the Indenture, and direct the Trustee in writing to call
the Bonds for mandatory purchase pursuant to the Indenture or to direct the
Trustee to draw on the Letter of Credit, declare the principal of the
outstanding Bonds, together with interest accrued thereon, to be due and payable
immediately, and direct the Trustee to exercise remedies under the Bond
Documents;
(b) Declare
the Borrower's Obligations hereunder to be, whereupon the same shall become,
immediately due and payable;
(c) Require
the Borrower to deposit with the Bank as additional collateral for the
Borrower's obligations under this Agreement, cash, cash equivalent and
remarketable securities having market value of not less than the Letter of
Credit Amount, as determined by the Bank; or
(d) Exercise,
or cause to be exercised, any and all such remedies as it may have under any of
the Bank Documents, or at law or in equity.
Section
8.03 Waivers;
Consents.
No
waiver of, or consent with respect to, any provision of this Agreement or any
other Bank Document shall in any event be effective unless the same shall be in
writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
Section
8.04 No
Waiver; Remedies Cumulative.
No
failure on the part of the Bank to exercise, and no delay in exercising, any
right under this Agreement or any other Bank Document shall operate as a waiver
thereof; and no single or partial exercise of any right hereunder shall preclude
any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive
of any remedies available under any other document or at law or in
equity.
Section
8.05 Set-Off.
Upon
the occurrence and during the continuance of any Event of Default, the Bank is
hereby authorized at any time and from time to time without notice to the
Borrower (any such notice being expressly waived by the Borrower) and, to the
fullest extent permitted by law, to set off and to apply any and all balances,
credits, deposits (general or special, time or demand, provisional or final),
accounts or monies at any time held and other indebtedness at any time owing by
the Bank to or for the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing under this Agreement or
any other Bank Document, whether or not the Bank shall have made any demand
hereunder or thereunder and although such obligations may be contingent or
unmatured. The rights of the Bank under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which the Bank may have.
ARTICLE
IX
GENERAL
PROVISIONS
Section
9.01 Notices.
All
notices and other communications provided for hereunder shall be in writing and
deemed to have been given or made when: (i) actually delivered
by hand, or (ii) when received, if sent by telecopier, nationally
recognized overnight courier or other authenticated delivery service, charges
prepaid, and addressed as follows:
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If
to the Bank:
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PNC
Bank, National Association
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Attention: ▇▇▇▇
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Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with
a copy to:
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PNC
Bank, National Association
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3rd
Floor Firstside Center
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▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: Trade
Services Operations
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Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If
to the Borrower:
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The
York Water Company
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▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇,
▇▇ ▇▇▇▇▇
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Attention: Chief
Financial Officer
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Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If
to the Trustee:
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Manufacturers
and Traders Trust Company
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: Corporate
Trust Department
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Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If
to the Remarketing Agent:
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PNC
Capital Markets, Inc.
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▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: Manager-Remarketing
Desk
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Telecopier:
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(▇▇▇)
▇▇▇-▇▇▇▇
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Any such
notice to the Bank shall refer to this Agreement and to the Letter of Credit by
its number. Either party hereto and the Trustee and the Remarketing
Agent may change the address to which notices to it are to be sent by written
notice given to the other Persons listed in this Section.
Section
9.02 Successors
and Assigns.
This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors and assigns. The Borrower may
not assign its rights under this Agreement without the prior written consent of
the Bank. The Bank will not assign its obligations under the Letter
of Credit without the prior written confirmation of the rating of the Bonds by
the agency rating the Bonds. The Borrower and the Bank intend that no
other Person shall have any claim or interest under this Agreement or right of
action hereon or hereunder.
Section
9.03 Survival
of Covenants.
All
covenants made by the Borrower herein and in the other Bank Documents shall
survive the delivery of this Agreement and the Letter of Credit and any advances
under the Letter of Credit.
Section
9.04 Counterparts.
Each
Bank Document may be signed in any number of counterpart copies and by the
parties to such Bank Document on separate counterparts, but all such copies
shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to any Bank Document by facsimile transmission
shall be as effective as delivery of a manually executed
counterpart. Any party executing any Bank Document by facsimile
transmission shall promptly deliver a manually executed counterpart; provided that the
failure to do so shall not affect the validity of the counterpart executed and
delivered by facsimile transmission.
Section
9.05 Costs,
Expenses and Taxes.
The
Borrower agrees to pay on demand all costs and expenses of the Bank in
connection with the preparation, execution, delivery and administration of the
Transaction Documents or any amendments, supplements or waivers thereto,
including, without limitation, the reasonable fees and expenses of counsel for
the Bank with respect thereto and with respect to advising the Bank as to its
rights and responsibilities under the Transaction Documents, and all costs and
expenses, if any, including without limitation reasonable counsel fees and
expenses of the Bank, in connection with the enforcement of such
documents. In addition, the Borrower shall pay any and all stamp and
other taxes and fees payable or determined to be payable in connection with the
execution and delivery of the Transaction Documents and any other documents
which may be required by the Bank hereunder and agrees to indemnify and to hold
the Bank harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and
fees.
Section
9.06 Amendments
and Waivers.
This
Agreement and the other Bank Documents may be amended only by an instrument in
writing executed by all parties to such Bank Document. The provisions
of any Bank Document may be waived only by a writing executed by the
Bank. No amendment of this Section 9.06 may be made without the
prior written consent of the Trustee. The Rating Agency (as defined
in the Indenture), if it has rated and continues to rate the Bonds, shall
receive prior written notice of all amendments.
Section
9.07 Severability;
Interest Limitation.
If
any provision hereof is found by a court of competent jurisdiction to be
prohibited or unenforceable in any jurisdiction, it shall be ineffective as to
such jurisdiction only to the extent of such prohibition or unenforceability,
and such prohibition or unenforceability shall not invalidate the balance of
such provision as to such jurisdiction to the extent it is not prohibited or
unenforceable, nor invalidate such provision in any other jurisdiction, nor
invalidate the other provisions hereof, all of which shall be liberally
construed in favor of the Bank in order to effect the provisions of this
Agreement. Notwithstanding anything to the contrary herein contained,
the total liability of the Borrower for payment of interest pursuant hereto
shall not exceed the maximum amount, if any, of such interest permitted by
applicable Law to be contracted for, charged or received, and if any payments by
the Borrower to the Bank include interest in excess of such a maximum amount,
the Bank shall apply such excess to the reduction of the unpaid principal amount
due pursuant hereto, or if none is due, such excess shall be refunded to the
Borrower; provided
that, to the extent permitted by applicable Law, in the event the
interest is not collected, is applied to principal or is refunded pursuant to
this sentence and interest thereafter payable pursuant hereto shall be less than
such maximum amount, then such interest thereafter so payable shall be increased
up to such maximum amount to the extent necessary to recover the amount of
interest, if any, theretofore uncollected, applied to principal or refunded
pursuant to this sentence. Any such application or refund shall not
cure or waive any Event of Default. In determining whether or not any
interest payable under this Agreement exceeds the highest rate permitted by law,
any nonprincipal payment (except payments specifically stated in this Agreement
to be "interest") shall
be deemed, to the extent permitted by applicable law, to be an expense, fee,
premium or penalty rather than interest.
Section
9.08 Complete
Agreement.
Taken
together with the other Bank Documents and any other instruments and documents
delivered in compliance herewith, this Agreement is a complete memorandum of the
agreement of the Borrower and the Bank.
Section
9.09 Participation.
Notwithstanding
any other provision of this Agreement, the Borrower understands that the Bank
may at any time enter into participation agreements with one or more
participating banks ("Participating Banks") whereby
the Bank will allocate to the Participating Banks certain percentages of the
funding obligations of the Bank under the Letter of Credit. The
Borrower agrees to assist the Bank in obtaining Participating Banks, including,
without limitation, the submission of any additional information requested by
any potential Participating Bank. Nothing contained in this
Section 9.09 shall affect the Bank's obligations and liabilities under the
Letter of Credit.
Section
9.10 Governing
Law and Jurisdiction.
This
Agreement has been delivered to and accepted by the Bank and will be deemed to
be made in the State. This Agreement will be interpreted and the
rights and liabilities of the parties hereto determined in accordance with the
laws of the State, excluding its conflict of laws rules. The Borrower
hereby agrees to the jurisdiction of any state or federal court located within
the county where the Bank's office indicated in Section 9.01 is situated,
or such other venue as the Bank chooses, and consents that all service of
process be sent by nationally recognized overnight courier service directed to
the Borrower at the Borrower's address set forth herein for notices and service
so made will be deemed to be completed on the Business Day after deposit with
such courier; provided
that nothing contained in this Agreement will prevent the Bank from
bringing any action or exercising any rights against any security or against the
Borrower individually, or against any property of the Borrower within any other
state or nation to enforce any award or judgment obtained in the venue provided
above, or such other venue as the Bank chooses. The Borrower waives
any objection to venue and any objection based on a more convenient forum in any
action instituted under this Agreement.
Section
9.11 Headings.
Section
headings in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement of any other
purpose.
Section
9.12 WAIVER OF
JURY TRIAL.
THE
BORROWER AND THE BANK WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT OR
ANY OF THE OTHER BANK DOCUMENTS OR ANY OF THE TRANSACTIONS RELATED TO ANY OF THE
BANK DOCUMENTS. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY MADE BY THE BORROWER AND THE BANK AND THE BORROWER AND THE BANK
ACKNOWLEDGE THAT NEITHER THE BORROWER NOR THE BANK NOR ANY PERSON ACTING ON
BEHALF OF THE BORROWER OR THE BANK HAS MADE ANY REPRESENTATIONS OF FACT TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT. THE BORROWER AND THE BANK FURTHER ACKNOWLEDGE THAT THEY HAVE
BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING
OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL. THE BORROWER AND THE BANK FURTHER
ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE MEANING OF THIS WAIVER
PROVISION.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE
PAGE TO REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT]
IN WITNESS WHEREOF, the
Borrower and the Bank have caused this Reimbursement, Credit and Security
Agreement to be duly executed and delivered as of the date first above
written.
|
THE
YORK WATER COMPANY
|
|||
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ATTEST/WITNESS:
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|||
| By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
By:
|
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| Secretary | President and CEO | ||
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|||
| PNC BANK, NATIONAL ASSOCIATION | |||
|
|
By:
|
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Vice President | |||
EXHIBIT
A
FORM
OF PNC BANK, NATIONAL ASSOCIATION
IRREVOCABLE
LETTER OF CREDIT
May 7,
2008
Irrevocable
Letter of Credit No. 18109378-00-000
Manufacturers
and Traders Trust Company
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate
Trust Department
|
Re:
|
$12,000,000
Pennsylvania Economic Development
|
|
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Financing
Authority
|
|
|
Exempt
Facilities Revenue Refunding Bonds, Series A of
2008
|
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|
(The
York Water Company Project) (the "Bonds")
|
Gentlemen:
1. At
the request and for the account of THE YORK WATER COMPANY (the "Borrower"), we (the "Bank") establish in your favor
as Trustee under the Trust Indenture dated as of May 1, 2008 (as the same
has been and may from time to time be supplemented or amended, the "Indenture") for the benefit of
the Bondholders (as defined in the Indenture) between the Pennsylvania Economic
Development Financing Authority (the "Issuer") and you, pursuant to
which the Bonds are being issued for the benefit of the Borrower, this
irrevocable letter of credit (this "Letter of Credit") in the
aggregate amount of $12,185,425 (as from time to time reduced and reinstated as
provided in this Letter of Credit, the "Letter of Credit
Amount"). Such Letter of Credit Amount shall be available for
drawing by you as set forth below in amounts not to exceed (a) $12,000,000
(as from time to time reduced and reinstated as provided in this Letter of
Credit, the "Principal
Component") with respect to unpaid principal of the Bonds and
(b) $185,425 (as from time to time reduced and reinstated as provided in
this Letter of Credit, the "Interest Component") with
respect to accrued interest on the Bonds.
2. This
Letter of Credit shall expire at 5:00 p.m. local time in Pittsburgh,
Pennsylvania, on the date (the "Expiration Date") which is the
earliest of: (a) May 6, 2011, unless extended by us (the "Scheduled Expiration Date")
(it being understood that we shall be under no obligation herein to grant any
such extension), (b) the date of payment of a Final Payment Drawing (as
defined below), (c) the date on which we receive a certificate from you on
the form of Annex
7 attached hereto, appropriately completed and executed, to the effect
that there are no Outstanding Bonds (as defined in the Indenture) other than
Bonds secured by an Alternate Credit Facility (as defined in the Indenture) or
(d) the date when you surrender this Letter of Credit to the Bank for
cancellation. You agree to surrender this Letter of Credit to us, and
not to make any Drawing, after the Expiration Date.
3. Subject
to the provisions of this Letter of Credit, demands for payment under this
Letter of Credit may be made by you from time to time prior to the Expiration
Date by presentation of your certificate in the form of (a) Annex
1 hereto,
appropriately completed and executed, in the case of a drawing for interest on
the Bonds under Section 2C.2 of the Indenture (an "Interest Drawing"),
(b) Annex
2 hereto, appropriately completed and executed, in the case of a drawing
for principal of the Bonds under Section 2C.2 (if less than all of the
Outstanding Bonds are being redeemed) of the Indenture (a "Principal Drawing"),
(c) Annex
3 hereto, appropriately completed and executed, in the case of a drawing
for the purchase price of any Bonds under Section 2B.5 of the Indenture (a
"Liquidity Drawing"),
and (d) Annex
4 hereto, appropriately completed and executed, in the case of a final
drawing for principal of and/or interest on all Outstanding Bonds (as defined in
the Indenture) due upon purchase, redemption or payment at maturity under
Section 2B.5 or 2C.2 (if all of the Outstanding Bonds are being purchased
upon a mandatory tender or redeemed) of the Indenture or upon acceleration of
the Outstanding Bonds under Section 7.2 of the Indenture (the "Final Payment Drawing") (each
such demand and presentation, a "Drawing"). Payment
against conforming documents presented under this Letter of Credit prior to
12:00 noon on any Business Day shall be made by us at or before 10:00 a.m. on
the next succeeding Business Day or, in the case of presentation after 12:00
noon, at or before 3:00 p.m. on the next succeeding Business Day; provided,
however, that with respect to a Liquidity Drawing, payment against conforming
documents presented under this Letter of Credit prior to 11:00 a.m. on any
Business Day shall be made by us at or before 3:00 p.m. on the same
Business Day. If requested by you, payment under this Letter of
Credit may be made by deposit of immediately available funds into a designated
account that you maintain with us, a wire transfer of immediately available
funds or by our check, all in accordance with your
instructions. Partial drawings are permitted under this Letter of
Credit. All payments by us under this Letter of Credit will be made
with our own funds.
4. As
used in this Letter of Credit "Business Day" means any day
other than (i) a Saturday or Sunday, (ii) a day on which commercial
banking institutions in Pittsburgh, Pennsylvania or in any other city where
either the principal corporate trust office of the Trustee or the office of the
Bank at which drafts are to be presented under the Letter of Credit is located
are required or authorized by law (including executive order) to close or on
which any such office is closed for reasons not related to financial condition,
or (iii) a day on which the New York Stock Exchange is
closed. References to any time of day shall refer to Eastern standard
time or Eastern daylight savings time, as in effect in Pittsburgh, Pennsylvania
on such day.
5. Each
Drawing honored by us under this Letter of Credit shall immediately reduce the
Principal Component or the Interest Component (as the case may be) by the amount
of such payment, and the Letter of Credit Amount available hereunder shall also
be correspondingly reduced. Upon such honor, our obligations in
respect of such Drawing shall be discharged, and we shall have no further
obligation in respect of such Drawing. The Principal Component and the Interest
Component (and correspondingly the Letter of Credit Amount) so reduced shall be
reinstated only as follows:
(a) In
the case of a reduction resulting from payment against an Interest Drawing, the
Interest Component shall be reinstated automatically as of our opening of
business in Pittsburgh, Pennsylvania on the tenth (10th) Business Day following
the date of such payment by an amount equal to the amount of such Interest
Drawing, unless you shall have received notice from us in writing not later than
the close of business on the ninth (9th) Business Day following the date of such
payment that such reinstatement shall not occur because an Event of Default has
occurred under the Reimbursement, Credit and Security Agreement dated as of
May 1, 2008 between the Borrower and us.
(b) In
the case of a reduction resulting from payment against a Liquidity Drawing with
regard to any Bonds, the Principal Component and, if applicable, the Interest
Component with respect to such Bonds shall be reinstated (i) automatically
when and to the extent that both (A) we have received reimbursement for
such drawing in immediately available funds from the Borrower (or you have
received immediately available funds which, pursuant to Section 2B.1(g) or
2B.2(f) of the Indenture, you will immediately remit to us as reimbursement for
such drawing, such funds to be remitted to the attention of our Letter of Credit
Department stating that they are repayments for Liquidity Drawings drawn under
PNC Bank, National Association Irrevocable Letter of Credit No. 18109378-00-000)
and (B) you have delivered to us a certificate in respect of such
reinstatement in the form of Annex 5 attached
hereto, appropriately completed and executed, or (ii) when and to the
extent that we, at our option, upon the Borrower's request, otherwise advise you
in writing that such reinstatement shall occur, it being understood that we
shall have no obligation to grant any such reinstatement except as provided in
clause (i) of this sentence. We will give telephonic confirmation (to
be further confirmed in writing) to you of each reinstatement pursuant to clause
(i) of the preceding sentence.
(c) The
Principal Component and the Interest Component shall otherwise be reinstated as
we may from time to time notify you in writing.
6. The
Letter of Credit Amount and the respective Principal and Interest Components
thereof shall be reduced automatically, without notice to you, upon our receipt
from you of a certificate in the form of Annex
6 attached hereto appropriately completed and executed, each such
reduction to be (a) in the amounts necessary to reduce the Letter of Credit
Amount and the Principal and Interest Components thereof to the respective
amounts specified by you in such certificate and (b) effective on the
Business Day on which we receive such certificate from you.
7. All
documents presented to us in connection with any Drawing, and all other
communications and notices to us with respect to this Letter of Credit, shall be
in writing, dated the date of presentation, and delivered to us at the address
set forth on the letterhead of this Letter of Credit and shall specifically
refer to "PNC Bank, National Association Irrevocable Letter of Credit No.
18109378-00-000." Any such documents, communications and notices may
be made by delivery in person, first class United States mail or
nationally-recognized courier services (postage prepaid) at the office of PNC
Bank, National Association, Third Floor, Firstside Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: Trade Services Operations, or by
facsimile transmission to (▇▇▇) ▇▇▇-▇▇▇▇ (with hard copy of any
transmission to follow by overnight courier).
8. No
person other than you as Trustee or a successor Trustee under the Indenture may
make any demand for payment under this Letter of Credit. This Letter
of Credit is transferable in its entirety only to any transferee who has
succeeded you as Trustee under the Indenture and may be successively transferred
to any subsequent successor Trustee under the Indenture, in each case upon
presentation to us of the original of this Letter of Credit accompanied by a
certificate in the form of Annex
8 hereto.
9. This
Letter of Credit sets forth in full the terms of our undertaking, and this
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein or in
which this Letter of Credit is referred to or to which this Letter of Credit
relates, except only the certificates referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document, instrument
or agreement, except such certificates. All certificates referred to
herein that are presented to us from time to time shall become an integral part
of this Letter of Credit and shall be binding on any transferee permitted by the
terms of this Letter of Credit.
10. Except
as herein specifically otherwise provided, this Letter of Credit shall be
subject to the ISP. "ISP" shall mean the International Standby
Practices, International Chamber of Commerce Publication No. 590, and any
subsequent official revision thereof. This Letter of Credit shall be
deemed to be issued under the laws of the Commonwealth of Pennsylvania and
shall, as to matters not governed by the ISP, be governed by and construed in
accordance with the internal laws (as opposed to conflicts of law provisions) of
said Commonwealth.
Very
truly yours,
| PNC BANK, NATIONAL ASSOCIATION | |||
|
|
By:
|
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Vice President | |||
ANNEX
1 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trade
Services Operation
|
|
Certificate
for Interest Drawing of Accrued Interest on Exempt Facilities Revenue
Refunding Bonds, Series A of 2008 (The York Water Company Project)
Issued by the Pennsylvania Economic Development Financing
Authority
|
The
undersigned, a duly authorized officer of Manufacturers and Traders Trust
Company, as Trustee (the "Trustee") under the Indenture
under which the Bonds have been issued, hereby certifies, with reference to
Irrevocable Letter of Credit No. 18109378-00-000 (the "Letter of Credit") issued by
PNC Bank, National Association (the "Bank") in favor of the Trustee
(the capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Letter of Credit), that:
1. The
Trustee is the Trustee under the Indenture securing the Bonds and is entitled to
present this certificate.
2. Pursuant
to Section 2C.2 of the Indenture, the Trustee is drawing on you in the
amount of $_______________. Such amount represents _______________
days accrued interest on the Bonds. Such amount does not include any
amount accrued on Pledged Bonds (as defined in the Indenture) or Bonds
registered in the name of the Borrower, was computed in accordance with the
terms and conditions of the Indenture and does not exceed the amount available
to be drawn under the Letter of Credit in respect of interest on the
Bonds.
3. The
Trustee demands payment of the amount specified in Paragraph 2
above.
IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of
the _____ day of _______________, 200_____.
MANUFACTURERS
AND TRADERS TRUST COMPANY, as Trustee
By
Name
Title
ANNEX
2 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trade
Services Operation
|
|
Certificate
for Principal Drawing in Respect of Principal of Exempt Facilities Revenue
Refunding Bonds, Series A of 2008 (The York Water Company Project)
Issued by the Pennsylvania Economic Development Financing
Authority
|
The
undersigned, a duly authorized officer of Manufacturers and Traders Trust
Company, as Trustee (the "Trustee") under the Indenture
under which the Bonds have been issued, hereby certifies, with reference to
Irrevocable Letter of Credit No. 18109378-00-000 (the "Letter of Credit") issued by
PNC Bank, National Association (the "Bank") in favor of the Trustee
(the capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Letter of Credit), that:
1. The
Trustee is the Trustee under the Indenture securing the Bonds and is entitled to
present this certificate.
2. Pursuant
to Section 2C.2 of the Indenture, the Trustee is drawing on you in the
amount of $_______________. Such amount represents payments of
principal due with respect to the Bonds on _______________ under
Section 2.2 of the Indenture. Such amount does not include any
amount in respect of Pledged Bonds (as defined in the Indenture) or any Bonds
registered in the name of the Borrower, is equal to the amount of principal due
on the Bonds on such date in accordance with the terms and conditions of the
Indenture and does not exceed the amount available to be drawn under the Letter
of Credit in respect of principal of the Bonds.
3. The
Trustee demands payment of the amount specified in Paragraph 2
above.
IN WITNESS WHEREOF, the
Trustee has executed and delivered this certificate this _____ day of
_______________, 200_____.
MANUFACTURERS
AND TRADERS TRUST COMPANY, as Trustee
By
Name
Title
ANNEX
3 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trade
Services Operation
|
|
Certificate
for Liquidity Drawing in Respect of the Purchase Price of Exempt
Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water
Company Project) Issued by the Pennsylvania Economic Development Financing
Authority
|
The
undersigned, a duly authorized officer of Manufacturers and Traders Trust
Company, as Trustee (the "Trustee") under the Indenture
under which the Bonds have been issued, hereby certifies, with reference to
Irrevocable Letter of Credit No. 18109378-00-000 (the "Letter of Credit") issued by
PNC Bank, National Association (the "Bank") in favor of the Trustee
(the capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Letter of Credit), that:
1. The
Trustee is the Trustee under the Indenture securing the Bonds and is entitled to
present this certificate.
2. Pursuant
to Section 2B.5 of the Indenture, the Trustee is drawing on you in the
amount of $_______________. Such amount represents the principal
portion in the amount of $_______________ and the accrued interest portion in
the amount of $_______________ of the purchase price of Bonds, tendered to the
Trustee and not successfully remarketed by the Remarketing Agent (as defined in
the Indenture) or remarketed but for which the purchase price has not been
received by the Trustee on the date hereof. Such amount does not
include any amount in respect of Pledged Bonds (as defined in the Indenture) or
any Bonds registered in the name of the Borrower, was computed in accordance
with the terms and conditions of the Indenture and does not exceed the amount
available to be drawn under the Letter of Credit in respect of principal of, and
interest on, such Bonds.
3. The
Trustee is holding as agent for the Bank, Bonds in the principal amount of
$_______________, which amount represents the amount of the principal portion of
the Bonds in respect of which a draw is being made on the Letter of Credit
pursuant to this certificate.
4. The
Trustee demands payment of the amount specified in Paragraph 2
above.
IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this
_____ day of _______________, 200_____.
MANUFACTURERS
AND TRADERS TRUST COMPANY, as Trustee
By
Name
Title
ANNEX
4 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
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Attention: Trade
Services Operation
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Certificate
for Final Payment Drawing in Respect of Principal and Accrued Interest on
Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York
Water Company Project) Issued by the Pennsylvania Economic Development
Financing Authority
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The
undersigned, a duly authorized officer of Manufacturers and Traders Trust
Company, as Trustee (the "Trustee") under the Indenture under which the Bonds
have been issued, hereby certifies, with reference to Irrevocable Letter of
Credit No. 18109378-00-000 (the "Letter of Credit") issued by PNC Bank, National
Association (the "Bank") in favor of the Trustee (the capitalized terms used
herein and not defined herein shall have the meanings ascribed to them in the
Letter of Credit), that:
1. The
Trustee is the Trustee under the Indenture securing the Bonds and is entitled to
present this certificate.
2. Pursuant
to Section 2B.5 or 2C.2 of the Indenture, the Trustee is drawing on you in
the amount of $_______________. Such amount represents an unpaid
principal amount of $_______________ and/or _______________ days' accrued
interest in the amount of $_______________ due upon purchase (pursuant to a
mandatory tender) or redemption or payment at maturity under Section 2B.5
of the Indenture or upon acceleration of the Bonds under Section 7.2 of the
Indenture. Such amount does not include any amount in respect of
Pledged Bonds (as defined in the Indenture) or any Bonds registered in the name
of the Borrower, was computed in accordance with the terms and conditions of the
Indenture and does not exceed the amount available to be drawn under the Letter
of Credit in respect of principal of, and interest on, the Bonds.
3. The
Trustee demands payment of the amount specified in Paragraph 2
above.
4. Upon
receipt of payment of the amount specified in Paragraph 2 above, the Letter of
Credit will be promptly surrendered.
IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this
_____ day of _______________, 200_.
MANUFACTURERS
AND TRADERS TRUST COMPANY, as Trustee
By
Name
Title
ANNEX
5 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
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Attention: Trade
Services Operation
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Liquidity Drawing Reinstatement
Certificate for PNC Bank, National Association (the "Bank") Irrevocable
Letter of Credit No. 18109378-00-000 (the "Letter of Credit")
Supporting Exempt Facilities Revenue Refunding Bonds, Series A of
2008 (The York Water Company Project) Issued by the Pennsylvania Economic
Development Financing
Authority
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The
undersigned, a duly authorized officer of Manufacturers and Traders Trust
Company, as Trustee (the "Trustee") under the Indenture
under which the Bonds have been issued, hereby certifies, with
reference to the Letter of Credit issued by the Bank in favor of the Trustee
(the capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Letter of Credit), that:
1. The
Trustee is the Trustee under the Indenture securing the Bonds and is entitled to
present this Certificate.
2. On
the date of this Certificate $_______________ aggregate principal amount of
Bonds are being purchased upon a remarketing thereof by the Remarketing Agent
(as defined in the Indenture). All of such Bonds were heretofore
purchased (or anticipated to be purchased) with the proceeds of one or more
Liquidity Drawings in the total drawing amount, with respect to such Bonds, of
$_______________, of which proceeds $_______________ was drawn in respect of
principal of such Bonds and $_______________ was drawn in respect of accrued
interest on such Bonds. Prior to the date of this Certificate there
has been no reinstatement of the Letter of Credit Amount with respect to amounts
drawn by such Liquidity Drawings to purchase such Bonds.
3. The
Trustee has received for immediate payment (or repayment) to the Bank in respect
of the Bonds described in Paragraph 2 of this Certificate the total amount of
$_______________, consisting of $_______________ from the Remarketing Agent,
$_______________ from the Borrower and $_______________ from the
Bank. Such total amount is being paid to the Bank with reference to
this Letter of Credit pursuant to Section 2B.1(g) or 2B.2(f) of the
Indenture, as reimbursement for amounts drawn under the Letter of Credit by the
Liquidity Drawings described in Paragraph 2 of this Certificate; provided that,
unless such reimbursement is being made on the same day that payment of such
Liquidity Drawings was received by the Trustee from the Bank, the Bonds
described in Paragraph 2 of this Certificate will be released for remarketing
and such payment to the Bank will be made only upon receipt of telephonic
confirmation by the Bank of the reinstatement described in Paragraph 6 below to
the Trustee at (_____) _____-__________,
Attention: _______________ (which confirmation shall thereafter be
sent in writing to the Trustee at its address on file with you).
4. Of
the total amount referred to in Paragraph 3 of this Certificate,
$_______________ represents the aggregate principal amount of Bonds described in
Paragraph 2 of this Certificate and $_______________ represents accrued interest
on such Bonds.
5. Payment
of the total amount referred to in Paragraph 3 of this Certificate, together
with other amounts heretofore paid to the Bank by or on behalf of the Borrower,
represents reimbursement for the entire outstanding balance of all amounts drawn
in respect of the Bonds described in Paragraph 2 of this
Certificate. The foregoing certification is made in reliance upon
representations by the Borrower or the Bank to the Trustee that, upon payment of
such amounts, the Bank will be fully reimbursed for all Liquidity Drawings (or
allocable portions thereof) made to purchase such Bonds. No
certification is made by the Trustee as to the payment of interest accrued
pursuant to the Reimbursement Agreement described in the Letter of Credit on the
amounts drawn by such Liquidity Drawings.
6. Pursuant
to Paragraph 5(b) of the Letter of Credit, the Letter of Credit Amount shall be
automatically reinstated by an amount equal to $_______________ (which does not
exceed the aggregate amount of the Liquidity Drawings, or allocable portions
thereof, paid by the Bank to purchase such Bonds), of which $_______________
(which does not exceed the aggregate amount of such Liquidity Drawings, or
allocable portions thereof, drawn against the Principal Component) shall be
applied to the Principal Component and $_______________ (which does not exceed
the aggregate amount of such Liquidity Drawings, or allocable portions thereof,
drawn against the Interest Component) shall be applied to the Interest
Component.
IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this
_____ day of _______________, 200_____.
MANUFACTURERS
AND TRADERS TRUST COMPANY, as Trustee
By
Name
Title
ANNEX
6 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
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Attention: Trade
Services Operation
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Certificate for Reducing PNC
Bank, National Association (the "Bank") Irrevocable Letter of Credit No.
18109378-00-000 (the "Letter of Credit")
Supporting Exempt Facilities Revenue Refunding Bonds, Series A of
2008 (The York Water Company Project) Issued by the Pennsylvania Economic
Development Financing
Authority
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The
undersigned, a duly authorized officer of Manufactures and Traders Trust
Company, as Trustee (the "Trustee") under the Indenture
under which the Bonds have been issued, hereby certifies (the capitalized terms
used herein and not defined herein shall have the meanings ascribed to them in
the Letter of Credit), that:
1. The
Trustee is the Trustee under the Indenture securing the Bonds and is entitled to
present this certificate.
2. The
Trustee hereby notifies you that on or prior to the date of this certificate,
$_______________ in principal amount of the Bonds have been redeemed, defeased
or otherwise are no longer outstanding pursuant to the Indenture.
3. Pursuant
to the terms of the Letter of Credit, the Bank is hereby directed to reduce the
Letter of Credit Amount and the Principal and Interest Components thereof,
effective on the Business Day on which you receive this certificate, so that
after such reduction, the Letter of Credit Amount shall be $_______________, of
which $_______________ shall be the Principal Component and $_______________
shall be the Interest Component, (calculated on the basis of 47 days' accrued
interest at a rate of 12% per annum), less the amount, if any, drawn with
Liquidity Drawings to purchase Outstanding Bonds in respect of which the Letter
of Credit has not been reinstated.
4. The
foregoing amounts were computed in accordance with the terms and conditions of
the Indenture.
IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this
_____ day of _______________, 200_____.
MANUFACTURES
AND TRADERS TRUST COMPANY, as Trustee
By
Name
Title
ANNEX
7 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
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Attention: Trade
Services Operation
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Certificate for Terminating PNC
Bank, National Association (the "Bank") Irrevocable Letter of Credit No.
18109378-00-000 (the "Letter of Credit")
Supporting Exempt Facilities Revenue Refunding Bonds, Series A of
2008 (The York Water Company Project) Issued by the Pennsylvania Economic
Development Financing
Authority
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The
undersigned, a duly authorized officer of Manufacturers and Traders Trust
Company, as Trustee (the "Trustee") under the Indenture
under which the Bonds have been issued, hereby certifies (the capitalized terms
used herein and not defined herein shall have the meanings ascribed to them in
the Letter of Credit) that:
1. The
Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. Pursuant
to the Indenture and the Letter of Credit, the Letter of Credit shall be
terminated on the date the Bank receives this Certificate, and the Trustee is
herewith surrendering the Letter of Credit for cancellation, because no Bonds
remain outstanding other than Bonds secured by an Alternate Credit
Facility.
IN
WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this
_____ day of _______________, 200_____.
MANUFACTURERS
AND TRADERS TRUST COMPANY, as Trustee
By
Name
Title
ANNEX
8 to PNC Bank, National Association
Irrevocable
Letter of Credit No. 18109378-00-000
PNC Bank,
National Association
3rd
Floor, Firstside Center
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Attention: Trade
Services Operation
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Re:
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PNC
Bank, National Association
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Irrevocable
Letter of Credit No.
18109378-00-000
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Ladies
and Gentlemen:
For value
received, the undersigned beneficiary hereby irrevocably transfers
to:
(Name of
Transferee)
(Address)
all
rights of the undersigned beneficiary to draw under the above Letter of Credit
in its entirety. Said transferee has succeeded to the undersigned as
Trustee under the Indenture which incorporated the Indenture. The
capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Letter of Credit.
By this
transfer, all rights of the undersigned beneficiary in such Letter of Credit are
transferred to the transferee and the transferee shall have the sole rights as
beneficiary thereof, including sole rights relating to any amendments whether
increases or extensions or other amendments and whether now existing or
hereafter made. All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.
The
original of such Letter of Credit is returned herewith, and in accordance
therewith we ask you to transfer the Letter of Credit to the transferee and
forward it directly to the transferee with your customary notice of transfer, or
that, at your option, you issue a new irrevocable letter of credit in favor of
the transferee with provisions consistent with the Letter of
Credit.
Very
truly yours,
SIGNATURE
AUTHENTICATED MANUFACTURES AND TRADERS TRUST COMPANY, as Trustee
By:
Name
Title
EXHIBIT
B
REQUIREMENTS
FOR OPINION OF BORROWER'S COUNSEL
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1.
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The
Company is a corporation, validly subsisting and authorized to transact
business under the laws of the Commonwealth of Pennsylvania, with full
corporate power to own its properties and conduct its business as
described in the Official
Statement.
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2.
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The
Company has full corporate power and authority to enter into the
Reimbursement Agreement and the Loan Agreement, and the Reimbursement
Agreement and the Loan Agreement have been duly authorized, executed and
delivered by the Company and are valid and binding agreements of the
Company, enforceable against the Company in accordance with their
terms.
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3.
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The
Company has obtained all requisite approvals, licenses and permits
(collectively, “Approvals”) to enter into and perform its obligations
under the Reimbursement Agreement and the Loan Agreement, including, but
not limited to, any Approvals required by the Pennsylvania Public Utility
Commission, but excluding any state Blue Sky or related state security
clearances or approvals, as to which no opinion is
expressed.
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4.
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To
our knowledge, except as may be disclosed in the Official Statement, there
is no action, suit, proceeding or investigation at law or in equity before
or by any court, public board or body pending or threatened against or
affecting the Company or to which the Company is a party or to which
property of the Company is subject, wherein an unfavorable decision,
ruling or finding would materially and adversely affect the Company, or
which would materially and adversely affect the transactions contemplated
by the Reimbursement Agreement or the Loan Agreement, or affect in any way
the validity of the Reimbursement Agreement or the Loan
Agreement.
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5.
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The
execution and delivery by the Company of the Reimbursement Agreement and
the Loan Agreement, and compliance by the Company with the provisions
thereof, do not and will not (i) result in a violation of the Articles of
Incorporation or Bylaws of the Company, or (ii) in any material respect
conflict with or constitute, on the part of the Company, a breach of or
default under any existing law or ordinance, or any material agreement or
material instrument known to us to which the Company is a party, or any
administrative regulation, court order or consent decree known to us to
which the Company is subject.
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The above
opinions are subject standard qualifications, limitations, assumptions and
exceptions, including, without limitation, bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other laws affecting the
rights of creditors generally and general principles of equity.