Exhibit 4.34





Exhibit 4.34







CREDIT AGREEMENT




among




AQUA PENNSYLVANIA, INC.




and




THE BANKS PARTY HERETO




and




PNC BANK, NATIONAL ASSOCIATION

as Agent




Dated as of November 30, 2010




$100,000,000








 












 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	BACKGROUND 
	 	 	1	 
	 
	 	 	 	 
	SECTION 1. DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	1.1 Defined Terms
	 	 	1	 
	1.2 Other Definitional Provisions
	 	 	16	 
	1.3 Construction
	 	 	16	 
	 
	 	 	 	 
	SECTION 2. THE CREDITS
	 	 	 	 
	2.1 Revolving Credit Loans
	 	 	17	 
	2.2 Swing Line Loans
	 	 	18	 
	2.3 General Provisions Regarding Loans
	 	 	20	 
	2.4 Fees
	 	 	22	 
	2.5 Revolving Credit Notes; Repayment of Revolving Credit Loans
	 	 	22	 
	2.6 Interest on Revolving Credit Loans
	 	 	22	 
	2.7 Default Rate; Additional Interest; Alternate Rate of Interest
	 	 	22	 
	2.8 Termination, Reduction, Extension of Commitments; Additional Banks
	 	 	23	 
	2.9 Optional and Mandatory Prepayments of Loans
	 	 	24	 
	2.10 Illegality
	 	 	25	 
	2.11 Requirements of Law
	 	 	25	 
	2.12 Taxes
	 	 	26	 
	2.13 Indemnity
	 	 	28	 
	2.14 Pro Rata Treatment, etc.
	 	 	28	 
	2.15 Payments
	 	 	28	 
	2.16 Conversion and Continuation Options
	 	 	29	 
	2.17 Defaulting Banks
	 	 	29	 
	 
	 	 	 	 
	SECTION 3. REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	3.1 Financial Condition
	 	 	31	 
	3.2 No Adverse Change
	 	 	31	 
	3.3 Existence; Compliance with Law
	 	 	31	 
	3.4 Corporate Power; Authorization; Enforceable Obligations
	 	 	32	 
	3.5 No Legal Bar
	 	 	32	 
	3.6 No Material Litigation
	 	 	32	 
	3.7 No Default
	 	 	32	 
	3.8 Taxes
	 	 	32	 
	3.9 Federal Regulations
	 	 	33	 
	3.10 ERISA
	 	 	33	 
	3.11 Investment Company Act
	 	 	33	 
	3.12 Purpose of Loans
	 	 	34	 






 


 









 





	 	 	 	 	 
	 	 	Page	 
	3.13 Environmental Matters
	 	 	34	 
	3.14 Ownership of the Borrower
	 	 	34	 
	3.15 Patents, Trademarks, etc.
	 	 	34	 
	3.16 Ownership of Property
	 	 	35	 
	3.17 Licenses, etc.
	 	 	35	 
	3.18 Labor Matters
	 	 	35	 
	3.19 Partnerships
	 	 	35	 
	3.20 No Material Misstatements
	 	 	35	 
	3.21 Anti-Terrorism Laws
	 	 	35	 
	 
	 	 	 	 
	SECTION 4. CONDITIONS PRECEDENT; CLOSING
	 	 	 	 
	4.1 Conditions to Closing
	 	 	36	 
	4.2 Conditions to Each Loan
	 	 	38	 
	4.3 Closing
	 	 	39	 
	 
	 	 	 	 
	SECTION 5. AFFIRMATIVE COVENANTS
	 	 	 	 
	5.1 Financial Statements
	 	 	39	 
	5.2 Certificates; Other Information
	 	 	39	 
	5.3 Payment of Obligations
	 	 	40	 
	5.4 Conduct of Business and Maintenance of Existence
	 	 	40	 
	5.5 Maintenance of Property; Insurance
	 	 	40	 
	5.6 Inspection of Property; Books and Records; Discussions
	 	 	40	 
	5.7 Notices
	 	 	41	 
	5.8 Environmental Laws
	 	 	41	 
	5.9 Taxes
	 	 	42	 
	5.10 Covenants of the Indenture
	 	 	42	 
	5.11 Guarantees of Obligations
	 	 	42	 
	5.12 Anti-Terrorism Laws
	 	 	42	 
	 
	 	 	 	 
	SECTION 6. NEGATIVE COVENANTS
	 	 	 	 
	6.1 Financial Covenants.
	 	 	43	 
	6.2 Limitation on Certain Debt
	 	 	43	 
	6.3 Limitation on Liens
	 	 	43	 
	6.4 Limitations on Fundamental Changes
	 	 	44	 
	6.5 Limitation on Sale of Assets
	 	 	45	 
	6.6 Limitations on Acquisitions
	 	 	45	 
	6.7 Limitation on Distributions and Investments
	 	 	45	 
	6.8 Transactions with Affiliates
	 	 	45	 
	6.9 Sale and Leaseback
	 	 	46	 
	6.10 Fiscal Year
	 	 	46	 
	6.11 Continuation of or Change in Business
	 	 	46	 






 


ii









 





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 7. EVENTS OF DEFAULT
	 	 	 	 
	7.1 Events of Default
	 	 	46	 
	7.2 Remedies
	 	 	48	 
	 
	 	 	 	 
	SECTION 8. THE AGENT
	 	 	 	 
	8.1 Appointment
	 	 	50	 
	8.2 Delegation of Duties
	 	 	50	 
	8.3 Exculpatory Provisions
	 	 	51	 
	8.4 Reliance by Agent
	 	 	51	 
	8.5 Notice of Default
	 	 	51	 
	8.6 Non-Reliance on Agent and Other Banks
	 	 	52	 
	8.7 Indemnification
	 	 	52	 
	8.8 Agent in its Individual Capacity
	 	 	52	 
	8.9 Successor Agent
	 	 	52	 
	8.10 Beneficiaries
	 	 	53	 
	8.11 USA Patriot Act
	 	 	53	 
	 
	 	 	 	 
	SECTION 9. MISCELLANEOUS
	 	 	 	 
	9.1 Amendments and Waivers
	 	 	53	 
	9.2 Notices
	 	 	54	 
	9.3 No Waiver; Cumulative Remedies
	 	 	55	 
	9.4 Survival of Representations and Warranties
	 	 	55	 
	9.5 Payment of Expenses and Taxes
	 	 	56	 
	9.6 Successors and Assigns
	 	 	56	 
	9.7 Confidentiality
	 	 	59	 
	9.8 Adjustments; Set-off
	 	 	60	 
	9.9 Counterparts
	 	 	60	 
	9.10 Severability
	 	 	60	 
	9.11 Integration
	 	 	60	 
	9.12 GOVERNING LAW
	 	 	61	 
	9.13 Submission To Jurisdiction; Waivers
	 	 	61	 
	9.14 Acknowledgments
	 	 	61	 
	9.15 WAIVERS OF JURY TRIAL
	 	 	62	 
	9.16 USA PATRIOT ACT
	 	 	62	 






	 	 	 
	SCHEDULES
	 	 
	 
	SCHEDULE I
	 	Bank and Commitment Information
	SCHEDULE 3.6
	 	Existing Litigation
	SCHEDULE 3.11
	 	Regulatory Approvals
	SCHEDULE 3.13
	 	Environmental Matters
	SCHEDULE 3.19
	 	Interests in Partnerships
	SCHEDULE 6.3
	 	Existing Liens
	 
	EXHIBITS
	 	 
	 
	EXHIBIT A
	 	Form of Borrowing Request
	EXHIBIT B-1
	 	Form of Note
	EXHIBIT B-2
	 	Form of Swing Line Note
	EXHIBIT C
	 	Form of Assignment and Acceptance







 


iii









 







CREDIT AGREEMENT




THIS CREDIT AGREEMENT (this “Agreement”) dated as of November 30, 2010, by and among AQUA
PENNSYLVANIA, INC., a Pennsylvania corporation (the “Borrower”), the several banks and other
financial institutions from time to time parties to this Agreement (the “Banks”), and PNC BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent (in such capacity,
the “Agent”).



BACKGROUND




The Borrower has requested that the Banks make Loans (that term and certain other terms are
defined in Section 1.1 hereof) to the Borrower, and the Banks severally have agreed to make Loans
on the terms and conditions herein contained. Proceeds of the Loans will be used for refinancing
existing indebtedness and general working capital purposes including financing acquisitions.



NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements
herein set forth and for other consideration, the receipt and sufficiency of which is hereby
acknowledged and intending to be legally bound hereby, covenant and agree as follows:



SECTION 1. DEFINITIONS





1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings:




“Adjusted Revolving Credit Commitment Percentage”: with respect to any
non-Defaulting Bank, the quotient (expressed as a percentage) of such Bank’s aggregate
Commitment divided by the aggregate Commitments of all non-Defaulting Banks.




“Affiliate”: any Person (other than a Subsidiary, or an officer, director or
employee of the Borrower who would not be an Affiliate but for such Person’s status as an
officer, director and/or employee) which, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with, the
Borrower, and any member, director, officer or employee of any such Person or any Subsidiary
of the Borrower. For purposes of this definition, “control” shall mean the power, directly
or indirectly, either to (i) vote 5% or more of the securities having ordinary voting power
for the election of directors of such Person or (ii) direct or in effect cause the direction
of the management and policies of such Person whether by contract or otherwise.




“Anti-Terrorism Laws”: any laws relating to terrorism or money laundering,
including Executive Order No. 13224, and the USA Patriot Act.




“Assignment and Acceptance”: an assignment and acceptance entered into by a
Bank and an assignee, and acknowledged by the Agent, in the form of Exhibit C or such other
form as shall be approved by the Agent.


 


 









 






“Base Rate”: for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/100th of 1%) equal to the highest of (a) the Prime Rate in effect on such day,
(b) the Federal Funds Open Rate in effect on such day plus fifty (50) basis points (0.5%)
and (c) the Daily LIBOR Rate plus one hundred (100) basis points (1.0%). If for any reason
the Agent shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Open Rate or the Daily LIBOR Rate
for any reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the definition of such term, the Base Rate shall be determined
without regard to clause (b) or (c) as the case may be, of the first sentence of this
definition until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate, the Federal Funds Open Rate or
the Daily LIBOR Rate shall be effective on the effective date of such change in the Prime
Rate, the Federal Funds Open Rate or the Daily LIBOR Rate, as the case may be.




“Base Rate Borrowing”: a Borrowing comprised of Base Rate Loans.




“Base Rate Loan”: any Revolving Credit Loan bearing interest at a rate
determined by reference to the Base Rate.




“Borrower”: as defined in the heading of this Agreement.




“Borrowing”: a Swing Line Loan made by the Swing Line Bank or each group of
Revolving Credit Loans of a single Type made by the Banks on a single date and, in the case
of Eurodollar Loans, as to which a single Interest Period is in effect.




“Borrowing Request”: a request made pursuant to Section 2.1(c) in the form of
Exhibit A.




“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in Philadelphia, Pennsylvania are authorized or required by law to close;
provided, however, that, when used in connection with a Eurodollar Loan, the
term “Business Day” shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London Interbank Market.




“Capital Lease”: at any time, a lease with respect to which the lessee is
required to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.




“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.




“Closing”: as defined in Section 4.3.




“Closing Date”: as defined in Section 4.3.




“Code”: the Internal Revenue Code of 1986, as amended from time to time.


 


2









 






“Commitment”: as to any Bank, the obligation of such Bank to make Loans to the
Borrower hereunder in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Bank’s name on Schedule I or in the
Assignment and Acceptance pursuant to which such Bank becomes a party to this Agreement, as
the same may be permanently terminated, reduced and extended from time to time pursuant to
the provisions of Section 2.9 or changed by subsequent assignments pursuant to subsection
9.6(b).




“Commitment Percentage”: as to any Bank at any time, the proportion (expressed
as a percentage) that such Bank’s Commitment bears to the Total Commitment (or, at any time
after the Commitments shall have expired or been terminated, the percentage which the amount
of such Bank’s Loans constitutes of the aggregate amount of the Loans of the Banks then
outstanding).




“Commonly Controlled Entity”: an entity, whether or not incorporated, which is
under common control with the Borrower within the meaning of Section 4001 of ERISA or is
part of a group which includes the Borrower and which is treated as a single employer under
Section 414 of the Code.




“Consolidated Assets”: at any time, the amount at which all assets (including,
without duplication, the capitalized value of any leasehold interest under any Capital
Lease) of the Borrower would be reflected on a consolidated balance sheet of the Borrower at
such time.




“Consolidated EBIT”: for any period, Consolidated Net Income for such period,
plus the amount of income taxes and interest expense deducted from earnings in
determining such Consolidated Net Income.




“Consolidated EBITDA”: for any period, Consolidated Net Income for such
period, plus the amount of income taxes, interest expense, depreciation and
amortization deducted from earnings in determining such Consolidated Net Income.




“Consolidated Funded Debt”: at any time, all Debt of the Borrower determined
on a consolidated basis consisting of, without duplication (a) borrowed money Debt,
including without limitation capitalized lease obligations;(b) reimbursement obligations in
respect of letters of credit, bank guarantees and the like; and (c) Debt in the nature of a
Contingent Obligation, whether or not required to be reflected on a balance sheet of the
Borrower in accordance with GAAP.




“Consolidated Interest Expense”: for any period, the amount of cash interest
expense deducted from earnings of the Borrower in determining Consolidated Net Income for
such period in accordance with GAAP.


 


3









 






“Consolidated Net Income”: for any fiscal period, net earnings (or loss) after
income and other taxes computed on the basis of income of the Borrower for such period
determined on a consolidated basis in accordance with GAAP, but excluding:




(a) the amount of any extraordinary items included in such calculation of net
earnings (or loss);




(b) any gain or loss resulting from the write-up or write-off of fixed assets;




(c) earnings of any Subsidiary accrued prior to the date it became a
Subsidiary;




(d) earnings of any Person, substantially all assets of which have been
acquired in any manner, realized by such Person prior to the date of such
acquisition; and




(e) any gain arising from the acquisition of any Securities of the Borrower or
any Subsidiary thereof.




“Consolidated Shareholders’ Equity”: at a particular date, the net book value
of the shareholders’ equity of the Borrower as would be shown on a consolidated balance
sheet at such time determined in accordance with GAAP.




“Contingent Obligation”: with respect to any Person (for the purpose of this
definition, the “Obligor”) any obligation (except the endorsement in the ordinary
course of business of instruments for deposit or collection) of the Obligor guaranteeing or
in effect guaranteeing any indebtedness of any other Person (for the purpose of this
definition, the “Primary Obligor”) in any manner, whether directly or indirectly,
including (without limitation) indebtedness incurred through an agreement, contingent or
otherwise, by the Obligor:




(a) to purchase such indebtedness of the Primary Obligor or any Property or
assets constituting security therefor;




(b) to advance or supply funds




(i) for the purpose of payment of such indebtedness (except to the extent such
indebtedness otherwise appears on Borrower’s balance sheet as indebtedness), or




(ii) to maintain working capital or other balance sheet condition or any income
statement condition of the Primary Obligor or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation; or




(c) to lease Property or to purchase Securities or other Property or services
primarily for the purpose of assuring the owner of such indebtedness or obligation
of the ability of the Primary Obligor to make payment of the indebtedness or
obligation.


 


4









 






For purposes of computing the amount of any Contingent Obligation, in connection with any
computation of indebtedness or other liability, it shall be assumed that, without
duplication, the indebtedness or other liabilities of the Primary Obligor that are the
subject of such Contingent Obligation are direct obligations of the issuer of such
Obligation.




“Contractual Obligation”: as to any Person, any provision of any Security
issued by such Person or of any agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is bound.




“Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by
the Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1%) (x) the Published Rate by (y) a number equal to 1.00 minus the
Eurocurrency Reserve Requirements. The Published Rate shall be adjusted as of each Business
Day based on changes in the Published Rate or the Eurocurrency Reserve Requirements without
notice to the Borrower, and shall be applicable from the effective date of any such change.




“Debt”: with respect to any Person, at any time, without duplication, all of
(i) its liabilities for borrowed money, (ii) liabilities secured by any Lien existing on
property owned by such Person (whether or not such liabilities have been assumed), (iii) its
liabilities in respect to Capital Leases; (iv) its liabilities under Contingent Obligations;
and (v) all other obligations which are required by GAAP to be shown as liabilities on its
balance sheet but excluding (x) deferred taxes and other deferred or long-term liabilities
and other amounts not in respect of borrowed money and (y) the aggregate amount of accounts
receivable sold, factored or otherwise transferred for value without recourse (other than
for breach of representations).




“Default”: any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other condition
precedent therein set forth, has been satisfied.




“Defaulting Bank”: any Bank, as determined by the Agent, that has (a) failed
to fund any portion of its Revolving Credit Loans or participations in Swing Line Loans
within three Business Days of the date required to be funded by it hereunder, (b) notified
the Borrower, the Agent, the Swing Line Bank or any Bank in writing that it does not intend
to comply with any of its funding obligations under this Agreement or has made a public
statement to the effect that it does not intend to comply with its funding obligations under
this Agreement or under other agreements in which it commits to extend credit, (c) failed,
within three Business Days after request by the Agent, to confirm that it will comply with
the terms of this Agreement relating to its obligations to fund prospective Revolving Credit
Loans or participations in Swing Line Loans, (d) otherwise failed to pay over to the Agent
or any other Bank any other amount required to be paid by it hereunder within three Business
Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or
is insolvent or has a parent company that has become or is insolvent or (ii) become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, or
has taken any action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that has become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or appointment
(it being understood that a Defaulting Bank shall cease to be a Defaulting Bank if the
Borrower, the Agent and the Swing Line Bank shall each agree that such Defaulting Bank has
adequately remedied all matters that caused such Bank to be a Defaulting Bank).


 


5









 






“Distribution”: in respect of any corporation, (a) dividends, distributions or
other payments on account of any capital stock of the corporation (except distributions in
common stock of such corporation); (b) the redemption or acquisition of such stock or of
warrants, rights or other options to purchase such stock (except when solely in exchange for
common stock of such corporation); and (c) any payment on account of, or the setting apart
of any assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any share of any class of capital stock of
such corporation or any warrants or options to purchase any such stock.




“Dollars” and “$”: dollars in lawful currency of the United States of
America.




“Environmental Laws”: any and all applicable foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or binding
requirements of any Governmental Authority, or binding Requirement of Law (including common
law) regulating, relating to or imposing liability or standards of conduct concerning
protection of the environment or public health, remediation of environmental conditions, or
damages arising from such conditions, as now or may at any time hereafter be in effect.




“Equity to Capital Ratio”: at the date of determination, the ratio of
Consolidated Shareholders’ Equity to the sum of (i) Consolidated Funded Debt and (ii)
Consolidated Shareholders’ Equity.




“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.




“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board)
maintained by a member bank of such System.


 


6









 






“Eurodollar Rate”: with respect to the Loans comprising any Eurodollar
Borrowing for any Interest Period, the interest rate per annum determined by the Agent
by dividing (the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1% per annum) (a) 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 Agent 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 (for
purposes of this definition, an “Alternate Source”), at approximately 11:00 a.m., London
time, two (2) Business Days prior to the commencement of such Interest Period as the London
interbank offered rate for U.S. Dollars for an amount comparable to such Eurodollar
Borrowing and having a borrowing date and a maturity comparable to such Interest Period (of
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
Agent at such time (which determination shall be conclusive absent manifest error)), by (b)
a number equal to 1.00 minus the Eurocurrency Reserve Requirements. The Eurodollar Rate may
also be expressed by the following formula:



	 	 	 
	Eurodollar Rate =

	 	London interbank offered rates quoted by Bloomberg
	 

	 	or appropriate successor as shown on Bloomberg Page BBAM1
	 

	 	1.00 — Eurocurrency Reserve Requirements








The Eurodollar Rate shall be adjusted with respect to any Eurodollar Borrowing that is
outstanding on the effective date of any change in the Eurocurrency Reserve Requirements as
of such effective date. The Agent shall give prompt notice to the Borrower of the
Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall
be conclusive absent manifest error.




“Eurodollar Borrowing”: a Borrowing comprised of Eurodollar Loans.




“Eurodollar Loan”: any Revolving Credit Loan bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the provisions of Section
2.




“Event of Default”: any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.




“Executive Order No. 13224”: 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.




“Exposure”: as to any Bank at any date, an amount equal to the sum of (a) the
aggregate principal amount of all Loans made by such Bank then outstanding and (b) the
principal amount of such Bank’s pro rata share of Swing Line Loans then
outstanding based on its Commitment Percentage.


 


7









 






“Federal Funds Effective Rate”: for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.




“Federal Funds Open Rate” for any day shall mean the rate per annum which is
the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor)
as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on
such other substitute Bloomberg Screen that displays such rate), or as set forth on such
other recognized electronic source used for the purpose of displaying such rate as selected
by the Agent (an “Alternate Federal Funds Source”) (or if such rate for such day does not
appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Federal
Funds Source, or if there shall at any time, for any reason, no longer exist a Bloomberg
Screen BTMM (or any substitute screen) or any Alternate Federal Funds Source, a comparable
replacement rate determined by the Agent at such time (which determination shall be
conclusive absent manifest error)); provided, that if such day is not a Business
Day, the Federal Funds Open Rate for such day shall be the Federal Funds Open Rate on the
immediately preceding Business Day.”




“Fee Letters”: collectively, the two letters from the Agent to the Borrower
dated November 19, 2010 regarding certain fees.




“Fees”: as defined in subsection 2.4(a).




“GAAP”: at any time with respect to the determination of the character or
amount of any asset or liability or item of income or expense, or any consolidation or other
accounting computation, generally accepted accounting principles as applied to the public
utility industry, as such principles shall be in effect on the date of, or at the end of the
period covered by, the financial statements from which such asset, liability, item of
income, or item of expense, is derived, or, in the case of any such computation, as in
effect on the date when such computation is required to be determined, subject to Section
1.3(b).




“Governmental Authority”: any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.




“Guarantor”: any Material Subsidiary which becomes a “Guarantor” after the date
hereof pursuant to Section 5.11.




“Guaranty”: any Guaranty Agreement entered into by a Guarantor pursuant to
Section 5.11.


 


8









 






“Indenture”: means the Indenture of Mortgage dated as of January 1, 1941
between the Borrower and Chase Manhattan Trust Company, National Association, as successor
Trustee, as amended and supplemented.




“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.




“Insolvent”: pertaining to a condition of Insolvency.




“Interest Coverage Ratio”: at the date of determination, the ratio of
Consolidated EBIT to Consolidated Interest Expense, in each case for the prior four (4)
consecutive fiscal quarters.




“Interest Payment Date”: (a) as to any Base Rate Loan or Swing Line Loan, the
last day of each month, (b) as to any Eurodollar Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (c) as to any Eurodollar Loan
having an Interest Period longer than three months, each day which is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last day of such
Interest Period.




“Interest Period”: with respect to any Eurodollar Loan:




(i) initially the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in their notice of borrowing or notice of
conversion, given with respect thereto; and




(ii) thereafter, each period commencing on the last day of the next preceding Interest
Period applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the Agent not less than
three Business Days prior to the last day of the then current Interest Period with respect
thereto;




provided that, the foregoing provisions relating to Interest Periods are
subject to the following:




(i) if any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day;




(ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of a calendar month;




(iii) an Interest Period that otherwise would extend beyond the Termination Date shall
end on the Termination Date; and


 


9









 






(iv) the Borrower shall select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period for such Loan.




“Investments”: investments (by loan or extension of credit, purchase, advance,
guaranty, capital contribution or otherwise) made in cash or by delivery of Property, by the
Borrower (i) in any Person, whether by acquisition of stock or other ownership interest,
indebtedness or other obligation or Security, or by loan, advance or capital contribution,
or (ii) in any Property or (iii) any agreement to do any of the foregoing.




“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or other security interest or any
preference, priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same economic effect as
any of the foregoing).




“Loan Documents”: this Agreement, the Notes and any Guaranty.




“Loans”: the collective reference to the Revolving Credit Loans and the Swing
Line Loans.




“Material” means material in relation to the business, operations, affairs,
financial condition, assets or properties of the Borrower and its subsidiaries taken as a
whole.




“Material Adverse Effect”: a material adverse effect on (a) the validity or
enforceability of this Agreement or any other Loan Document, (b) the business, Property,
assets, financial condition or results of operations of the Borrower, (c) the ability of the
Borrower duly and punctually to pay its Debts and perform its obligations hereunder, or (d)
the ability of the Agent or any of the Banks, to the extent permitted, to enforce their
legal remedies pursuant to this Agreement or any other Loan Document.




“Material Subsidiary”: a Subsidiary of the Borrower the assets or net earnings
of which, determined in accordance with GAAP, constitute more than 5% of the Borrower’s
Consolidated Assets or Consolidated Net Income, as the case may be.




“Materials of Environmental Concern”: any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, or pollutants or contaminants defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls, and ureaformaldehyde insulation.




“Moody’s”: Moody’s Investors Service, Inc.




“Multiemployer Plan”: a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.




“Non-Defaulting Bank”: at any time, all Banks other than any Defaulting Banks
at such time.


 


10









 






“Notes”: the Revolving Credit Notes and the Swing Line Notes.




“Parent Company”: Aqua America, Inc., a Pennsylvania corporation.




“Participant”: as defined in Section 9.6(f).




“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.




“Permitted Acquisition”: an acquisition by the Borrower of the stock or assets
of a Person engaged in businesses similar or incidental or ancillary to Borrower’s existing
business, provided that at least 30 days prior to the consummation of any such
acquisition for which cash consideration paid by the Borrower (including the assumption of
Debt in connection therewith) exceeds $70,000,000, no Default or Event of Default shall
exist or would exist if such acquisition were consummated on such date (assuming for
purposes of the covenants contained in Section 6.1 that pro forma
adjustments are made to the financial statements of the Borrower reflecting such
acquisition; provided, that historical EBIT of the Person to be acquired (or the
assets of which are to be acquired) shall be included for purposes of calculating such
covenant compliance only if historical financial statements of such Person are received by
the Agent at least 30 days prior to the consummation of such acquisition), and the Borrower
shall have delivered to the Agent a certificate of a Responsible Officer showing
calculations in reasonable detail demonstrating such pro forma compliance
with the covenants contained in Section 6.1, and provided further, that any
such acquisition for which cash consideration paid by the Borrower (including the assumption
of Debt in connection therewith) exceeds $75,000,000, shall also have been consented to by
the Required Banks.




“Permitted Investments”: Investments in:




(a) one or more Material or Wholly-Owned Subsidiaries thereof;




(b) Property to be used in the ordinary course of business of the Borrower;




(c) current assets arising from the sale or purchase of goods and services in
the ordinary course of business of the Borrower;




(d) direct obligations of the United States of America, or any agency or
instrumentality thereof or obligations guaranteed by the United States of America,
provided that such obligations mature within one (1) year from the date of
acquisition thereof;




(e) certificates of deposit, time deposits or banker’s acceptances, maturing
within one (1) year from the date of acquisition, with banks or trust companies
organized under the laws of the United States, the unsecured long-term debt
obligations of which are rated “A3” or higher by Moody’s or “A-” or higher by S&P,
and issued, or in the case of banker’s acceptance, accepted, by a bank or
trust company having capital, surplus and undivided profits aggregating at
least $250,000,000;


 


11









 






(f) commercial paper given the highest rating by either S&P or Moody’s maturing
not more than 270 days from the date of creation thereof;




(g) mutual funds registered with the Securities and Exchange Commission under
the Investment Company Act of 1940 that hold themselves out as “money market funds;”




(h) trade credit extended on usual and customary terms in the ordinary course
of business;




(i) advances to employees to meet expenses incurred by such employees in the
ordinary course of business;




(j) Permitted Acquisitions; and




(k) other loans, advances and investments not exceeding in the aggregate
$2,000,000 at any one time outstanding.




(l) investments in tax exempt obligations of any state of the United States of
America, or any municipality of any such State, in each case rated “Aa2” or higher
by Moody’s or “AA” or higher by S&P or an equivalent credit rating by another credit
rating agency of recognized national standing, provided that such obligations mature
or can be tendered by the holder within 365 days from the date of acquisition
thereof; and




(m) investments in repurchase agreements.




“Person”: an individual, partnership, corporation, business trust, joint stock
company, limited liability company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.




“Plan”: at a particular time, any employee benefit plan which is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA.




“PNC”: PNC Bank, National Association, a national banking association.




“Prime Rate”: the rate of interest per annum announced from time to time by
PNC as its prime rate in effect at its principal office in Philadelphia, Pennsylvania; each
change in the Prime Rate shall be effective on the date such change is announced as
effective.




“Property”: any interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible.


 


12









 






“Published Rate” shall mean the rate of interest published each Business Day in
The Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered
Rates” for a one month period (or, if no such rate is published therein for any reason, then
the Published Rate shall be the eurodollar rate for a one month period as published in
another publication determined by the Agent).




“Regulation U”: Regulation U of the Board of Governors of the Federal Reserve
System as from time to time in effect, and all official rulings and interpretations
thereunder or thereof.




“Regulation X”: Regulation X of the Board of Governors of the Federal Reserve
System as from time to time in effect, and all official rulings and interpretations
thereunder or thereof.




“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.




“Reportable Event”: any of the events set forth in Section 4043(b) of ERISA,
except to the extent that notice thereof has been waived by the PBGC.




“Required Banks”: at any time, (a) Banks the Exposures of which aggregate at
least 51% of the Total Exposure at such time of the Banks, or (b) if there are no Loans
outstanding, Banks whose Commitments aggregate at least 51% of the Total Commitment at such
time.




“Requirement of Law”: as to any Person, the Certificate of Incorporation,
By-Laws, Operating Agreement or other organizational or governing documents of such Person,
and any law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case binding upon such Person or any of its property
or to which such Person or any of its property is subject.




“Responsible Officer”: as to any Borrower, any officer of such Borrower or of
the manager of such Borrower.




“Revolving Credit Loans”: the revolving loans made by the Banks to the
Borrower pursuant to Section 2.1(a). Each Loan shall be a Eurodollar Loan or a Base Rate
Loan.




“Revolving Credit Note”: a promissory note of the Borrower in the form of
Exhibit B-1, as the same may be amended, supplemented or otherwise modified from time to
time.




“S&P”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.




“Security”: “security” as defined in Section 2(1) of the Securities Act of
1933, as amended.


 


13









 






“Single Employer Plan”: any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan.




“Solvent”: as to any Person, as of the time of determination, the financial
condition under which the following conditions are satisfied:




(a) the fair market value of the assets of such Person will exceed the debts
and liabilities, subordinated, contingent or otherwise, of such Person; and




(b) the present fair saleable value of the Property of such Person will be
greater than the amount that will be required to pay the probable liability of such
Person on its debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; and




(c) such Person will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured;
and




(d) such Person will not have unreasonably small capital with which to conduct
the businesses in which it is engaged as such businesses are then conducted and are
proposed to be conducted after the date thereof.




“Subordinated Debt”: at any time, all Debt of the Borrower subordinated to all
of the obligations of the Borrower to the Banks on terms satisfactory to the Banks.




“Subsidiary”: as to any Person, (i) any corporation, limited liability
company, company or trust of which 50% or more (by number of shares or number of votes) of
the outstanding capital stock, interests, shares or similar items of beneficial interest
normally entitled to vote for the election of one or more directors, managers or trustees
(regardless of any contingency which does or may suspend or dilute the voting rights) is at
such time owned directly or indirectly by such person or one or more of such Person’s
Subsidiaries, or any partnership of which such Person is a general partner or of which 50%
or more of the partnership interests is at the time directly or indirectly owned by such
Person or one or more of such Person’s Subsidiaries, and (ii) any corporation, company,
trust, partnership or other entity which is controlled or capable of being controlled by
such Person or one or more of such Person’s subsidiaries. Unless otherwise indicated, all
references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a
Subsidiary of the Borrower.




“Supplemental Indenture”: means the Forty-Sixth Supplemental Indenture to the
Indenture dated as of October 15, 2010.




“Swing Line Bank”: PNC Bank, National Association, or any other Bank to which
the Swing Line Commitment is assigned pursuant to the terms of Section 9.6.




“Swing Line Collateral Account”: as defined in Section 2.17(b)(ii).


 


14









 






“Swing Line Commitment”: the amount set forth opposite the Swing Line Bank’s
name under the heading “Swing Line Commitment” on Schedule I hereto, as such amount
may be reduced pursuant to Section 2.2(f).




“Swing Line Loans”: has the meaning given to such term in Section 2.2(a).




“Swing Line Note”: has the meaning given to such term in Section 2.2(c), as
the same may be amended, supplemented or otherwise modified from time to time.




“Swing Line Repayment Date”: has the meaning given to such term in Section
2.2(b).




“Termination Date”: the earlier of (a) November 28, 2011 or any later date to
which the Termination Date shall have been extended pursuant to subsection 2.8(d) hereof and
(b) the date the Commitments are terminated as provided herein.




“Total Commitment”: at any time, the aggregate amount of the Banks’
Commitments, as in effect at such time.




“Total Commitment Percentage”: as to any Bank at any time, the proportion
(expressed as a percentage) that such Bank’s Commitment bears to the Total Commitment.




“Total Exposure”: at any time, the aggregate amount of the Banks’ Exposures at
such time.




“Tranche”: the collective reference to Eurodollar Loans whose Interest Periods
begin on the same date and end on the same later date (whether or not such Loans originally
were made on the same date).




“Type”: when used in respect of any Revolving Credit Loan or Borrowing of
Revolving Credit Loans, shall refer to the Rate by reference to which interest on such
Revolving Credit Loan or on the Revolving Credit Loans comprising such Borrowing is
determined. For purposes hereof, “Rate” shall include the Eurodollar Rate and the Base
Rate.




“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.




“Voting Stock”: capital stock of any class or classes of a corporation the
holders of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the directors (or Persons performing similar functions) and, as applicable, any
equity, participation or ownership interests in any partnership, business trust, joint stock
company, limited liability company, trust, unincorporated association, joint venture or any
other Person which interests are similar by analogy to capital stock or ownership rights
giving rise to voting or governance rights.


 


15









 






“Wholly-Owned Subsidiary”: at any time, any Subsidiary one hundred percent
(100%) of all of the equity Securities (except directors’ qualifying shares) and voting
Securities of which are owned by any one or more of the Borrower at such time.




1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the Notes or any certificate or other document made or delivered
pursuant hereto.



(b) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.



1.3 Construction. (a) Unless the context of this Agreement otherwise clearly requires, references to the
plural include the singular, the singular the plural and the part the whole, “or” has the inclusive
meaning represented by the phrase “and/or,” and “including” has the meaning represented by the
phrase “including without limitation.” References in this Agreement to “determination” of or by
the Agent or the Banks shall be deemed to include good faith estimates by the Agent or the Banks
(in the case of quantitative determinations) and good faith beliefs by the Agent or the Banks (in
the case of qualitative determinations). Whenever the Agent or the Banks are granted the right
herein to act in their sole discretion or to grant or withhold consent such right shall be
exercised in good faith, except as otherwise provided herein. Except as otherwise expressly
provided, all references herein to the “knowledge of” or “best knowledge of” the Borrower shall be
deemed to refer to the knowledge of a Responsible Officer thereof. The words “hereof,” “herein,”
“hereunder”, “hereby” and similar terms in this Agreement refer to this Agreement as a whole and
not to any particular provision of this Agreement. The section and other headings contained in
this Agreement and the Table of Contents preceding this Agreement are for reference purposes only
and shall not control or affect the construction of this Agreement or the interpretation thereof in
any respect. Section, subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.



(b) Except as otherwise provided in this Agreement, all computations and determinations as to
accounting or financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation
where appropriate). As used herein and in the Notes, and any certificate or other document made or
delivered pursuant hereto, accounting terms relating to the Borrower and any Subsidiary thereof not
defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP. In the event that any future
change in GAAP, without more, materially affects the Borrower’s compliance with any financial
covenant herein, the Borrower, the Banks and the Agent shall use their best efforts to modify such
covenant in order to account for such change and to secure for the Banks the intended benefits of
such covenant.


 


16









 





SECTION 2. THE CREDITS




2.1 Revolving Credit Loans. (a) Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, each Bank, severally and not
jointly, agrees to make Revolving Credit Loans to the Borrower, at any time or from time to
time on or after the date hereof and until the Termination Date or until the Commitment of such
Bank shall have been terminated in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding which, when added to such Bank’s Commitment Percentage of the
principal amount of Swing Line Loans then outstanding does not exceed such Bank’s Commitment
subject, however, to the conditions that (i) at no time shall (x) the sum of the outstanding
aggregate principal amount of all Loans made by all Banks exceed (y) the Total Commitment and (ii)
at all times the outstanding aggregate principal amount of all Revolving Credit Loans required to
be made by each Bank shall equal the product of (x) its Commitment Percentage times (y) the
outstanding aggregate principal amount of all Revolving Credit Loans required to be made pursuant
to subsection 2.1 at such time. Such Commitments may be terminated or reduced from time to time
pursuant to Section 2.8. Within the foregoing limits, the Borrower may borrow, repay and reborrow
under the Commitment on or after the date hereof and prior to the Termination Date, subject to the
terms, provisions and limitations set forth herein.



(b) Each Revolving Credit Loan shall be made as part of a Borrowing consisting of Revolving
Credit Loans made by the Banks ratably in accordance with their Commitment Percentages;
provided, however, that the failure of any Bank to make any Revolving Credit Loan
shall not in itself relieve any other Bank of its obligation to lend hereunder (it being
understood, however, that no Bank shall be responsible for the failure of any other Bank to make
any Revolving Credit Loan required to be made by such other Bank). The Revolving Credit Loans
comprising any Eurodollar Borrowing shall be in a minimum aggregate principal amount of $500,000 or
a whole multiple of $100,000 in excess thereof (or an aggregate principal amount equal to the
remaining balance of the available Commitments) and the Revolving Credit Loans comprising any Base
Rate Borrowing shall be in a minimum aggregate principal amount of $250,000 or a whole multiple of
$50,000 in excess thereof (or an aggregate principal amount equal to the remaining balance of the
available Commitments). Each Borrowing of Revolving Credit Loans shall be comprised entirely of
Eurodollar Loans or Base Rate Loans, as the Borrower may request pursuant to Section 2.1.



(c) In order to request a Borrowing, the Borrower shall hand deliver or telecopy (or notify by
telephone and promptly confirm by hand delivery or telecopy) to the Agent the information requested
by the form of Borrowing Request attached as Exhibit A hereto (i) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., Philadelphia time, three Business Days before a proposed
Borrowing and (ii) in the case of a Base Rate Borrowing, not later than 11:00 a.m., Philadelphia
time, on the day of a proposed Borrowing. Such notice shall be irrevocable and shall in each case
specify (x) whether the Borrowing then being requested is to be a Eurodollar Borrowing or a Base
Rate Borrowing; (y) the date of such Borrowing (which shall be a Business Day) and the amount
thereof; and (z) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with
respect thereto. If no election as to the Type of Borrowing is specified in any such notice, then
the requested Borrowing shall be a Base Rate Borrowing. If no Interest Period with respect to any
Eurodollar Borrowing is specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. The Agent shall promptly advise the Banks of
any notice given pursuant to this Section 2.1 and of each Bank’s portion of the requested
Borrowing.


 


17









 





2.2 Swing Line Loans. (a) Subject to the terms and conditions hereof, the Swing Line Bank may in its discretion
make swing line loans (the “Swing Line Loans”) to the Borrower from time to time until the
Termination Date or until the Swing Line Commitment is terminated in accordance with the terms
hereof in the aggregate up to the amount of the Swing Line Commitment for periods requested by the
Borrower and agreed to by the Swing Line Bank; provided, that, no Swing Line Loan
shall be made if, after giving effect to the making of such Loan and the simultaneous application
of the proceeds thereof, the Total Exposure would exceed the Total Commitment. Within the
foregoing limits, the Borrower may borrow, repay and reborrow under the Swing Line Commitment,
subject to and in accordance with the terms and limitations hereof.



(b) The Borrower may request a Swing Line Loan to be made on any Business Day. Each request
for a Swing Line Loan shall be in writing (or by telephone promptly confirmed in writing) and
delivered to the Swing Line Bank not later than 12:00 noon, Philadelphia time, on the Business Day
such Swing Line Loan is to be made, specifying in each case (i) the amount to be borrowed, (ii) the
requested borrowing date, (iii) whether the interest rate applicable to such Swing Line Loan is to
be: (A) the Base Rate or (B) an interest rate mutually agreed upon by the Borrower and the Swing
Line Bank and (iv) the date such Swing Line Loan is to be repaid (the “Swing Line Repayment
Date”). The request for such Swing Line Loan shall be irrevocable. Provided that all
applicable conditions precedent contained in Section 4.2 hereof have been satisfied, the Swing Line
Bank shall, not later than 4:00 p.m., Philadelphia time, on the date specified in the Borrower’s
request for such Swing Line Loan, make such Swing Line Loan by crediting the Borrower’s deposit
account with the Swing Line Bank.



(c) The obligation of the Borrower to repay the Swing Line Loans shall be evidenced by a
promissory note of the Borrower dated the date hereof, payable to the order of the Swing Line Bank
in the principal amount of the Swing Line Commitment and substantially in the form of Exhibit
B-2 (as amended, supplemented or otherwise modified from time to time, the “Swing Line
Note”).



(d) Interest shall accrue on the outstanding principal balance of a Swing Line Loan at the
interest rate chosen by the Borrower in accordance with Section 2.2(b) with respect to such Swing
Line Loan and shall be payable on each applicable Interest Payment Date and upon the repayment of
such Swing Line Loan.



(e) A Swing Line Loan shall be repaid on the earlier of (i) the Termination Date and (ii) the
Swing Line Repayment Date for such Swing Line Loan. Unless the Borrower shall have notified the
Agent prior to 11:00 a.m., Philadelphia time, on such Swing Line Repayment Date that the Borrower
intends to repay such Swing Line Loan with funds other than the proceeds of a Revolving Credit
Loan, the Borrower shall be deemed to have given notice to the Agent requesting the Banks to make a
Revolving Credit Loan which shall be a Base Rate Borrowing in accordance with Section 2.1 on the
Swing Line Repayment Date in an aggregate amount equal to the amount of such Swing Line Loan plus
interest thereon, and (A) subject to satisfaction or waiver of the conditions specified in Section
4.2, the Banks shall, on the Swing Line Repayment Date, make a Revolving Credit Loan which shall be
a Base Rate Borrowing, in an aggregate amount equal to the amount of such Swing Line Loan plus
interest thereon, the proceeds of which shall be applied directly by the Agent to repay the Swing
Line
Bank for such Swing Line Loan plus accrued interest thereon; and provided,
further, that if for any reason the proceeds of such Base Rate Borrowing are not received
by the Swing Line Bank on the Swing Line Repayment Date in an aggregate amount equal to the amount
of such Swing Line Loan plus accrued interest, the Borrower shall reimburse the Swing Line Bank on
the day immediately following the Swing Line Repayment Date, in same day funds, in an amount equal
to the excess of the amount of such Swing Line Loan over the aggregate amount of such Base Rate
Borrowing, if any, received plus accrued interest thereon.


 


18









 





(f) In the event that the Borrower shall fail to repay the Swing Line Bank as provided in
Section 2.2(e) in an amount equal to the amount required under Section 2.2(e), the Agent shall
promptly notify each Bank of the unpaid amount of such Swing Line Loan and of such Bank’s
respective participation therein in an amount equal to such Bank’s Commitment Percentage of such
Swing Line Loan. Each Bank shall make available to the Agent for payment to the Swing Line Bank an
amount equal to its respective participation therein (including without limitation its pro rata
share of accrued but unpaid interest thereon), in same day funds, at the office of the Agent
specified in such notice, not later than 11:00 a.m., Philadelphia time, on the Business Day after
the date the Agent notifies each Bank. In the event that any Bank fails to make available to the
Agent the amount of such Bank’s participation in such unpaid amount as provided herein, the Swing
Line Bank shall be entitled to recover such amount on demand from such Bank together with interest
thereon at a rate per annum equal to the Base Rate for each day during the period between the Swing
Line Repayment Date and the date on which such Bank makes available its participation in such
unpaid amount. The failure of any Bank to make available to the Agent its pro rata share of any
such unpaid amount shall not relieve any other Bank of its obligations hereunder to make available
to the Agent its pro rata share of such unpaid amount on the Swing Line Repayment Date. The Agent
shall distribute to each Bank which has paid all amounts payable by it under this Section 2.2(f)
with respect to the unpaid amount of any Swing Line Loan, such Bank’s Commitment Percentage of all
payments received by the Agent from the Borrower in repayment of such Swing Line Loan when such
payments are received. Notwithstanding anything to the contrary herein, each Bank which has paid
all amounts payable by it under this Section 2.2(f) shall have a direct right to repayment of such
amounts from the Borrower subject to the procedures for repaying Banks set forth in this Section
2.2.



(g) In the event the Commitments are terminated in accordance with Section 2.8 hereof, the
Swing Line Commitment shall also be terminated automatically. In the event the Borrower reduces
the Total Commitment to less than the Swing Line Commitment, the Swing Line Commitment shall
immediately be reduced to an amount equal to the Total Commitment. In the event the Borrower
reduces the Total Commitment to less than the outstanding principal amount of the Swing Line Loans,
the Borrower shall immediately repay the amount by which the outstanding Swing Line Loans exceed
the Swing Line Commitment as so reduced plus accrued interest thereon.




(h) At no time shall there be more than two outstanding Swing Line Loans.



(i) Each Swing Line Loan shall be in an original principal amount of $100,000 or multiples of
$50,000 in excess thereof.


 


19









 





(j) The Borrower shall have the right at any time and from time to time to prepay any Swing
Line Loan, in whole or in part, without premium or penalty, upon prior written, telecopy or
telephonic notice to the Swing Line Bank given no later than 1:00 p.m., Philadelphia time, on the
date of any proposed prepayment. Each notice of prepayment shall specify the Swing Line Loan to be
prepaid and the amount to be prepaid, shall be irrevocable and shall commit the Borrower to prepay
such amount on such date, with accrued interest thereon.



(k) In addition to making Swing Line Loans pursuant to the foregoing provisions of this
Section 2.2, the Swing Line Bank may also make Swing Line Loans to the Borrower without the
requirement for a specific request from the Borrower pursuant to Section 2.2(b) in accordance with
the provisions of the agreements between the Borrower and the Swing Line Bank relating to the
Borrower’s deposit, sweep and other accounts at the Swing Line Bank and related arrangements and
agreements regarding the management and investment of Borrower’s cash assets as in effect from time
to time (the “Cash Management Agreements”) to the extent of the daily aggregate net
negative balance in the Borrower’s accounts which are subject to the provisions of the Cash
Management Agreements. Swing Line Loans made pursuant to this Section 2.2(k) in accordance with
the provisions of the Cash Management Agreements shall (i) be subject to the limitations as to
aggregate amount set forth in Section 2.2(a), (ii) not be subject to the limitations as to number
or individual amount set forth in Sections 2.2(h) and (i), (iii) be payable by the Borrower, both
as to principal and interest, at the times set forth in the Cash Management Agreements (but in no
event later than the Termination Date), (iv) not be made at any time after the Swing Line Bank has
notice of the occurrence of a Default or Event of Default, (v) if not repaid by the Borrower in
accordance with the provisions of the Cash Management Agreements, be subject to each Bank’s
obligation to purchase participating interests therein pursuant to Section 2.2(f), and (vi) except
as provided in the foregoing subsections (i) through (v), be subject to all of the terms and
conditions of this Section 2.2.



2.3 General Provisions Regarding Loans. Subject to Section 2.3(b), each Bank shall make each Revolving Credit Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available funds to the Agent
in Philadelphia, Pennsylvania, not later than 1:00 p.m., Philadelphia time, and the Agent shall by
3:00 p.m., Philadelphia time, credit the amounts so received to the general deposit account of the
Borrower with the Agent or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so received to the
respective Banks. Loans shall be made by the Banks pro rata in accordance with Section 2.14.
Unless the Agent shall have received notice from a Bank prior to the date of any Borrowing that
such Bank will not make available to the Agent such Bank’s portion of such Borrowing, the Agent may
assume that such Bank has made such portion available to the Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the extent that such Bank
shall not have made such portion available to the Agent, such Bank and the Borrower severally agree
to repay to the Agent forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until the date such amount
is repaid to the Agent at (i) in the case of the Borrower, the interest rate applicable at the time
to the Revolving Credit Loans comprising such Borrowing and (ii) in the case of such Bank, the
Federal Funds Effective Rate. If such Bank shall repay to the Agent
such corresponding amount, such amount shall constitute such Bank’s Revolving Credit Loan as
part of such Borrowing for purposes of this Agreement.


 


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(b) The Borrower may refinance all or any part of any Borrowing with any other Borrowing,
subject to the conditions and limitations set forth herein and elsewhere in this Agreement. Any
Borrowing or part thereof so refinanced shall be deemed to be repaid in accordance with Section 2.5
with the proceeds of a new Borrowing hereunder and the proceeds of the new Borrowing, to the extent
they do not exceed the principal amount of the Borrowing being refinanced, shall not be paid by the
Banks to the Agent or by the Agent to the Borrower; provided, however, that (i) if
the principal amount extended by a Bank in a refinancing is greater than the principal amount
extended by such Bank in the Borrowing being refinanced, then such Bank shall pay such difference
to the Agent for distribution to the Banks described in (ii) below, (ii) if the principal amount
extended by a Bank in the Borrowing being refinanced is greater than the principal amount agreed to
be extended by such Bank in the refinancing, the Agent shall return the difference to such Bank out
of amounts received pursuant to (i) above, and (iii) to the extent any Bank fails to pay the Agent
amounts due from it pursuant to (i) above, any Revolving Credit Loan or portion thereof being
refinanced with such amounts shall not be deemed repaid in accordance with Section 2.5 and shall be
payable by the Borrower without prejudice to the Borrower’s rights against any such Bank.



(c) Each Bank may at its option fulfill its commitment hereunder with respect to any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Bank to make such
Revolving Credit Loan; provided, however, that (A) any exercise of such option
shall not affect the obligation of the Borrower to repay such Revolving Credit Loan in accordance
with the terms of the Agreement and the applicable Note and (B) the Borrower shall not be liable
for increased costs under Sections 2.11 or 2.12 to the extent that (x) such costs could be avoided
by the use of a different branch or Affiliate to make Eurodollar Loans and (y) such use would not,
in the judgment of such Bank, entail any significant additional expense for which such Bank shall
not be indemnified hereunder or otherwise be disadvantageous to it; and



(d) All Borrowings, conversions and continuations of Revolving Credit Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such
elections that, after giving effect thereto, (A) the aggregate principal amount of the Revolving
Credit Loans comprising each Tranche of Eurodollar Loans shall be equal to $500,000 or a whole
multiple of $100,000 in excess thereof and (B) the Borrower shall not have outstanding at any one
time more than in the aggregate five (5) separate Tranches of Eurodollar Loans.



(e) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request any Borrowing if the Interest Period requested with respect thereto would end after the
Termination Date.


 


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2.4 Fees. (a) The Borrower agrees to pay to the Agent the fees at the times and in the amounts as
are set forth in the Fee Letters (collectively, the “Fees”).



(b) All Fees shall be paid on the dates due, in immediately available funds, to the Agent for
distribution, if and as appropriate, among the Banks. Once paid, none of the Fees shall be
refundable under any circumstances.



2.5 Revolving Credit Notes; Repayment of Revolving Credit Loans. The Revolving Credit Loans made by each Bank shall be evidenced by a single Revolving
Credit Note duly executed on behalf of the Borrower, dated the Closing Date, in substantially the
form attached hereto as Exhibit B-1 with the blanks appropriately filled, payable to such Bank in a
principal amount equal to the Commitment of such Bank. Each Revolving Credit Note shall bear
interest from the date thereof on the outstanding principal balance thereof as set forth in Section
2.6. Each Bank shall, and is hereby authorized by the Borrower to, endorse on the schedule
attached to the relevant Revolving Credit Note held by such Bank (or on a continuation of such
schedule attached to each such Revolving Credit Note and made a part thereof), or otherwise to
record in such Bank’s internal records, an appropriate notation evidencing the date and amount of
each Revolving Credit Loan of such Bank, each payment or prepayment of principal of any Revolving
Credit Loan, and the other information provided for on such schedule; provided,
however, that the failure of any Bank to make such a notation or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Revolving Credit Loans made by
such Bank in accordance with the terms of the relevant Revolving Credit Note. The outstanding
principal balance of each Revolving Credit Loan, as evidenced by the relevant Revolving Credit
Note, shall be payable on the Termination Date.



2.6 Interest on Revolving Credit Loans. (a) Subject to the provisions of Section 2.7, each Base Rate Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to the Base Rate.



(b) Subject to the provisions of Section 2.7, each Eurodollar Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to the Eurodollar Rate for the Interest Period in effect for such Loan plus
seventy-five (75) basis points (0.75%).



(c) Interest on each Revolving Credit Loan shall be payable on each Interest Payment Date
applicable to such Revolving Credit Loan; provided that, interest accruing on
overdue amounts pursuant to Section 2.7 shall be payable on demand as provided in the Revolving
Credit Notes. The Eurodollar Rate and the Base Rate shall be determined by the Agent, and such
determination shall be conclusive absent error.



2.7 Default Rate; Additional Interest; Alternate Rate of Interest. (a) To the extent not contrary to any Requirement of Law, upon the occurrence and during
the continuation of an Event of Default, any principal, past due interest, fee or other amount
outstanding hereunder shall, at the option of the Required Banks, bear interest for each day
thereafter until paid in full (after as well as before judgment) at a rate per annum which shall be
equal to two percent (2%) above the Base Rate (but in no event shall any such rate exceed the
maximum rate permitted by any Requirement of Law). The Borrower acknowledges that such increased
interest rate reflects, among other things, the fact that such loans or other amounts have become a
substantially greater risk given their default status and that the Banks are entitled to additional
compensation for such risk.


 


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(b) In the event, and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Loan, the Agent shall have determined (which
determination absent manifest error shall be conclusive and binding upon the Borrower) that dollar
deposits in the principal amount of such Eurodollar Loan are not generally available in the London
Interbank Market, or that the rate at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to the Banks of making or maintaining the principal amount
of such Eurodollar Loan during such Interest Period, or that reasonable means do not exist for
ascertaining the Eurodollar Rate, the Agent shall, as soon as practicable thereafter, give written,
telegraphic or telephonic notice of such determination to the Borrower and the Banks, and any
request by the Borrower for a Eurodollar Loan or for conversion to or maintenance of a Eurodollar
Loan pursuant to the terms of this Agreement shall be deemed a request for a Base Rate Loan. After
such notice shall have been given and until the circumstances giving rise to such notice no longer
exist, each request for a Eurodollar Loan shall be deemed to be a request for a Base Rate Loan.
Each determination by the Agent hereunder shall be conclusive absent manifest error.



2.8 Termination, Reduction, Extension of Commitments; Additional Banks. (a) The Commitments shall be automatically terminated on the Termination Date.



(b) Subject to the last sentence of this paragraph, upon at least three Business Days’ prior
irrevocable written or telecopy notice to the Agent, the Borrower may at any time in whole
permanently terminate, or from time to time permanently reduce, the Total Commitment. Each partial
reduction of the Total Commitment shall be in a minimum principal amount of $1,000,000 or in whole
multiples of $500,000 in excess thereof, and no such termination or reduction shall be made which
would reduce the Total Commitment to an amount less than the aggregate outstanding principal amount
of the Loans.



(c) Each reduction in the Total Commitment hereunder shall be made ratably among the Banks in
accordance with their respective Commitment Percentages. In connection with any reduction of the
Total Commitment, the Borrower shall make any prepayment required under subsection 2.9(b).



(d) During the period beginning ninety days prior to the Termination Date then in effect and
ending sixty days prior to such Termination Date, the Borrower may deliver to the Agent (which
shall promptly transmit to each Bank) a notice requesting that the Commitments be extended for a
364 day period beyond the Termination Date then in effect. Within thirty days after its receipt
of any such notice, each Bank shall notify the Agent of its willingness or unwillingness so to
extend its Commitment. Any Bank that shall fail so to notify the Agent within such period shall be
deemed to have declined to extend its Commitment. If each (but only if each) Bank agrees to extend
its Commitment, the Agent shall so notify the Company and each Bank, whereupon (i) the respective
Commitments of the Banks shall without further act by any party hereto, be extended for a 364 day
period beyond the Termination Date then in effect and (ii) the term “Termination Date” shall
thereafter mean the last day of such period. Any such extension shall be evidenced by a written
agreement among the Agent, the Banks and the Borrower, such agreement to be in form and substance
acceptable to the Agent, the Banks and the Borrower. In the event that one or more Banks (each a
“Non-Electing Bank”) shall have



 


23









 






declined or been deemed to have declined to extend its or
their Commitment and Banks holding a majority in amount of the Commitments shall have notified the Agent of their
desire to extend their Commitments, the Borrower shall have the right, but not the obligation, at
its own expense, upon notice to each such Non-Electing Bank and the Agent, to replace all (but not
less than all) such Non-Electing Banks (in accordance with and subject to the restrictions
contained in Section 9.6) at any time before the twentieth (20th) day prior to the Termination Date
with one or more assignees (each a “Replacement Bank”) willing to purchase the Non-Electing
Banks’ interests hereunder and to agree to extend its or their Commitment in accordance with the
notice referred to in the first sentence of this clause (d). In such event, each Non-Electing Bank
shall promptly upon request transfer and assign without recourse (in accordance with and subject to
the restrictions contained in Section 9.6) all its interests, rights and obligations under this
Agreement to the applicable Replacement Bank; provided, however, that (i) no such
assignment shall conflict with any law or any rule, regulation or order of any Governmental
Authority, (ii) the applicable Replacement Bank shall pay to the applicable Non-Electing Bank in
immediately available funds on the date of such assignment the principal of and interest accrued to
the date of payment on the Loans made by such Non-Electing Bank hereunder and all other amounts
accrued for such Non-Electing Bank’s account or owed to it hereunder (including any unpaid costs or
expenses), and (iii) a Non-Electing Bank shall not be required to sell its interests hereunder
unless the Borrower has arranged for one or more Replacement Banks to acquire the interests of all
other Non-Electing Banks. If, as a result of the foregoing, each Bank (including Replacement
Banks, but excluding Non-Electing Banks whose interests have been purchased as provided above) has
agreed to extend its Commitment, the Commitments shall be extended as provided in clause (i) of the
fourth sentence of this paragraph and the term Termination Date shall have the meaning set forth in
clause (ii) in such fourth sentence of this clause (d).



(e) Any bank or financial institution becoming a party to this Agreement in compliance with
the provisions of subsection 2.8(d) hereof shall execute and deliver to the Agent and the Banks and
the Borrower a joinder and assumption agreement in form and substance satisfactory to the Agent.
Upon execution and delivery of such joinder such additional bank or financial institution shall be
a party hereto and one of the Banks hereunder for all purposes, all as of the date of such joinder.
Simultaneously therewith the Borrower shall execute and deliver to such additional Bank an
additional Note to the order of such additional Bank in an amount equal to the Commitment assumed
by such additional Bank.



2.9 Optional and Mandatory Prepayments of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any
Borrowing, in whole or in part, without premium or penalty (but in any event subject to Section
2.13), upon prior written, telecopy or telephonic notice to the Agent given no later than 11:00
a.m., Philadelphia time, one Business Day before any proposed prepayment; provided,
however, that each such partial prepayment of a Eurodollar Borrowing shall be in the
principal amount of at least $500,000 or in whole multiples of $100,000 in excess thereof and each
such partial prepayment of a Base Rate Borrowing shall be in the principal amount of at least
$250,000 or in whole multiples of $50,000 in excess thereof.



(b) On the date of any termination or reduction of the Total Commitment pursuant to Section
2.8, the Borrower shall pay or prepay so much of the Borrowings as shall be necessary in order that
the aggregate principal amount of the Loans then
outstanding will not exceed the Total Commitment after giving effect to such termination or
reduction.


 


24









 





(c) Each notice of prepayment shall specify the prepayment date and the principal amount of
each Borrowing to be prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing (or portion thereof) by the amount stated therein. All prepayments under this Section on
other than Base Rate Borrowings shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment.



2.10 Illegality. Notwithstanding any other provision herein, if any change in any Requirement of Law or in
the interpretation or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Bank hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert or refinance Base Rate Loans
to Eurodollar Loans shall forthwith be cancelled and (b) such Bank’s Revolving Credit Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such Revolving Credit
Loans or within such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Bank such amounts, if any, as may be required pursuant to
Section 2.13.



2.11 Requirements of Law. (a) In the event that any change in any Requirement of Law or in the interpretation, or
application thereof or compliance by any Bank with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made subsequent to the date
hereof:




(i) shall subject any Bank to any tax of any kind whatsoever with respect to this
Agreement, any Note or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Bank in respect thereof (except for taxes covered by Section 2.12 and
changes in the rate of tax on the overall net income, gross receipts or revenue of such
Bank);




(ii) shall impose, modify or hold applicable any reserve, special deposit or similar
requirement against assets held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other acquisition of funds by, any
office of such Bank which is not otherwise included in the determination of the interest
rate on such Eurodollar Loan hereunder; or




(iii) shall impose on such Bank any other condition;



and the result of any of the foregoing is to increase the cost to such Bank, by an amount which
such Bank reasonably deems to be material, of making, converting into, continuing or maintaining
Eurodollar Loans or to reduce any amount receivable hereunder in respect thereof then, in any such
case, the Borrower shall as promptly as practicable pay such Bank, upon its demand, any additional
amounts necessary to compensate such Bank for such increased cost or reduced amount receivable;
provided, that the Borrower shall not be liable for any such amounts incurred by such Bank
more than 180 days prior to the date of such Bank’s notification to the
Borrower. If any Bank becomes entitled to claim any additional amounts pursuant to this
subsection, it shall as promptly as practicable notify the Borrower, through the Agent, of the
event by reason of which it has become so entitled. A certificate describing in reasonable detail
the determination of any additional amounts payable pursuant to this subsection submitted by such
Bank, through the Agent, to the Borrower shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. If any amount is refunded to such Bank, such Bank will reimburse
Borrower for amounts paid in respect of the refunded amount.


 


25









 





(b) In the event that any Bank shall have determined that any change in any Requirement of Law
regarding capital adequacy or in the interpretation or application thereof or compliance by such
Bank or any corporation controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental Authority made subsequent
to the date hereof does or shall have the effect of reducing the rate of return on such Bank’s or
such corporation’s capital as a consequence of its obligations hereunder to a level below that
which such Bank or such corporation could have achieved but for such change or compliance (taking
into consideration such Bank’s or such corporation’s policies with respect to capital adequacy) by
an amount reasonably deemed by such Bank to be material, then from time to time, after submission
as promptly as practicable by such Bank to the Borrower (with a copy to the Agent) of a written
request therefor, the Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction.



(c) Each Bank agrees that it will use reasonable efforts in order to avoid or to minimize, as
the case may be, the payment by the Borrower of any additional amount under subsections 2.11(a)
and (b); provided, however, that no Bank shall be obligated to incur any expense,
cost or other amount in connection with utilizing such reasonable efforts. Notwithstanding any
other provision of this Section 2.11, no Bank shall apply the provisions of subsections 2.11(a) or
(b) hereof with respect to the Borrower if it shall not at the time be the general policy or
practice of the Bank exercising its rights hereunder to apply the provisions similar to those of
this Section 2.11 to other Borrower in substantially similar circumstances under substantially
comparable provisions of other credit agreements.



2.12 Taxes. (a) All payments made by the Borrower under this Agreement and the Notes shall be made
free and clear of, and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding, in the case of the Agent and each Bank, net income taxes and franchise or gross receipts
taxes (imposed in lieu of net income taxes) imposed on the Agent or such Bank, as the case may be,
as a result of a present or former connection between the jurisdiction of the government or taxing
authority imposing such tax and the Agent or such Bank or any political subdivision or taxing
authority thereof or therein (all such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called “Taxes”). Except as provided in Section
2.12(c) and the penultimate sentence of this Section 2.12(a), if any Taxes are required to be
withheld from any amounts payable to the Agent or any Bank hereunder or under the Notes, the
amounts so payable



 


26









 






to the Agent or such Bank shall be increased to the extent necessary to yield to
the Agent or such Bank (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes. Whenever any Taxes are payable by the Borrower,
as promptly as possible thereafter the Borrower shall send to the Agent for its own account or for
the account of such Bank, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay any Taxes when due
to the appropriate taxing authority or fail to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and the Banks for any
incremental taxes, interest or penalties that may become payable by the Agent or any Bank as a
result of any such failure. If as a result of a payment by the Borrower of Taxes pursuant to this
subsection a Bank receives a tax benefit or tax savings such as by receiving a credit against,
refund of, or reduction in Taxes which such Bank would not have received but for the payment by the
Borrower of Taxes pursuant to this subsection, then such Bank shall promptly pay to the Borrower
the amount of such credit, refund, reduction or any other similar item. The agreements in this
subsection shall survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.



(b) Each Bank that is not incorporated under the laws of the United States of America or a
state thereof agrees that it will deliver to the Borrower and the Agent (i) two duly completed
copies of United States Internal Revenue Service Form W-8 ECI, W-8 BEN or W-8 IMY or successor
applicable form, as the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form. Each such Bank also agrees to deliver to the Borrower and the Agent two
further copies of the said Form W-8 ECI, W-8 BEN or W-8 IMY and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event requiring a change
in the most recent form previously delivered by it to the Borrower, and such extensions or renewals
thereof as may reasonably be requested by the Borrower or the Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and delivering any such form
with respect to it and such Bank so advises the Borrower and the Agent. Such Bank shall certify
(i) in the case of a Form W-8 ECI, W-8 BEN or W-8 IMY that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal income taxes and (ii)
in the case of a Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Bank shall deliver to the Borrower and the Agent, with respect to Taxes
imposed by any Governmental Authority other than the United States of America, similar forms, if
available (or the information that would be contained in similar forms if such forms were
available), to the forms which are required to be provided under this subsection with respect to
Taxes of the United States of America.



(c) The Borrower shall not be required to pay any additional amounts to the Agent or any Bank
in respect of payments of United States withholding tax or other Taxes made by the Borrower which
are consistent with the forms and information delivered to the Borrower and the Agent or if the
payment of such amounts would not have arisen but for a failure by the Agent or such Bank to comply
with the requirements of subsection 2.12(b) or the Agent or such Bank did not timely deliver to the
Borrower the forms listed or described in subsection 2.12(b) or did not take such other steps as
reasonably may be available to it under
applicable tax laws and any applicable tax treaty or convention to obtain an exemption from,
or reduction (to the lowest applicable rate) of, such United States withholding tax and other Taxes
or, if such steps were taken, the information was not timely and duly delivered to Borrower.


 


27









 





2.13 Indemnity. The Borrower agrees to indemnify each Bank and to hold each Bank harmless from any loss or
expense which such Bank may sustain or incur as a consequence of (a) default by the Borrower in
payment when due of the principal amount of or interest on any Eurodollar Loan, (b) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the provisions of this
Agreement, (c) default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (d) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto, including, without limitation, in each case, any such loss or expense arising from
the reemployment of funds obtained by it or from fees payable to terminate the deposits from which
such funds were obtained. This covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.



2.14 Pro Rata Treatment, etc. Except as required under Sections 2.2 and 2.10, each Borrowing, each payment or
prepayment of principal of any Borrowing, each payment of interest on the Loans, each reduction of
the Commitments, each refinancing of any Borrowing with a Borrowing of any Type and each conversion
of Loans, shall be made pro rata among the Banks in accordance with their respective Commitment
Percentages. Each Bank agrees that in computing such Bank’s portion of any Borrowing to be made
hereunder, the Agent may, in its discretion, round each Bank’s percentage of such Borrowing to the
next higher or lower whole dollar amount.



2.15 Payments. (a) The Borrower shall make each payment (including principal of or interest on any Loan
or any Fees or other amounts) hereunder not later than 12:00 (noon), Philadelphia time, on the date
when due in Dollars to the Agent at its offices at 1600 Market Street, Philadelphia, Pennsylvania,
or at such other place as may be designated by the Agent, in immediately available funds.



(b) Whenever any payment (including principal of or interest on any Loan or any Fees or other
amounts) hereunder shall become due, or otherwise would occur, on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.


 


28









 





2.16 Conversion and Continuation Options. The Borrower shall have the right at any time upon prior irrevocable notice to the Agent
(i) not later than 11:00 a.m., Philadelphia time, on the Business Day of conversion, to convert any
Eurodollar Loan to a Base Rate Loan, (ii) not later than 11:00 a.m., Philadelphia time, three
Business Days prior to conversion or continuation, (y) to convert any Base Rate Loan into a
Eurodollar Loan, or (z) to continue any Eurodollar Loan as a Eurodollar Loan for any additional
Interest Period, and (iii) not later than 11:00 a.m., Philadelphia time, three Business Days prior
to conversion, to convert the Interest
Period with respect to any Eurodollar Loan to another permissible Interest Period,
subject in each case to the following:



(a) a Eurodollar Loan may not be converted at a time other than the last day of the Interest
Period applicable thereto;



(b) any portion of a Revolving Credit Loan maturing or required to be repaid in less than one
month may not be converted into or continued as a Eurodollar Loan;



(c) no Eurodollar Loan may be continued as such and no Base Rate Loan may be converted to a
Eurodollar Loan when any Default or Event of Default has occurred and is continuing;



(d) any portion of a Eurodollar Loan that cannot be converted into or continued as a
Eurodollar Loan by reason of paragraph 2.16(b) or 2.16(c) automatically shall be converted at the
end of the Interest Period in effect for such Revolving Credit Loan to a Base Rate Loan;



(e) if by the third Business Day prior to the last day of any Interest Period for Eurodollar
Loans, the Borrower has failed to give notice of conversion or continuation as described in this
subsection, the Agent shall give notice thereof to the Banks and such Revolving Credit Loans shall
be automatically converted to Base Rate Loans on the last day of such then expiring Interest
Period; and



(f) each request by the Borrower to convert or continue a Revolving Credit Loan shall
constitute a representation and warranty that each of the representations and warranties made by
the Borrower herein is true and correct in all material respects on and as of such date as if made
on and as of such date.



Accrued interest on a Revolving Credit Loan (or portion thereof) being converted shall be paid by
the Borrower at the time of conversion.



2.17 Defaulting Banks. Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes a
Defaulting Bank, then the following provisions shall apply for so long as such Bank is a Defaulting
Bank:



(a) such Defaulting Bank, or the Exposure and Commitment Percentage of such Defaulting Bank,
as applicable, shall not be included in determining whether all Banks or Required Banks have taken
or may take any action hereunder (including any consent to any amendment or waiver pursuant to
Section 9.1), provided that any waiver, amendment or modification requiring the consent of all
Banks or each affected Bank which affects such Defaulting Bank differently than other affected
Banks shall require the consent of such Defaulting Bank;


 


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(b) if any outstanding Swing Line Loans exist at the time a Bank becomes a Defaulting Bank
then:



(i) such Defaulting Bank’s pro rata portion of such Swing Line Loans shall be reallocated
among the Non-Defaulting Banks in accordance with their respective Adjusted Commitment Percentages
but only to the extent (x) the sum of (A) the Revolving Credit Loans of all Non-Defaulting Banks
plus (B) all Non-Defaulting Banks’ Adjusted Commitment Percentages of the aggregate principal
amount of all outstanding Swing Line Loans then outstanding does not exceed the aggregate amount of
the Commitments of all Non-Defaulting Banks and (y) the conditions set forth in Section 4.2 are
satisfied at such time;



(ii) to the extent that all or any part of such Defaulting Bank’s pro rata portion of Swing
Line Loans cannot be reallocated pursuant to Section 2.17(b)(i), then the Borrower (A) shall,
within 15 days following notice from the Agent until such Defaulting Bank ceases to be a Defaulting
Bank under this Agreement, establish and, thereafter, maintain a special collateral account (the
“Swing Line Collateral Account”) at the Agent’s office at the address specified pursuant to Section
9.2, in the name of the Borrower but under the sole dominion and control of the Agent, (B) grant to
the Agent for the benefit of the Banks, solely as security for repayment of the unallocated portion
of such Defaulting Bank’s Commitment Percentage of outstanding Swing Line Loans, a security
interest in and to the Swing Line Collateral Account and any funds that may thereafter be deposited
therein and (C) shall maintain in the Swing Line Collateral Account an amount equal to the
unallocated portion of such Defaulting Bank’s Commitment Percentage of outstanding Swing Line
Loans; and



(iii) the Swing Line Bank shall not be required to, but in its sole discretion may from time
to time elect to, fund any Swing Line Loan, unless it is satisfied in its sole discretion that the
related exposure will be 100% covered by the Non-Defaulting Banks and/or cash collateral will be
provided by the Borrower in accordance with Section 2.17(b)(ii).



(iv) any amount payable to a Defaulting Bank hereunder (whether on account of principal,
interest, fees or otherwise) shall, in lieu of being distributed to such Defaulting Bank, be
retained by the Agent in a segregated account and, subject to any applicable requirements of law,
be applied at such time or times as may be determined by the Agent (i) first, to the payment of any
amounts owing by such Defaulting Bank to the Agent hereunder, (ii) second, pro rata, to the payment
of any amounts owing by such Defaulting Bank to the Swing Line Bank hereunder, (iii) third, to the
funding of any Revolving Credit Loan or the funding of any participating interest in any Swing Line
Loan or in respect of which such Defaulting Bank has failed to fund its portion thereof as required
by this Agreement, as determined by the Agent, (iv) fourth, if so determined by the Agent and the
Borrower, held in such account as cash collateral for future funding obligations of the Defaulting
Bank under this Agreement, (v) fifth, pro rata, to the payment of any amounts owing to the Borrower
or the Banks as a result of any judgment of a court of competent jurisdiction obtained by the
Borrower or any Bank against such Defaulting Bank as a result of such Defaulting Bank’s breach of
its obligations under this Agreement; provided that, if an Event of Default shall have occurred and
be continuing, any payments that would be made to the Borrower shall be applied by the Agent to the
Obligations in such order as the Agent shall elect and (vi) sixth, to such Defaulting Bank or as
otherwise directed by a court of competent jurisdiction; provided that if such
payment is (x) a payment of the principal amount of any Revolving Credit Loans for which a
Defaulting Bank has not fully funded its participation obligations and (y) made at a time when the
conditions set forth in Section 4.2 are satisfied, the remaining portion of such payment shall be
applied solely to prepay
the Revolving Credit Loans of, and reimbursement obligations owed to, all Non-Defaulting Banks
pro rata prior to being applied to the prepayment of any Revolving Credit Loans of, or
reimbursement obligations owed to, any Defaulting Bank.


 


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(v) In the event that the Borrower, the Agent and the Swing Line Bank each agrees that a
Defaulting Bank has adequately remedied all matters that caused such Bank to be a Defaulting Bank,
then the Swing Line Loans of the Banks shall be readjusted to reflect the inclusion of such Bank’s
Commitment Percentage and on such date such Bank shall purchase at par such of the Revolving Credit
Loans of the other Banks (other than Swing Line Loans) as the Agent shall determine may be
necessary in order for such Bank to hold such Revolving Credit Loans in accordance with its
Commitment Percentage, subject to the provisions of Section 2.13.



SECTION 3. REPRESENTATIONS AND WARRANTIES




To induce the Banks to enter into this Agreement, and to make the Loans, the Borrower hereby
represents and warrants to the Agent and each Bank that:



3.1 Financial Condition. (a) The audited consolidated balance sheet of the Borrower and its Subsidiaries as at
December 31, 2009 and the related consolidated statements of income and of cash flows for the
fiscal year ended on such date, and the consolidated balance sheet as at September 30, 2010 and the
statements of income and cash flow of the Borrower and its Subsidiaries for the nine month period
ended September 30, 2010, copies of all of which have heretofore been furnished to each Bank,
present fairly the consolidated financial condition of the Borrower as at such dates, and the
consolidated results of its operations and its consolidated cash flows for the periods covered
thereby. All such financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the periods involved.
Neither the Borrower nor any of its Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Contingent Obligation, liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is required by GAAP to be but is not reflected
in the foregoing statements or in the notes thereto.



(b) (i) As of the Closing Date and after giving effect to this Agreement and any Loans to be
made on the Closing Date, the Borrower is Solvent.



(ii) The Borrower does not intend to incur debts beyond its ability to pay such debts as they
mature, taking into account the timing of and amounts of cash to be received by it and the timing
of the amounts of cash to be payable on or in respect of its Debt.



3.2 No Adverse Change. Since December 31, 2009, there has been no development or event which has had a Material
Adverse Effect.



3.3 Existence; Compliance with Law. The Borrower (a) is duly organized, and subsisting under the laws of the jurisdiction of
its incorporation, (b) has the corporate power and authority to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it is currently
engaged, (c) is duly qualified to transact business in
each jurisdiction where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except to the extent that the failure to be so qualified
would not, in the aggregate, have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law the non-compliance with which would have a Material Adverse Effect.


 


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3.4 Corporate Power; Authorization; Enforceable Obligations. The Borrower has the corporate power, authority, and legal right, to make, deliver and
perform this Agreement, the Notes and the other Loan Documents to which it is a party and to borrow
hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement and the Notes and to authorize the execution, delivery and performance
of this Agreement, the Notes and the other Loan Documents to which it is a party. No consent or
authorization of, filing with or other act by or in respect of, any Governmental Authority or any
other Person (including stockholders and creditors of the Borrower) is required in connection with
the borrowings hereunder or with the execution, delivery, performance, validity or enforceability
of this Agreement, the Notes or the other Loan Documents. This Agreement has been, and each Note
and other Loan Document will be, duly executed and delivered on behalf of the Borrower. This
Agreement constitutes, and each Note and other Loan Document when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower enforceable against the Borrower
in accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law).



3.5 No Legal Bar. The execution, delivery and performance of this Agreement, the Notes and the other Loan
Documents by the Borrower, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or Contractual Obligation of the Borrower or of any of the
Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any of
its or their respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.



3.6 No Material Litigation. Except as set forth on Schedule 3.6, no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower,
threatened against the Borrower or against any of the properties or revenues of the Borrower (a)
with respect to this Agreement, the Notes or the other Loan Documents or any of the transactions
contemplated hereby, or (b) as to which there is a reasonable likelihood of an adverse
determination and which, if adversely determined, would have a Material Adverse Effect.



3.7 No Default. The Borrower is not in default under or with respect to any of its Contractual Obligations,
including without limitation, those under the Indenture in any respect which would have a Material
Adverse Effect. No Event of Default has occurred and is continuing.



3.8 Taxes. The Borrower has filed or caused to be filed all tax returns which are required to be filed
(or has obtained authorized extensions for such filings) and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Borrower, as the case may be); no material tax
Lien has been filed against the Borrower, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charges.


 


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3.9 Federal Regulations. No part of the proceeds of any Loans will be used for “purchasing” or “carrying” any
“margin stock” within the respective meanings of each of the quoted terms under Regulation U or for
any purpose which violates the provisions of Regulation U. If requested by any Bank or the Agent,
the Borrower will furnish to the Agent and each Bank a statement to the foregoing effect in
conformity with the requirements of FR Form U-l referred to in said Regulation U. No part of the
proceeds of the Loans hereunder will be used for any purpose which violates, or which is
inconsistent with, the provisions of Regulation X.



3.10 ERISA.



(a) Each Plan has complied in all respects with the applicable provisions of the ERISA and the
Code and has been administered in accordance with its terms, except to the extent that failure(s)
to so comply, or to so administer the Plan, in the aggregate, has not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. No Reportable Event has occurred
with respect to any Single Employer Plan which presents a material risk of termination of the Plan
by the PBGC. There have been no “prohibited transactions” (as defined in Section 406 of ERISA or
Section 4975 of the Code) in connection with which the Borrower or any Commonly Controlled Entity
could be subject to any Material civil penalty under 502(i) of ERISA or any Material excise tax
under Section 4975 of the Code.



(b) With respect to each Single Employer Plan maintained by the Borrower or a Commonly
Controlled Entity, the adjusted funding target attainment percentage (within the meaning of Section
436(j)(2) of the Code) of each such Single Employer Plan, as of the close of the most recent plan
year for such Plan as certified by the Plan’s actuary, is not less than eighty percent (80%).



(c) Neither the Borrower nor any Commonly Controlled Entity has incurred any withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under Section 4201 or 4204
of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material. To
the best of Borrower’s knowledge, no Multiemployer Plan is in Reorganization as defined in Section
4241 of ERISA or is Insolvent.



(d) The expected post-retirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification 715-60 (formerly FASB Statement No. 106), without regard
to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of the
Company and its Subsidiaries would not reasonably be expected to have a Material Adverse Effect.



3.11 Investment Company Act. Except as set forth on Schedule 3.11, the Borrower is not (a) an “investment
company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended or (b) subject
to any other federal or state law or regulation which purports to restrict or regulate its ability
to borrow money.


 


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3.12 Purpose of Loans. The proceeds of the Loans shall be used by the Borrower for refinancing existing
indebtedness of the Borrower and the Borrower’s general working capital purposes including the
financing of Permitted Acquisitions.



3.13 Environmental Matters. To the best knowledge of the Borrower, except as may be disclosed on Schedule 3.13
and except to the extent that the aggregate cost of any remediation or other expense to the
Borrower as a consequence of the failure of any of the following representations to be true and
correct does not exceed $1,000,000, each of the representations and warranties set forth in
paragraphs (a) through (d) of this subsection is true and correct with respect to each parcel of
real property owned or operated by the Borrower (the “Properties”):



(a) the Borrower does not have any knowledge of any claim nor has it received any written
notice of any claim, and no proceeding has been instituted of which it has received written notice,
raising any claim against the Borrower or any of its real properties now or formerly owned, leased
or operated by it, or other assets, alleging damage to the environment or any violation of or
liability arising under any Environmental Laws, except, in each case, such as could not reasonably
be expected to result in a Material Adverse Effect;



(b) the Borrower does not have knowledge of any facts which would give rise to any claim,
public or private, for violation of or liability arising under Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real properties or to operation
of other assets now or formerly owned, leased or operated by it or for its use, except, in each
case, such as could not reasonably be expected to result in a Material Adverse Effect;



(c) the Borrower has not stored any Materials of Environment Concern on real properties now or
formerly owned, leased or operated by it, and has not disposed of or released any Materials of
Environment Concern in a manner that may give rise to liability under any Environmental Laws and in
any manner that could reasonably be expected to result in a Material Adverse Effect; and



(d) all buildings on all real properties now owned, leased or operated by the Borrower are and
have been constructed, maintained and operated in a manner that will not give rise to liability
under applicable Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.



3.14 Ownership of the Borrower. As of the Closing Date the Borrower is a wholly-owned Subsidiary of the Parent Company.



3.15 Patents, Trademarks, etc. The Borrower has obtained and holds in full force and effect all patents, trademarks,
servicemarks, trade names, copyrights or licenses therefor and other such rights, free from
burdensome restrictions, which are necessary for the operation of its business as presently
conducted. To the Borrower’s best knowledge, no material
product, process, method, substance, part or other material presently sold by or employed by
the Borrower in connection with such business infringes any patent, trademark, service mark, trade
name, copyright, license or other right owned by any other Person so as to have a Material Adverse
Effect. There is not pending or, to the Borrower’s knowledge, threatened any claim or litigation
against or affecting the Borrower contesting its right to sell or use any such product, process,
method, substance, part or other material.


 


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3.16 Ownership of Property. The Borrower has good and marketable fee simple title to or valid leasehold interests in
all real property owned or leased by the Borrower (except in the case of certain properties not
material to its business as to which its title was obtained by quit-claim or special warranty
deed), and good title to all of its personal property subject to no Lien of any kind except Liens
permitted hereby. The Borrower enjoys peaceful and undisturbed possession under all of its
respective material leases.



3.17 Licenses, etc. The Borrower has obtained and holds in full force and effect, all franchises, licenses,
permits, certificates, authorizations, qualifications, easements, rights of way and other rights,
consents and approvals which are necessary for the operation of its business as presently
conducted, except where the failure to obtain and hold such rights, consents or approvals could not
reasonably be expected to have a Material Adverse Effect.



3.18 Labor Matters. The Borrower has not, within the last five years, suffered any strikes, walkouts, work
stoppages or other labor difficulty involving a material number of its employees and, to the best
of the Borrower’s knowledge, there are none now threatened.



3.19 Partnerships. Except as disclosed on Schedule 3.19, as of the Closing Date, the Borrower is not a
partner in any partnership or in any joint venture.



3.20 No Material Misstatements. To the best of the Borrower’s knowledge, no information, report, financial statement,
exhibit or schedule furnished by or on behalf of the Borrower to the Agent or any Bank in
connection with the negotiation of this Agreement or any Note or other Loan Document or included
therein contains any misstatement of fact, or omitted or omits to state any fact necessary to make
the statements therein not misleading, where such misstatement or omission would in the Borrower’s
judgment be material to the interests of the Banks with respect to the Borrower’s performance of
its obligations hereunder.



3.21 Anti-Terrorism Laws. (a) Neither the Borrower nor its Subsidiaries or Affiliates are in violation of any
Anti-Terrorism Law nor does the Borrower or its Subsidiaries 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 any Anti-Terrorism Law.



(b) Executive Order No. 13224. Neither the Borrower nor any of its Subsidiaries,
Affiliates or agents acting or benefiting in any capacity in connection with the extensions 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,
Executive Order No. 13224;


 


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(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, Executive Order No. 13224;



(iii) a Person or entity with which any 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 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 U.S. 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 affiliated with a person or entity listed above.



The Borrower does not nor does any of its Subsidiaries, Affiliates or agents acting in any
capacity in connection with the extensions of credit hereunder or other transactions hereunder (x)
conduct any business or engage in making or receiving any contribution of funds, goods or services
to or for the benefit of any Blocked Person, or (y) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to the Executive Order No.
13224.



All of the foregoing representations and warranties shall survive the execution and delivery
of the Notes and the making by the Banks of the Loans hereunder.



SECTION 4. CONDITIONS PRECEDENT; CLOSING




4.1 Conditions to Closing. The agreement of each Bank to enter into this Agreement and make its initial Loan hereunder
is subject to the satisfaction, immediately prior to or concurrently with such Loans, of the
following conditions precedent:



(a) Loan Documents. The Agent shall have received (i) this Agreement, executed and
delivered by a duly authorized officer of the Borrower, with a counterpart for each Bank, (ii) for
the account of each Bank, a Revolving Credit Note conforming to the requirements hereof and
executed by a duly authorized officer of the Borrower and (iii) for the account of the Swing Line
Bank, the Swing Line Note conforming to the requirements hereof and executed by a duly authorized
officer of the Borrower.



(b) Corporate Proceedings of the Borrower. The Agent shall have received a copy of
the resolutions or other corporate proceedings or action, in form and substance satisfactory to the
Agent, taken on behalf of the Borrower authorizing (i) the execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents to which it is a party, and (ii) the
borrowings contemplated hereunder, certified by a Responsible Officer of the Borrower as of the
Closing Date, which certificate shall state that
such resolutions, or other proceedings or action thereby certified have not been amended,
modified, revoked or rescinded and shall be in form and substance satisfactory to the Agent.


 


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(c) Representations and Warranties True; No Default. The representations and
warranties of the Borrower contained in Section 3 hereof shall be true and accurate on and as of
the Closing Date in all material respects with the same effect as though such representations and
warranties had been made on and as of such date (except representations and warranties which relate
solely to an earlier date or time, which representations and warranties shall be true and correct
on and as of the specific dates or times referred to therein), and the Borrower shall have
performed and complied with all covenants and conditions hereof; and no Event of Default or Default
under this Agreement shall have occurred and be continuing or shall exist.



(d) Corporate Documents. The Agent shall have received, with a counterpart for each
Bank, true and complete copies of (i) the articles of incorporation and bylaws of the Borrower,
certified as of the Closing Date as complete and correct copies thereof by a Responsible Officer of
the Borrower; and (ii) good standing certificates issued by the Secretaries of State (or the
equivalent thereof) of each state in which the Borrower has been formed or is required to be
qualified to transact business no earlier than thirty days prior to the Closing Date.



(e) Incumbency. The Agent shall have received a written certificate dated the Closing
Date by a Responsible Officer of the Borrower as to the names and signatures of the officers of the
Borrower authorized to sign this Agreement and the other Loan Documents. The Agent may
conclusively rely on such certificate until it shall receive a further certificate by a Responsible
Officer of the Borrower amending such prior certificate.



(f) Indenture. The Agent shall have received, with a counterpart for each Bank, true
and complete copies of the Indenture and the Supplemental Indenture.



(g) Fees. The Borrower shall have paid or caused to be paid to the Agent (i) all Fees
then due hereunder and (ii) all other fees and expenses due and payable hereunder on or before the
Closing Date (if then invoiced), including without limitation the reasonable fees and expenses of
counsel to the Agent.



(h) Legal Opinion. The Agent shall have received, with a counterpart for each Bank,
the executed legal opinion of the General Counsel of the Borrower, addressed to the Banks and
satisfactory in form and substance to the Agent and its counsel covering such matters incident to
the transactions contemplated by this Agreement as the Agent may reasonably require. The Borrower
hereby directs such counsel to deliver such opinion, upon which the Banks and the Agent may rely.



(i) No Material Adverse Change. There shall be no material adverse change in the
business, operations, Property or financial or other condition of the Borrower nor any material
change in the management of the Borrower or an event which would cause or constitute a Material
Adverse Effect; and there shall be delivered to the Agent for the benefit of
each Bank a certificate dated the Closing Date and signed on behalf of the Borrower by a
Responsible Officer to each such effect.


 


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(j) No Litigation. No action, proceeding, investigation, regulation or legislation
shall have been instituted, or to the knowledge of the Borrower, threatened or proposed before any
court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain
damages in respect of this Agreement or the consummation of the transactions contemplated hereby or
which, in the Agent’s sole discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement.



(k) Evidence of Insurance. The Borrower shall have provided to each of the Banks
copies of the evidence of insurance required by subsection 5.5(b).



(l) Existing Indebtedness. The existing loans owed by the Borrower pursuant to a
Revolving Credit Agreement by and among the Borrower, the banks party thereto and PNC Bank,
National Association, as Agent, dated as of December 29, 1999, as amended, shall have been repaid
in full or arrangements satisfactory to the Agent shall exist for the repayment thereof from the
proceeds of the initial Loans hereunder, and the commitments thereunder terminated.



(m) Evidence of Regulatory Approval. The Borrower shall have provided to the Agent a
copy of each and every authorization, permit, consent, and approval of and other actions by, and
notice to and filing with, every Governmental Authority which is required to be obtained or made by
the Borrower for the due execution, delivery and performance of this Agreement and the other Loan
Documents, if any.



(n) Additional Documents. The Agent shall have received such additional documents,
certificates and information as the Agent may require pursuant to the hereof or as the Agent may
otherwise reasonably request.



4.2 Conditions to Each Loan. The agreement of each Bank to make any Loan requested to be made by it on any date
(including, without limitation, the first such Loan hereunder) is subject to the satisfaction of
the following conditions precedent:



(a) Representations and Warranties. Each of the representations and warranties made
by the Borrower herein or which are contained in any certificate, document or financial or other
statement furnished at any time under or in connection herewith or therewith shall be true and
correct in all material respects on and as of such date as if made on and as of such date;
provided, however, that for purposes of the representations in Section 3.1 hereof, the annual and
quarterly financial information referred to in such Section shall be deemed to be the most recent
such information furnished to each Bank.



(b) No Default. No Default or Event of Default shall have occurred and be continuing
on such date or after giving effect to the Loans requested to be made or the Letter of Credit is to
be issued on such date.


 


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(c) No Contravention of Law. The making of the Loans or the issuance of the Letter of
Credit shall not contravene any Requirement of Law applicable to the Borrower or any of the Banks.



Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such Loan that the conditions contained in this Section 4.2 have been
satisfied.



4.3 Closing. The closing (the “Closing”) of the transactions contemplated hereby shall take
place at the offices of Ballard Spahr LLP, commencing at 10:00 a.m., Philadelphia time, on November
30, 2010 or such other place or date as to which the Agent, the Banks and the Borrower shall agree.
The date on which the Closing shall be completed is referred to herein as the “Closing
Date”.



SECTION 5. AFFIRMATIVE COVENANTS




The Borrower hereby agrees that, so long as the Commitments remain in effect, any Note remains
outstanding and unpaid, any Letter of Credit remains outstanding or any other amount is owing to
any Bank or the Agent hereunder, the Borrower shall:



5.1 Financial Statements. Furnish to each Bank (i) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year a consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of each such fiscal quarter and statements of income for the period from the beginning
of such fiscal year to the end of such fiscal quarter, and (ii) within 120 days after the end of
each fiscal year a consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
each fiscal year and statements of income, statements of retained earnings and cash flow for such
fiscal year. All financial statements will be prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and with the prior periods, such annual
financial statements to be certified by independent certified public accountants selected by the
Borrower and reasonably acceptable to the Agent, without any exception or qualification arising out
of the restricted or limited nature of the examination made by such accountants.



5.2 Certificates; Other Information. Furnish to each Bank:



(a) concurrently with the delivery of the financial statements referred to in subsection 5.1,
a certificate on behalf of the Borrower executed by a Responsible Officer, (i) showing in detail
the calculations supporting such statements in respect of Section 6.1; and (ii) stating that, to
the best of his or her knowledge, the Borrower during such period has kept, observed, performed and
fulfilled each and every covenant and condition contained in this Agreement and in the Notes and
the other Loan Documents applicable to it and that he or she obtained no knowledge of any Default
or Event of Default except as specifically indicated;



(b) on or prior to February 15 of each fiscal year, a budgeted balance sheet, income statement
and statement of cash flow for the current fiscal year; and



(c) promptly, such additional financial and other information as any Bank or the Agent may
from time to time reasonably request.


 


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5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent,
as the case may be, all its obligations of whatever nature, except (x) in the case of indebtedness
other than that described in subsection 7.1(f), when the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or (y) where the failure so to pay
such indebtedness is in the normal course of the Borrower’s business as now conducted and would not
have a Material Adverse Effect.



5.4 Conduct of Business and Maintenance of Existence. Subject to Section 6.4 hereof, continue to engage in business of the same general type as
now conducted by it and, except to the extent that failure to do so would not have a Material
Adverse Effect, preserve, renew and keep in full force and effect its corporate existence and take
all reasonable action to maintain all rights, privileges, trademarks, trade names, licenses,
franchises and other authorizations necessary or desirable in the normal conduct of its business;
comply with all Contractual Obligations and Requirements of Law except to the extent that failure
to comply therewith would not reasonably be expected to have, in the aggregate, a Material Adverse
Effect.



5.5 Maintenance of Property; Insurance. (a) Maintain in good repair, working order and condition (ordinary wear and tear excepted)
in accordance with the general practice of other businesses of similar character and size, all of
those properties material or necessary to its business, and from time to time make or cause to be
made all appropriate repairs, renewals or replacements thereof; provided, however, that this
Section shall not prevent the Borrower from discontinuing the operation and the maintenance of any
of its properties if such discontinuance is desirable in the conduct of its business and the
Borrower has concluded that such discontinuance would not, individually or in the aggregate, have a
Material Adverse Effect on its business, operations, affairs, financial condition, property or
assets, taken as a whole.



(b) Insure its properties and assets against loss or damage by fire and such other insurable
hazards as such assets are commonly insured (including fire, extended coverage, property damage,
worker’s compensation, public liability and business interruption insurance) and against other
risks (including errors and omissions) in such amounts as similar properties and assets are insured
by prudent companies in similar circumstances carrying on similar businesses, and with reputable
and financially sound insurers, including self-insurance to the extent customary. The Borrower
shall deliver at the request of the Agent from time to time a summary schedule indicating all
insurance then in force with respect to the Borrower.



5.6 Inspection of Property; Books and Records; Discussions. (a) Permit any of the officers or authorized employees or representatives of the Agent or
any of the Banks to visit and inspect during normal business hours any of its properties and to
examine and make excerpts from its books and records and discuss its business affairs, finances and
accounts (including those of its Affiliates) with its officers, all in such detail and at such
times and as often as any of the Banks may reasonably request, provided that each Bank shall
provide the Borrower and the Agent with reasonable notice prior to any visit or inspection. In the
event Required Banks desire to conduct an audit of the Borrower (to which the Borrower hereby
consents), such Banks shall make a reasonable effort to conduct such audit contemporaneously with
any audit to be performed by the Agent.


 


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(b) Maintain and keep proper books of record and account which enable the Borrower and the
Parent Company to issue financial statements in accordance with GAAP and as otherwise required by
applicable Requirements of Law, and in which full, true and correct entries shall be made in all
material respects of all its dealings and business and financial affairs.



5.7 Notices. Promptly, upon the Borrower becoming aware, give notice to the Agent and each Bank of:




(a) the occurrence of any Default or Event of Default;



(b) any (i) default or event of default under any Contractual Obligation of the Borrower,
including, without limitation, the Indenture, or (ii) litigation, investigation or proceeding which
may exist at any time between the Borrower and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, would have a Material Adverse Effect;



(c) any litigation or proceeding which, if adversely determined, would have a Material Adverse
Effect;



(d) the following events, as soon as possible and in any event within 30 days after the
Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with
respect to any Single Employer Plan which presents a material risk of termination fo the Plan by
the PBGC, (ii) any withdrawal from, or the termination, Reorganization or Insolvency of any
Multiemployer Plan, (iii) the adjusted funding target attainment percentage (within the meaning of
Section 436(j)(2) of the Code) with respect to any Single Employer Plan maintained by the Borrower
or a Commonly Controlled Entity is certified by the Single Employer Plan’s actuary to be less than
eighty percent (80%) or deemed by operation of Section 436 of the Code in the absence of such
certification to be less than eighty percent (80%), or (iv) the institution of proceedings or the
taking of any action by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the termination of any Single Employer Plan in a distress
termination under Section 4041(c) of ERISA or the withdrawal from or the termination,
Reorganization or Insolvency, of any Multiemployer Plan; and




(e) an event which has had a Material Adverse Effect.



Each notice pursuant to this subsection shall be accompanied by a statement of the Borrower,
executed on its behalf by a Responsible Officer, setting forth details of the occurrence referred
to therein and stating what action the Borrower propose to take with respect thereto.



5.8 Environmental Laws. (a) Comply with, and require compliance by all tenants and to the extent possible, all
subtenants, if any, with, all Environmental Laws and obtain and comply with and maintain, and
require that all tenants and to the extent possible, all subtenants obtain and comply with and
maintain, any and all licenses, approvals, registrations or permits required by Environmental Laws
except to the extent that failure to so comply or obtain or maintain such documents would not have
a Material Adverse Effect.


 


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(b) Except as set forth in Schedule 3.13, comply with all lawful and binding orders and
directives of all Governmental Authorities respecting Environmental Laws except to the extent that
failure to so comply would not have a Material Adverse Effect.



(c) Defend, indemnify and hold harmless the Agent and the Banks, and their respective
employees, agents, officers and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation of, noncompliance
with or liability arising under any Environmental Laws applicable to the real property owned or
operated by or the operations of the Borrower, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation, attorneys’ and
consultants’ fees, investigation and laboratory fees, court costs and litigation expenses, except
to the extent that any of the foregoing arise out of the negligence or willful misconduct of any of
the foregoing enumerated parties.



5.9 Taxes. Pay when due all taxes, assessments and governmental charges imposed upon it or any of its
properties or that it is required to withhold and pay over, except where contested in good faith
and where adequate reserves have been set aside to the extent required under GAAP.



5.10 Covenants of the Indenture. Comply at all times with the covenants contained in the Indenture, as last supplemented by
the Supplemental Indenture, without regard to any amendment of or supplement to the Indenture
occurring after October 15, 2010.



5.11 Guarantees of Obligations. It is the intent of the parties hereto that all of the obligations of the Borrower
hereunder shall be unconditionally guaranteed by all of its Material Subsidiaries to the maximum
extent permitted under any Requirement of Law applicable to any such Material Subsidiary.
Accordingly, in the event that any Material Subsidiary shall be formed, acquired or come into
existence after the date hereof then the Borrower will cause such Material Subsidiary to (i)
execute and deliver a Guaranty Agreement in form and substance satisfactory to the Agent pursuant
to which such Material Subsidiary will become a “Guarantor” hereunder, and guarantee the
obligations of the Borrower hereunder and under the Notes and other Loan Documents and (ii) deliver
such proof of corporate or other action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by the Borrower pursuant to Section 4.1 on the
Closing Date or as the Agent shall have reasonably requested.



5.12 Anti-Terrorism Laws. Neither the Borrower nor its Affiliates, Subsidiaries or agents shall (a) conduct any
business or engage in any transaction or dealing with any Blocked Person, including the making or
receiving of any contribution of funds, goods or services to or for the benefit of any Blocked
Person, (b) deal in, or otherwise engage in any transaction relating to, any property or interests
in property blocked pursuant to Executive Order No. 13224; or (c) 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 Executive Order No. 13224 or the USA Patriot Act.
The Borrower shall deliver to Agent any certification or other evidence requested from time to time
by the Agent in its sole discretion, confirming Borrower’s and its Affiliates’ and Subsidiaries’
compliance with this Section 5.12.


 


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SECTION 6. NEGATIVE COVENANTS




The Borrower hereby agrees that, so long as the Commitments remain in effect, any Note remains
outstanding and unpaid or any other amount is owing to any Bank or the Agent hereunder, the
Borrower shall not directly or indirectly:




6.1 Financial Covenants.



(a) Equity to Capital Ratio. Permit as of the end of any fiscal quarter the Equity to
Capital Ratio to be less than thirty eight percent (38%).



(b) Interest Coverage Ratio. Permit as of the end of any fiscal quarter the Interest
Coverage Ratio to be less than 1.8 to 1.



6.2 Limitation on Certain Debt. Except for the Commitments under the Loan Documents, at any time enter into, assume or
suffer to exist lines of credit or comparable extensions of credit from one or more commercial
banks (or their Affiliates) under which the Borrower has incurred or may incur aggregate Debt in
excess of $15,000,000.



6.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, including, without limitation, the stock of its Subsidiaries, whether now owned or
hereafter acquired, except for:



(a) The following, (i) if the validity or amount thereof is being contested in good faith by
appropriate and lawful proceedings diligently conducted so long as levy and execution thereon have
been stayed and continue to be stayed or (ii) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and in either case they do not materially impair the
ability of the Borrower to perform its obligations hereunder or under the other Loan Documents:




(A) Claims or Liens for taxes, assessments or charges due and payable and subject to
interest or penalty, provided that the Borrower maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes, assessments or charges
forthwith upon the commencement of proceedings to foreclose any such Lien;




(B) Claims, Liens or encumbrances upon, and defects of title to, real or personal
property including any attachment of personal or real property or other legal process prior
to adjudication of a dispute on the merits; and




(C) Claims or Liens of mechanics, materialmen, warehousemen, carriers, or other
statutory nonconsensual Liens;



(b) pledges or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation;



(c) deposits to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of business of
the Borrower;


 


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(d) easements, rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial in amount and which do not
interfere with the ordinary conduct of the business of the Borrower;



(e) Liens which were in existence on the date hereof and shown on Schedule 6.3 and
replacements, extensions or replacements thereof;



(f) Liens on assets acquired by the Borrower in acquisitions permitted by Section 6.6 (which
liens were in existence at the time of such acquisitions);



(g) Liens upon real property, which property was acquired after the Closing Date by the
Borrower, each of which Liens existed on such property before the time of its acquisition or was
created to finance, refinance or refund the cost (including the cost of construction) of the
respective property; provided, however, that no such Lien shall extend to or cover
any accounts receivable or inventory under any circumstances or any property of the Borrower other
than the respective property so acquired and improvements thereon, and the principal amount of
indebtedness secured by any such Lien shall not exceed the fair market value of the respective
property at the time it was acquired;




(h) Capital Leases as and to the extent permitted under this Agreement;



(i) purchase money security interests on capital equipment purchased in the ordinary course of
business;



(j) Liens granted to secure indebtedness permitted by Section 6.2(vii) to the extent such
Liens are also permitted under the Indenture;



(k) the Lien of the Indenture and other Liens in connection with the issuance of industrial
revenue bonds or pollution control bonds, to the extent such Liens are permitted under the
Indenture; and



(l) in addition to the Liens permitted by the preceding subparagraphs (a) through (k),
inclusive, of this Section 6.3, Liens securing Debt of the Borrower provided that the aggregate
principal amount of Debt secured by Liens pursuant to this Section 6.3(l) shall not exceed
$10,000,000.



6.4 Limitations on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or assets except:



(a) the Borrower may merge into the Parent Company, so long as the Parent Company is the
surviving entity;


 


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(b) any corporation or limited liability company (other than the Parent Company) may be merged
or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation); and



(c) a merger in connection with a Permitted Acquisition in accordance with Section 6.6 in
which the surviving entity is the Borrower;



provided that, immediately after each such transaction and after giving effect thereto, the
Borrower is in compliance with this Agreement and no Default or Event of Default shall be in
existence or result from such transaction.



6.5 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business
or assets (including, without limitation, accounts receivable and leasehold interests), whether now
owned or hereafter acquired, except:




(i) obsolete or worn out property disposed of in the ordinary course of business;




(ii) the sale of inventory or other assets, or the licensing of intellectual property,
in each case in the ordinary course of business;




(iii) any sale, transfer or lease of assets (i) which are replaced by like-kind assets
or (ii) the proceeds of the sale of which are used within one-hundred and twenty (120) days
of such sale to purchase like-kind assets;




(iv) any sale, transfer or lease of assets the proceeds of the sale of which are used
to permanently reduce the Commitments; and




(v) in addition to the above subsections 6.5(a)(i) through 6.5(a)(iv), inclusive, any
such conveyances, sales, leases, assignments, transfers or other disposals, the aggregate
amount of which for any fiscal year does not exceed 5% of the Borrower’s Consolidated
Shareholders’ Equity as at the end of the immediately preceding fiscal year.



6.6 Limitations on Acquisitions. Purchase, hold or acquire beneficially any stock, other securities or evidences of
indebtedness of, or make or permit any investment or acquire any interest whatsoever in, any other
Person, except for Permitted Acquisitions.



6.7 Limitation on Distributions and Investments. (a) At any time make (or incur any liability to make) or pay any Distribution in respect
of the Borrower (other than a Distribution payable to the Parent Company); provided,
however, that as of the declaration date of any such Distribution and after giving effect
to the declaration or payment of any such Distribution no Default or Event of Default would exist;
or




(b) Make any Investments other than Permitted Investments.



6.8 Transactions with Affiliates. Except as expressly permitted in this Agreement, directly or indirectly enter into any
transaction or arrangement whatsoever or make
any payment to or otherwise deal with any Affiliate, except, as to all of the foregoing in the
ordinary course of and pursuant to the reasonable requirements of the Borrower’s business and upon
fair and reasonable terms not materially less favorable to the Borrower than would be obtained in a
comparable arm’s length transaction with a Person not an Affiliate of the Borrower.


 


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6.9 Sale and Leaseback. Except if reasonably contemporaneous with the Borrower’s purchase, enter into any
arrangement with any Person providing for the leasing by the Borrower of real or personal property
which has been or is to be sold or transferred by such Borrower to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the security of such
property or rental obligations of such Borrower.



6.10 Fiscal Year. Permit its Fiscal Year to end on a day other than December 31.



6.11 Continuation of or Change in Business. Discontinue any substantial part, or change the nature of, the existing business activities
of the Borrower, or engage in any business either directly or through any Subsidiary except for
businesses in which the Borrower is engaged on the date of this Agreement and any business
activities directly related, similar or incidental or ancillary to such existing businesses.



SECTION 7. EVENTS OF DEFAULT




7.1 Events of Default. If any of the following events shall occur and be continuing:



(a) The Borrower shall fail to pay when due any principal of any Note, or shall fail to pay
within five (5) days after the date when due any interest, Fees or other amount payable hereunder;
or



(b) Any representation or warranty made or deemed made by the Borrower or any Guarantor herein
or in any other Loan Document or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with this Agreement shall prove to
have been incorrect in any material respect on or as of the date made or deemed made; or



(c) The Borrower shall default in the observance or performance of any agreement contained in
Section 6; or



(d) The Borrower or any Guarantor shall default in the observance or performance of any other
agreement contained in this Agreement (other than as provided in paragraphs (a), (b) or (c) of this
Section 7.1) or any other Loan Document, and such default shall continue unremedied for a period of
thirty (30) days after notice of such default is given by the Agent; or



(e) One or more judgments or decrees shall be entered against the Borrower or any Guarantor
involving in the aggregate a liability (not paid or fully covered by insurance) of $10,000,000 or
more and all such judgments or decrees shall not have been
vacated, discharged, settled, satisfied or paid, or stayed or bonded pending appeal, within
thirty (30) days from the entry thereof; or


 


46









 





(f) The Borrower shall (i) default in the payment of any amount due under any Debt of the
Borrower in excess of $10,000,000 in the aggregate (other than the Notes), beyond the period of
grace, if any, provided in the instrument or agreement under which such Debt was created; or (ii)
default in the observance or performance of any other agreement contained in any such Debt or in
any instrument or agreement evidencing, securing or relating thereto beyond any applicable notice
and grace period, or any other event shall occur the effect of which default or other event is to
cause, or to permit the holder or holders or beneficiary or beneficiaries of such Debt (or a
trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Debt to become due and payable prior to its stated maturity or any such Debt is declared to be due
and payable prior to its stated maturity unless such default, event or declaration referred to in
this subparagraph (ii) is waived or cured to the satisfaction of such other party as demonstrated
to the satisfaction of the Agent by the Borrower prior to the Agent taking any action under Section
7.2 in respect of such occurrence; or



(g) (i) The Borrower or any Guarantor shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or the Borrower or any
Guarantor shall make a general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any Guarantor any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of
sixty (60) days; or (iii) there shall be commenced against the Borrower or any Guarantor any case,
proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or
similar process on a claim in excess of $10,000,000 against all or any substantial part of its
assets which results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry
thereof; or (iv) the Borrower or any Guarantor shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any Guarantor shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they become due; or



(h) (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (ii) the adjusted target attainment
percentage (within the meaning of Section 436(j)(2) of the Code) with respect to any Single
Employer Plan maintained by the Borrower or Commonly Controlled Entity is certified by the Single
Employer Plan’s actuary to be less than eighty percent (80%) or deemed by operation of Section 436
of the Code in the absence of such certification to be less than eighty percent (80%), (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or institution of proceedings is,
in the reasonable opinion of the Required Banks, likely to result in the termination by action of
the PBGC or any court of such Single Employer Plan for purposes of Title IV of ERISA, (v) any
Single Employer Plan, if any, shall terminate for purposes of Title IV of ERISA, or (v) the
Borrower or a Commonly Controlled Entity should completely or partially withdraw from a
Multiemployer Plan; and in each case in clauses (i) through (v) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or


 


47









 





(i) Any change in control of the Borrower shall occur (as used herein, the term “change in
control” means either (A) any change in ownership of any class of stock or capital stock generally
of the Borrower which would result in a change or transfer in the power to control the election of
a majority of the board of directors or in other indicia of majority voting control to persons or
entities other than those persons who have such majority voting control on the Closing Date or (B)
a decrease in such persons’ right to vote at shareholders’ meetings to an aggregate level less than
51%); or



(j) Any of the Loan Documents shall cease to be legal, valid and binding agreements
enforceable against the party executing the same or such party’s successors and assigns (as
permitted under the Loan Documents) in accordance with the respective terms thereof or shall in any
way be terminated (except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged and thereby deprive or deny the Banks and the Agent
the intended benefits thereof or they shall thereby cease substantially to have the rights, titles,
interests, remedies, powers or privileges intended to be created thereby; or



(k) A notice of lien or assessment in excess of $2,000,000 is filed of record with respect to
all or any part of the Borrower’s or any Guarantor’s assets having a value of at least that amount
by the United States, or any department, agency or instrumentality thereof, or by any state,
county, municipal, or other governmental agency, including, without limitation, the PBGC, becomes
payable and the same is not paid, vacated, bonded or stayed pending appeal within thirty (30) days
after the same becomes payable; or




(l) The Borrower ceases to be Solvent; or



(m) Except as otherwise permitted in this Agreement, the Borrower ceases to conduct its
business as contemplated or the Borrower is enjoined, restrained or in any way prevented by court
order from conducting all or any material part of its business so as to cause or result in a
Material Adverse Effect, and such injunction, restraint or other preventive order is not dismissed
within thirty (30) days after the entry thereof.



7.2 Remedies. (a) If an Event of Default specified under subsections 7.1 (a) through (f) or (h) through
(m) shall occur and be continuing, the Banks shall be under no further obligation to make Loans
hereunder, and the Agent upon the request of the Required Banks shall by written notice to the
Borrower, terminate the Commitments and the Swing Line Commitment and/or declare the unpaid
principal amount of the Notes then outstanding and all interest accrued thereon, any unpaid fees
and all other obligations of the Borrower to the Banks hereunder and thereunder to be forthwith due
and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Bank without presentment,
demand, protest or any other notice of any kind, all of which are hereby expressly waived.


 


48









 





(b) If an Event of Default specified under subsections 7.1(g) hereof shall occur, the
Commitments and the Swing Line Commitment shall immediately terminate and the Banks shall be under
no further obligations to make Loans hereunder, and the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all other obligations of the
Borrower to the Banks hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby expressly waived.



(c) If an Event of Default shall occur and be continuing, any Bank to whom any obligation is
owed by the Borrower hereunder or under any other Loan Document or any participant of such Bank
which has agreed in writing to be bound by the provisions of Section 9.6 hereof and any branch,
subsidiary or Affiliate of such Bank or Participant shall have the right, in addition to all other
rights and remedies available to it, without notice to the Borrower, to set-off against and apply
to the then unpaid balance of all the Loans and all other obligations of the Borrower hereunder or
under any other Loan Document any debt owing to, and any other funds held in any manner for the
account of, the Borrower by such Bank or participant or by such branch, Subsidiary or Affiliate,
including, without limitation, all funds in all deposit accounts (whether time or demand, general
or special, provisionally credited or finally credited, or otherwise) now or hereafter maintained
by the Borrower for its own account (but not including funds held in custodian or trust accounts or
other accounts established solely for the benefit of parties other than the Borrower) with such
Bank or Participant or such branch, Subsidiary or Affiliate. Such right shall exist whether or not
any Bank or the Agent shall have made any demand under this Agreement or any other Loan Document,
whether or not such debt owing to or funds held for the account of the Borrower is or are matured
or unmatured and regardless of the existence or adequacy of any collateral, guaranty or any other
security, right or remedy available to any Bank or the Agent.



(d) Notwithstanding any provision herein to the contrary or in the other Loan Documents, any
proceeds received by the Agent from any payment made by the Borrower under this Agreement or the
other Loan Documents after the Commitments and the Swing Line Commitment have been terminated, or
received by the Agent from the foreclosure, sale, lease, collection upon, realization of or other
disposition of any collateral which may have been provided to the Agent for the obligations of the
Borrower hereunder after the Commitments and the Swing Line Commitment have been terminated
(including without limitation insurance proceeds), shall be applied by the Agent as follows, unless
otherwise agreed by all the Banks:



(i) first, to reimburse the Agent for out-of-pocket costs, expenses and disbursements,
including without limitation reasonable attorneys’ fees and legal expenses, incurred by the Agent
in connection with collection of any obligations of the Borrower under any of the Loan Documents;



(ii) second, to accrued and unpaid interest on the Loans;


 


49









 






(iii) third, to the principal amount of the Loans then outstanding;



(iv) fourth, to fees payable under this Agreement or any of the other Loan Documents (ratably
according to the respective amounts then outstanding);



(v) fifth, to the repayment of all other indebtedness then due and unpaid of the Borrower to
the Banks incurred under this Agreement or any of the other Loan Documents, whether of principal,
interest, fees, expenses or otherwise (ratably according to the respective amounts then
outstanding); and




(vi) the balance, if any, as required by law.



(e) Each Bank agrees that (i) if at any time it shall receive the proceeds of any collateral
or any proceeds thereof or (ii) if after the Commitments and the Swing Line Commitment have been
terminated it shall receive any payment on account of the Loans or any other amounts owing
hereunder or under the other Loan Documents, under an Interest Rate Protection Agreement (in either
case other than through application by the Agent in accordance with subsection 7.2(d)), it shall
promptly turn the same over to the Agent for application in accordance with the terms of subsection
7.2(d).



(f) In addition to the other rights and remedies contained in this Agreement or in the other
Loan Documents, the Loans shall, at the Required Banks’ option, bear the interest rates provided in
Section 2.7 hereof.



(g) In addition to all of the rights and remedies contained in this Agreement or in any of the
other Loan Documents, the Agent shall have all of the rights and remedies under applicable law, all
of which rights and remedies shall be cumulative and non-exclusive, to the extent permitted by law.
The Agent may, and upon the request of the Required Banks shall, exercise all post-default rights
granted to it and the Banks under the Loan Documents or applicable law.



SECTION 8. THE AGENT




8.1 Appointment. Each Bank hereby irrevocably designates and appoints PNC as the Agent of such Bank under
this Agreement. Each such Bank irrevocably authorizes the Agent, as the agent for such Bank to
take such action on its behalf under the provisions of this Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the Agent. The Agent agrees to act as
the Agent on behalf of the Banks to the extent provided in this Agreement.



8.2 Delegation of Duties. The Agent may execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to engage and pay for
the advice and services of counsel concerning all matters pertaining to such duties. The
Agent shall not be responsible to the Banks for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.


 


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8.3 Exculpatory Provisions. Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by them or
such Person under or in connection with this Agreement (except for their or such Person’s own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, the
Notes or the other Loan Documents or for any failure of the Borrower to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements contained in, or conditions
of, this Agreement or the other Loan Documents, or to inspect the properties, books or records of
the Borrower.



8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Banks as they deem appropriate or they
shall first be indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from acting, under this
Agreement, the Notes and the other Loan Documents in accordance with a request of the Required
Banks, and such request and any action taken or failure to act pursuant thereto shall be binding
upon all the Banks and all future holders of the Notes.



8.5 Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default hereunder unless they have received notice from a Bank or the Borrower
referring to this Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”. In the event that the Agent receives such a notice, the Agent
shall give notice thereof to the Banks. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required Banks; provided
that unless and until the Agent shall have received such directions, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable in the best interests of the Banks.


 


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8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the Agent to any Bank.
Each Bank represents to the Agent that it has, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and the other Loan Documents, and to
make such investigation as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to the Banks by the Agent hereunder,
the Agent shall not have any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of the Borrower which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.



8.7 Indemnification. The Banks agree to indemnify the Agent in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably
according to their respective Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement, the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in connection with any of the foregoing;
provided that no Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent’s gross negligence or willful misconduct. The
agreements in this Section 8.7 shall survive the payment of the Notes and all other amounts payable
hereunder.



8.8 Agent in its Individual Capacity. The Agent and its Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with the Borrower as though it was not the Agent hereunder. With respect
to its Loans made or renewed by it and any Note issued to it, the Agent shall have the same rights
and powers under this Agreement as any Bank and may exercise the same as though it were not the
Agent, and the terms “Bank” and “Banks” shall include the Agent in its individual capacity.



8.9 Successor Agent. The Agent may resign as Agent upon sixty (60) days’ notice to the Banks and the Borrower.
If such Agent shall resign as Agent under this Agreement, then the Required Banks shall appoint
from among the Banks a successor agent for the Banks, which appointment shall be subject to the
approval of the Borrower (which approval shall not be
unreasonably withheld), whereupon such successor agent shall succeed to the rights, powers and
duties of an Agent, and the term “Agent” shall mean such successor agent effective upon its
appointment, and the former Agent’s rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring Agent’s resignation as Agent, the
provisions of this Section 8.9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.


 


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8.10 Beneficiaries. Except as expressly provided herein, the provisions of this Section 8 are solely for the
benefit of the Agent and the Banks, and the Borrower shall not have any rights to rely on or
enforce any of the provisions hereof. In performing their functions and duties under this
Agreement the Agent shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust with or for the
Borrower.



8.11 USA Patriot Act. (a) Each Bank or assignee or participant of a Bank that is not incorporated under the laws
of the United States of America or a state thereof (and is not excepted from the certification
requirement contained in Section 313 of the USA Patriot Act and the applicable regulations because
it is both (a) an Affiliate of a depository institution or foreign bank that maintains a physical
presence in the United States or foreign country, and (b) subject to supervision by a banking
authority regulating such affiliated depository institution or foreign bank) shall deliver to the
Agent the certification, or, if applicable, recertification, certifying that such Bank is not a
“shell” and certifying to other matters as required by Section 313 of the USA Patriot Act and the
applicable regulations: (i) within 10 days after the Closing Date, and (ii) at such other times as
are required under the USA Patriot Act.



(b) Each Bank acknowledges and agrees that neither such Bank, nor any of its Affiliates,
participants or assignees, may rely on the Agent to carry out such Bank’s, Affiliate’s,
participant’s or assignee’s customer identification program, or other obligations required or
imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”),
or any other Anti-Terrorism Law, including any programs involving any of the following items
relating to or in connection with the Borrower, its Affiliates or their agents, the Loan Documents
or the transactions hereunder or contemplated hereby: (i) any identity verification procedures,(ii)
any recordkeeping, (iii) comparisons with government lists, (iv) customer notices or (v) other
procedures required under the CIP Regulations or such other Anti-Terrorism Laws.



SECTION 9. MISCELLANEOUS




9.1 Amendments and Waivers. Neither this Agreement, any Note or any other Loan Document, nor any terms hereof of
thereof may be amended, supplemented or modified except in accordance with the provisions of this
subsection. With the written consent of the Required Banks, the Agent and the Borrower may, from
time to time, enter into written amendments, supplements or modifications hereto and to the Notes
and the other Loan Documents for the purpose of adding any provisions to this Agreement or



 


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the
Notes or the other Loan Documents or changing in any manner the rights of the Banks or of the
Borrower hereunder or thereunder or waiving, on such terms and conditions as the Agent may specify in
such instrument, any of the requirements of this Agreement or the Notes or the other Loan Documents
or any Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall directly or indirectly (a)
reduce the amount or extend the maturity of any Note or any installment thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce any Fees payable to any Bank
hereunder, or change the duration or amount of any Bank’s Commitment, in each case without the
consent of the Bank affected thereby or (b) amend, modify or waive any provision of this Section
9.1 or reduce the percentages specified in the definition of Required Banks or consent to the
assignment or transfer by the Borrower of any of its rights and obligations under this Agreement,
the Notes and the other Loan Documents, in each case without the written consent of all the Banks,
(c) amend, modify or waive any provision of Section 2.2 without the written consent of the then
Swing Line Bank or (d) amend, modify or waive any provision of Section 8 without the written
consent of the then Agent. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Banks and shall be binding upon the Borrower, the Banks, the
Agent and all future holders of the Notes. In the case of any waiver, the Borrower, the Banks and
the Agent shall be restored to their former position and rights hereunder and under the outstanding
Notes, and any Default or Event of Default waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair
any right consequent thereon.



9.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including electronic transmission, facsimile transmission or posting on a
secured web site), and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered by hand, or three days after being deposited in the mail, postage
prepaid, or, in the case of facsimile transmission notice, when sent during normal business hours
with electronic confirmation or otherwise when received, or in the case of electronic transmission,
when received and in the case of posting on a secured web site, upon receipt of (i) notice of such
posting and (ii) rights to access such web site, addressed as follows in the case of the Borrower
and the Agent, and as set forth in Schedule I in the case of the other parties hereto, or
to such other address as may be hereafter notified by the respective parties hereto and any future
holders of the Notes:



	 	 	 	 	 
	 

	 	the Borrower:
	 	Aqua Pennsylvania, Inc.

762 W. Lancaster Avenue

Bryn Mawr, PA 19010-3489

Attention: Diana Moy Kelly

                 Treasurer
	 
	 	 	 	 
	 

	 	 	 	Facsimile: (610) 645-0908
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Aqua Pennsylvania, Inc.

762 West Lancaster Avenue

Bryn Mawr, PA 19010

Attention: Roy H. Stahl

                 Chief Administrative Officer and

                 General Counsel






 


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	 	 	 	(provided that failure to send a copy of any notice to said
counsel shall in no way affect, limit or invalidate any
notice sent to the Borrower or the exercise of any of the
Banks’ or the Agent’s rights or remedies pursuant to a notice
sent to the Borrower.)
	 
	 	 	 	 
	 

	 	The Agent or the

Swing Line Bank:
	 	PNC Bank, National Association

1600 Market Street

Philadelphia, Pa 19103

Attention: Meredith Jermann
	 
	 	 	 	 
	 

	 	 	 	Facsimile: (215) 585-6987
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	PNC Agency Services

One PNC Plaza

249 Fifth Avenue

22nd Floor

Pittsburgh, PA 15222

Attention: Ronald Harapko
	 
	 	 	 	 
	 

	 	 	 	Facsimile: (412) 762-8672






provided that any notice, request or demand to or upon the Agent, the Swing Line Bank or
the Banks pursuant to Sections 2.1, 2.2, 2.8 or 2.9 shall not be effective until received.



9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Agent or any Bank,
any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.



9.4 Survival of Representations and Warranties. All representations and warranties made hereunder and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement, the Notes and the other Loan Documents.


 


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9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Agent for all of its reasonable
out-of-pocket costs and expenses incurred in connection with any amendment, supplement or
modification to this Agreement, the Notes, the other Loan Documents and any other documents
prepared in connection therewith, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent (which counsel may or may not include employees of the
Agent), (b) to pay or reimburse each Bank and the
Agent for all of their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, reasonable fees and disbursements of counsel to the Agent
(which counsel may or may not include employees of the Agent) and to the several Banks, and (c) to
pay, indemnify, and hold each Bank and the Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any (other than Taxes expressly excluded from the definition of
Taxes in Section 2.12 and Taxes for which the Borrower has no liability under subsection 2.12(c))
which may be payable or determined to be payable in connection with the execution and delivery of,
or consummation of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this Agreement, the Notes, the
other Loan Documents, and any such other documents, and (d) to pay, indemnify, and hold each Bank
and the Agent harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement, and, incident to a Default
or Event of Default, the performance and administration, of this Agreement, the Notes, the other
Loan Documents and any such other documents or the transactions contemplated hereby or thereby or
any action taken or omitted under or in connection with any of the foregoing (all the foregoing,
collectively, the “indemnified liabilities”), provided, that the Borrower shall have no
obligation hereunder to the Agent or any Bank with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of the Agent or any such Bank. The Borrower shall be
given notice of any claim for indemnified liabilities and shall be afforded a reasonable
opportunity to participate in the defense, compromise or settlement thereof. The agreements in
this subsection shall survive repayment of the Notes and all other amounts payable hereunder.



9.6 Successors and Assigns. (a) Whenever in this Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party, and all covenants, promises
and agreements by or on behalf of the Borrower, the Agent or the Banks that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and assigns. The
Borrower may not assign or transfer any of its rights or obligations under this Agreement or the
other Loan Documents without the prior written consent of each Bank.



(b) Each Bank may, in accordance with applicable law, assign to all or a portion of its
interests, rights and obligations under this Agreement and the other Loan Documents (including all
or a portion of its Commitment or the Swing Line Commitment, and the Loans at the time owing to it
and the Notes held by it); provided, however, that (i) each such assignment shall
be to a Bank or Affiliate thereof, or, with the consent of the Agent and, prior to the occurrence
of an Event of Default, of the Borrower (which consent shall not be unreasonably withheld or
delayed) to one or more banks or other financial institutions, (ii) so long as the Commitments are
in effect, the amount of each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Agent) shall not be less than
$5,000,000, (iii) the parties to each such assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with the Note or Notes subject to such assignment and a
processing and recordation fee of $3,500 (except in the case of an assignment by any Bank to one of
its Affiliates), (iv) any assignment of the Swing



 


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Line Commitment may be made only to a Bank which holds a Commitment hereunder and must be of the entire Swing Line
Commitment and (v) each such assignment of Revolving Credit Loans and all or any portion of a
Bank’s Commitment shall be of a constant, and not a varying, percentage of the assigning Bank’s
Commitment and Revolving Credit Loans then outstanding. Upon acceptance and recording pursuant to
paragraph (d) of this Section 9.6, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five Business Days after the execution
thereof, (A) the assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a Bank under this
Agreement and (B) the assigning Bank thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an assigning Bank’s
rights and obligations under this Agreement, such Bank shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.11, 2.12, 2.13 and 9.5 (to the extent that
such Bank’s entitlement to such benefits arose out of such Bank’s position as a Bank prior to the
applicable assignment)). Notwithstanding any provision of this subsection 9.6, after the
Commitments and the Swing Line Commitments have been terminated, any Bank may assign all or any
portion of its interests, rights and obligations under this Agreement and the other Loan Documents
to any Person (whether or not an entity described in clause (i) above).



(c) By executing and delivering an Assignment and Acceptance, the assigning Bank thereunder
and the assignee thereunder shall be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Bank warrants that it is the legal and beneficial
owner of the interest being assigned thereby, free and clear of any adverse claim, and that its
Commitment and/or the Swing Line Commitment, as the case may be, and the outstanding balances of
its Loans, in each case without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Acceptance, (ii) except as set forth in (i)
above, such assigning Bank makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents, or any other
instrument or document furnished pursuant hereto or thereto, or the financial condition of the
Borrower or the performance or observance by the Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such Assignment and Acceptance;
(iv) such assignee confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements delivered pursuant to Section 5.1 and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the
Agent, such assigning Bank or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be performed by it as a Bank.


 


57









 





(d) The Agent shall maintain at its offices in Philadelphia, Pennsylvania a copy of each
Assignment and Acceptance and the names and addresses of the Banks, and the Commitment and/or the
Swing Line Commitment of, and principal amount of the Loans owing to, each Bank pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive
in the absence of error and the Borrower, the Agent and the Banks may treat each person whose name
is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower and any Bank, at
any reasonable time and from time to time upon reasonable prior notice.



(e) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning
Bank and an assignee together with the Note or Notes subject to such assignment, the processing and
recordation fee referred to in paragraph (b) above, the Agent shall (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to the Banks. Within five Business Days after receipt of notice, the Borrower, at
its own expense, shall execute and deliver to the Agent, in exchange for the surrendered original
Note(s), (x) a new Revolving Credit Note to the order of such assignee in an amount equal to the
portion of the Commitment assumed by it pursuant to such Assignment and Acceptance and, if
applicable, a new Swing Line Note to the order of such assignee in an amount equal to the Swing
Line Commitment and, (y) if the assigning Bank has retained a Commitment, a new Revolving Credit
Note to the order of such assigning Bank in a principal amount equal to the applicable Commitment
retained by it. Such new Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Notes; such new Notes shall be dated the date of the
surrendered Notes which they replace and shall otherwise be in substantially the form of Exhibit
B-1 or Exhibit B-2 hereto, as appropriate. Canceled Notes shall be returned to the Borrower.



(f) Each Bank may without the consent of the Borrower or the Agent sell participations to one
or more banks or other entities (each a “Participant”) in all or a portion of its rights
and obligations under this Agreement (including all or a portion of its Commitment or Swing Line
Commitment and the Loans owing to it and the Notes held by it); provided, however,
that (i) such Bank’s obligations under this Agreement shall remain unchanged, (ii) such Bank shall
remain solely responsible to the other parties hereto for the performance of such obligations,
(iii) such Bank shall remain the holder of any such Note for all purposes under this Agreement,
(iv) the Borrower, the Agent and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank’s rights and obligations under this Agreement, (v) in any
proceeding under the Bankruptcy Code such Bank shall be, to the extent permitted by law, the sole
representative with respect to the obligations held in the name of such Bank whether for its own
account or for the account of any Participant and (vi) such Bank shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans and to approve any amendment,
modification or waiver of any provision of this Agreement or the Note or Notes held by such Bank
other than any such amendment, modification or waiver with respect to any Loan or Commitment in
which such Participant has an interest and which is described in subsection 9.1(a) hereof.


 


58









 





(g) If amounts outstanding under this Agreement and the Notes are due or unpaid, or shall have
been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under this Agreement and any Note
to the same extent as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement or any Note, provided that in purchasing such participation such
Participant shall be deemed to have agreed to share with the Banks the proceeds thereof as provided
in Section 9.8. The Borrower also agree that each Participant shall be entitled to the benefits of
Sections 2.11, 2.12, 2.13 and 9.5 with respect to its participation in the Commitments and the
Loans outstanding from time to time; provided, that no Participant shall be entitled to
receive any greater amount pursuant to such Sections than the Bank selling the participation would
have been entitled to receive in respect of the amount of the participation transferred by such
Bank to such Participant had no such transfer occurred.



(h) If any Participant is organized under the laws of any jurisdiction other than the United
States or any state thereof, the Bank selling the participation, concurrently with the sale of a
participating interest to such Participant, shall cause such Participant (i) to represent to the
Bank selling the participation (for the benefit of such Bank, the other Banks, the Agent and the
Borrower) that under applicable law and treaties no taxes will be required to be withheld by the
Agent, the Borrower or the Bank selling the participation with respect to any payments to be made
to such Participant in respect of its participation in the Loans and (ii) to agree (for the benefit
of such Bank, the other Banks, the Agent and Borrower) that it will deliver the tax forms and other
documents required to be delivered pursuant to Section 2.12 and comply from time to time with all
applicable U.S. laws and regulations with respect to withholding tax exemptions.



(i) Any Bank may at any time assign all or any portion of its rights under this Agreement and
the Notes issued to it to a Federal Reserve Bank; provided that no such assignment shall
release a Bank from any of its obligations hereunder.



9.7 Confidentiality. The Banks agree that they will maintain all information and financial statements provided
to them or otherwise obtained by them with respect to the Borrower and its Subsidiaries
confidential and that they will not disclose the same or use it for any purposes; provided
that nothing herein shall prevent any Bank from disclosing any such information (a) to the Agent or
any other Bank, (b) to any prospective assignee or participant in connection with any assignment or
participation of Loans permitted by this Agreement, (c) to its employees, directors, agents,
attorneys, accountants and other professional advisers, provided that any such person is advised by
such Bank that such information is subject to the confidentiality limitations of this Section, (d)
upon the request or demand of any Governmental Authority having jurisdiction over such Bank, (e) in
response to any order of any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, provided that the Borrower has (unless prohibited by the terms
of any such order or requirement) been advised at least ten (10) days (or if such is not possible
or practicable, such lesser number of days as is possible or practicable under the circumstances)
prior to such disclosure of the existence of such order or requirement, (f) which has been publicly
disclosed other than in breach of this Agreement, or (g) in connection with the exercise of any
remedy hereunder or under the Notes.


 


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9.8 Adjustments; Set-off. (a) If any Bank (a “benefited Bank”) shall at any time receive any payment of all or part
of its Loans, or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred
to in subsection 7(g), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Bank, if any, in respect of such other Bank’s Loans, or interest
thereon, being paid in respect of Loans being repaid simultaneously therewith or Loans required
hereby to be paid proportionately such benefited Bank shall purchase for cash from the other Banks
such portion of each such other Bank’s Loan, or shall provide such other Banks with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause such benefited Bank to
share the excess payment or benefits of such collateral or proceeds ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Bank, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without interest. The Borrower
agrees that each Bank so purchasing a portion of another Bank’s Loan may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such portion as fully as
if such Bank were the direct holder of such portion.



(b) In addition to any rights and remedies of the Banks provided by law, upon the occurrence
of an Event of Default, each Bank shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon
any amount becoming due and payable by the Borrower hereunder or under the Notes (whether at the
stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such
Bank to or for the credit or the account of the Borrower. Each Bank agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such Bank, that the failure
to give such notice shall not affect the validity of such set-off and application.



9.9 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any
number of separate counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and each of the Banks.



9.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.



9.11 Integration. This Agreement represents the agreement of the Borrower, the Agent and the Banks with
respect to the subject matter hereof, and there are no promises, undertakings, representations or
warranties by the Agent or any Bank relative to subject matter hereof not expressly set forth or
referred to herein or in the Notes or the other Loan Documents.


 


60









 





9.12 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS HAVE BEEN EXECUTED IN THE
COMMONWEALTH OF PENNSYLVANIA AND SAID DOCUMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA.



9.13 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and unconditionally:



(a) submits for itself and its property in any legal action or proceeding relating to this
Agreement, the Notes or the other Loan Documents, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the
Commonwealth of Pennsylvania located in Montgomery and Philadelphia Counties, the courts of the
United States of America for the Eastern District of Pennsylvania, and appellate courts from any
thereof;



(b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;



(c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at the address set forth in Section 9.2 for the Borrower or at such other
address of which the Agent shall have been notified pursuant thereto; and



(d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction.



9.14 Acknowledgments. The Borrower hereby acknowledges that:



(a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement, the Notes and the other Loan Documents;



(b) neither the Agent nor any Bank has any fiduciary relationship to the Borrower, and the
relationship between the Agent and the Banks, on one hand, and the Borrower, on the other hand, is
solely that of debtor and creditor; and




(c) no joint venture exists among the Banks or between the Borrower and the Banks.


 


61









 





9.15 WAIVERS OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS AND FOR ANY COUNTERCLAIM THEREIN.



9.16 USA PATRIOT ACT. Each Bank that is subject to the requirements of the USA Patriot Act hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify
and record information that identifies the Borrower, which information includes the name and
address of the Borrower and other information that will allow such Bank to identify the Borrower in
accordance with the USA Patriot Act.


 


62









 





IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written.



	 	 	 	 	 	 	 
	 	 	AQUA PENNSYLVANIA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	David P. Smeltzer
 

Name: David P. Smeltzer
	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION, 
 as Agent and as a Bank	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Meredith Jermann
 

Name: Meredith Jermann
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	TD BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Thomas McGrory
 

Name: Thomas McGrory
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	CITIZENS BANK OF PENNSYLVANIA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Leslie D. Broderick
 

Name: Leslie D. Broderick
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 







 


 









 







Schedule I




Bank and Commitment Information




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Swing Line	 
	Bank	 	Commitment	 	 	Commitment	 
	PNC Bank, National Association
	 	$	50,000,000	 	 	$	10,000,000	 
	1600 Market Street

Philadelphia, PA 19103

Attention: Meredith Jermann	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	TD Bank, N.A.

	 	$	35,000,000	 	 	 	N/A	 
	2005 Market Street

Philadelphia, PA 19103

Attention: Thomas McGrory	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Citizens Bank of Pennsylvania

	 	$	15,000,000	 	 	 	N/A	 
	610 W. Germantown Avenue

Plymouth Meeting, PA 19462

Attention: Leslie Broderick	 	 	 	 	 	 	 	 








 


 









 







Schedule 3.6




Existing Litigation




None.




 


 









 







Schedule 3.11




Regulatory Approvals




The Pennsylvania Public Utility Commission regulates Borrower’s issuance of debt, the maturity date
of which is one year or more from the date of execution. (66 Pa. C.S. § 1901)




 


 









 







Schedule 3.13




Environmental Matters





	A.	 	In its water treatment process, the Borrower uses chemicals, including chlorine, caustic soda
and sodium chlorite, which are listed as hazardous substances. These chemicals are, in all
materials respects, stored and used at the Borrower’s plants and facilities in accordance with
the Environmental Laws.
	 
	B.	 	The Borrower operates a central laboratory at its Bryn Mawr facility for analysis of drinking
water samples. To perform required analyses, the Borrower maintains small quantities of
solvents, reagents and chemical standards, some of which are listed as hazardous substances.
These materials, in all material respects, are stored and used in compliance with the
Environmental Laws.






 


 









 







Schedule 3.19




Interests in Partnerships




None.




 


 









 







Schedule 6.3




Existing Liens





	A.	 	Indenture of Mortgage dated as of January 1, 1941 from the Borrower to The Bank of New York
Mellon Trust Company, N.A., as current trustee thereunder, as amended and supplemented.






 


 











 




EXHIBIT A




FORM OF

BORROWING REQUEST




PNC Bank, National Association





as Agent for the

Banks referred to below



PNC Agency Services

One PNC Plaza

249 Fifth Avenue

22nd Floor

Pittsburgh, PA 15222

Attention: Ronald Harapko





[Date]



Ladies and Gentlemen:



The undersigned, Aqua Pennsylvania, Inc. (the “Borrower”), refers to the Credit Agreement
dated as of November _____, 2010 (as amended, modified, extended or restated from time to time, the
“Agreement”), among the Borrower, the Banks party thereto and PNC Bank, National Association as
Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Agreement. The Borrower hereby gives you notice pursuant to Section
2.1 of the Agreement that it requests a Borrowing under the Agreement, and in that connection sets
forth below the terms on which such Borrowing is requested to be made:



	 	 	 	 	 	 	 	 	 	 	 
	(A)

	 	Date of Borrowing	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	(which is a Business Day)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(B)

	 	Principal Amount of	 	 	 	 	 	 	 	 
	 

	 	Borrowing 1
	 	 	$	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(C)

	 	Interest rate basis 2	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 





 





	 	 	 
	1/	 	Not less than $500,000 or a whole multiple
of $100,000 in excess thereof for a Eurodollar Borrowing nor less than $250,000
or a whole multiple of $50,000 in excess thereof for a Base Rate Borrowing.
	 
	2/	 	Eurodollar Loan or Base Rate Loan.



 


A-1









 









	 	 	 	 	 	 	 	 	 
	(D)

	 	Interest Period and the	 	 	 	 	 	 
	 

	 	last day thereof 3	 	 	 	 	 	 
	 	 	 	 	 	 	 






Upon acceptance of any or all of the Revolving Credit Loans made by the Banks in response to
this request, the Borrower shall be deemed to have represented and warranted that the conditions to
lending specified in Section 4.2 of the Agreement have been satisfied.



	 	 	 	 	 
	 	Very truly yours,







AQUA PENNSYLVANIA, INC.

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 


 





	 	 	 
	3/	 	Which shall be subject to the definition
of “Interest Period” and end not later than the Termination Date.



 


C-2









 









EXHIBIT B-1




NOTE




	 	 	 
	$                    

	 	Philadelphia, Pennsylvania
	 

	 	November
 _____, 2010






FOR VALUE RECEIVED, the undersigned, AQUA PENNSYLVANIA, INC. (the “Borrower”), hereby promises
to pay to the order of                                          (the “Bank”), at the office of PNC Bank, National
Association (the “Agent”), at 1600 Market Street, Philadelphia, PA 19103, on the Termination Date,
the lesser of the principal sum of                    
                      Dollars ($                    ) and the aggregate
unpaid principal amount of all Loans made by the Bank to the Borrower pursuant to Section 2.1 of
the Credit Agreement dated as of November
 _____, 2010, among the Borrower, the Banks party thereto and
the Agent (as amended, modified, extended or restated from time to time, the “Agreement”), in
lawful money of the United States of America in same day funds, and to pay interest from the date
hereof on such principal amount from time to time outstanding, in like funds, at said office, at a
rate or rates per annum and payable on the dates determined pursuant to the Agreement.



The Borrower promises to pay interest, on demand, on any overdue principal and, to the extent
permitted by law, overdue interest from their due dates at the rate or rates determined as set
forth in the Agreement.



The Borrower hereby waives diligence, presentment, demand, protest and notice of any kind
whatsoever. The nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent instance.



All borrowings evidenced by this Note and all payments and prepayments of the principal hereof
and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, or otherwise recorded by such holder in its internal
records; provided, however, that the failure of the holder hereof to make such a
notation or any error in such a notation shall not in any manner affect the obligations of the
Borrower to make payments of principal and interest in accordance with the terms of this Note and
the Agreement.


 


B-1









 





This Note is one of the Notes referred to, in evidences indebtedness incurred under, and is
entitled to the benefits of the Agreement. The Agreement, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of certain events, for optional and
mandatory prepayments of the principal hereof prior to the maturity hereof, for a higher rate of
interest hereunder after an Event of Default and for the amendment or waiver of certain provisions
of the Agreement, all upon the terms and conditions therein specified. This Note shall be
construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania and any
applicable laws of the United States of America. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Agreement.



	 	 	 	 	 
	 	AQUA PENNSYLVANIA, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


C-2









 





Loans and Payments




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Unpaid	 	 	Name of	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Principal	 	 	Person	 
	 	 	Amount	 	 	Interest	 	 	Interest	 	 	Payments	 	 	Balance of	 	 	Making	 
	Date	 	of Loan	 	 	Rate	 	 	Period	 	 	Principal	 	 	Interest	 	 	Note_	 	 	Notation	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







 


C-3









 







EXHIBIT B-2




SWING LINE NOTE




	 	 	 
	$10,000,000

	 	Philadelphia, Pennsylvania
	 

	 	November
 _____, 2010






FOR VALUE RECEIVED, the undersigned, AQUA PENNSYLVANIA, INC. (the “Borrower”), hereby promises
to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the “Bank”), at the office of the Agent (as
hereinafter defined), at 1600 Market Street, Philadelphia, PA 19103, in accordance with the terms
of the Agreement (as hereinafter defined), the lesser of the principal sum of Ten Million Dollars
($10,000,000) and the aggregate unpaid principal amount of all Swing Line Loans made by the Bank to
the Borrower pursuant to Section 2.2 of the Credit Agreement dated as of November
 _____, 2010, among
the Borrower, the Banks party thereto and PNC Bank, National Association, as agent for the Banks
(the “Agent”) (as amended, modified, extended or restated from time to time, the “Agreement”), in
lawful money of the United States of America in same day funds, and to pay interest from the date
hereof on such principal amount from time to time outstanding, in like funds, at said office, at a
rate or rates per annum and payable on the dates determined pursuant to the Agreement.



The Borrower promises to pay interest, on demand, on any overdue principal and, to the extent
permitted by law, overdue interest from their due dates at the rate or rates determined as set
forth in the Agreement.



The Borrower hereby waives diligence, presentment, demand, protest and notice of any kind
whatsoever. The nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent instance.



All borrowings evidenced by this Swing Line Note and all payments and prepayments of the
principal hereof and interest hereon and the respective dates thereof shall be endorsed by the
holder hereof on the schedule attached hereto and made a part hereof, or on a continuation thereof
which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its
internal records; provided, however, that the failure of the holder hereof to make
such a notation or any error in such a notation shall not in any manner affect the obligations of
the Borrower to make payments of principal and interest in accordance with the terms of this Swing
Line Note and the Agreement.


 


B-2-1









 





This Swing Line Note is the Swing Line Note referred to in, evidences indebtedness incurred
under, and is entitled to the benefits of the Agreement. The Agreement, among other things,
contains provisions for the acceleration of the maturity hereof upon the happening of certain
events, for optional and mandatory prepayments of the principal hereof prior to the maturity
hereof, for a higher rate of interest hereunder after an Event of Default and for the amendment or
waiver of certain provisions of the Agreement, all upon the terms and
conditions therein specified. This Swing Line Note shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania and any applicable laws of the United
States of America. Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Agreement.



	 	 	 	 	 
	 	AQUA PENNSYLVANIA, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


C-2









 





Loans and Payments




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Unpaid	 	 	Name of	 
	 	 	 	 	 	 	 	 	 	 	Swing Line	 	 	 	 	 	 	 	 	 	 	Principal	 	 	Person	 
	 	 	Amount	 	 	Interest	 	 	Repayment	 	 	Payments	 	 	Balance of	 	 	Making	 
	Date	 	of Loan	 	 	Rate	 	 	Date	 	 	Principal	 	 	Interest	 	 	Note_	 	 	Notation	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







 


C-3









 







EXHIBIT C




FORM OF

ASSIGNMENT AND ACCEPTANCE




Reference is made to the Credit Agreement dated as of November
 _____, 2010 (as amended, modified,
extended or restated from time to time, the “Agreement”), among Aqua Pennsylvania, Inc. (the
“Borrower”), the banks party thereto (the “Banks”) and PNC Bank, National Association, as Agent.
Terms defined in the Agreement are used herein with the same meanings.



                     (the “Assignor”) and                      (the “Assignee”) hereby agree as
follows:



The Assignor hereby sells and assigns, without recourse, to the Assignee, and the Assignee
hereby purchases and assumes, without recourse, from the Assignor, effective as of the Effective
Date set forth on Schedule A attached hereto, the interests set forth on Schedule A (the “Assigned
Interest”) in the Assignor’s rights and obligations under the Agreement, including, without
limitation, the interests set forth on Schedule A in the Commitment of the Assignor on the
Effective Date and the Loans owing to the Assignor which are outstanding on the Effective Date,
together with unpaid interest accrued on the assigned Loans to the Effective Date and the amount,
if any, set forth on Schedule A of the Fees accrued to the Effective Date for the account of the
Assignor. Each of the Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 9.6(c) of the Agreement, a copy of
which has been received by each such party. From and after the Effective Date (i) the Assignee
shall be a party to and be bound by the provisions of the Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and obligations of a Bank
thereunder and under the Agreement or any other document issued in connection therewith and (ii)
the Assignor shall, to the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement.



This Assignment and Acceptance is being delivered to the Agent together with (i) the Notes
evidencing the Loans included in the Assigned Interest, (ii) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee’s exemption from withholding taxes with
respect to all payments to be made to the Assignee under the Agreement or such other documents as
are necessary to indicate that all such payments are subject to such tax at a rate reduced by an
applicable tax treaty, all duly completed and executed by such Assignee, and (iii) a processing and
recordation fee of $3,500, if required.



This Assignment and Acceptance shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania.


 


i









 





The terms set forth above and on Schedule A attached hereto are hereby agreed to as of the
date hereof.



	 	 	 	 	 
	 	                                        , as Assignor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	                                        , as Assignee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Acknowledged:	 	 
	 
	 	 	 	 
	PNC BANK, NATIONAL ASSOCIATION,

as Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:

Title:
	 	 
	 
	 	 	 	 
	Consented to:	 	 
	 
	 	 	 	 
	AQUA PENNSYLVANIA, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:

Title:
	 	 






 


ii









 





SCHEDULE A




Date of Assignment:



Legal Name of Assignor:



Legal Name of Assignee:



Assignee’s Address for Notices:



	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 
	 

	 	 
	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	Telecopy:
	 	 

	 	 
	 

	 	 	 	 

	 	 






Effective Date of Assignment

(may not be fewer than 5 Business

Days after the Date of Assignment):                                         




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage of Loans and	 
	Revolving Credit Facility	 	Principal Amount Assigned	 	 	Commitment Assigned	 
	Commitment Assigned:
	 	$	 	 	 	 	%	 
	Revolving Credit Loans:
	 	$	 	 	 	 	%	 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage of Loans and	 
	Swing Loan Facility	 	Principal Amount Assigned	 	 	Commitment Assigned	 
	Commitment Assigned:
	 	 	 	 	 	$	100	%
	Swing Line Loans:
	 	 	 	 	 	$	100	%







 


iii