FOURTH AMENDED REPLACEMENT AND RESTATED
CREDIT AGREEMENT
October 13, 2020
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Borrower:
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Pike County Light & Power
Company
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a(n) ☐ individual ☒ corporation ☐ general
partnership ☐ limited liability company ☐
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organized under the laws of
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Pennsylvania
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having its chief executive office at
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330 West William Street, Corning, New York 14830
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Bank:
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M&T BANK, a New York banking corporation with its chief executive office at One M&T
Plaza, Buffalo, NY 14203. Attention: Office of General Counsel.
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The Bank and the Borrower agree as follows:
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a.
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“Agreement” means this Third Amended Replacement and Restated Credit
Agreement.
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b.
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“Capital Expenditures” (“CAPEX”) means, at any time, all acquisitions
of machinery, equipment, land, leaseholds, buildings, improvements and all other expenditures considered to be for fixed assets
under G.A.A.P., consistently applied. Where an asset is acquired under a capital lease, the amount required to be capitalized shall
be considered a capital expenditure during the first year of the lease.
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c.
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“Cash Flow” means the sum of (i) net income after
tax, dividends and distributions, plus (ii) depreciation expense and amortization, plus (iii) Interest Expense, plus (iv)non-cash
expenses and minus (v) non-cash income, all determined in accordance with G.A.A.P.
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d.
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“Cash Flow Coverage” means the ratio of Cash Flow to the sum of (i) the current
portion of all Long Term Debt as specified in the financial statement dated twelve (12) months prior, plus (ii) Interest Expense,
all determined in accordance with G.A.A.P
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e.
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“Credit” means any and all credit facilities and any other financial accommodations
made by the Bank in favor of the Borrower whether now or hereafter in existence.
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f.
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“Current Assets” means, at any time, the aggregate amount of all current assets,
including, but not limited to, cash, cash equivalents, marketable securities, receivables maturing within twelve (12) months from
such time, and inventory (net of LIFO Reserve), but excluding prepaid expenses and officer, stockholder, employee and related entity
advances and receivables, all as determined in accordance with G.A.A.P.
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g.
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“Current Maturity of Long-Term Debt” (“CMLTD”) means, for any period,
the scheduled principal loan or capital lease payments paid or required to be paid during the applicable period.
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h.
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“Current Liabilities” means, at any time, the aggregate amount of all liabilities
and obligations which are due and payable on demand or within twelve (12) months from such time, or should be properly reflected
as attributable to such twelve (12) month period in accordance with G.A.A.P.
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i.
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“Current Ratio” means the ratio of Current Assets to Current Liabilities.
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j.
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“Distributions” means any dividend or other form of distribution (whether in
cash, securities or other property) with respect to any stock, membership or other form of equity interest in Borrower or any Subsidiary,
or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of any such interests or any option, warrant or other
right to acquire any such interests, in each case in accordance with the applicable governing documents of Borrower or Subsidiary,
as the case may be, or otherwise.
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k.
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“EBITDA” shall mean net income after tax, plus depreciation, plus amortization,
plus interest expense, plus non-cash expenses, less non-cash income, all as determined in accordance with G.A.A.P.
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l.
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“Fixed Charge Coverage Ratio” means, at any time, EBITDA less CAPEX less Distributions
(but not preferred dividends) plus rental and operating lease payments plus other defined fixed charges.
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m.
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“G.A.A.P.” means, with respect to any date of determination, generally accepted
accounting principles as used by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants
consistently applied and maintained throughout the periods indicated.
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n.
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“Interest Expense” means all finance charges reflected on the income statement
as interest expense for all obligations of Borrower to any person, including, but not limited to, Bank, as shown on any properly
prepared balance sheet in accordance with G.A.A.P.
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o.
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“Long Term Debt” means all obligations of Borrower to any person, including,
but not limited to, the Obligations, payable more than twelve (12) months from the date of their creation, which in accordance
with G.A.A.P. are properly shown on the balance sheet as a liability (excluding reserves for deferred income taxes) for the period
then ended, and also specifically the Replacement Term Note dated June 27, 2019 and any renewals, replacements and extensions
thereof.
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p.
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“Obligations” means
any and all indebtedness or other obligations of the Borrower to the Bank in any capacity, now existing or hereafter incurred,
however created or evidenced, regardless of kind, class or form, whether direct, indirect, absolute or contingent (including obligations
pursuant to any guaranty, endorsement, other assurance of payment or otherwise), whether joint or several, whether from time to
time reduced and thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions, renewals
and replacements thereof, and all interest, fees, charges, costs or expenses which accrue on or in connection with the foregoing,
including any indebtedness or obligations (i) not yet outstanding but contracted for, or with regard to which any other commitment
by the Bank exists; (ii) arising prior to, during or after any pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding; (iii) owed by the Borrower to others and which the Bank
obtained, or may obtain, by assignment or otherwise; and (iv) payable under this Agreement.
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q.
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“Permitted Distributions” has the meaning set forth in the Schedule.
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r.
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“Permitted Guaranties” has the meaning set forth in the Schedule.
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s.
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“Permitted Indebtedness” has the meaning set forth in the Schedule.
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t.
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“Permitted Investments” has the meaning set forth in the Schedule.
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u.
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“Permitted Liens” has the meaning set forth in the Schedule.
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v.
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“Permitted Loans” has the meaning set forth in the Schedule.
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w.
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“Quick Ratio” means the ratio of Current Assets less inventory (net of LIFO
Reserve), to Current Liabilities.
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w-1
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“Revolver” Shall mean the Replacement Daily Adjusting LIBOR Revolving Note between
Bank and Pike County Light & Power Company dated October 13, 2020 in the maximum principal amount of $2,000,000.00.
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x.
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“Schedule” means Schedule A, attached hereto and made a part hereof.
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y.
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“Subordinated Debt” means all indebtedness of the Borrower which has been formally
subordinated to payment and collection of the Obligations on written terms approved by Bank in writing.
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z.
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“Subsidiary” means any corporation or other business entity of which at least
fifty percent (50%) of the voting stock or other ownership interest is owned by the Borrower directly or indirectly through one
or more Subsidiaries.
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aa.
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“Tangible Net Worth” means the aggregate assets
of Borrower excluding all intangible assets, including, but not limited to, goodwill, licenses, trademarks, patents, copyrights,
organization costs, appraisal surplus, officer, stockholder, related entity and employee advances or receivables, mineral rights
and the like, less liabilities, plus Subordinated Debt, all determined in accordance with G.A.A.P. (except to the extent that under
G.A.A.P. “tangible net worth” excludes leasehold improvements which are included in “Tangible Net Worth”
as defined herein).
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bb.
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“Total Funded Debt” means the sum of all obligations for borrowed money (including
Subordinated Debt and guaranties of obligations for borrowed money plus all capital lease obligations.
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cc.
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“Total Liabilities” means the aggregate amount of all assets of the Borrower
less the sum of shareholder equity and Subordinated Debt (if any), as shown on the balance sheet properly prepared in accordance
with G.A.A.P.
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dd.
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“Transaction Documents” means this Agreement and all documents, instruments
or other agreements by the Borrower in favor of the Bank in connection (directly or indirectly) with the Obligations, whether now
or hereafter in existence, including, without limitation, promissory notes, security agreements, guaranties and letter of credit
reimbursement agreements.
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ee.
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“Unencumbered Liquid Assets” means cash, cash equivalents and/or publicly traded/quoted
marketable securities acceptable to Bank in its sole discretion, free of any lien or other encumbrance. Account assets held in
a fiduciary capacity by Borrower shall not qualify as Unencumbered Liquid Assets.
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ff.
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“Unfunded Capital Expenditures” means, for any relevant period, the amount of
Capital Expenditures paid for out of ordinary operating cash flow and not financed through the incurrence of debt or the issuance
of equity.
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gg.
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“Working Capital” means that amount which is equal to the excess of Current
Assets over Current Liabilities.
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2.
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REPRESENTATIONS AND WARRANTIES. The Borrower makes the following representations and warranties
and any “Additional Representations and Warranties” on the Schedule, all of which shall be deemed to be continuing
representations and warranties as long as this Agreement is in effect:
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a)
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Good Standing; Authority. The Borrower and each Subsidiary (if either is not an individual) is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it was formed. The Borrower and each Subsidiary is duly
authorized to do business in each jurisdiction in which failure to be so qualified might have a material adverse effect on its
business or assets and has the power and authority to own each of its assets and to use them in the ordinary course of business
as contemplated now and in the future.
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b)
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Compliance. The Borrower and each Subsidiary conducts its business and operations and the ownership of its assets in compliance
with each applicable statute, regulation and other law, including environmental laws. All approvals, including authorizations,
permits, consents, franchises, licenses, registrations, filings, declarations, reports and notices (the “Approvals”)
necessary for the conduct of the Borrower’s and each Subsidiary’s business and for the Credit have been duly obtained
and are in full force and effect. The Borrower and each Subsidiary is in compliance with the Approvals. The Borrower and each
Subsidiary (if either is not an individual) is in compliance with its certificate of incorporation, by-laws, partnership agreement,
articles of organization, operating agreement or other applicable organizational or governing document as may be applicable to
the Borrower or a Subsidiary depending on its organizational structure (“Governing Documents”). The Borrower and each
Subsidiary is in compliance with each agreement to which it is a party or by which it or any of its assets is bound.
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c)
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Legality. The execution, delivery and performance by the Borrower of this Agreement and all related documents, including
the Transaction Documents, (i) are in furtherance of the Borrower’s purposes and within its power and authority; (ii) do
not (A) violate any statute, regulation or other law or any judgment, order or award of any court, agency or other governmental
authority or of any arbitrator with respect to the Borrower or any Subsidiary or (B) violate the Borrower’s or any Subsidiary’s
Governing Documents (if either is not an individual), constitute a default under any agreement binding on the Borrower or any
Subsidiary or result in a lien or encumbrance on any assets of the Borrower or any Subsidiary; and (iii) if the Borrower or any
Subsidiary is not an individual, have been duly authorized by all necessary organizational actions.
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d)
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Fiscal Year. The fiscal year of the Borrower is the calendar year unless the following blank states otherwise: year ending
September 30th.
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e)
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Title to Assets. The Borrower and each Subsidiary has good and marketable title to each of its assets free of security
interests, mortgages or other liens or encumbrances, except as set forth on the Schedule titled “Permitted Liens”
or pursuant to the Bank’s prior written consent.
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f)
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Judgments and Litigation. There is no pending or threatened claim, audit, investigation, action or other legal proceeding
or judgment, order or award of any court, agency or other governmental authority or arbitrator (any, an “Action”)
which involves the Borrower, its Subsidiaries or their respective assets and might have a material adverse effect upon the Borrower
or any Subsidiary or threaten the validity of the Credit, any Transaction Document or any related document or action. Borrower
will immediately notify the Bank in writing upon acquiring knowledge of any such Action.
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g)
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Full Disclosure. Neither this Agreement nor any certificate, financial statement or other writing provided to the Bank
by or on behalf of the Borrower or any Subsidiary contains any statement of fact that is incorrect or misleading in any material
respect or omits to state any fact necessary to make any such statement not incorrect or misleading. The Borrower has not failed
to disclose to the Bank any fact that might have a material adverse effect on the Borrower or any Subsidiary.
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3.
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AFFIRMATIVE COVENANTS. So long as this Agreement is in effect, the Borrower will comply,
and cause each of its Subsidiaries to comply, with the following covenants and any other “Additional Affirmative Covenant”
contained in the Schedule:
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a) Financial Statements and Other Information.
Promptly deliver to the Bank (i) within sixty (60) days after the end of each of its first three fiscal quarters, an internally
prepared financial statement of the Borrower and each subsidiary as of the end of such quarter, which financial statement
shall consist of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year and for the
period from the end of the previous fiscal year, with a consolidating and consolidated balance sheet as of the fiscal year
end all in such detail as the Bank may request; (ii) Borrower shall cause Corning Natural Gas Holding Corporation (“Holding”)
to promptly deliver to the Bank copies of all annual reports, proxy statements and similar information distributed to shareholders,
partners or members and of all filings with the Securities and Exchange Commission and the Pension Benefit Guaranty Corporation
and shall provide in form satisfactory to the Bank: (i) within sixty (60) days after the end of each of its first three
fiscal quarters, consolidating and consolidated statements of income and cash flows for the quarter, for the corresponding
quarter
in the previous fiscal year and for the period from the end of the previous fiscal year, with a consolidating and consolidated
balance sheet as of the quarter end; and (ii) within one-hundred twenty days (120) after the end of each fiscal year, consolidating
and consolidated statements of Holding’s income and cash flows and its consolidating and consolidated balance sheet
as of the end of such fiscal year, setting forth comparative figures for the preceding fiscal year and to be:
☒ audited
☐ reviewed ☐ compiled
by an independent certified public accountant
acceptable to the Bank; all such statements shall be certified by Holding’s chief financial officer or partner to
be correct, not misleading and in accordance with Holding’s records and to present fairly the results of Holding’s
operations and cash flows and if annual its financial position at year end in conformity with generally accepted accounting
principles. If no box is checked, Holding shall deliver financial statements and information in the form and at the times
satisfactory to the Bank. Holding represents that its assets are not subject to any liens, encumbrances or contingent liabilities
except as fully disclosed to the Bank in such statements. Holding authorizes the Bank from time to time to obtain, verify
and review all financial data deemed appropriate by the Bank in connection with the Obligations, including without limitation credit
reports from agencies. Holding understands this requirement and has satisfied itself as to its meaning and consequences
and acknowledges that it has made its own arrangements for keeping informed of changes or potential changes affecting the Borrower
including the Borrower’s financial condition; within one hundred twenty (120) days after the end of each fiscal year,
internally prepared statement of the Borrower and internally prepared consolidating and consolidated statements of income and
cash flows and its consolidating and consolidated balance sheet as of the end of such fiscal year, setting forth comparative figures
for the preceding fiscal year; all such statements shall be certified by the Borrower’s chief financial officer to be correct
and in accordance with the Borrower’s and each Subsidiary’s records and to present fairly the results of the Borrower’s
and each Subsidiary’s operations and cash flows and its financial position at year end; and (iii) with each of the financial
statements set forth above in clauses (i) and (ii) statement of income, a certificate executed by the Borrower’s chief executive
or chief financial officers or other such person responsible for the financial management of the Borrower (A) setting forth the
computations required to establish the Borrower’s compliance with each financial covenant, if any, during the statement period,
(B) stating that the signer of the certificate has reviewed this Agreement and the operations and condition (financial or other)
of the Borrower and each of its Subsidiaries during the relevant period and (C) stating that no Event of Default occurred during
the period, or if an Event of Default did occur, describing its nature, the date(s) of its occurrence or period of existence and
what action the Borrower has taken with respect thereto; and (iv) prior to December 31 of each year, Borrower’s operating
and capital budgets for the succeeding year. The Borrower shall also promptly provide the Bank with copies of all annual reports,
proxy statements and similar information distributed to shareholders, partners or members, and copies of all filings with the Securities
and Exchange Commission and the Pension Benefit Guaranty Corporation, and shall provide, in form satisfactory to the Bank, such
additional information, reports or other information as the Bank may from time to time reasonably request regarding the financial
and business affairs of the Borrower or any Subsidiary. If the Borrower is an individual, the Borrower shall provide annually a
personal financial statement in form and detail acceptable to the Bank and such other financial information as the Bank may from
time to time reasonably request. Promptly upon the request of the Bank from time to time, Borrower shall supply all additional
information requested and permit the Bank’s officers, employees, accountants, attorneys and other agents to (x) visit and
inspect each of Borrower’s premises, (y) Upon no less than seven (7) days advance written notice to Borrower Bank may, at
Bank’s sole expense, examine, audit, copy and extract from Borrower’s records and (z) discuss Borrower’s or its
affiliates’ business, operations, assets, affairs or condition (financial or other) with its responsible officers and independent
accountants.
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b)
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Accounting; Tax Returns and Payment of Claims. Maintain a system of accounting and reserves in accordance with generally
accepted accounting principles, has filed and will file each tax return required of it and, except as disclosed in the Schedule,
has paid and will pay when due each tax, assessment, fee, charge, fine and penalty imposed by any taxing authority upon it or
any of its assets, income or franchises, as well as all amounts owed to mechanics, materialmen, landlords, suppliers and the like
in the normal course of business. Borrower shall notify Bank of any pending assessments or adjustments of its income tax payable
with respect to any year.
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c)
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Inspections. Promptly upon the Bank’s request permit the Bank’s officers, attorneys or other agents to inspect
its and its Subsidiary’s premises, examine and copy its records and discuss its and its Subsidiary’s business, operations
and financial or other condition with its and its Subsidiary’s responsible officers and independent accountants.
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d)
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Operating Accounts. Maintain all bank accounts with the Bank.
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e)
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Changes in Management and Control. Immediately upon any change in the identity of the Borrower’s chief executive
officers or in its beneficial ownership, the Borrower will provide to the Bank a certificate executed by its senior individual
authorized to transact business on behalf of the Borrower, specifying such change.
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f)
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Notice of Defaults, Change of Address and Material Adverse Changes. Immediately upon acquiring reason to know of (i) any
Event of Default, (ii) any event or condition that might have a material adverse effect upon the Borrower or any Subsidiary or
(iii) any change of its address or of the location of any collateral securing the Obligations, or (iv) any Action, the Borrower
will provide to the Bank a certificate executed by the Borrower’s senior individual authorized to transact business on behalf
of the Borrower, specifying the date(s) and nature of the event or the Action and what action the Borrower or its Subsidiary has
taken or proposes to take with respect to it.
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g)
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Insurance. Maintain its property in good repair and will on request provide the Bank with evidence of insurance coverage
satisfactory to the Bank, including fire and hazard, liability, workers’ compensation and business interruption insurance
and flood hazard insurance as required.
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h)
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Further Assurances. Promptly upon the request of the Bank, the Borrower will execute and deliver each writing and take
each other action that the Bank deems necessary or desirable in connection with any transaction contemplated by this Agreement.
In the event that Borrower or any of its Subsidiaries shall create or acquire a new Subsidiary after the date hereof but while
this Agreement is in effect or any Obligation remains outstanding, Borrower shall cause such new Subsidiary to execute such agreements
or other documents as shall be required in Bank’s sole and absolute discretion so as to join this Agreement as an additional
borrower, guarantor or such other capacity as Bank deems appropriate in its sole and absolute discretion. Borrower shall deliver
such resolutions, organizational documents, and such other items as Bank may reasonably requires in connection with same.
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i.
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Additional Closing Conditions. As an additional condition to any advance of new funds to Borrower
on or after the date of this Agreement to be evidenced by the Replacement Term Note (the form of which is annexed hereto as Schedule
3.i): (i) Borrower must provide to Bank evidence that it has contributed from working capital the amount of not less than 40% of
the cost of any capital expenditure project financed with such advance; and (ii) Borrower must provide a copy of its most current
capital expenditure tracking report submitted to the Pennsylvania Public Utility Commission with any request for advance.
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4.
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NEGATIVE COVENANTS. As long as this Agreement is in effect, the Borrower shall not violate,
and shall not suffer or permit any of its Subsidiaries to violate, any of the following covenants and any “Additional Negative
Covenant” on the Schedule. The Borrower shall not:
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a)
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Intentionally Omitted.
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b)
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Intentionally Omitted.
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c)
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Intentionally Omitted.
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d)
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Intentionally Omitted.
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e)
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Intentionally Omitted.
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f)
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Intentionally Omitted.
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g)
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Changes In Form or Control. (i) Transfer or dispose of substantially all of its assets, (ii) acquire substantially all
of the assets of any other entity, (iii) do business under or otherwise use any name other than its true name or (iv) make any
material change in its business, structure, ownership, purposes or operations that might have a material adverse effect on the
Borrower or any of its Subsidiaries. If the Borrower or any Subsidiary is not an individual, (i) participate in any merger, consolidation
or other absorption or (ii) make, terminate or permit to be revoked any election pursuant to Subchapter S of the Internal Revenue
Code.
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h.
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Sale of Assets. Sell, transfer lease or otherwise dispose of any assets (including, without
limitation, pursuant to any sale/leaseback transaction, securitization transaction, or with respect to any equity interest owned
by it) other than sales, transfers and dispositions of (y) inventory in the ordinary course of business and (z) used, obsolete,
worn out or surplus equipment or property in the ordinary course of business;
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5.
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FINANCIAL COVENANTS. During the term of this Agreement, the Borrower shall not violate,
and shall not suffer or permit any of its Subsidiaries to violate, any of the following covenants (complete applicable financial
covenant) or any Additional Financial Covenants on the Schedule. For purposes of this Section, if the Borrower has any Subsidiaries
all references to the Borrower shall include the Borrower and all of its Subsidiaries on a consolidated basis. Unless a different
measurement period is specified, compliance for the financial covenants shall be required at all times.
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☐ A. Borrower
shall maintain Tangible Net Worth of not less than $_________________, measured (select one: quarterly or annually) ______________
as of each (select one: quarter or fiscal year) ___________ end.
☒ B. Borrower
shall maintain a ratio of Total Funded Debt excluding the then principal balance on the Revolver, to Tangible Net Worth
of not greater than 1:40:1.0, measured quarterly based on Company’s trailing twelve (12) month operating
performance as reflected in Borrower’s fiscal quarterly financial statements.
o C. Borrower
shall maintain a Fixed Charge Coverage Ratio of not less than [___.___] to 1.00 measured quarterly on a trailing twelve month basis,
commencing with the period ending [__________________].
☒ D. Borrower
shall maintain a ratio of Total Funded Debt excluding the then principal balance due on the Revolver to EBITDA of not greater
than 3.75:1.0, measured quarterly based on Borrower’s trailing twelve (12) month operating performance as
reflected in Borrower’s fiscal quarterly financial statements
o E. Borrower
shall not have suffered a net loss as of each fiscal year end, as determined in accordance with G.A.A.P., as reflected on its financial
statements furnished to Bank pursuant to the requirements of this Agreement.
o F. Borrower
shall maintain a Current Ratio of not less than ________________:______________, measured (select one: quarterly or annually) ______________
as of each (select one: quarter or fiscal year) ___________ end.
o G. Borrower
shall maintain a Quick Ratio of not less than ________________ to 1.00, measured [quarterly/annually] as of each quarter/fiscal
year] end.
o H. Borrower
shall maintain Working Capital of not less than $______________________________, measured (select one: quarterly or annually) ______________
as of each (select one: quarter or fiscal year)___________ end.
☒ I. Minimum
Cash Flow Coverage ratio. Borrower shall maintain Cash Flow Coverage of not less than 1.10:1.0, measured quarterly
based on Borrower’s trailing twelve (12) month operating performance as reflected in Borrower’s fiscal quarterly financial
statements.
o J. Without
the prior written consent of Bank, Borrower shall not make any Capital Expenditures in excess of $______________ in the aggregate
during any fiscal year of Borrower.
o K. Borrower
shall not pay or accrue during any fiscal year compensation (including but not limited to all salary, bonuses, consulting, management
or other fees, rentals and other payments to any person owning or managing 5%or more of the Borrower or any relative or cohabitant
of such a person, and to any entity under common control with or controlling the Borrower) exceeding $_______________ in the aggregate.
o L. Borrower
shall not become obligated as lessee pursuant to operating leases exceeding $_______________ in the aggregate during any fiscal
year.
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a)
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Events of Default. Any of the following events or conditions shall constitute an “Event of Default”: (i) failure
by the Borrower to pay when due (whether at the stated maturity, by acceleration, upon demand or otherwise) the Obligations, or
any part thereof, or there occurs any event or condition which after notice, lapse of time or after both notice and lapse of time
will permit acceleration of any Obligation; (ii) default by the Borrower in the performance of any obligation, term or condition
of this Agreement, the other Transaction Documents or any other agreement with the Bank or any of its affiliates or subsidiaries
(collectively, “Affiliates”); (iii) failure by the Borrower to pay when due (whether at the stated maturity, by acceleration,
upon demand or otherwise) any indebtedness or obligation owing to any third party or any Affiliate, the occurrence of any event
which could result in acceleration of payment of any such indebtedness or obligation or the failure to perform any agreement with
any third party or any Affiliate; (iv) the Borrower is dissolved, becomes insolvent, generally fails to pay or admits in writing
its inability generally to pay its debts as they become due; (v) the Borrower makes a general assignment, arrangement or composition
agreement with or for the benefit of its creditors or makes, or sends notice of any intended, bulk sale; the sale, assignment,
transfer or delivery of all or substantially all of the assets of the Borrower to a third party; or the cessation by the Borrower
as a going business concern; (vi) the Borrower files a petition in bankruptcy or institutes any action under federal or state
law for the relief of debtors or seeks or consents to the appointment of an administrator, receiver, custodian or similar official
for the wind up of its business (or has such a petition or action filed against it and such petition action or appointment
is not dismissed or stayed within forty-five (45) days; (vii) the reorganization, merger, consolidation or dissolution of
the Borrower (or the making of any agreement therefor); (viii) the death or judicial declaration of incompetency of the Borrower,
if an individual; (ix) the entry of any judgment or order of any court, other governmental authority or arbitrator against the
Borrower which Bank in good faith determines shall have a material adverse effect on the Borrower or the Borrower’s ability
to pay or perform the Obligations; (x) falsity, omission or inaccuracy of facts submitted to the Bank or any Affiliate (whether
in a financial statement or otherwise); (xi) an adverse change in the Borrower, its business, assets, operations, affairs or condition
(financial or otherwise) from the status shown on any financial statement or other document submitted to the Bank or any Affiliate,
and which change the Bank determines will have a material adverse effect on (a) the Borrower, its business, assets, operations
or condition (financial or otherwise), or (b) the ability of the Borrower to pay or perform the Obligations; (xii) any pension
plan of the Borrower fails to comply with applicable law or has vested unfunded liabilities that, in the opinion of the Bank,
might have a material adverse effect on the Borrower’s ability to repay its debts; (xiii) failure of the Borrower to supply
new or additional collateral within ten (10) days of request by the Bank; (xiv) the occurrence of any event described in sub-paragraph(i)
through and including(xiii) hereof with respect to any Subsidiary or to any endorser, guarantor or any other party liable for,
or whose assets or any interest therein secures, payment of any of the Obligations; or (xv) the Bank in good faith deems itself
insecure with respect to payment or performance of the Obligations.
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b)
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Rights and Remedies Upon Default. Upon the occurrence of any Event of Default, the Bank without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Borrower,
any Subsidiary or any other person (all and each of which demands, presentments, protests, advertisements and notices are hereby
waived), may exercise all rights and remedies under the Borrower’s or its Subsidiaries’ agreements with the Bank or
its Affiliates, applicable law, in equity or otherwise and may declare all or any part of any Obligations not payable on demand
to be immediately due and payable without demand or notice of any kind and terminate any obligation it may have to grant any additional
loan, credit or other financial accommodation to the Borrower or any Subsidiary. All or any part of any Obligations whether or
not payable on demand, shall be immediately due and payable automatically upon the occurrence of an Event of Default in sub-paragraph
(vi) above. The provisions hereof are not intended in any way to affect any rights of the Bank with respect to any Obligations
which may now or hereafter be payable on demand.
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7.
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EXPENSES. The Borrower shall pay to the Bank on demand all costs and expenses (including
all fees and disbursements of counsel retained for advice, suit, appeal or other proceedings or purpose and of any experts or agents
it may retain), which the Bank may incur in connection with (i) the administration of the Obligations, including any administrative
fees the Bank may impose for the preparation of discharges, releases or
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assignments to third-parties; (ii) the enforcement and
collection of any Obligations or any guaranty thereof; (iii) the exercise, performance, enforcement or protection of any of the
rights of the Bank hereunder; or (iv) the failure of the Borrower or any Subsidiary to perform or observe any provisions hereof.
After such demand for payment of any cost, expense or fee under this Section or elsewhere under this Agreement, the Borrower shall
pay interest at the highest default rate specified in any instrument evidencing any of the Obligations from the date payment is
demanded by the Bank to the date reimbursed by the Borrower. All such costs, expenses or fees under this Agreement shall be added
to the Obligations.
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8.
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TERMINATION. This Agreement shall remain in full force and effect until (i) all Obligations
outstanding, or contracted or committed for (whether or not outstanding), shall be finally and irrevocably paid in full and (ii)
all Transaction Documents have been terminated by the Bank.
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9.
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RIGHT OF SETOFF. If an Event of Default occurs, the Bank shall have the right to set off
against the amounts owing under this Agreement and the other Transaction Documents any property held in a deposit or other account
or otherwise with the Bank or its Affiliates or otherwise owing by the Bank or its Affiliates in any capacity to the Borrower,
its Subsidiary or any guarantor of, or endorser of any of the Transaction Documents evidencing, the Obligations. Such setoff shall
be deemed to have been exercised immediately at the time the Bank or such Affiliate elect to do so.
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10.
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USA PATRIOT ACT NOTICE. Bank hereby notifies the Borrower that pursuant to the requirements
of the USA PATRIOT Act (“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 Bank to identify
the Borrower in accordance with the Patriot Act. The Borrower agrees to, promptly following a request by Bank, provide all
such other documentation and information that Bank requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including the Patriot Act.
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a)
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Notices. Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given
if delivered to Borrower (at its address on the Bank’s records) or to the Bank (at the address on page one and separately
to the Bank officer responsible for Borrower’s relationship with the Bank). Such notice or demand shall be deemed sufficiently
given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or
courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United
States Post Office for the collection of mail or one (1) business day after delivery to a nationally recognized overnight courier
service (e.g., Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Borrower and the
Bank.
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b)
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Generally Accepted Accounting Principles. Any financial calculation to be made, all financial statements and other financial
information to be provided, and all books and records, system of accounting and reserves to be kept in connection with the provisions
of this Agreement, shall be in accordance with generally accepted accounting principles consistently applied during each interval
and from interval to interval; provided, however, that in the event changes in generally accepted accounting principles shall
be mandated by the Financial Accounting Standards Board or any similar accounting body of comparable standing, or should be recommended
by Borrower’s certified public accountants, to the extent such changes would affect any financial calculations to be made
in connection herewith, such changes shall be implemented in making such calculations only from and after such date as Borrower
and the Bank shall have amended this Agreement to the extent necessary to reflect such changes in the financial and other covenants
to which such calculations relate.
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c)
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Indemnification. If after receipt of any payment of all, or any part of, the Obligations, the Bank is, for any reason,
compelled to surrender such payment to any person or entity because such payment is determined to be void or voidable as a preference,
an impermissible setoff, or a diversion of trust funds, or for any other reason, the Transaction Documents shall continue in full
force and the Borrower shall be liable, and shall indemnify and hold the Bank harmless for, the amount of such payment surrendered.
The provisions of this Section shall be and remain effective notwithstanding any contrary action which may have been taken by
the Bank in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Bank’s rights
under the Transaction Documents and shall be deemed to have been conditioned upon such payment having become final and irrevocable.
The provisions of this Section shall survive the termination of this Agreement and the Transaction Documents.
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d)
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Further Assurances. From time to time, the Borrower shall take, and cause its Subsidiaries to take, such action and execute
and deliver to the Bank such additional documents, instruments, certificates, and agreements as the Bank may reasonably request
to effectuate the purposes of the Transaction Documents.
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e)
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Cumulative Nature and Non-Exclusive Exercise of Rights and Remedies. All rights and remedies of the Bank pursuant to this
Agreement and the Transaction Documents shall be cumulative, and no such right or remedy shall be exclusive of any other such
right or remedy. In the event of any unreconcilable inconsistencies, this Agreement shall control. No single or partial exercise
by the Bank of any right or remedy pursuant to this Agreement or otherwise shall preclude any other or further exercise thereof,
or any exercise of any other such right or remedy, by the Bank.
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f)
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Governing Law; Jurisdiction. This Agreement has been delivered to and accepted by the
Bank and will be deemed to be made in the State of New York. Except as otherwise provided under federal law, this Agreement will
be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. BORROWER HEREBY IRREVOCABLY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR
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JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH AND CONSENTS THAT THE BANK MAY EFFECT
ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED
THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR
EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER
COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Borrower acknowledges and agrees that the venue provided above
is the most convenient forum for both the Bank and Borrower. Borrower waives any objection to venue and any objection based
on a more convenient forum in any action instituted under this Agreement.
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g)
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Joint and Several; Successors and Assigns. If there is more than one Borrower, each of them shall be jointly and severally
liable for all amounts, which become due, and the performance of all obligations under this Agreement, and the term “the
Borrower” shall include each as well as all of them. This Agreement shall be binding upon the Borrower and upon its heirs
and legal representatives, its successors and assignees, and shall inure to the benefit of, and be enforceable by, the Bank, its
successors and assignees and each direct or indirect assignee or other transferee of any of the Obligations; provided, however,
that this Agreement may not be assigned by the Borrower without the prior written consent of the Bank.
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h)
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Waivers; Changes in Writing. No failure or delay of the Bank in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.
The Borrower expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of the Bank (including
representations to make loans to the Borrower) and agrees that none of the foregoing shall operate as a waiver of any right or
remedy of the Bank. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances. No waiver of any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless made specifically in writing by the Bank and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given. No modification to any provision of this Agreement
shall be effective unless made in writing in an agreement signed by the Borrower and the Bank.
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i)
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Interpretation. Unless the context otherwise clearly requires, references to plural includes the singular and references
to the singular include the plural; references to “individual” shall mean a natural person and shall include a natural
person doing business under an assumed name (e.g., a “DBA”); the word “or” has the inclusive meaning
represented by the phrase “and/or”; the word “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; and captions or section headings are solely for
convenience and not part of the substance of this Agreement. Any representation, warranty, covenant or agreement herein shall
survive execution and delivery of this Agreement and shall be deemed continuous. Each provision of this Agreement shall be interpreted
as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting law. If any
provision nevertheless is held invalid, the other provisions shall remain in effect. The Borrower agrees that in any legal proceeding,
a photocopy of this Agreement kept in the Bank’s course of business may be admitted into evidence as an original.
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j.
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Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument.
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k.
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Waiver of Jury Trial. The Borrower and the Bank hereby
knowingly, voluntarily, and intentionally waive any right to trial by jury the Borrower and the Bank may have in any action or
proceeding, in law or in equity, in connection with this Agreement or any transactions related hereto. The Borrower represents
and warrants that no representative or agent of the Bank has represented, expressly or otherwise, that the Bank will not, in the
event of litigation, seek to enforce this jury trial waiver. The Borrower acknowledges that the Bank has been induced to enter
into this Agreement by, among other things, the provisions of this Section.
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This Fourth
Amended Replacement Credit Agreement is intended to supersede and fully replace the previous Third Amended Replacement Credit Agreement
which was executed by the parties hereto on June 27, 2019. This Fourth Amended Replacement and Restated Credit Agreement shall
govern the Replacement Term Note between Borrower and Bank in the principal amount of $11,200,000.00 dated May 23, 2018, the Multiple
Disbursement Term Note between Borrower and Bank in the principal amount of $2,072,000.00 dated June 27, 2019, the Replacement
Term Note between Borrower and Bank in the principal amount of $489,739.84 dated June 27, 2019, the Replacement Daily Adjusting
Libor Revolving Line Note dated October , 2020 between Borrower and Bank in the amount of $2,000,000.00, Multiple Disbursement
Term Note in the amount of $1,315,000.00 dated October , 2020 and Letter(s) of Credit that may be issued by the Bank for the benefit
of Borrower in an amount up to $2,500,000.00.
Acknowledgment. Borrower acknowledges
that it has read and understands all the provisions of this Agreement, including the Governing Law, Jurisdiction
and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.
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M&T
BANK
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By /
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s/ Edgar B. Parsons, III
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Signature of Witness
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Name:
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Edgar B. Parsons, III
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Typed Name of Witness
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Title:
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Vice President
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PIKE
COUNTY LIGHT & POWER COMPANY
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By
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/s/ Charles Lenns
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Signature of Witness
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Name:
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Charles Lenns
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Typed Name of Witness
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Title:
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Vice President/Chief Financial Officer
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ACKNOWLEDGMENT
STATE OF NEW YORK )
: SS.
COUNTY OF BROOME )
On the 12th
day of October the year 2020, before me, the undersigned, a Notary Public in and for said State, personally appeared EDGAR
B. PARSONS, III, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name
is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature
on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.
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/s/ Kelly J. Anderson
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Notary Public
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ACKNOWLEDGMENT
STATE OF NEW YORK )
: SS.
COUNTY OF BROOME )
On the 12th
day of October in the year 2020, before me, the undersigned, a Notary Public in and for said State, personally appeared CHARLES
LENNS, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted, executed the instrument.
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/s/ Kelly J. Anderson
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Notary Public
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BANK USE ONLY
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Authorization Confirmed:
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Signature
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SCHEDULE A
For each of the subtitles below, list the appropriate
items or, if none, state “none”:
Additional Representations and Warranties (§2)
None
Additional Affirmative Covenants (§3)
None
Permitted Indebtedness (§4(a))
None
Permitted Guaranties (§4(b))
None
Permitted Liens (§4(c))
None
Permitted Investments (§4(d))
None
Permitted Loans (§4(e))
None
Permitted Distributions (§4(f))
None
Additional Financial Covenants (§5)
None
MULTIPLE DISBURSEMENT
TERM NOTE
New York
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October 13, 2020
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$1,315,000.00
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BORROWER (Name): Pike County Light
& Power Company
(Organizational Structure): Corporation
(State Law organized under): Pennsylvania
(Address of residence/chief executive office):
105 Schneider Lane, Milford, PA 18337
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BANK:
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M&T BANK, a New York banking corporation with its banking offices at One M&T Plaza, Buffalo,
NY 14203. Attention: Office of the General Counsel.
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Definitions. The following terms shall
have the indicated meanings in this Note:
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1.
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“Amortization Commencement Date” shall mean the first day of the Permanent Loan
Period, which shall be October 31, 2020.
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2.
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“Amortization Period” shall be ten (10) years, and shall mean the approximate
number of years, starting on the Amortization Commencement Date, needed to result in the full repayment of the Principal Amount,
if all regularly scheduled payments are made at the required intervals over that period. The Amortization Period may be longer
than the remaining term of this loan and shall not compromise the enforceability of the Maturity Date.
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3.
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“Disbursement Period” shall mean the period from the date of this Note to, but
not including, the Amortization Commencement Date, during which the Bank may advance funds to Borrower in accordance with the terms
of this Note and/or a Loan Agreement, if applicable.
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4.
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“First Installment Payment Date” shall mean the first Payment Due Date following
the Amortization Commencement Date.
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5.
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“Loan Agreement” shall mean any supplementary agreement, if any, between Borrower
and the Bank dated on or about the date hereof and/or in connection herewith, providing for the disbursement of funds under this
Note, as the same may be amended, modified or replaced from time to time.
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6.
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“Maturity Date” shall mean the Payment Due Date in the 120th
month following the Amortization Commencement Date.
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7.
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“New York Business Day” shall mean any day other than Saturday, Sunday or other
day in which commercial banking institutions in New York, New York are authorized or required by law or other governmental action
to remain closed for business.
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8.
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“Payment Due Date” shall mean the 13th day of the applicable calendar
month (or if there is no numerically corresponding day in a particular month, the last calendar day of such month); provided, however,
to the extent, if at all, that a non-daily adjusting LIBOR-based interest rate is in effect, if in any applicable month the day
identified above is not a Joint Business Day, the Payment Due Date shall be extended to the next succeeding Joint Business Day
unless such next succeeding Joint Business Day would fall in the next calendar month, in which case such Payment Due Date shall
be the immediately preceding Joint Business Day, so as to, in all instances, coincide with the end of the applicable Interest Period.
See attached LIBOR Rate Rider, the terms of which are incorporated herein by reference, for definitions and additional provisions.
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9.
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“Permanent Loan Period” shall mean the period from and including the Amortization Commencement Date to the
Maturity Date, during which Borrower shall repay the outstanding Principal Amount, with interest, as set forth below.
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10.
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“Principal Amount” shall mean the amount actually advanced, which sum shall
not exceed One Million Three Hundred Fifteen Thousand and 00/100 /Dollars ($1,315,000.00).
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Promise to Pay. For value received,
intending to be legally bound, Borrower promises to pay to the order of the Bank, on the dates set forth below, the Principal Amount
plus interest as agreed below, all payments required by the Bank to fund any escrow accounts for the payment of taxes, insurance
and/or other charges (collectively, “Escrow”), and all fees and costs (including without limitation attorneys’
fees and disbursements whether for internal or outside counsel) the Bank incurs in order to collect any amount due under this Note,
to negotiate or document a workout or restructuring, or to preserve its rights or realize upon any guaranty or other security for
the payment of this Note (“Expenses”).
Authorized Representatives. During the
Disbursement Period, the Bank may fund loan proceeds hereunder in reliance upon any oral, telephonic, written, teletransmitted
or other request (the “Request(s)”) that the Bank in good faith believes to be valid and to have been made by Borrower
or on behalf of Borrower by Michael I. German as President or Charles Lenns as Vice President and Chief Financial Officer
(include name(s) and title(s), as appropriate) or any other officer, employee or representative of Borrower who is authorized
or designated as a signer of loan documents under the provisions of Borrower’s most recent resolutions or similar documents
on file with the Bank (each an “Authorized Person”). Notwithstanding that individual names may have been provided to
the Bank, the Bank shall be permitted at any time to rely solely on an individual’s title to ascertain whether that individual
is an Authorized Person. The Bank may act on the Request of any Authorized Person until the Bank shall have received from Borrower,
and had a reasonable time to act on, written notice revoking the authority of such Authorized Person. Borrower acknowledges that
the transmission between Borrower and Bank of any Request or other instructions involves the possibility of errors, omissions,
misinterpretations, fraud and mistakes, and agrees to adopt such internal measures and operational procedures as may be necessary
to prevent such occurrences. By reason thereof, Borrower hereby assumes all risk of loss and responsibility for, and releases and
discharges the Bank from any and all responsibility or liability for, and agrees to indemnify, reimburse on demand and hold Bank
harmless from, any and all claims, actions, damages, losses, liability and expenses by reason of, arising out of, or in any way
connected with or related to: (i) Bank’s accepting, relying on and acting upon any Request or other instructions with respect
to the loan evidenced by this Note; or (ii) any such error, omission, misinterpretation, fraud or mistake, provided such error,
omission, misinterpretation, fraud or mistake is not directly caused by the Bank’s gross negligence or willful misconduct.
The Bank shall incur no liability to Borrower or to any other person as a direct or indirect result of funding any advance pursuant
to this paragraph.
Availability; Non-Revolving Credit. As a
condition to the advance of any funds hereunder, Borrower must demonstrate that it has funded 40% of the PSC approval capital expenditure
costs to be financed hereunder as described in the Revised Commitment Letter dated June 24, 2020 issued by Bank to Borrower. Borrower
also agrees that any request for an advance must be accompanied with a copy of a Pennsylvania Public Utility Commission capital
expenditure tracker report. Once the Disbursement Period ends, no further advances shall be Requested under this Note. The
aggregate amount of all advances made pursuant to this Note shall not exceed the Principal Amount, but in the event of any excess
advances, the amount of any such excess shall be due and payable immediately, with interest calculated at the applicable rate.
Repayment of any portion of any advance made hereunder shall NOT increase the remaining availability for future advances.
Interest. The unpaid Principal Amount
of this Note shall, at all times, earn interest calculated on the basis of a 360-day year for the actual number of days of each
year (365 or 366), from and including the date the proceeds of this Note are disbursed to, but not including, the date all amounts
hereunder are paid in full, at a rate per year which shall be:
During the Disbursement Period:
2.90 percentage points above the greater of
(i) One month LIBOR adjusting daily or (ii) .5 percentage points
During the Permanent Loan Period:
Fixed at 2.90 percentage points
above the sum of the yield on United States Treasury Obligations adjusted to a constant maturity of ten (10) years
in effect two (2) New York Business Days prior to the Amortization Commencement Date, as published by the Board of Governors of
the Federal Reserve System in the Federal Reserve Statistical Release H.15 (519), or by such other quoting service, index or commonly
available source utilized by the Bank.
At no time during the term
of the loan shall the rate fall below 340 percentage points (3.40%) (the “Interest Rate Floor”)
If no rate is specified above, interest shall
accrue at the Maximum Legal Rate (defined below) for the applicable period.
Maximum Legal Rate. It is the intent
of the Bank and Borrower that in no event shall interest be payable at a rate in excess of the maximum rate permitted by applicable
law (the “Maximum Legal Rate”). Solely to the extent necessary to prevent interest under this Note from exceeding the
Maximum Legal Rate, Borrower agrees that any amount that would be treated as excessive under a final judicial interpretation of
applicable law shall be deemed to have been a mistake and automatically canceled, and, if received by the Bank, shall be refunded
to Borrower, without interest.
Default Rate. If an Event of Default
(defined below) occurs, the interest rate on the unpaid Principal Amount shall immediately be automatically increased to five (5)
percentage points per year above the otherwise applicable rate per year, and any judgment entered hereon or otherwise in connection
with any suit to collect amounts due hereunder shall bear interest at such default rate.
Payments. Payments shall be made in
immediately available United States funds at any banking office of the Bank.
Preauthorized Transfers from Deposit Account.
If a deposit account number is provided in the following blank, Borrower hereby authorizes the Bank to debit Borrower’s deposit
account #___________________ with the Bank automatically for any amount which becomes due under this Note.
Interest Accrual; Application of Payments.
Interest will continue to accrue on the actual principal balance outstanding until the Principal Amount is paid in full. All installment
payments (excluding voluntary prepayments of principal) will be applied as of the date each payment is received and processed.
Payments may be applied in any order in the sole discretion of the Bank, but, prior to an Event of Default, may be applied chronologically
(i.e., oldest invoice first) to unpaid amounts due and owing, in the following order: first to accrued interest, then to principal,
then to Escrow, then to late charges and other fees, and then to all other Expenses.
Repayment Terms. Borrower
shall pay to the Bank the Principal Amount and all interest owing pursuant to this Note in installments as follows:
During the Disbursement
Period:
All accrued and
unpaid interest, in amounts that may vary, on the Payment Due Date of each month, beginning on the first Payment Due Date following
the date of this Note, and continuing through and including the Amortization Commencement Date, or as otherwise invoiced by the
Bank.
During the
Permanent Loan Period:
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(i)
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119 consecutive level monthly installments consisting of both principal and interest, each
in the amount that would result in the outstanding Principal Amount, as of the Amortization Commencement Date, plus interest at
the applicable rate, being repaid in full over the course of the Amortization Period, due and payable on the First Installment
Payment Date and each Payment Due Date thereafter, and
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(ii)
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ONE (1) FINAL INSTALLMENT, due and payable on the Maturity Date, in an amount equal to the outstanding
Principal Amount, together with all other amounts outstanding hereunder, including, without limitation, accrued interest, costs
and expenses.
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To the extent, if at all, that (i)
the repayment terms of this Note contemplate level installments of principal and interest during any period in which the applicable
interest rate is a variable rate (“Variable Rate P&I Period”), and (ii) during any such Variable Rate P&I Period,
the applicable interest rate changes in accordance with the terms of this Note, the Bank may, but shall be under no obligation
to, recalculate and adjust at any time the installment amount due and payable to the Bank, so as to appropriately reamortize the
unpaid Principal Amount, as of the date of such adjustment through the Maturity Date (or such other date as may be provided for
herein). Borrower understands that non-adjustment of the installment amount as described herein could result in a greater portion
of the unadjusted installment amount being applied to interest due, leaving less available to reduce the Principal Amount balance,
resulting in a higher than expected Principal Amount balance due and payable to the Bank on the Maturity Date. Absent manifest
error, the Bank’s determination of any amount due in connection herewith shall be conclusive.
Late Charge. If Borrower fails to pay,
within five (5) days of its due date, any amount due and owing pursuant to this Note or any other agreement executed and delivered
to the Bank in connection with this Note, including, without limitation, any Escrow payment due and owing, Borrower shall immediately
pay to the Bank a late charge equal to the greatest of (a) $50.00, (b) five percent (5%) of the delinquent amount or (c) the Bank’s
then current late charge as announced from time to time. Notwithstanding the above, if this Note is secured by a one- to six-family
owner-occupied residence, the late charge shall equal 2% of the delinquent amount and shall be payable if payment is not received
within fifteen days of its due date.
Prepayment Premium. During the term
of this Note, Borrower shall have the option of paying the unpaid Principal Amount to the Bank in advance of the Maturity Date,
in whole or in part, at any time and from time to time upon written notice received by the Bank at least three (3) days prior to
making such payment; provided, however, as consideration for the privilege of making such prepayment, Borrower shall pay to the
Bank a fee (the “Premium”) equal to the amount provided for on the attached Prepayment Premium Rider (or LIBOR Rate
Rider, as applicable). Any partial prepayment of principal shall be posted as of the date received and applied in inverse order
of maturity. With any prepayment in full of the Principal Amount balance, Borrower shall also pay to the Bank all accrued interest
and Expenses owing pursuant to this Note. In the event the Maturity Date of this Note is accelerated following an Event of Default,
the Bank’s right to collect the Premium, as liquidated damages, shall accrue immediately, with the amount of the Premium
to be determined in accordance with the terms of this Note at the time of any actual prepayment or other satisfaction, in whole
or in part, by any means, of the principal indebtedness evidenced by this Note. Any tender of payment by or on behalf of the Borrower
made after such Event of Default to satisfy or reduce the principal indebtedness shall be expressly deemed a voluntary prepayment,
in which case, to the extent permitted by law, the Bank shall be entitled to the amount necessary to satisfy the entire indebtedness,
plus the appropriate Premium calculated in accordance with the terms of this Note.
Representations, Warranties and Covenants.
Borrower represents and warrants to and agrees and covenants with the Bank that now and until this Note is paid in full:
a) Business
Purpose. The Loan proceeds shall be used only for a business purpose and not for any personal, family or household purpose.
b) Good Standing;
Authority. Borrower is an entity or sole proprietor (i) duly organized and existing and in good standing under the laws of
the jurisdiction in which it was formed, (ii) duly qualified, in good standing and authorized to do business in every jurisdiction
in which failure to be so qualified might have a material adverse effect on its business or assets and (iii) has the power and
authority to own each of its assets and to use them as contemplated now or in the future.
c) Legality.
The execution, issuance, delivery to the Bank and performance by Borrower of this Note (i) are in furtherance of Borrower’s
purposes and within its power and authority; (ii) do not (A) violate any statute, regulation or other law or any judgment, order
or award of any court, agency or other governmental authority or of any arbitrator or (B) violate Borrower’s certificate
of incorporation or other governing instrument, constitute a default under any agreement binding on Borrower, or result in a lien
or encumbrance on any assets of Borrower; and (iii) have been duly authorized by all necessary corporate or partnership action.
d) Compliance.
The Borrower conducts its business and operations and the ownership of its assets in compliance with each applicable statute, regulation
and other law, including without limitation environmental laws. All approvals, including without limitation authorizations, permits,
consents, franchises, licenses, registrations, filings, declarations, reports and notices (the “Approvals”) necessary
to the conduct of Borrower’s business and for Borrower’s due issuance of this Note have been duly obtained and are
in full force and effect. The Borrower is in compliance with all conditions of each Approval.
e) Financial Statements and Other Information.
Promptly deliver to the Bank (i) within sixty (60) days after the end of each of its first three fiscal quarters, an internally
prepared financial statement of the Borrower and each subsidiary as of the end of such quarter, which financial statement shall
consist of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year and for the period
from the end of the previous fiscal year, with a consolidating and consolidated balance sheet as of the quarter end all in such
detail as the Bank may request; (ii) within one hundred twenty (120) days after the end of each fiscal year, internally
prepared consolidating and consolidated statements of the Borrower’s and each subsidiary’s income and cash flows
and its consolidating and consolidated balance sheet as of the end of such fiscal year, setting forth comparative figures for the
preceding fiscal year; all such statements shall be certified by the Borrower’s chief financial officer to be correct
and in accordance with the Borrower’s and each Subsidiary’s records and to present fairly the results of the Borrower’s
and each Subsidiary’s operations and cash flows and its financial position at year end; and (iii) with each of the financial
statements set forth above in clauses (i) and (ii) statement of income, a certificate executed by the Borrower’s chief executive
or chief financial officers or other such person responsible for the financial management of the Borrower (A) setting forth the
computations required to establish the Borrower’s compliance with each financial covenant, if any, during the statement period,
(B) stating that the signer of the certificate has reviewed the Credit Agreement and the operations and condition (financial or
other) of the Borrower and each of its Subsidiaries during the relevant period and (C) stating that no Event of Default occurred
during the period, or if an Event of Default did occur, describing its nature, the date(s) of its occurrence or period of existence
and what action the Borrower has taken with respect thereto; and (iv) prior to December 31 of each year, Borrower’s operating
and capital budgets for the succeeding year. The Borrower shall also promptly provide the Bank with copies of all annual reports,
proxy statements and similar information distributed to shareholders, partners or members, and copies of all filings with the Securities
and Exchange Commission and the Pension Benefit Guaranty Corporation, and shall provide, in form satisfactory to the Bank, such
additional information, reports or other information as the Bank may from time to time reasonably request regarding the financial
and business affairs of the Borrower or any Subsidiary. If the Borrower is an individual, the Borrower shall provide annually a
personal financial statement in form and detail acceptable to the Bank and such other financial information as the Bank may from
time to time reasonably request. Promptly upon the request of the Bank from time to time, Borrower shall supply all additional
information requested and permit the Bank’s officers, employees, accountants, attorneys and other agents to (x) visit and
inspect each of Borrower’s premises, (y) Upon no less than seven (7) days advance written notice to Borrower Bank may, at
Bank’s sole expense, examine, audit, copy and extract from Borrower’s records and (z) discuss Borrower’s or its
affiliates’ business, operations, assets, affairs or condition (financial or other) with its responsible officers and independent
accountants. Borrower shall cause Corning Natural Gas Holding Corporation (“Holding”) to (i) promptly deliver to
the Bank copies of all annual reports, proxy statements and similar information distributed to shareholders, partners or members
and of all filings with the Securities and Exchange Commission and the Pension Benefit Guaranty Corporation, and (ii) provide in
form satisfactory to the Bank: (a) within sixty (60) days after the end of each of its first three fiscal quarters, consolidating
and consolidated statements of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year
and for the period from the end of the previous fiscal year, with a consolidating and consolidated balance sheet as of the quarter
end; and (b) within one-hundred twenty days (120) after the end of each fiscal year, consolidating and consolidated statements
of Holding’s income and cash flows and its consolidating and consolidated balance sheet as of the end of such fiscal year,
setting forth comparative figures for the preceding fiscal year and to be:
☒
audited ☐ reviewed ☐
compiled
by an independent certified public accountant
acceptable to the Bank; all such statements shall be certified by Holding’s chief financial officer or partner to be correct,
not misleading and in accordance with Holding’s records and to present fairly the results of Holding’s operations and
cash flows and if annual its financial position at year end in conformity with generally accepted accounting principles. If no
box is checked, Holding shall deliver financial statements and information in the form and at the times satisfactory to the Bank.
Holding represents that its assets are not subject to any liens, encumbrances or contingent liabilities except as fully disclosed
to the Bank in such statements. Holding authorizes the Bank from time to time to obtain, verify and review all financial data deemed
appropriate by the Bank in connection with the Obligations, including without limitation credit reports from agencies. Holding
understands this requirement and has satisfied itself as to its meaning and consequences and acknowledges that it has made its
own arrangements for keeping informed of changes or potential changes affecting the Borrower including the Borrower’s financial
condition.
f) Accounting; Tax
Returns and Payment of Claims. Borrower will maintain a system of accounting and reserves in accordance with generally accepted
accounting principles, has filed and will file each tax return required of it and, except as disclosed in an attached schedule,
has paid and will pay when due each tax, assessment, fee, charge, fine and penalty imposed by any taxing authority upon Borrower
or any of its assets, income or franchises, as well as all amounts owed to mechanics, materialmen, landlords, suppliers and the
like in the ordinary course of business.
g) Title to Assets;
Insurance. Borrower has good and marketable title to each of its assets free of security interests and mortgages and other
liens except as disclosed in its financial statements or on a schedule attached to this Note or pursuant to the Bank’s prior
written consent. Borrower will maintain its property in good repair and will maintain and on request provide the Bank with evidence
of insurance coverage satisfactory to the Bank including without limitation fire and hazard, liability, worker’s compensation
and business interruption insurance and flood hazard insurance as required.
h) Judgments and
Litigation. There is no pending or threatened claim, audit, investigation, action or other legal proceeding or judgment, order
or award of any court, agency or other governmental authority or arbitrator (each an “Action”) which involves Borrower
or its assets and might have a material adverse effect upon Borrower or threaten the validity of this Note or any related document
or transaction. Borrower will immediately notify the Bank in writing upon acquiring knowledge of any such Action.
i) Borrower Notices.
Borrower will immediately notify the Bank in writing (i) of any change in its address or of the location of any collateral securing
this Note, (ii) of the occurrence of any Event of Default defined below, (iii) of any material change in Borrower’s ownership
or management and (iv) of any material adverse change in Borrower’s ability to repay this Note.
j) No Transfer of
Assets. Until this Note is paid in full, Borrower shall not without the prior written consent of the Bank (i) sell or otherwise
dispose of substantially all of its assets, (ii) acquire substantially all of the assets of another entity, (iii) if it is a corporation,
participate in any merger, consolidation or other absorption or (iv) agree to do any of these things.
k. Further
Assurances. The Borrower shall, and shall cause its affiliates to take such action and execute and deliver to the Bank such
additional documents, instruments, certificates, and agreements as the Bank may reasonably request from time to time to effectuate
the purposes and intent of the transaction(s) contemplated hereby, including, without limitation, causing any affiliate, entity
or series of entities it may create hereafter through merger, division or otherwise, to execute agreements, in form and substance
acceptable to Bank, (i) assuming or guarantying the Borrower’s obligations under this Note and all related agreements and
(ii) pledging assets to the Bank to the same extent as the Borrower.
Events of Default. The following constitute
an event of default (“Event of Default”): (i) failure by Borrower to make any payment when due (whether at the stated
maturity, by acceleration or otherwise) of the amounts due under the Note, or any part thereof, or there occurs any event or condition
which after notice, lapse of time or both will permit such acceleration of any Note; (ii) Borrower defaults in the performance
of any covenant or other provision with respect to this Note or any other agreement between Borrower and the Bank or any of its
affiliates or subsidiaries (collectively, “Affiliates”); (iii) Borrower fails to pay when due (whether at the stated
maturity, by acceleration or otherwise) any indebtedness for borrowed money owing to the Bank (other than under this Note), any
third party or Affiliate or the occurrence of any event which could result in acceleration of payment of any such indebtedness
or the failure to perform any agreement with any third party or Affiliate; (iv) the reorganization, merger, consolidation or dissolution
of Borrower (or the making of any agreement therefor); the sale, assignment, transfer or delivery of all or substantially all of
the assets of Borrower to a third party; or the cessation by Borrower as a going business concern; (v) the death or judicial declaration
of incompetency of Borrower, if an individual; (vi) failure to pay, withhold or collect any tax as required by law; the service
or filing against Borrower or any of its assets of any lien (other than a lien permitted in writing by the Bank), judgment, garnishment,
order or award which Bank in good faith determines shall have a material adverse effect on the Borrower or the Borrower’s
ability to pay or perform the Obligations; (vii) if Borrower becomes insolvent or is generally not paying its debts as such
debts become due; (viii) the making of any general assignment by Borrower for the benefit of creditors; the appointment of a receiver
or similar trustee for Borrower or its assets; or the making of any, or sending notice of any intended, bulk sale; (ix) Borrower
commences, or has commenced against it, any proceeding or request for relief under any bankruptcy, insolvency or similar laws now
or hereafter in effect in the United States of America or any state or territory thereof or any foreign jurisdiction or any formal
or informal proceeding for the dissolution or liquidation of, settlement of claims against or winding up of affairs of Borrower,
and such petition, action or appointment is not dismissed or stayed within forty-five (45) days; (x) any representation
or warranty made in this Note, any related document, any agreement between Borrower and the Bank or any Affiliate or in any financial
statement of Borrower proves to have been misleading in any material respect when made; Borrower omits to state a material fact
necessary to make the statements made in this Note, any related document, any agreement between Borrower and the Bank or any Affiliate
or any financial statement of Borrower not misleading in light of the circumstances in which they were made; or, if upon the date
of execution of this Note, there shall have been any material adverse change in any of the facts disclosed in any financial statement,
representation or warranty that was not disclosed in writing to the Bank at or prior to the time of execution hereof; (xi) any
pension plan of Borrower fails to comply with applicable law or has vested unfunded liabilities that, in the opinion of the Bank,
might have a material adverse effect on Borrower’s ability to repay its debts; (xii) an adverse change in the Borrower, its
business, assets, operations, management, ownership, affairs or condition (financial or otherwise) from the status shown on any
financial statement or other document submitted to the Bank or any Affiliate, and which change the Bank determines will have a
material adverse effect on (a) the Borrower, its business, assets, operations or condition (financial or otherwise), or (b) the
ability of the Borrower to pay or perform any obligation to the Bank; (xiii) the occurrence of any event described in sub-paragraph
(i) through and including (xii) hereof with respect to any guarantor or any other party liable for, or whose assets or any interest
therein secures, payment of any of the amounts due under this Note (“Guarantor”); (xiv) Borrower fails to supply new
or additional collateral within ten (10) days of request by the Bank; or (xv) the Bank in good faith deems itself insecure with
respect to payment or performance under the Note.
Rights and Remedies Upon Default. Upon
the occurrence of any Event of Default, the Bank without demand of performance or other demand, presentment, protest, advertisement
or notice of any kind (except any notice required by law) to or upon the Borrower or any other person (all and each of which demands,
presentments, protests, advertisements and notices are hereby waived), may exercise all rights and remedies under the Borrower’s
agreements with the Bank or its Affiliates, applicable law, in equity or otherwise and may declare all or any part of any amounts
due hereunder not payable on demand to be immediately due and payable without demand or notice of any kind and terminate any obligation
it may have to grant any additional loan, credit or other financial accommodation to the Borrower. All or any part of any amounts
due hereunder whether or not payable on demand, shall be immediately due and payable automatically upon the occurrence of an Event
of Default in sub-paragraph (ix) above, or at the Bank’s option, upon the occurrence of any other Event of Default. The provisions
hereof are not intended in any way to affect any rights of the Bank with respect to any amounts due hereunder which may now or
hereafter be payable on demand.
Right of Setoff. The Bank shall have
the right to set off against the amounts owing under this Note any property held in a deposit or other account with the Bank or
any Affiliates or otherwise owing by the Bank or any Affiliates in any capacity to Borrower or any Guarantor or endorser of this
Note. Such set-off shall be deemed to have been exercised immediately at the time the Bank or such Affiliate elects to do so.
USA PATRIOT Act Notice. Bank hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (“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 Bank to identify the Borrower in accordance with the Patriot Act. The Borrower agrees to,
promptly following a request by Bank, provide all such other documentation and information that Bank requests in order to comply
with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations,
including the Patriot Act.
Miscellaneous. Simultaneously herewith,
the Borrower and Bank have entered into a Fourth Amended Replacement and Restated Credit Agreement (the “Credit Agreement”),
the terms of which control and are incorporated in this Note. This Note, together with the Credit Agreement and any
related loan and collateral agreements and guaranties, contains the entire agreement between the Bank and Borrower with respect
to the Note, and supersedes every course of dealing, other conduct, oral agreement and representation previously made by the Bank.
All rights and remedies of the Bank under applicable law and this Note or amendment of any provision of this Note are cumulative
and not exclusive. No single, partial or delayed exercise by the Bank of any right or remedy shall preclude the subsequent exercise
by the Bank at any time of any right or remedy of the Bank without notice. No waiver or amendment of any provision of this Note
shall be effective unless made specifically in writing by the Bank. No course of dealing or other conduct, no oral agreement or
representation made by the Bank, and no usage of trade, shall operate as a waiver of any right or remedy of the Bank. No waiver
of any right or remedy of the Bank shall be effective unless made specifically in writing by the Bank. Borrower agrees that in
any legal proceeding, a copy of this Note kept in the Bank’s course of business may be admitted into evidence as an original.
This Note is a binding obligation enforceable against Borrower and its successors and assigns and shall inure to the benefit of
the Bank and its successors and assigns. If a court deems any provision of this Note invalid, the remainder of the Note shall remain
in effect. Section headings are for convenience only. Singular number includes plural and neuter gender includes masculine and
feminine as appropriate.
Notices. Any demand or notice hereunder
or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Borrower (at its address on the
Bank’s records) or to the Bank (at the address on page one and separately to the Bank officer responsible for Borrower’s
relationship with the Bank). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal
delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) business
days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1)
business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express). Notice by e-mail
is not valid notice under this or any other agreement between Borrower and the Bank.
Joint and Several. If there is more
than one Borrower, each of them shall be jointly and severally liable for all amounts and obligations that become due under this
Note and the term “Borrower” shall include each as well as all of them.
Governing Law; Jurisdiction. This Note
has been delivered to and accepted by the Bank and will be deemed to be made in the State of New York. Except as otherwise provided
under federal law, this Note will be interpreted in accordance with the laws of the State of New York excluding its conflict of
laws rules. Borrower hereby irrevocably consents to the exclusive jurisdiction of any
state or federal court in New York State in a County or Judicial district where the Bank maintains a branch and consents that the
Bank may effect any service of process in the manner and at Borrower’s address set forth above for providing notice or demand;
provided that nothing contained in this Note will prevent the Bank from bringing any action, enforcing any award or judgment or
exercising any rights against Borrower individually, against any security or against any property of Borrower within any other
county, state or other foreign or domestic jurisdiction. Borrower acknowledges and agrees that the venue provided above
is the most convenient forum for both the Bank and Borrower. Borrower waives any objection to venue and any objection based on
a more convenient forum in any action instituted under this Note.
Waiver of Jury Trial. Borrower
and the Bank hereby knowingly, voluntarily, and intentionally waive any right to trial by jury Borrower and the Bank may have in
any action or proceeding, in law or in equity, in connection with this note or the transactions related hereto. Borrower represents
and warrants that no representative or agent of the Bank has represented, expressly or otherwise, that the Bank will not, in the
event of litigation, seek to enforce this jury trial waiver. Borrower Acknowledges that the Bank has been induced to enter into
this note by, among other things, the provisions of this Section.
o Amended
and Restated Note. The Borrower acknowledges, agrees and understands
that this Note is given in replacement of and in substitution for, but not in payment of, a prior note dated on or about ____________,
____, in the original principal amount of $__________, given by Borrower in favor of the Bank (or its predecessor-in-interest),
as the same may have been amended or modified from time to time (“Prior Note”), and further, that: (a) the obligations
of the Borrower as evidenced by the Prior Note shall continue in full force and effect, as amended and restated by this Note, all
of such obligations being hereby ratified and confirmed by the Borrower; (b) any and all liens, pledges, assignments and security
interests securing the Borrower's obligations under the Prior Note shall continue in full force and effect, are hereby ratified
and confirmed by the Borrower, and are hereby acknowledged by the Borrower to secure, among other things, all of the Borrower's
obligations to the Bank under this Note, with the same priority, operation and effect as that relating to the obligations under
the Prior Note; and (c) nothing herein contained shall be construed to extinguish, release, or discharge, or constitute, create,
or effect a novation of, or an agreement to extinguish, the obligations of the Borrower with respect to the indebtedness originally
described in the Prior Note or any of the liens, pledges, assignments and security interests securing such obligations.
Acknowledgment. Borrower acknowledges
that it has read and understands all the provisions of this Note, including the provisions relating to Governing Law, Jurisdiction
and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.
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PIKE COUNTY LIGHT & POWER COMPANY
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By:
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/s/ Charles Lenns
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Name:
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Charles Lenns
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Title:
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Vice President/Chief Financial Officer
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PIKE COUNTY LIGHT &
POWER COMPANY
ACKNOWLEDGMENT
STATE OF NEW YORK )
: SS.
COUNTY OF BROOME )
On the 12th
day of October, in the year 2020, before me, the undersigned, a Notary Public in and for said State, personally appeared CHARLES
LENNS personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted, executed the instrument.
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/s/ Kelly J. Anderson
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Notary Public
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FOR BANK USE ONLY
Disbursement of Funds:
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Credit A/C
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#
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Off Ck
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#
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Payoff Obligation
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#
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$
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$
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$
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LIBOR RATE RIDER
(For Actual Balance Promissory Notes)
Borrower: Pike County Light & Power Company
Promissory Note Original Principal Amount:
$1,315,000.00
Promissory Note Date: October 13, 2020
DEFINITIONS. The above-referenced Promissory
Note is referred to herein as the “Note”. As used in the Note and this Rider, each capitalized term shall have the
meaning specified in the Note, and the following terms shall have the indicated meanings:
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a.
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“Base Rate” shall mean the rate of interest announced by the Bank each day as
its prime rate of interest (“Prime Rate”). If the prior blank is not completed, the Base Rate shall be two (2) percentage
points above the Prime Rate. To the extent the Prime Rate shall, at any time, be less than zero percent (0.00%), the Prime Rate
shall be deemed to be zero percent (0.00%) for purposes hereof.
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b.
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“Interest Period” shall mean, as used in connection with a non-daily adjusting
LIBOR Rate, the period commencing on the date of this Note or any Rate Adjustment Date (as the case may be) and ending on, as applicable,
the next succeeding Payment Due Date or the Payment Due Date of the calendar month that is one (1) or three (3) months thereafter
(as applicable in accordance with the LIBOR Rate in effect); provided, however, that if an Interest Period would end on a day that
is not a Joint Business Day, such Interest Period shall be extended to the next succeeding Joint Business Day unless such next
succeeding Joint Business Day would fall in the next calendar month, in which case such Interest Period shall end on the immediately
preceding Joint Business Day. To the extent that the preceding clause results in either the extension or shortening of an Interest
Period, the Bank shall have the right (but not the obligation) to shorten or extend, respectively, the succeeding Interest Period
so that it shall end on a day that numerically corresponds to the intended Payment Due Date indicated in the Note.
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c.
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“Joint Business Day” shall mean a day that is both a New York Business Day and
a London Business Day.
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d.
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“LIBOR” shall mean the rate per annum (rounded upward to the nearest 1/16th
of 1%) obtained by dividing (i) either the one-day (i.e., overnight), one-month or three-month interest period London Interbank
Offered Rate (as applicable in accordance with the LIBOR Rate in effect) as set and administered by ICE Benchmark Administration
Limited (or such other administrator of LIBOR, as may be duly authorized by the UK Financial Conduct Authority or such other proper
authority from time to time) for United States dollar deposits in the London interbank market at approximately 11:00 a.m. London,
England time (or as soon thereafter as practicable) as determined by the Bank from any broker, quoting service or commonly available
source utilized by the Bank, by (ii) a percentage equal to 100% minus the stated maximum rate of all reserves required to be maintained
against “Eurocurrency Liabilities” as specified in Regulation D (or against any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR-based loans is determined or any category of extensions of credit
or other assets which includes loans by a non-United States’ office of a bank to United States residents) on such date to
any member bank of the Federal Reserve System. Notwithstanding any provision above, the practice of rounding to determine LIBOR
may be discontinued at any time in the Bank’s sole discretion. In the event and to the extent the applicable London Interbank
Offered Rate index (“Index”) utilized for determining LIBOR shall, at any time, be less than zero percent (0.00%),
such Index shall be deemed to be zero percent (0.00%) for purposes hereof (“Negative Index Restriction”). Notwithstanding
the foregoing, to the extent an interest rate swap agreement (“Swap”) between Borrower and the Bank shall at any time
be in effect in connection with the credit facility evidenced by this Note, the Negative Index Restriction shall not apply to such
credit facility during such period as the Swap is in effect; provided, however, at such time and to the extent such Swap is terminated,
cancelled or otherwise not in effect, the Negative Index Restriction shall be deemed reinstated.
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e.
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“LIBOR Rate” shall mean the applicable LIBOR-based interest rate in effect from
time to time, as provided for in the Note and this Rider.
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f.
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“London Business Day” shall mean any day on which dealings in United States
dollar deposits are carried on by banking institutions in the London interbank market.
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g.
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“New York Business Day” shall mean any day other than Saturday, Sunday or other
day in which commercial banking institutions in New York, New York are authorized or required by law or other governmental action
to remain closed for business.
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h.
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“One-Month LIBOR” shall mean LIBOR as fixed for a one-month interest period.
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i.
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“Rate Adjustment Date” shall mean the effective date of a change in the applicable LIBOR Rate, as follows:
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i.
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For a daily-adjusting LIBOR Rate, the Rate Adjustment Date shall be each London Business
Day.
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ii.
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For a monthly-adjusting LIBOR Rate (i.e., having an Interest Period of one (1) month),
the Rate Adjustment Date shall be, in each month, the calendar day of that month that corresponds with the Payment Due Date in
such month (as may be adjusted pursuant to the definition of “Payment Due Date” in the Note).
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iii.
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For a quarterly-adjusting LIBOR Rate (i.e., having an Interest Period of three (3) months),
the Rate Adjustment Date shall be, initially, the Payment Due Date that is three (3) months after the first day such LIBOR Rate
is in effect (“Effective Date”), and thereafter, the Payment Due Date that is three (3) months after each prior Rate
Adjustment Date, respectively; provided, however, that if the Effective Date is not a Payment Due Date, the first Rate Adjustment
Date shall be the next succeeding Payment Due Date, after which a new three-month Interest Period shall begin with quarterly Rate
Adjustment Dates thereafter, as provided above.
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ADDITIONAL PROVISIONS:
Disclosure Regarding the Availability of
LIBOR. Borrower acknowledges and understands that (i) the London Interbank Offered Rate (defined above as the “Index”),
which is used to calculate LIBOR for purposes of this Note, is established, issued and regulated by third parties, and that its
continuing existence and ongoing viability as a source and basis for establishing contractual interest rates is entirely outside
the control of the Bank, (ii) regulatory agencies in the United States and worldwide have advised that the Index may be discontinued
after 2021, or possibly sooner, (iii) in order to address the possibility of a discontinuance of the Index, this Note includes
provisions that contemplate the replacement of the Index as a basis for establishing the applicable interest rate for the loan(s)
evidenced hereby, and (iv) should the actual discontinuance of the Index occur, any replacement index may be materially different
than the Index, and necessitate substantive changes to the manner in which the applicable interest rate for the loan(s) evidenced
hereby is calculated and applied. Notwithstanding the above, Borrower has knowingly and voluntarily requested and/or accepted utilization
of the Index for all purposes provided for herein, accepting any inherent risks associated with such utilization and any subsequent
discontinuance of the Index, and hereby waives any claims or defenses against the Bank in connection therewith.
Interest Rate Determinations and Adjustments.
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To the extent a daily-adjusting
LIBOR Rate is in effect, the LIBOR Rate shall be determined using the One-Month LIBOR in effect on the date of the Note (or if
such day is not a London Business Day, on the immediately preceding London Business Day), and shall be adjusted thereafter on each
subsequent Rate Adjustment Date using the One-Month LIBOR in effect on each respective Rate Adjustment Date.
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To the extent a monthly-adjusting
LIBOR Rate (i.e., a LIBOR Rate adjusting each month) or a quarterly-adjusting LIBOR Rate (i.e., a LIBOR Rate adjusting every
three (3) months) is in effect, the initial LIBOR Rate shall be determined using the applicable LIBOR in effect two (2) London
Business Days prior to the date of the Note (or two (2) London Business Days prior to the Amortization Commencement Date, as applicable),
and shall be adjusted thereafter on each subsequent Rate Adjustment Date using the applicable LIBOR in effect two (2) London Business
Days prior to each Rate Adjustment Date, respectively.
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Prepayment; Breakage Fee. Subject to
the following, during the term of this Note, Borrower shall have the option of paying the Principal Amount to the Bank in advance
of the Maturity Date, in whole or in part, at any time and from time to time upon written notice received by the Bank at least
three (3) days prior to making such payment; provided, however, that if (i) Borrower prepays, in whole or in part, any Principal
Amount, when a LIBOR Rate is in effect (other than on a Rate Adjustment Date), or (ii) the LIBOR Rate is converted to the Base
Rate on any day other than a Rate Adjustment Date, then Borrower shall be liable for and shall pay the Bank, on demand, the higher
of $250.00 or the actual amount of the liabilities, expenses, costs or funding losses that are a direct or indirect result of such
prepayment or other condition described above, whether such liability, expense, cost or loss is by reason of (a) any reduction
in yield, by reason of the liquidation or reemployment of any deposit or other funds acquired by the Bank, (b) the fixing of the
interest rate payable on any LIBOR-based loan or (c) otherwise (collectively, the “Breakage Fee”). The determination
by the Bank of the foregoing amount shall, in the absence of manifest error, be conclusive and binding upon Borrower. The provisions
of this paragraph shall not be applicable if the LIBOR Rate in effect at the time of the prepayment has an Interest Period of one
day.
Inability to Determine LIBOR Rates, Increased
Costs, Illegality.
a) Increased Costs.
If the Bank shall determine that, due to either (a) the introduction of any change (other than any change by way of imposition
of or increase in reserve requirements included in the calculation of the LIBOR Rate) in or in the interpretation of any requirement
of law or (b) the compliance with any guideline or request from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to the Bank of agreeing to make or making, funding or maintaining
any loans based on LIBOR, then Borrower shall be liable for, and shall from time to time, upon demand therefor by the Bank, pay
to the Bank such additional amounts as are sufficient to compensate the Bank for such increased costs.
b) Inability to
Determine Rates. If the Bank shall determine that for any reason adequate and reasonable means do not exist for ascertaining
LIBOR, the Bank will give notice of such determination to Borrower. Thereafter, the Bank may not maintain the loan hereunder at
the LIBOR Rate until the Bank revokes such notice in writing and, until such revocation, the Bank may convert the applicable interest
rate to the Base Rate, subject to the terms of the section below entitled “Effect of Benchmark Transition Event”.
c) Illegality.
If the Bank shall determine that the introduction of any law (statutory or common), treaty, rule, regulation, guideline or determination
of an arbitrator or of a governmental authority or in the interpretation or administration thereof, has made it unlawful, or that
any central bank or other governmental authority has asserted that it is unlawful for the Bank to make LIBOR-based loans, then,
on notice thereof by the Bank to Borrower, the Bank may suspend the maintaining of the loan hereunder at the LIBOR Rate until the
Bank shall have notified Borrower that the circumstances giving rise to such determination shall no longer exist. If the Bank shall
determine that it is unlawful to maintain the loan hereunder based on LIBOR, the Bank may convert the applicable interest rate
to the Base Rate, subject to the terms of the section below entitled “Effect of Benchmark Transition Event”.
Conversion to Base Rate Upon Default.
Unless the Bank shall otherwise and in its sole discretion consent in writing, if (i) an event of default (with respect to any
payment obligation or otherwise, as may be defined or described in the Note or related documents) has occurred and is continuing,
or (ii) there exists a condition or event that, with the passage of time, the giving of notice, or both, shall constitute such
an event of default, the Bank, in its sole discretion, may convert the applicable interest rate from the LIBOR Rate to the Base
Rate, and each reference in the Note and herein to the LIBOR Rate shall be deemed to be a reference to the Base Rate. Nothing
herein shall be construed to be a waiver by the Bank of its right to have the outstanding principal balance accrue interest at
the Default Rate, accelerate the indebtedness and/or exercise any other remedies available to the Bank under the terms hereof or
applicable law.
Repayment Upon Conversion to Base Rate. Except as otherwise
provided herein, during the time of any conversion of the LIBOR Rate to the Base Rate, whether temporary or permanent, and whether
pursuant to an event of default or otherwise, and without compromising any other rights and remedies of the Bank, and in the absence
of the Bank exercising any such other rights or remedies as may be applicable, Borrower shall continue to repay all indebtedness
in accordance with the terms of the Note. The determination by the Bank of the foregoing amounts shall, in the absence of
manifest error, be conclusive and binding upon Borrower.
Effect of Benchmark Transition Event.
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(a)
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Benchmark Replacement. Notwithstanding anything to the contrary herein or in the Note or any related
agreement, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the Bank may unilaterally
amend the terms hereof to replace LIBOR with a Benchmark Replacement. Any such amendment will become effective as soon as practicable
for the Bank and upon notice to the Borrower, without any further action or consent of the Borrower, except that with respect
to an amendment pursuant to an Early Opt-in Election, such amendment will become effective at 5:00 p.m. on the fifth (5th) New
York Business Day after the Bank has provided such proposed amendment to the Borrower, so long as the Bank has not received, by
such time, written notice of objection to such amendment from the Borrower. No replacement of LIBOR with a Benchmark Replacement
pursuant to this Section titled “Effect of Benchmark Transition Event” (“this Section”) will occur prior
to the applicable Benchmark Transition Start Date. Borrower shall pay all out-of-pocket costs (including reasonable attorney fees)
incurred by the Bank in connection with any amendment and related actions contemplated in this Section.
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(b)
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Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark
Replacement, the Bank will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding
anything to the contrary herein or in any related document or agreement, any amendments implementing such Benchmark Replacement
Conforming Changes will become effective without any further action or consent of the Borrower. The Bank shall not be liable to
the Borrower for any Benchmark Replacement Conforming Changes made by the Bank in good faith.
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(c)
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Notices; Standards for Decisions and Determinations. The Bank will endeavor to promptly notify
the Borrower of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related
Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the implementation of any Benchmark Replacement, (iii) the
effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability
Period. Any determination, decision or election that may be made by the Bank pursuant to this Section, including, without limitation,
any determination with respect to a tenor, rate or adjustment, or of the occurrence or non-occurrence of an event, circumstance
or date, and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may
be made in the Bank’s sole discretion and without consent from the Borrower (except, in each case, as expressly required
pursuant to this Section) and shall not be a basis of any claim of liability of any kind or nature against the Bank, all such claims
being hereby waived by the Borrower.
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(d)
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Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement
of a Benchmark Unavailability Period, the Borrower may revoke (as applicable) any request for an advance/borrowing of, conversion
to, or continuation of a LIBOR-based loan to be made, converted or continued during any Benchmark Unavailability Period and, failing
that, the Borrower will be deemed to have converted any such request (as applicable) into a request for an advance/borrowing of
or conversion to a loan that shall accrue interest at the Base Rate. During any Benchmark Unavailability Period, the component
of the Base Rate based upon LIBOR (if any) will not be used in any determination of the Base Rate.
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(e)
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Certain Defined Terms. As used in this Section:
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1.
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“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which may
include Term SOFR) that has been selected by the Bank giving due consideration to (i) any selection or recommendation of a replacement
rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market
convention for determining a rate of interest as a replacement to LIBOR for U.S. dollar-denominated syndicated or bilateral credit
facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be
less than zero, the Benchmark Replacement will be deemed to be zero for the purposes hereof.
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2.
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“Benchmark Replacement Adjustment” means, with respect to any replacement of LIBOR
with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating
or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Bank giving
due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such
spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental
Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or
determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement for U.S.
dollar-denominated syndicated or bilateral credit facilities at such time.
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3.
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“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement,
any technical, administrative or operational changes (including, without limitation, changes to the definition of “Base Rate,”
the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and
other administrative matters) that the Bank decides may be appropriate to reflect the adoption and implementation of such Benchmark
Replacement and to permit the administration thereof by the Bank in a manner substantially consistent with market practice (or,
if the Bank decides that adoption of any portion of such market practice is not administratively feasible or if the Bank determines
that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the
Bank decides is reasonably necessary in connection with the administration of the loan(s) evidenced hereby).
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4.
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“Benchmark Replacement Date” means the earlier to occur of the following events with
respect to LIBOR:
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1)
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in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,”
the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the
administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; or
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2)
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in the case of clause (3) of the definition of “Benchmark Transition Event,” the date
of the public statement or publication of information referenced therein.
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5.
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“Benchmark Transition Event” means the occurrence of one or more of the following events
with respect to LIBOR:
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1)
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a public statement or publication of information by or on behalf of the administrator of LIBOR
announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely, provided that, at the
time of such statement or publication, there is no successor administrator that will continue to provide LIBOR;
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2)
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a public statement or publication of information by the regulatory supervisor for the administrator
of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution
authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority
over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently
or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue
to provide LIBOR; or
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3)
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a public statement or publication of information by the regulatory supervisor for the administrator
of LIBOR announcing that LIBOR is no longer representative.
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6.
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“Benchmark Transition Start Date” means (a) in the case of a Benchmark Transition Event,
the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement
or publication of information of a prospective event, the 180th day prior to the expected date of such event as of such public
statement or publication of information (or if the expected date of such prospective event is fewer than 180 days after such statement
or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified
by the Bank by notice to the Borrower, so long as the Bank has not received, by such date, written notice of objection to such
Early Opt-In Election from the Borrower.
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7.
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“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related
Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a
Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time,
no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with this Section and (y) ending at the time
that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to this Section.
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8.
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“Early Opt-in Election” means the occurrence of:
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1)
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a determination by the Bank that currently outstanding U.S. dollar-denominated syndicated or bilateral
credit facilities at such time contain (as a result of amendment or as originally executed) as a benchmark interest rate, in lieu
of LIBOR, a new benchmark interest rate to replace LIBOR, and
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2)
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the election by the Bank to declare that an Early Opt-in Election has occurred and the provision
by the Bank of written notice of such election to the Borrower.
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9.
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“Federal
Reserve Bank of New York’s Website” means the website of the Federal Reserve
Bank of New York at http://www.newyorkfed.org, or any successor source.
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10.
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“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve
Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of
New York or any successor thereto.
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11.
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“SOFR” with respect to any day means the secured overnight financing rate published
for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on
the Federal Reserve Bank of New York’s Website.
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12.
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“Term SOFR” means the forward-looking term rate based on SOFR that has been selected
or recommended by the Relevant Governmental Body.
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13.
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“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark
Replacement Adjustment.
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Acknowledgment. Borrower acknowledges that it has read and
understands all the provisions of this Rider and has been advised by counsel as necessary or appropriate.
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PIKE COUNTY LIGHT & POWER COMPANY
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By:
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/s/ Charles Lenns
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Name:
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Charles Lenns
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Title:
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Vice President/Chief Financial Officer
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PREPAYMENT PREMIUM RIDER
(Yield Maintenance)
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Borrower:
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Pike County Light & Power
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Title of Promissory Note:
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Multiple Disbursement Term Note
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Date of Promissory Note:
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October 13, 2020
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Principal Amount of Promissory Note:
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$1,315,000.00
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(The above-referenced promissory note is referred
to herein as the “Note”.)
Each capitalized term used herein shall have
the meaning specified in the Note, except as otherwise defined herein.
Prepayment Premium. If the interest
rate in effect at the time of any prepayment is a fixed percentage rate (whether in effect since the date of this Note or any subsequent
date in connection with an interest rate adjustment), as consideration of the privilege of making such prepayment, Borrower shall
pay to M&T Bank (“Bank”) a premium equal to the greater of (a) one percent (1%) of the amount prepaid, or (b) the
present value of the difference between (i) the amount of interest that would have accrued on the prepaid principal from the date
of prepayment through the earlier of the Maturity Date or the date of the next scheduled interest rate adjustment, if any (“Measurement
Period”) at the fixed interest rate in effect on the date of prepayment and (ii) the amount of interest that would have accrued
on the prepaid principal during the Measurement Period at the Current Market Rate. “Current Market Rate” shall mean
the most recent yield on United States Treasury Obligations adjusted to a constant maturity having a term most nearly corresponding
to the Measurement Period, in effect two (2) business days prior to the date of prepayment, as published by the Board of Governors
of the Federal Reserve System in the Federal Reserve Statistical Release H.15 (519), or by such other quoting service, index or
commonly available source utilized by the Bank for such purposes. The present value calculation used herein shall use the Current
Market Rate as the discount rate and shall be calculated as if each installment of principal had been made as scheduled pursuant
to the terms of this Note.
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PIKE COUNTY LIGHT & POWER COMPANY
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By:
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/s/ Charles Lenns
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Name:
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Charles Lenns
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Title:
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Vice President/Chief Financial Officer
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