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COMMONWEALTH OF PENNSYLVANIA

DEPARTMENT OF EDUCATION

LOAN AGREEMENT

FINANCIAL RECOVERY TRANSITIONAL LOAN PROGRAM

This Agreement (“Agreement”), is entered into by and between the Commonwealth of

Pennsylvania (the “Commonwealth”), acting through the Department of Education (the

“Department”), and the Penn Hills School District, with an address at 260 Aster Street,

Pittsburgh, PA 15235, a School District organized under the laws of the Commonwealth, (the

“Borrower”, or the “Contractor.”)

BACKGROUND

WHEREAS, the Financial Recovery Act (“Act”) (Article VI-A of the Public School

Code of 1949, as amended, 24 P.S. §§ 6-601-A to 6-695-A) governs school districts declared to

be in financial recovery status, such as the Borrower;

WHEREAS, Part VII of Sub-article C of the Act provides for the Financial Recovery

Transitional Loan Program. See 24 P.S. §§ 6-681-A to 6-683-A. Pursuant to Section 681-A of

the Act, there is established in the Department a Transitional Loan Program, which shall be

funded from an account described in the Act (the “Account.”) See 24 P.S. § 6-681-A(d);

WHEREAS, Section 681-A of the Act provides for loans from the Account to be made

when the board of school directors of an eligible district has approved a financial recovery plan

under Section 652-A(c) or 663-A(c) of the Act that includes provisions for such a loan;

WHEREAS, on June 29, 2019, the Board of School Directors for the Borrower (the

“Board”) approved a financial recovery plan for the District (the “Financial Recovery Plan”),

which included provision for a loan for the District under the Transitional Loan Program;

WHEREAS, the Financial Recovery Plan was approved by the Secretary of Education on

July 16, 2019; and

WHEREAS, the General Assembly of the Commonwealth has appropriated funds to the

Department to carry out the provisions of the Act.

NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and

covenants herein contained, intending to be legally bound hereby, do covenant and agree as

follows:

1. Loan Amount. Subject to the terms and conditions herein set forth, and subject to

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the Act and relevant guidelines, regulations, statements of policy and directives as adopted,

promulgated and/or issued by the Department pursuant thereto, the Borrower agrees to borrow

from the Department, and the Department agrees to lend to the Borrower, the aggregate principal

sum of $1,235,000 (the “Loan”), out of state funds appropriated. The Borrower shall utilize the

Loan solely to implement the components of the Financial Recovery Plan in conformity with the

schedule of permitted uses attached hereto as Exhibit A (such schedule, the “Permitted Uses.”)

2. Loan Payments to Borrower. Subject to the terms and conditions herein, the

Loan shall be disbursed to Borrower following the full execution of this Agreement.

3. Conditions of the Loan and Fiscal Responsibilities.

(a) Interest Rate. As provided in the Act, the Loan shall be non-interest

bearing.

(b) Project Account. All Loan proceeds received from the Department by the

Borrower shall be deposited in a separate project account (the “Project Account”)

maintained by the Borrower to utilize the Loan in accordance with the terms of this

Agreement and the Note. The Borrower shall provide the Department with evidence that

this account has been established and maintain full and complete records of all deposits

into and disbursements from this account for a period of six (6) years following the

expiration or termination of this Agreement.

The Department or any of its duly-appointed officers, representatives,

agents or employees shall have full and complete access to said records to inspect, copy

or reproduce them, at any time during the term of this Agreement, or the six (6) year

period following the expiration or termination of this Agreement. The Borrower shall

report to the Department or its representative, as deemed necessary by the Department

and shall provide detailed information concerning the use of proceeds of the Loan and

such financial information concerning the Borrower as is required by the Department on a

monthly basis in reports to be submitted to the Department no later than 15 days after the

close of each month. The report shall be submitted on a form to be prescribed by the

Department.

(c) Return of Interest Earnings. The Borrower shall return to the Department

on a quarterly calendar basis any interest earned on the Project Account.

(d) Promissory Note. The Borrower shall duly authorize, execute and deliver

to the Department a promissory note (the “Note”), in the principal amount of the Loan.

The form of the Note is attached hereto as Exhibit B and incorporated herein and made a

part hereof.

(e) Repayment. The Loan shall be payable to the Department in accordance

with the repayment schedule contained in the Note, which is attached hereto as Exhibit

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BB and incorporated herein and made a part hereof. The Borrower shall have the right,

at its option, to pre-pay any or all installments of principal at any time prior to the stated

payment dates, without notice or penalty.

(f) Security. The Borrower hereby irrevocably covenants that it shall include

the amount of debt service due under this Agreement and the Note for each fiscal year in

which such sums are payable in its budget for that year, shall appropriate such amounts to

the payment of such debt service and shall duly and punctually pay or cause to be paid the

principal due under this Agreement and the Note at the dates and places and in the

manner stated in this Agreement and the Note according to the true intent and meaning

thereof, and for such proper budgeting, appropriations and payment, the full faith, credit

and taxing power of the Borrower is hereby irrevocably pledged.

(g) Use of Proceeds. The Borrower hereby covenants that as required by

Section 683-A(a) of the Act, it will use the proceeds of the Loan solely to implement the

components of the Financial Recovery Plan in conformity with the Permitted Uses.

(h) General Conditions of Lending and Loan Advances. The obligation of the

Department to make the Loan and to make each advance is subject to the fulfillment of

the following conditions by the Borrower to the satisfaction of the Department:

(1) each and all of the representations and warranties of the Borrower

under this Agreement, the Note and any other loan document shall be true and correct in

all respects as though separately and independently made as of the date Borrower

executes this Agreement and as of the date of each such disbursement;

(2) there shall have been no event of default under this Agreement, the

Note or any other loan document; and

(3) the Borrower shall have complied with all conditions of this

Agreement and such other conditions as have been required by the Department in its sole

discretion.

(4) Concurrently with, or prior to the execution of, this Agreement and

the Note, the Borrower shall have furnished to the Department, in form and substance

satisfactory to the Department, a favorable written opinion of counsel for the Borrower

that:

(i) The Borrower is validly organized and existing and has

authority to execute this Agreement, the Note and other applicable loan

documents as required by the Department;

(ii) This Agreement, the Note and other applicable loan

documents have been duly executed on behalf of the Borrower and are

legally binding obligations of the Borrower, enforceable in accordance

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with their terms except as such enforcement may be limited by bankruptcy

laws; and

(iii) The execution and delivery of this Agreement and the Note,

consummation of the transactions herein contemplated and compliance

with the terms and provisions hereof, will not (with or without notice or

lapse of time) conflict with or result in a breach of any law governing the

activities and powers and duties of the Borrower or of any agreement,

indenture or other instrument to which the Borrower is a party, or by

which it is bound, or to which it or its property is subject, or give any

person the right to declare a default, or exercise any remedy, or to

accelerate the maturity or performance of, or payment under, or to cancel,

terminate, or modify such agreement, indenture or other instrument.

4. Hold Harmless. The Borrower shall hold the Commonwealth harmless from and

indemnify the Commonwealth against any and all claims, demands and actions based or arising

out of any activities performed by the Borrower and its employees and agents under this

Agreement; and shall defend any and all actions brought against the Commonwealth based upon

any such claims or demands. It is understood and agreed that the Borrower’s standard liability

insurance policies shall protect, or shall be endorsed to protect, the Commonwealth from claims

of bodily injury and/or property damage arising out of any services performed by the Borrower or

its employees or agents under this Agreement, including business and non-business invitees, and

their property and all other property sustaining damage as a direct or indirect result of the

execution of this project when validly present on Borrower’s premises whether or not actually

engaged in the project at the time the claim inures. Such policies shall not include any provision

limiting the existing sovereign immunity of the Commonwealth or of its agents or employees.

Upon request, the Borrower shall furnish to the Department proof of insurance as required by this

subparagraph.

5. Representations and Warranties. To induce the Department to enter into this

Agreement and to disburse the proceeds thereof in accordance with the provisions hereof, the

Borrower represents and warrants that:

(a) This Agreement and the Note have been duly and validly executed by the

Borrower and constitute valid and legally binding agreements of the Borrower

enforceable in accordance with their terms and, when duly executed and delivered

pursuant to the provisions hereof, shall constitute valid and binding obligations for the

Borrower.

(b) The execution and delivery of this Agreement and the Note,

consummation of the transactions herein contemplated and compliance with the terms

and provisions hereof, will not (with or without notice or lapse of time) conflict with or

result in a breach of any law governing the activities and powers and duties of the

Borrower or of any agreement, indenture or other instrument to which the Borrower is a

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party, or by which it is bound, or to which it or its property is subject, or give any person

the right to declare a default, or exercise any remedy, or to accelerate the maturity or

performance of, or payment under, or to cancel, terminate, or modify such agreement,

indenture or other instrument.

(c) The Borrower is not delinquent in or in default on any existing public or

private loan or indebtedness.

(d) On demand by the Department, the Borrower shall do any act, execute any

additional documents, and give all further assurances required by the Department to

secure the Note.

(f) The Borrower shall give immediate written notice to the Department of the

occurrence of any event of default under this Agreement, the Note, or any other

applicable loan documents.

(g) The Borrower shall comply with such other conditions as shall be required

by the Department.

All representations and warranties of the Borrower set forth herein shall survive and continue

until the Loan is paid in full and all of the Borrower’s obligations hereunder have been satisfied.

6. Compliance with Statutes and Regulations. The Borrower hereby covenants that

it shall comply with all applicable laws and regulations, including the Act and all relevant

guidelines, regulations, statements of policy and directives adopted, promulgated and/or issued

by the Department.

7. Contractor Responsibility Provisions.

For the purpose of these provisions, the term contractor is defined as any person,

including, but not limited to, a bidder, offeror, loan recipient, grantee or lessor, who has

furnished or performed or seeks to furnish or perform, goods, supplies, services, leased space,

construction or other activity, under a contract, grant, lease, purchase order or reimbursement

agreement with the Commonwealth of Pennsylvania (Commonwealth). The term contractor

includes a permittee, licensee, or any agency, political subdivision, instrumentality, public

authority, or other public entity in the Commonwealth.

(a) The Contractor certifies, in writing, for itself and its subcontractors

required to be disclosed or approved by the Commonwealth, that as of the date of its execution

of this Bid/Contract, that neither the Contractor, nor any such subcontractors, are under

suspension or debarment by the Commonwealth or any governmental entity, instrumentality, or

authority and, if the Contractor cannot so certify, then it agrees to submit, along with its

Bid/Contract, a written explanation of why such certification cannot be made.

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(b) The Contractor also certifies, in writing, that as of the date of its execution

of this Bid/Contract it has no tax liabilities or other Commonwealth obligations, or has filed a

timely administrative or judicial appeal if such liabilities or obligations exist, or is subject to a

duly approved deferred payment plan if such liabilities exist.

(c) The Contractor's obligations pursuant to these provisions are ongoing from

and after the effective date of the Contract through the termination date thereof. Accordingly, the

Contractor shall have an obligation to inform the Commonwealth if, at any time during the term

of the Contract, it becomes delinquent in the payment of taxes, or other Commonwealth

obligations, or if it or, to the best knowledge of the Contractor, any of its subcontractors are

suspended or debarred by the Commonwealth, the federal government, or any other state or

governmental entity. Such notification shall be made within 15 days of the date of suspension or

debarment.

(d) The failure of the Contractor to notify the Commonwealth of its

suspension or debarment by the Commonwealth, any other state, or the federal government shall

constitute an event of default of the Contract with the Commonwealth.

(e) The Contractor agrees to reimburse the Commonwealth for the reasonable

costs of investigation incurred by the Office of State Inspector General for investigations of the

Contractor's compliance with the terms of this or any other agreement between the Contractor

and the Commonwealth that results in the suspension or debarment of the Contractor. Such costs

shall include, but shall not be limited to, salaries of investigators, including overtime; travel and

lodging expenses; and expert witness and documentary fees. The Contractor shall not be

responsible for investigative costs for investigations that do not result in the Contractor's

suspension or debarment.

(f) The Contractor may obtain a current list of suspended and debarred

Commonwealth contractors by either searching the Internet at http://www.dgs.state.pa.us/ or

contacting the:

Department of General Services

Office of Chief Counsel

603 North Office Building

Harrisburg, PA 17125

Telephone No: (717) 783-6472

FAX No: (717) 787-9138

8. Nondiscrimination/Sexual Harassment Clause.

The Contractor agrees:

(a) In the hiring of any employee(s) for the manufacture of supplies, performance of

work, or any other activity required under the contract or any subcontract, the Contractor, each

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subcontractor, or any person acting on behalf of the Contractor or subcontractor shall not

discriminate by reason of race, gender, creed, color, sexual orientation, gender identity or

expression, or in violation of the Pennsylvania Human Relations Act (PHRA) and applicable

federal laws, against any citizen of this Commonwealth who is qualified and available to perform

the work to which the employment relates.

(b) Neither the Contractor nor any subcontractor nor any person on their behalf shall

in any manner discriminate by reason of race, gender, creed, color, sexual orientation, gender

identity or expression, or in violation of the PHRA and applicable federal laws, against or

intimidate any employee involved in the manufacture of supplies, the performance of work, or

any other activity required under the contract.

(c) Neither the Contractor nor any subcontractor nor any person on their behalf shall

in any manner discriminate by reason of race, gender, creed, color, sexual orientation, gender

identity or expression, or in violation of the PHRA and applicable federal laws, in the provision

of services under the contract.

(d) Neither the Contractor nor any subcontractor nor any person on their behalf shall

in any manner discriminate against employees by reason of participation in or decision to refrain

from participating in labor activities protected under the Public Employee Relations Act,

Pennsylvania Labor Relations Act or National Labor Relations Act, as applicable and to the

extent determined by entities charged with such Acts’ enforcement, and shall comply with any

provision of law establishing organizations as employees’ exclusive representatives.

(e) The Contractor and each subcontractor shall establish and maintain a written

nondiscrimination and sexual harassment policy and shall inform their employees in writing of

the policy. The policy must contain a provision that sexual harassment will not be tolerated and

employees who practice it will be disciplined. Posting this Nondiscrimination/Sexual Harassment

Clause conspicuously in easily-accessible and well-lighted places customarily frequented by

employees and at or near where the contracted services are performed shall satisfy this

requirement for employees with an established work site.

(f) The Contractor and each subcontractor shall not discriminate by reason of race,

gender, creed, color, sexual orientation, gender identity or expression, or in violation of PHRA

and applicable federal laws, against any subcontractor or supplier who is qualified to perform the

work to which the contract relates.

(g) The Contractor and each subcontractor represents that it is presently in

compliance with and will maintain compliance with all applicable federal, state, and local laws,

regulations and policies relating to nondiscrimination and sexual harassment. The Contractor and

each subcontractor further represents that it has filed a Standard Form 100 Employer Information

Report (“EEO-1”) with the U.S. Equal Employment Opportunity Commission (“EEOC”) and

shall file an annual EEO-1 report with the EEOC as required for employers’ subject to Title VII

of the Civil Rights Act of 1964, as amended, that have 100 or more employees and employers

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that have federal government contracts or first-tier subcontracts and have 50 or more employees.

The Contractor and each subcontractor shall, upon request and within the time periods requested

by the Commonwealth, furnish all necessary employment documents and records, including

EEO-1 reports, and permit access to their books, records, and accounts by the contracting agency

and the Bureau of Diversity, Inclusion and Small Business Opportunities for purpose of

ascertaining compliance with provisions of this Nondiscrimination/Sexual Harassment Clause.

(h) The Contractor shall include the provisions of this Nondiscrimination/Sexual

Harassment Clause in every subcontract so that those provisions applicable to subcontractors will

be binding upon each subcontractor.

(i) The Contractor’s and each subcontractor’s obligations pursuant to these

provisions are ongoing from and after the effective date of the contract through the termination

date thereof. Accordingly, the Contractor and each subcontractor shall have an obligation to

inform the Commonwealth if, at any time during the term of the contract, it becomes aware of

any actions or occurrences that would result in violation of these provisions.

(j) The Commonwealth may cancel or terminate the contract and all money due or to

become due under the contract may be forfeited for a violation of the terms and conditions of this

Nondiscrimination/Sexual Harassment Clause. In addition, the agency may proceed with

debarment or suspension and may place the Contractor in the Contractor Responsibility File.

9. Provisions concerning the Americans with Disabilities Act. During the terms of

this contract, the Contractor agrees as follows:

(a) Pursuant to federal regulations promulgated under the authority of THE

AMERICANS WITH DISABILITIES ACT, 28 C.F.R. §35.101 et seq., the Contractor

understands and agrees that no individual with an disability shall, on the basis of the disability,

be excluded from participation in this contract or from activities provided for under this contract.

As a condition of accepting and executing this contract, the Contractor agrees to comply with the

"General Prohibitions Against Discrimination," 28 C.F.R. §35.130, and all other regulations

promulgated under Title II of The Americans With Disabilities Act which are applicable to the

benefits, services, programs, and activities provided by the Commonwealth of Pennsylvania

through contracts with outside Contractors.

(b) The Contractor shall be responsible for and agrees to indemnify and hold harmless

the Commonwealth of Pennsylvania from all losses, damages, expenses, claims, demands, suits,

and actions brought by any party against the Commonwealth of Pennsylvania as a result of the

Contractor's failure to comply with the provisions of paragraph a., above.

10. Contractor Integrity Provisions.

It is essential that those who seek to contract with the Commonwealth of

Pennsylvania (“Commonwealth”) observe high standards of honesty and integrity. They must

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conduct themselves in a manner that fosters public confidence in the integrity of the

Commonwealth contracting and procurement process.

1. DEFINITIONS. For purposes of these Contractor Integrity Provisions, the following

terms shall have the meanings found in this Section:

a. “Affiliate” means two or more entities where (a) a parent entity owns more than fifty

percent of the voting stock of each of the entities; or (b) a common shareholder or group of

shareholders owns more than fifty percent of the voting stock of each of the entities; or (c) the

entities have a common proprietor or general partner.

b. “Consent” means written permission signed by a duly authorized officer or employee

of the Commonwealth, provided that where the material facts have been disclosed, in writing, by

prequalification, bid, proposal, or contractual terms, the Commonwealth shall be deemed to have

consented by virtue of the execution of this contract.

c. “Contractor” means the individual or entity, that has entered into this contract with the

Commonwealth.

d. “Contractor Related Parties” means any affiliates of the Contractor and the

Contractor’s executive officers, Pennsylvania officers and directors, or owners of 5 percent or

more interest in the Contractor.

e. “Financial Interest” means either:

(1) Ownership of more than a five percent interest in any business; or

(2) Holding a position as an officer, director, trustee, partner, employee, or holding any

position of management.

f. “Gratuity” means tendering, giving, or providing anything of more than nominal

monetary value including, but not limited to, cash, travel, entertainment, gifts, meals, lodging,

loans, subscriptions, advances, deposits of money, services, employment, or contracts of any

kind. The exceptions set forth in the Governor’s Code of Conduct, Executive Order 1980-18, the

4 Pa. Code §7.153(b), shall apply.

g. “Non-bid Basis” means a contract awarded or executed by the Commonwealth with

Contractor without seeking bids or proposals from any other potential bidder or offeror.

2. In furtherance of this policy, Contractor agrees to the following:

a. Contractor shall maintain the highest standards of honesty and integrity during the

performance of this contract and shall take no action in violation of state or federal laws or

regulations or any other applicable laws or regulations, or other requirements applicable to

Contractor or that govern contracting or procurement with the Commonwealth.

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b. Contractor shall establish and implement a written business integrity policy, which

includes, at a minimum, the requirements of these provisions as they relate to the Contractor

activity with the Commonwealth and Commonwealth employees and which is made known to all

Contractor employees. Posting these Contractor Integrity Provisions conspicuously in easily-

accessible and well-lighted places customarily frequented by employees and at or near where the

contract services are performed shall satisfy this requirement.

c. Contractor, its affiliates, agents, employees and anyone in privity with Contractor shall

not accept, agree to give, offer, confer, or agree to confer or promise to confer, directly or

indirectly, any gratuity or pecuniary benefit to any person, or to influence or attempt to influence

any person in violation of any federal or state law, regulation, executive order of the Governor of

Pennsylvania, statement of policy, management directive or any other published standard of the

Commonwealth in connection with performance of work under this contract, except as provided

in this contract.

d. Contractor shall not have a financial interest in any other contractor, subcontractor, or

supplier providing services, labor, or material under this contract, unless the financial interest is

disclosed to the Commonwealth in writing and the Commonwealth consents to Contractor’s

financial interest prior to Commonwealth execution of the contract. Contractor shall disclose the

financial interest to the Commonwealth at the time of bid or proposal submission, or if no bids or

proposals are solicited, no later than Contractor’s submission of the contract signed by

Contractor.

e. Contractor certifies to the best of its knowledge and belief that within the last five (5)

years Contractor or Contractor Related Parties have not:

(1) been indicted or convicted of a crime involving moral turpitude or business honesty or

integrity in any jurisdiction;

(2) been suspended, debarred or otherwise disqualified from entering into any contract

with any governmental agency;

(3) had any business license or professional license suspended or revoked;

(4) had any sanction or finding of fact imposed as a result of a judicial or administrative

proceeding related to fraud, extortion, bribery, bid rigging, embezzlement, misrepresentation or

anti-trust; and

(5) been, and is not currently, the subject of a criminal investigation by any federal, state

or local prosecuting or investigative agency and/or civil anti-trust investigation by any federal,

state or local prosecuting or investigative agency.

If Contractor cannot so certify to the above, then it must submit along with its bid,

proposal or contract a written explanation of why such certification cannot be made and the

Commonwealth will determine whether a contract may be entered into with the Contractor. The

Contractor’s obligation pursuant to this certification is ongoing from and after the effective date

of the contract through the termination date thereof. Accordingly, the Contractor shall have an

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obligation to immediately notify the Commonwealth in writing if at any time during the term of

the contract if becomes aware of any event which would cause the Contractor’s certification or

explanation to change. Contractor acknowledges that the Commonwealth may, in its sole

discretion, terminate the contract for cause if it learns that any of the certifications made herein

are currently false due to intervening factual circumstances or were false or should have been

known to be false when entering into the contract.

f. Contractor shall comply with the requirements of the Lobbying Disclosure Act (65

Pa.C.S. §13A01 et seq.) regardless of the method of award. If this contract was awarded on a

Non-bid Basis, Contractor must also comply with the requirements of the Section 1641 of the

Pennsylvania Election Code (25 P.S. §3260a).

g. When Contractor has reason to believe that any breach of ethical standards as set forth

in law, the Governor’s Code of Conduct, or these Contractor Integrity Provisions has occurred or

may occur, including but not limited to contact by a Commonwealth officer or employee which,

if acted upon, would violate such ethical standards, Contractor shall immediately notify the

Commonwealth contracting officer or the Office of the State Inspector General in writing.

h. Contractor, by submission of its bid or proposal and/or execution of this contract and

by the submission of any bills, invoices or requests for payment pursuant to the contract, certifies

and represents that it has not violated any of these Contractor Integrity Provisions in connection

with the submission of the bid or proposal, during any contract negotiations or during the term of

the contract, to include any extensions thereof. Contractor shall immediately notify the

Commonwealth in writing of any actions for occurrences that would result in a violation of these

Contractor Integrity Provisions. Contractor agrees to reimburse the Commonwealth for the

reasonable costs of investigation incurred by the Office of the State Inspector General for

investigations of the Contractor’s compliance with the terms of this or any other agreement

between the Contractor and the Commonwealth that results in the suspension or debarment of the

Contractor. Contractor shall not be responsible for investigative costs for investigations that do

not result in the Contractor’s suspension or debarment.

i. Contractor shall cooperate with the Office of the State Inspector General in its

investigation of any alleged Commonwealth agency or employee breach of ethical standards and

any alleged Contractor non-compliance with these Contractor Integrity Provisions. Contractor

agrees to make identified Contractor employees available for interviews at reasonable times and

places. Contractor, upon the inquiry or request of an Inspector General, shall provide, or if

appropriate, make promptly available for inspection or copying, any information of any type or

form deemed relevant by the Office of the State Inspector General to Contractor's integrity and

compliance with these provisions. Such information may include, but shall not be limited to,

Contractor's business or financial records, documents or files of any type or form that refer to or

concern this contract. Contractor shall incorporate this paragraph in any agreement, contract or

subcontract it enters into in the course of the performance of this contract/agreement solely for

the purpose of obtaining subcontractor compliance with this provision. The incorporation of this

provision in a subcontract shall not create privity of contract between the Commonwealth and

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any such subcontractor, and no third party beneficiaries shall be created thereby.

j. For violation of any of these Contractor Integrity Provisions, the Commonwealth may

terminate this and any other contract with Contractor, claim liquidated damages in an amount

equal to the value of anything received in breach of these Provisions, claim damages for all

additional costs and expenses incurred in obtaining another contractor to complete performance

under this contract, and debar and suspend Contractor from doing business with the

Commonwealth. These rights and remedies are cumulative, and the use or non-use of any one

shall not preclude the use of all or any other. These rights and remedies are in addition to those

the Commonwealth may have under law, statute, regulation, or otherwise.

11. Compliance with the Offset Provision for Commonwealth Contracts. The Borrower

agrees that the Commonwealth may set off the amount of any state tax liability or other debt of

the Borrower or its subsidiaries that is owed to the Commonwealth and is not being contested on

appeal, against any payments due the Borrower under this or any other contract with the

Commonwealth.

12. Right to Know Law Provisions.

(1) The Pennsylvania Right-to-Know Law, 65 P.S. §§ 67.101-3104,

(“RTKL”) applies to this Agreement. For the purpose of these provisions, the

term “the Commonwealth” shall refer to the Department of Community and

Economic Development.

(2) If the Commonwealth needs the Borrower’s assistance in any

matter arising out of the RTKL related to this Agreement, it shall notify the

Borrower using the legal contact information provided in this Agreement. The

Borrower, at any time, may designate a different contact for such purpose upon

reasonable prior written notice to the Commonwealth.

(3) Upon written notification from the Commonwealth that it requires

the Borrower’s assistance in responding to a request under the RTKL for

information related to this Agreement that may be in the Borrower’s possession,

constituting, or alleged to constitute, a public record in accordance with the RTKL

(“Requested Information”), the Borrower shall:

(A) Provide the Commonwealth, within ten (10)

calendar days after receipt of written notification, access to, and

copies of, any document or information in the Borrower’s

possession arising out of this Agreement that the Commonwealth

reasonably believes is Requested Information and may be a public

record under the RTKL; and

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(B) Provide such other assistance as the Commonwealth

may reasonably request, in order to comply with the RTKL with

respect to this Agreement.

(4) If the Borrower considers the Requested Information to include a

request for a Trade Secret or Confidential Proprietary Information, as those terms

are defined by the RTKL, or other information that the Borrower considers

exempt from production under the RTKL, the Borrower must notify the

Commonwealth and provide, within seven (7) calendar days of receiving the

written notification, a written statement signed by a representative of the Borrower

explaining why the requested material is exempt from public disclosure under the

RTKL.

(5) The Commonwealth will rely upon the written statement from the

Borrower in denying a RTKL request for the Requested Information unless the

Commonwealth determines that the Requested Information is clearly not protected

from disclosure under the RTKL. Should the Commonwealth determine that the

Requested Information is clearly not exempt from disclosure, the Borrower shall

provide the Requested Information within five (5) business days of receipt of

written notification of the Commonwealth’s determination.

(6) If the Borrower fails to provide the Requested Information within

the time period required by these provisions, the Borrower shall indemnify and

hold the Commonwealth harmless for any damages, penalties, costs, detriment or

harm that the Commonwealth may incur as a result of the Borrower’s failure,

including any statutory damages assessed against the Commonwealth.

(7) The Commonwealth will reimburse the Borrower for any costs

associated with complying with these provisions only to the extent allowed under

the fee schedule established by the Office of Open Records or as otherwise

provided by the RTKL if the fee schedule is inapplicable.

(8) The Borrower may file a legal challenge to any Commonwealth

decision to release a record to the public with the Office of Open Records, or in

the Pennsylvania Courts, however, the Borrower shall indemnify the

Commonwealth for any legal expenses incurred by the Commonwealth as a result

of such a challenge and shall hold the Commonwealth harmless for any damages,

penalties, costs, detriment or harm that the Commonwealth may incur as a result

of the Borrower’s failure, including any statutory damages assessed against the

Commonwealth, regardless of the outcome of such legal challenge. As between

the parties, the Borrower agrees to waive all rights or remedies that may be

available to it as a result of the Commonwealth’s disclosure of Requested

Information pursuant to the RTKL.

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(9) The Borrower’s duties relating to the RTKL are continuing duties

that survive the expiration of this Agreement and shall continue as long as the

Borrower has Requested Information in its possession.

13. Assignment, Transfer, Collateral Use. This Agreement shall be binding upon and

inure to the benefit of the Department, the Borrower, and their respective successors and assigns,

except that the Borrower may not assign or transfer its rights hereunder without the prior written

consent of the Department. Approval of an assignment does not establish any legal relationship

between the Commonwealth or the Department and any other third party, and under no

circumstances shall the Commonwealth be held liable for any act or omission committed

pursuant to such an assignment.

14. Temporary Suspension of the Agreement. At the discretion of the Department,

the Department may suspend payment under this Agreement at any time upon written notice to

the Borrower for any or all of the following:

(a) Violations of laws and regulations;

(b) Audit exceptions;

(c) Misuse of funds;

(d) Failure to submit required reports;

(e) When responsible public officials or private citizens make allegations of

mismanagement, malfeasance or criminal activity; or

(f) Any basis for termination of this Agreement.

During the term of suspension, the Borrower shall hold all available funds previously paid under

this Agreement and unexpended as of the date of notice of suspension, in the Project Account.

15. Termination of the Agreement. At the discretion of the Department, the

Department may terminate this Agreement upon the occurrence of any one or more of the

following events, by written notice to the Borrower. The termination shall be effective as of the

date of delivery to the Borrower of the notice of termination.

(a) Termination for Default. Upon the occurrence of any or all of the

following events of default, the Department may declare the unpaid principal

indebtedness under this Agreement and the Note due and payable immediately,

without further notice or demand:

(1) Failure of the Borrower to pay the principal of the Loan

when due and payable, whether at the maturity or at a date fixed for

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payment of installments or by acceleration or otherwise.

(2) Failure of the Borrower to comply with or perform its

obligations, duties, conditions, covenants, agreements, or undertakings as

required by this Agreement, the Note and all applicable laws and

regulations, including the Act and all relevant guidelines, regulations,

statements of policy and directives adopted, promulgated and/or issued by

the Department

(3) Misuse of the Loan, malfeasance, criminal activity or

mismanagement in the implementation of this Agreement; or

(4) if, in the judgment of the Secretary of the Department, the

Borrower fails to take all actions necessary to implement a Financial

Recovery Plan under section 653-A(b) or 664-A(b) of the School Code

(24. P.S. §§6-653-A(b), 6-664-A(b)) and is not progressing toward

financial stability.

(b) Termination/Modification for Lack of Appropriation. This

Agreement is expressly conditioned upon the availability of funds appropriated for

the purpose of this Agreement. Unavailability of funds for any reason shall result

in a suspension or termination of this Agreement by the Department. Further, the

Department shall be permitted to reduce the Loan and/or cancel or change the

timing or amount of any disbursement due hereunder by notice to Borrower on

account of actual or expected availability of funds in the Account for any reason,

including, without limitation, in consideration of other loans made or expected to

be made under Financial Recovery Transitional Loan Program.

Upon notification of termination by the Department herein, the Borrower shall repay to the

Department all unused Loan proceeds and interest earned thereon. The Borrower shall also repay

to the Department all Loan proceeds determined by the Department to have been used contrary to

the terms of this Agreement, the Note, applicable related documents, laws, directives, guidelines

and statements of policy.

16. Remedies. In the event that the indebtedness shall be declared due and payable by

the Department pursuant to the provisions of this Agreement and the Note, or shall automatically

become so due and payable, the Department may otherwise exercise, separately, concurrently,

successively or otherwise, any and all remedies available to the Department pursuant to this

Agreement and the Note or available by law, equity, statute or otherwise; except that as required

by the Act: (a) the Loan shall not be subject to, and shall be subordinate to indebtedness incurred

under, the provisions of 53 Pa.C.S. Pt. VII Subpt. B (relating to indebtedness and borrowing); and

(b) Borrower’s failure to make timely payment of principal on the Loan shall not subject the

Borrower to withholding of unpaid amounts from Commonwealth appropriations under section

24. P.S. §6-633.

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17. Entire Agreement. This Agreement, the Note, and other applicable loan

documents as required by the Department, when signed by all parties hereto, constitute the full

and complete understanding and agreement of the parties of its express terms as provided above.

18. No Third Party Beneficiaries. No provision of this Agreement, the Note and other

applicable loan documents, shall be construed in any manner so as to create any rights in third

parties not party to this Agreement. It shall be interpreted solely to define specific duties and

responsibilities between the Department and the Borrower and shall not provide any basis for

claims of any other individual, partnership, corporation, organization, municipal entity, supplier or

other respective creditors.

19. Counterparts. This Agreement may be executed in as many counterparts as may

be deemed necessary and convenient, and each of which, when so executed, shall be deemed an

original, but all such counterparts shall constitute but one and the same instrument. Execution by

the Commonwealth shall not be complete unless the Agreement bears all the signature approvals

of duly authorized representatives of each and every Commonwealth office designated on the

signature page(s).

20. Continuation of Covenants. All covenants and agreements of the Borrower

contained herein, or made in writing in connection herewith, shall survive and continue until the

Loan is entirely paid and all of the Borrower’s obligations hereunder have been entirely satisfied.

21. Amendments. A properly executed written amendment is required to change or

revise any provisions or conditions of this Agreement or the Note, except that the Department

shall be permitted to waive any provision of this Agreement upon written notice of waiver to

Borrower expressly identified as such by the Department. Any amendment or written notice of

waiver shall be effective only to the extent specifically set forth in such amendment or written

notice of waiver.

22. Form and Notice. Any notices or consents required or permitted by this

Agreement shall be deemed sufficient if in writing and addressed to the Borrower or to the

Department, as applicable, and shall be deemed to be delivered if delivered in person or sent by

certified or registered mail, postage prepaid, return receipt requested, addressed to the Borrower or

to the Department, as applicable, at the address set forth at the beginning of this Agreement.

Notice shall be effective on delivery if delivered in person or on the second business day

following mailing, if mailed.

23. Severability. Should any section or any part of any section of this Agreement and

the Note be rendered void, invalid or unenforceable by any court of law, for any reason, such a

determination shall not render void, invalid, or unenforceable any other section or part of any

section of this Agreement.

24. Construction. The terms of this Agreement, the Note and any other loan

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document shall be liberally construed in favor of the Department to effectuate the purposes

hereof. This Agreement and the Note and all other applicable loan documents executed pursuant

hereto shall be interpreted and construed in accordance with the laws of the Commonwealth. All

of the terms and conditions of this Agreement are expressly intended to be construed as

covenants as well as conditions. The titles of the sections and subsections herein have been

inserted as a matter of convenience and reference only and shall not control or affect the meaning

or construction of any of the terms or provisions herein.

25. Rights and Remedies. No delay or failure on the part of the Department in

exercising any right, power or privilege hereunder, or as provided in the Note, shall affect such

right, power or privilege, nor shall any single or partial exercise thereof, or any abandonment

waiver or discontinuance of steps to enforce such a right, power or privilege preclude any other

or further exercise thereof, or the exercise of any other right, power or privilege. The rights and

remedies of the Department hereunder are cumulative and concurrent and not exclusive of any

rights or remedies which it might otherwise have. The Department shall have the right at all

times to enforce the provisions of this Agreement and the Note and all related documentation in

strict accordance with the terms hereof and thereof, notwithstanding any conduct or custom on

the part of the Department in refraining from so doing at any time or times. The failure of the

Department at any time or times to enforce its rights under such provisions, strictly in accordance

with same, shall not be construed as having created a custom in any way or manner contrary to

specified provisions of this Agreement or the Note, or any such documentation, or as having in

any way or manner modified or waived same.

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the

day and year first above written.

WITNESS/ATTEST:

By: (x)_____________________________

Title:_______________________________

Date: _______________________________

Approved as to Form and Legality:

____________________________________

Office of Chief Counsel (Date)

____________________________________

Office of General Counsel (Date)

____________________________________

Office of Attorney General (Date)

PENN HILLS SCHOOL DISTRICT

By: (x)_____________________________

Title: _______________________________

Date: _______________________________

COMMONWEALTH OF

PENNSYLVANIA, ACTING THROUGH

THE DEPARTMENT OF EDUCATION

____________________________________

Secretary (Date)

Certified as to Availability of Funds:

I certify that funds are available in the amount

of $1,235,000 under expenditure symbol

(appropriate) numbers as follows:

FUND: 6033200000

COST CENTER: 1611001213

GL: 1301220

_____________________________________

Comptroller Date

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Exhibit A

Schedule of Permitted Uses

Any of the following uses, which are described in more detail in the Financial Recovery Plan

shall constitute Permitted Uses:

Page Initiative Description

1 p. 84 CBA 8 ERI Healthcare Plans – Legal Support

2 p. 97 REV 11 PR Services

3 p. 75 OPSY 1 Plant Audit

4 p. 75 OPSY 2 Transportation Audit

5 p. 76 OPSY 4 Special Education Audit

6 p. 54 ACA 7 Middle School Program

7 p. 78 CON 4 RFP Solicitor

8 p. 78 CON 6 RFP Transportation

9 p. 81 CBA 1 RFP Outsource Plant Services

10 p. 70 OPE 6 Board Training

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11 p. 71 OPE 7 Middle School Study

12 p. 75 OPSY 3 Cafeteria Operations Audit

13 p. 98 REV 12 Charter Tuition/Cash Flow

14 p. 76 OPSY 5 Security Audit

15 p. 76 OPSY 6 Technology Audit

16 p.76 OPSY 7 Insurance Audit

17 pp. 77-79

CON 1-3, 5, 7-8

RFP’s (Food, Technology, Security, Insurance, Garbage, Other

18 pp. 81-84

CBA 2-7 Renegotiate Contracts

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EXHIBIT B

NOTE

FOR VALUE RECEIVED, the undersigned, (the “Borrower”), organized and existing

under the laws of the Commonwealth of Pennsylvania, does hereby irrevocably promise to pay,

without defalcation, to the order of the Pennsylvania Department of Education (the

“Department”), an agency of the Commonwealth of Pennsylvania, at the latter’s principal office

in Harrisburg, Pennsylvania, the principal sum of $1,235,000 without interest, in lawful money

of the United States of America, payable at the principal office of the Department set forth above,

on the dates and in the amounts as set forth in Exhibit BB, attached hereto and incorporated

herein and made a part hereof, without fraud or delay.

This Note is executed and delivered pursuant to the Agreement between the Borrower and

the Department, dated of even date herewith (the “Loan Agreement”), and is subject to all terms

and conditions thereof.

THE BORROWER HEREBY COVENANTS AND AGREES AS FOLLOWS:

1. All the terms, covenants, conditions and provisions of the Loan Agreement

are incorporated herein by reference and made a part hereof, and any breach or violation

thereof shall constitute a breach or violation of this Note.

2. It is hereby recited that this Note is authorized to be issued in accordance

with The School District Financial Recovery Act (“Act”) (Article VI-A of the Public

School Code of 1949, as amended, 24 P.S. §§ 6-601-A to 6-695-A), and that all acts,

conditions and things required to be or be done, happen and be performed precedent to

and in the issuance of this Note, or in the creation of the debt of which it is evidence,

have been done, happened, and been performed in regular and due form and manner as

required by law; and that for the proper budgeting, appropriation, and the prompt and full

payment of all the obligations of this Note the entire faith, credit and taxing power of said

Borrower are hereby irrevocably pledged.

3. It is hereby further certified that the Borrower has effectively covenanted

to include the amount of the debt service on this Note in each fiscal year for which sums

are due, in its budget for that year, to appropriate such amounts to the payment of such

debt service, and to periodically pay or cause to be paid the principal and interest thereon,

if any, at the dates and places and in the manner stated herein, according to the true intent

and meaning hereof.

4. If the Borrower shall fail to pay any sum required to be paid by the

Borrower under this Note or the Loan Agreement when same becomes due and payable,

or if the Borrower shall fail to perform any other provision hereof to be performed by the

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Borrower, or if there is an event of default under the Loan Agreement, then, in any event,

at the option of the Department, the whole unpaid balance of the principal indebtedness,

together with all other sums due hereunder, shall become due and payable immediately

without presentment, demand, protest or further notice to the Borrower, all of which are

expressly waived by the Borrower.

5. Partial prepayments on the principal indebtedness may be made at any

time, without premium, without the prior written consent of the Department.

6. All of the covenants herein contained shall accrue to the benefit of the

successors and assigns, voluntary or involuntary, of the Department.

7. Demand, grace, presentment for payment, protest, notice of dishonor or

nonpayment, and notice of the exercise of any option hereunder are hereby waived by the

Borrower.

8. The remedies provided in this Note and the Loan Agreement, or otherwise

available to the Department for the enforcement of the payment of the principal sum and

performance of the covenants, conditions, agreements, matters and things herein and

therein contained, are cumulative and concurrent and may be pursued singly or

successively or together at the sole discretion of the Department, and may be exercised

from time to time as often as occasion therefor shall occur until the Department has been

paid all sums due in full; except that as required by the Act: (a) the loan evidenced by this

Note shall not be subject to, and shall be subordinate to indebtedness incurred under, the

provisions of 53 Pa.C.S. Pt. VII Subpt. B (relating to indebtedness and borrowing); and

(b) Borrower’s failure to make timely payment of principal on this Note shall not subject

the Borrower to withholding of unpaid amounts from State appropriations under section

24. P.S. 6-633.

9. The terms and provisions of this Note are severable. In the event of the

un-enforceability or invalidity of any one or more of the terms, covenants, conditions or

provisions of this Note under federal, state or other applicable law, such un-enforceability

or invalidity shall not render any other term, covenant, condition or provision hereunder

unenforceable or invalid. In the event any waiver by the Borrower hereunder is

prohibited by law, including, but not limited to, the waiver of exemption from execution,

such waiver shall be deemed to be deleted.

10. The Borrower hereby waives presentment for payment, demand, notice of

nonpayment, notice of protest and protest of this Note, and all other notices in connection

with the delivery, acceptance, performance, default or enforcement of the payment of this

Note, and agrees that the liability of the Borrower shall be unconditional without regard

to the liability of any other party, and shall not be in any manner affected by any

indulgence, extension of time, renewal, waiver or modification.

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11. This Note shall be construed and governed by the laws of the

Commonwealth of Pennsylvania.

IN WITNESS WHEREOF, the Borrower has caused this Note to be properly executed by

as of the «Day» day of «Month», «Year»

WITNESS/ATTEST: PENN HILLS SCHOOL DISTRICT

By: (x)_____________________________ By: (x)_____________________________

Title:_______________________________ Title: _____________________________

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EXHIBIT BB

REPAYMENT SCHEDULE

1. June 30, 2022 -- $123,500.00

2. June 30, 2023 -- $123,500.00

3. June 30, 2024 -- $123,500.00

4. June 30, 2025 -- $123,500.00

5. June 30, 2026 -- $123,500.00

6. June 30, 2027 -- $123,500.00

7. June 30, 2028 -- $123,500.00

8. June 30, 2029 -- $123,500.00

9. June 30, 2030 -- $123,500.00

10. June 30, 2031 -- $123,500.00