Amendment No. 3 to
SEC File No. 70-8315
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
ENERGY INITIATIVES, INC. ("EI")
One Upper Pond Road
Parsippany, New Jersey 07054
(Names of companies filing this statement and addresses
of principal executive offices)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company parent of applicants)
Don W. Myers, Vice President Douglas E. Davidson, Esq.
and Treasurer Berlack, Israels &
Liberman
M. A. Nalewako, Secretary 120 West 45th Street
GPU Service Corporation New York, New York 10036
100 Interpace Parkway
Parsippany, New Jersey 07054
B. L. Levy, President
K. A. Tomblin, Secretary
Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
(Names and addresses of agents for service)
<PAGE>
GPU and EI hereby amend their Application on Form U-1,
docketed in SEC File No. 70-8315, as heretofore amended, as
follows:
1. By amending Item 2 thereof to read in its entirety
as follows:
"The estimated fees, commissions and expenses to be
incurred by GPU and EI in connection with the proposed
transactions will be as follows:
SEC Filing Fee $ 2,000
Legal Fees
Berlack, Israels & Liberman 35,000
Miscellaneous 5,000
$ 42,000"
2. By filing the following exhibits in Item 6
thereof:
A-1 - Form of Letter of Credit.
A-2 - Form of Letter of Credit
Reimbursement Agreement.
A-3 - Form of GPU Guarantee.
F - Opinion of Berlack, Israels &
Liberman.
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE UNDER-
SIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:
Don W. Myers
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:
B. L. Levy, President
Date: January 27, 1994
<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
A-1 - Form of Letter of Credit.
A-2 - Form of Letter of Credit
Reimbursement Agreement.
A-3 - Form of GPU Guarantee.
F - Opinion of Berlack, Israels &
Liberman.
<PAGE>
Exhibit A-1
EXHIBIT B
TO
REIMBURSEMENT AGREEMENT
FORM OF
IRREVOCABLE STANDBY LETTER OF CREDIT
IRREVOCABLE STANDBY LETTER OF CREDIT
__________, 1994
Irrevocable Standby Letter of Credit No. __________
(Addressee?)
Re: Brooklyn Energy Project
Ladies and Gentlemen:
1. Introduction. Brooklyn Power Limited Partnership (the
"Account Party") owns and is developing a certain 22.5 mw (net)
wood and coal fired electricity generating facility located in
Brooklyn, Province of Nova Scotia, Canada (the "Project"). In
connection with certain financing for the construction and
completion of the Project (The Mutual Life Assurance Company of
Canada) (the "Beneficiary"), is hereby irrevocably authorized,
subject to the terms and conditions set forth herein, to make
demands for payment under this Irrevocable Standby Letter of
Credit No. ___________ issued by Canadian Imperial Bank of
Commerce, acting by and through its New York Agency (the "Bank").
The Bank has issued this Letter of Credit for the account of the
Account Party, pursuant to that certain Reimbursement Agreement,
dated as of January __, 1994 (the "Reimbursement Agreement"), by
and between the Account Party and the Bank.
2. Stated Amount. The stated amount of this Letter of
Credit shall, initially, be an aggregate amount of C$12,500,000
(Twelve Million Five Hundred Thousand Canadian Dollars) (as
reduced from time to time as provided hereunder, the "Stated
Amount").
3. Procedure for Submitting Demands for Payment. Funds
under this Letter of Credit are available to the Beneficiary
against sight draft(s) of the Beneficiary presented to the Bank
at the office of the Bank referred to in paragraph 7 hereof,
which sight drafts shall state on their face "Drawn under
Canadian Imperial Bank of Commerce Irrevocable Standby Letter of
Credit No. ___________", accompanied by a certificate in the
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form, appropriately completed, of Attachment I hereto. Funds
under this Letter of Credit are available, at the Beneficiary's
option, in either the lawful currency of the United States
("United States Dollars" or "US$") or the lawful currency of
Canada ("Canadian Dollars" or "C$")
No more than one demand for payment, accompanied by a
completed certificate in the form of Attachment I, hereto, may be
made hereunder during each calendar month.
4. Procedure for Making Letter of Credit Payments. The
Bank hereby agrees that demands for payment made under and in
compliance with the terms of this Letter of Credit will be duly
honored by the Bank (from the Bank's own funds, and not directly
or indirectly from funds or other assets of the Account Party or
any affiliate thereof) on or before the termination hereof. If a
demand for payment is received by the Bank hereunder at or prior
to 10:00 a.m., Atlanta, Georgia time, on a Business Day (as
hereinafter defined), and if such demand for payment conforms to
the terms and conditions hereof, payment shall be made of the
amount specified, in immediately available funds, by 3:00 p.m.,
Atlanta, Georgia time, on that Business Day. If a demand for
payment is made by the Beneficiary hereunder after 1:00 p.m.,
Atlanta, Georgia time, on a Business Day, and if such demand for
payment conforms to the terms and conditions hereof, payment
shall be made of the amount specified, in immediately available
funds, by 3:00 p.m., Atlanta, Georgia time, the next following
Business Day. Payment under this Letter of Credit to the
Beneficiary shall be made to the account specified in the
certificate(s) delivered pursuant to paragraph 3 hereof. Upon
payment of the amount specified in a demand for payment made
hereunder, the Bank shall be fully discharged of its obligation
under this Letter of Credit with respect to such demand for
payment and the Bank shall not thereafter be obligated to make
any further payments under this Letter of Credit in respect of
such demand for payment. By paying the Beneficiary an amount
demanded in accordance with this Letter of Credit, the Bank makes
no representation as to the correctness of the amount demanded or
of the calculations and representations of the Beneficiary
required by this Letter of Credit. As used in this Letter of
Credit, "Business Day" means any day of the year, other than a
day (i) on which banking institutions in Atlanta, Georgia (the
city in which offices of the Bank are located that act with
respect to drawings hereunder), or in any of the states in which
the principal offices of the Account Party are located are
authorized or required by law to remain closed or (ii) on which
the New York Stock Exchange is closed.
5. Reduction of Stated Amount. The Stated Amount shall be
automatically reduced from time to time by the aggregate amount
of payments the Bank has made under the Letter of Credit, which
payments if paid in United States Dollars will be converted to a
Canadian Dollar Equivalent for purposes of reducing the Stated
Amount. The Canadian Dollar Equivalent of US Dollars shall be
determined on the day of the reduction by multiplying (i) the
2
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given amount of US Dollars by (ii) the then applicable exchange
rate taken from the Exchange Factor Table, attached hereto as
Attachment II.
6. Termination. This Letter of Credit shall automatically
terminate upon the earliest of (i) December 31, 1994 (such date,
as extended from time to time as provided in this Section 6,
being called the "Stated Expiration Date") or (ii) the date on
which the Letter of Credit is surrendered for cancellation. The
term of the Letter of Credit shall automatically be extended to
(a date that is 22 months after the issuance date) unless the
Bank shall have provided written notice to the Beneficiary on or
after November 15, 1994, and on or before December 15, 1994, that
it has elected not to extend the Letter of Credit. The Bank may,
in its sole discretion, further extend the Stated Expiration Date
to a date which is 33 months after the issuance date. The Bank
shall deliver to the Beneficiary a certificate, with a copy
thereof to the Account Party in the form of Attachment III
hereto, evidencing an extension of the Stated Expiration Date.
7. Notices and Communications. All documents presented to
the Bank in connection with any demand for payment under this
Letter of Credit, as well as all notices and other communications
to the Bank or to the Beneficiary or to the Account Party in
respect hereof, shall be in writing and shall make specific
reference to this Letter of Credit by number. Notices to any
party hereto shall be either (i) personally delivered to such
party at its office set forth below, or at any other office in
the continental United States or Canada as may be designated by
such party by written notice delivered to the other parties
hereto, (ii) by facsimile transmission, promptly confirmed in
writing, at its telephone number set forth below or such other
telephone number designated by such party by written notice
delivered to the other parties hereto, or (iii) sent to such
party by tested telex to its number(s) set forth below (or at any
number(s) in the continental United States or Canada designated
by such party by written notice delivered to the other parties
hereto), as applicable:
Bank: Canadian Imperial Bank of Commerce
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attention: Loan Administration
Facsimile No.: 404/319-4950
with copies to:
Canadian Imperial Bank of Commerce
200 West Madison, Suite 2300
Chicago, Illinois 60606
Attention: Utilities
Facsimile No.: 312/750-0927
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<PAGE>
Beneficiary: (The Mutual Life Assurance Company of
Canada)
__________________________________
__________________________________
Account Party: Brooklyn Power Limited Partnership
__________________________________
__________________________________
8. Transfer of Letter of Credit. The Beneficiary may not
transfer its rights under this Letter of Credit.
9. Governing Law. This Letter of Credit is subject to the
Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce, Publication No. 500
(the "Uniform Customs"); provided, however, that (i) this Letter
of Credit will not terminate because of a failure to make any
permitted demands for payment hereunder as provided in Article 45
of the Uniform Customs and (ii) this Letter of Credit will not
terminate because of more than one transfer as provided in
Article 54 of the Uniform Customs. This Letter of Credit shall,
as to matters not governed by the Uniform Customs, be governed by
and construed in accordance with the laws of the State of New
York, including Article 5 of the Uniform Commercial Code as in
effect in the State of New York without regard to principles of
conflicts of law.
10. Entire Undertaking. This Letter of Credit sets forth
in full the undertaking of the Bank, and such undertaking shall
not be deemed in any way to be modified, amended, amplified or
otherwise affected by any document, instrument or agreement
referred to herein, except only the Uniform Customs and the
certificate(s) provided for herein.
Very truly yours,
CANADIAN IMPERIAL BANK OF COMMERCE
_________________________ By:_______________________________
Countersigned Title:
4
<PAGE>
Attachment I
to Exhibit B
CERTIFICATE FOR A PAYMENT DEMAND
The undersigned hereby certifies to Canadian Imperial Bank
of Commerce (the "Bank"), with reference to Irrevocable Standby
Letter of Credit No. ___________ (the "Letter of Credit") issued
by the Bank in favor of (The Mutual Life Assurance Company of
Canada), as Beneficiary (the "Beneficiary"), and for the account
of Brooklyn Power Limited Partnership (the "Account Party"), that
the undersigned is a duly authorized officer of the Beneficiary,
that any capitalized term used but not defined herein shall have
its respective meaning set forth in the Letter of Credit and
that:
1. The Beneficiary hereby makes a demand for payment under
the Letter of Credit in the amount of $__________.
2. The amount hereby demanded (i) does not exceed the
amount available on the date hereof to be demanded under the
Letter of Credit and (ii) is the amount Beneficiary is entitled
to in accordance with Section __ of the Equity Contribution
Agreement dated as of January __, 1994.
3. The Beneficiary hereby directs you to make payment of
the amount demanded hereby by wire transfer to account
no. __________ at ___________________________________.
IN WITNESS WHEREOF, the Beneficiary has executed and
delivered this Certificate as of _____ day of __________, 1994.
(THE MUTUAL LIFE ASSURANCE COMPANY
OF CANADA), as Beneficiary
By:________________________________
Title:___________________________
<PAGE>
Attachment II
to Exhibit B
EXCHANGE FACTOR TABLE
<PAGE>
Attachment III
to Exhibit B
CERTIFICATE EVIDENCING EXTENSION OF
LETTER OF CREDIT STATED EXPIRATION DATE
The undersigned hereby certifies to (The Mutual Life
Assurance Company of Canada) (the "Beneficiary"), with reference
to Irrevocable Standby Letter of Credit No. ___________ (the
"Letter of Credit") issued by Canadian Imperial Bank of Commerce
(the "Bank") in favor of Brooklyn Power Limited Partnership (the
"Account Party"), that, at the request of the Account Party, the
Bank has agreed to extend the stated Expiration Date of the
Letter of Credit from December 31, 1994 to _________, ______.
This Certificate should be attached to the Letter of Credit.
IN WITNESS WHEREOF, the Bank has executed and delivered this
Certificate as of the ____ day of ____________, 19_____.
CANADIAN IMPERIAL BANK OF COMMERCE
By:________________________________
Title:_____________________________
<PAGE>
Exhibit A-2
MB&P Draft 01/25/94
REIMBURSEMENT AGREEMENT
dated as of January __, 1994
by and between
BROOKLYN POWER LIMITED PARTNERSHIP
and
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE AND RECITALS . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms . . . . . . . . . . . . . . . . . . 1
1.2 Interpretation . . . . . . . . . . . . . . . . . 1
1.3 Conflict in Loan Documents . . . . . . . . . . . 3
1.4 Legal Representation of the Parties . . . . . . . 3
ARTICLE II
LETTER OF CREDIT AND LOANS
2.1 Issuance and Extension of Letter of Credit . . 3
2.1.1 Issuance of Letter of Credit . . . . . . . . . 3
2.1.2 Extensions of Letter of Credit . . . . . . . . 3
2.2 Agreement to Borrow from Bank . . . . . . . . . 4
2.2.1 Company Borrowing . . . . . . . . . . . . . . . 4
2.2.2 Other Bank Payments and Disbursements . . . . . 4
2.3 Letter of Credit Fees . . . . . . . . . . . . . 5
2.3.1 Letter of Credit Fee . . . . . . . . . . . . . 5
2.3.2 Upfront Fee . . . . . . . . . . . . . . . . . . 5
2.4 Borrowing Procedure . . . . . . . . . . . . . . 5
2.5 Continuation and Conversion Elections . . . . . 5
2.6 Funding . . . . . . . . . . . . . . . . . . . . 6
2.7 Note . . . . . . . . . . . . . . . . . . . . . 6
2.8 Repayments and Prepayments . . . . . . . . . . 6
2.9 Interest Provisions . . . . . . . . . . . . . . 7
2.9.1 Rates . . . . . . . . . . . . . . . . . . . . . 7
2.9.2 Post-Maturity Rates . . . . . . . . . . . . . . 8
2.9.3 Payment Dates . . . . . . . . . . . . . . . . . 9
2.10 Eurodollar Rate Lending Unlawful . . . . . . . 9
2.11 Deposits Unavailable . . . . . . . . . . . . . 10
2.12 Increased Fixed Eurodollar Loan Costs, etc . . 10
2.13 Funding Losses . . . . . . . . . . . . . . . . 10
2.14 Increased Capital Costs . . . . . . . . . . . . 11
2.15 Taxes . . . . . . . . . . . . . . . . . . . . . 11
2.16 Payments, Computations, etc . . . . . . . . . . 12
ARTICLE III
REPRESENTATIONS
3.1 Organization . . . . . . . . . . . . . . . . . . 13
3.2 Authorization; No Conflict . . . . . . . . . . . 13
3.3 Validity and Binding Nature . . . . . . . . . . 13
3.4 True and Complete Disclosure . . . . . . . . . . 13
3.5 Litigation . . . . . . . . . . . . . . . . . . . 14
<PAGE>
3.6 Public Utility Holding Company Act . . . . . . . 14
3.7 Investment Company Act . . . . . . . . . . . . . 14
3.8 Compliance with Laws . . . . . . . . . . . . . . 14
ARTICLE IV
COVENANTS
4.1 Further Assurances . . . . . . . . . . . . . . . 14
ARTICLE V
CONDITIONS TO ISSUANCE OF LETTER OF CREDIT AND LOANS
5.1 Letter of Credit Conditions . . . . . . . . . . 15
5.1.1 Initial Cash Collateral; Substitute
Guaranty . . . . . . . . . . . . . . . . . . 15
5.1.2 Company Action . . . . . . . . . . . . . . . . 15
5.1.3 Company Incumbency and Signatures . . . . . . . 16
5.1.4 Company Partnership Documents . . . . . . . . . 16
5.1.5 Bring-Down Certificate . . . . . . . . . . . . 16
5.1.6 Other Documents . . . . . . . . . . . . . . . . 16
5.2 Loan Conditions . . . . . . . . . . . . . . . . 16
5.2.1 Note . . . . . . . . . . . . . . . . . . . . . 16
5.2.2 Bring-Down Certificate . . . . . . . . . . . . 16
5.2.3 Other Documents . . . . . . . . . . . . . . . . 17
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
6.1 Listing of Events of Default . . . . . . . . . 17
6.1.1 Non-Payment of Obligations . . . . . . . . . . 17
6.1.2 Breach of Warranty . . . . . . . . . . . . . . 17
6.1.3 Non-Performance of Certain Covenants and
Obligations . . . . . . . . . . . . . . . . . 17
6.1.4 Default on Other Indebtedness . . . . . . . . . 17
6.1.5 Judgments . . . . . . . . . . . . . . . . . . . 18
6.1.6 Bankruptcy, etc . . . . . . . . . . . . . . . . 18
6.1.7 Impairment of Security, etc . . . . . . . . . . 19
6.1.8 Impairment of Guarantee . . . . . . . . . . . . 19
6.2 Deemed Disbursements . . . . . . . . . . . . . 19
6.3 Remedies . . . . . . . . . . . . . . . . . . . 19
6.4 No Remedy Exclusive . . . . . . . . . . . . . . 19
6.5 No Additional Waiver Implied by One Waiver . . 20
ARTICLE VII
GENERAL
7.1 Amendments . . . . . . . . . . . . . . . . . . . 20
7.2 Notices . . . . . . . . . . . . . . . . . . . . . 20
7.3 Confidentiality . . . . . . . . . . . . . . . . . 20
7.4 Payment in the Contractual Currency . . . . . . . 21
<PAGE>
7.5 Judgments . . . . . . . . . . . . . . . . . . . . 21
7.6 Costs, Expenses and Taxes . . . . . . . . . . . . 22
7.7 Liability of the Bank . . . . . . . . . . . . . . 23
7.8 Captions and References . . . . . . . . . . . . . 23
7.9 Governing Law . . . . . . . . . . . . . . . . . . 23
7.10 Successors and Assigns . . . . . . . . . . . . . 23
7.11 Severability of Provisions . . . . . . . . . . . 24
7.12 Execution in Counterparts . . . . . . . . . . . 24
8. Financial Information and Reports . . . . . . . 24
EXHIBIT A - Form of Note
EXHIBIT B - Form of Irrevocable Letter of Credit
EXHIBIT C - Form of Cash Collateral Agreement
EXHIBIT D - Form of Guaranty
EXHIBIT E - Exchange Factor Table
SCHEDULE I - Defined Terms
<PAGE>
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT (together with Schedules and
Exhibits, this "Agreement"), dated as of January __, 1994, is
entered into by and between BROOKLYN POWER LIMITED PARTNERSHIP, a
limited partnership duly organized and validly existing under the
laws of the Province of Nova Scotia (the "Company"), and CANADIAN
IMPERIAL BANK OF COMMERCE, a bank duly organized and validly
existing under the laws of Canada and acting by and through its
New York Agency (the "Bank").
W I T N E S S E T H:
WHEREAS, the Company owns and is developing that certain
22.5 mw (net) wood waste and coal fired electricity generating
facility located in Brooklyn, Province of Nova Scotia, Canada
(the "Project") and, in connection with certain financing for the
construction and completion of the Project (the "Project
Financing"), the Company is required to obtain an irrevocable
standby letter of credit in a stated amount equal to C$12,500,000
(Twelve Million Five Hundred Thousand Canadian Dollars) issued by
a bank acceptable to the Lenders and available to be drawn from
the Closing Date until December 31, 1994;
WHEREAS, the Bank is a bank acceptable to the Lenders;
WHEREAS, to satisfy such requirements, the Company has
requested that the Bank issue the Letter of Credit and the Bank,
subject to the terms and upon the conditions contained in this
Agreement, has agreed to issue the Letter of Credit.
NOW THEREFORE, in consideration of the premises and to
induce the Bank to issue such Letter of Credit, and intending to
be legally bound hereby, the Company and the Bank hereby agree as
follows:
ARTICLE i
DEFINITIONS AND INTERPRETATION
SECTION i.1 Defined Terms. Unless a clear contrary
intention appears or the context otherwise requires, when used in
this Agreement or any other Loan Document, capitalized terms that
are defined in Schedule I shall have the respective meanings
therein set forth.
SECTION i.2 Interpretation. Unless a clear contrary
intention appears or the context otherwise requires, in this
Agreement and each other Loan Document:
(a) the singular number includes the plural number and
vice versa;
<PAGE>
(b) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement and
the other Loan Documents, and reference to a Person in a
particular capacity excludes such Person in any other
capacity or individually;
(c) reference to any gender includes the other gender;
(d) reference to any agreement (including this
Agreement), document or instrument means such agreement,
document or instrument as amended or modified and in effect
from time to time in accordance with the terms thereof and,
if applicable, the terms hereof and the other Loan Documents
and reference to any promissory note includes any promissory
note which is an extension or renewal thereof or a
substitute or replacement therefor;
(e) reference to any Applicable Law means such
Applicable Law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder
and reference to any section or other provision of any
Applicable Law means that provision of such Applicable Law
from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or
reenactment of such section or other provision;
(f) reference to any Article, Section, Annex, Schedule
or Exhibit means such Article or Section hereof or Annex,
Schedule or Exhibit hereto;
(g) "hereunder", "hereof", "hereto" and words of
similar import shall be deemed references to this Agreement
as a whole and not to any particular Article, Section or
other provision hereof;
(h) "including" (and with correlative meaning
"include") means including without limiting the generality
of any description preceding such term;
(i) "or" is not exclusive; and
(j) relative to the determination of any period of
time, "from" means "from and including" and "to" and
"through" mean "to but excluding".
SECTION i.3 Conflict in Loan Documents. If there is any
conflict between this Agreement and any other Loan Document, this
Agreement and such other Loan Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict
2
<PAGE>
but, to the extent (and only to the extent) of such conflict,
this Agreement shall prevail and control.
SECTION i.4 Legal Representation of the Parties. This
Agreement and the other Loan Documents were negotiated by the
parties with the benefit of legal representation and any rule of
construction or interpretation otherwise requiring this Agreement
or any other Loan Document to be construed or interpreted against
any party shall not apply to any construction or interpretation
hereof or thereof.
ARTICLE ii
LETTER OF CREDIT AND LOANS
SECTION ii.1 Issuance and Extension of Letter of Credit.
SECTION ii.1.1 Issuance of Letter of Credit. Subject
to the terms and conditions of this Agreement, the Bank
agrees to issue to (The Mutual Life Assurance Company of
Canada) (the "Beneficiary") for the account of the Company,
on the Closing Date, an irrevocable standby letter of credit
(the "Letter of Credit") substantially in the form of
Exhibit B. On the Closing Date, the initial Stated Amount
of the Letter of Credit shall be C$12,500,000 (Twelve
Million Five Hundred Thousand Canadian Dollars) and the
initial Stated Expiration Date of the Letter of Credit shall
be December 31, 1994; provided, however, that the Letter of
Credit shall automatically be extended to (a date that is 22
months after the Closing Date) unless the Bank shall have
provided written notice to the Beneficiary on or after
November 15, 1994 and on or before December 15, 1994, that
it has elected not to extend the Letter of Credit. The Bank
agrees that it will provide the aforesaid notice if an only
if GPU has failed on or before November 14, 1994 to deliver
to the Bank a guaranty in the same form as the Guaranty but
with an expiration date as of (a date that is 22 months
after the Closing Date).
SECTION ii.1.2 Extensions of Letter of Credit.
Commencing on and from January __, 1994, the Company shall
have the right to request that the Bank extend the Stated
Expiration Date to a date which is 33 months after the
Closing Date, which request may be conditioned upon terms
and conditions which are different from the terms and
conditions of this Agreement in effect on the Closing Date.
In order for the Bank to extend the Stated Expiration Date,
GPU must amend its guarantee to reflect an expiration date
which is 33 months after the Closing Date. The Bank shall,
no later than 90 days after receiving such request, notify
the Company of its acceptance or rejection of such request,
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<PAGE>
which acceptance may be conditioned upon terms and
conditions which are different from the terms and conditions
of this Agreement in effect on the Closing Date or the terms
and conditions proposed by the Company in making an
extension request. The foregoing notwithstanding, each such
extension shall, except as otherwise expressly provided in
an amendment to this Agreement, be on the same terms and
conditions as those set forth in this Agreement. No
extension of the Stated Expiration Date shall be effective
without the express written consent of the Bank. The
Company acknowledges and agrees that the Bank may accept or
reject any request for an extension of the Stated Expiration
Date as the Bank, in the Bank's sole and unfettered
discretion, deems appropriate.
SECTION ii.2 Agreement to Borrow from Bank. The Company
agrees:
SECTION ii.2.1 Company Borrowing. Following notice
from the Bank of a demand for payment by the Beneficiary
under the Letter of Credit, to immediately request a
Borrowing (a "Borrowing") from the Bank in a principal
amount equal to the amount of such demand, the proceeds
thereof to be used by the Bank solely to reimburse the Bank
for such demand. Such demand may be made in either US
Dollars or Canadian Dollars.
SECTION ii.2.2 Other Bank Payments and Disbursements.
To reimburse the Bank, on demand, for any and all reasonable
disbursements made or expenses incurred by the Bank in
enforcing any rights under this Agreement, including,
without limitation, reasonable attorneys' fees and any
amounts advanced by the Bank hereunder.
The Company's obligation to reimburse the Bank when due for
payments, disbursements and expenses made or incurred by the Bank
as described in this Section 2.2 shall be absolute and uncondi-
tional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment that the Company may
have or have had against the Bank, including, without limitation,
any set-off, counterclaim or defense that is based upon (i) the
failure of such demand for payment to conform to the terms of the
Letter of Credit, (ii) the failure or refusal of the Bank to
extend the Stated Expiration Date or to issue another letter of
credit upon the expiration of the Letter of Credit or (iii) the
illegality, invalidity, irregularity or unenforceability of the
Letter of Credit; provided that the Company shall not be
obligated to reimburse the Bank for any wrongful payment or
disbursement made by the Bank under the Letter of Credit as a
result of acts or omissions constituting gross negligence or
willful misconduct on the part of the Bank or any of its
officers, employees or agents.
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SECTION ii.3 Letter of Credit Fees. The Company agrees to
pay to the Bank the following fees:
SECTION ii.3.1 Letter of Credit Fee. A letter of
credit fee with respect to the Letter of Credit on the
average daily Stated Amount as adjusted from time to time
shall be paid (in Canadian Dollars) at a rate per annum
equal to the Letter of Credit Fee Rate. The foregoing
letter of credit fee shall be payable in quarterly
installments in arrears on each March 31, June 30,
September 30 and December 31, commencing March 31, 1994;
provided that if the Letter of Credit terminates on a date
other than March 31, June 30, September 30 or December 31,
then the final quarterly installment of the letter of credit
fee shall be payable on the date that the Letter of Credit
terminates. Each letter of credit fee shall be calculated
on the basis of a 360-day year for the actual number of days
elapsed; provided for purposes of computing the first
quarterly installment of the initial letter of credit fee,
the first day of the fee period shall be the Closing Date;
and provided, further, for purposes of computing the final
quarterly installment of the final letter of credit fee, the
last day of the fee period shall be the date that the Letter
of Credit terminates.
SECTION ii.3.2 Upfront Fee. An upfront structuring
fee of 15 basis points payable (in Canadian Dollars) on the
initial Stated Amount of the Letter of Credit shall be paid
to the Bank on the Closing Date.
SECTION ii.4 Borrowing Procedure. By delivering a
Borrowing Request to the Bank on or before (10:00) a.m., Atlanta,
Georgia time, on a Business Day, the Company may from time to
time irrevocably request, on not less than three nor more than
five Business Days' notice, that a Borrowing be made. On the
terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of loans, and shall be
made on the Business Day, specified in such Borrowing Request.
SECTION ii.5 Continuation and Conversion Elections. By
delivering a Continuation/Conversion Notice to the Bank on or
before 10:00 a.m., Atlanta, Georgia time, on a Business Day, the
Company may from time to time irrevocably elect, on not less than
three nor more than five Business Days' notice that all, or any
portion in an aggregate minimum amount of US$500,000 (or the
Canadian Dollar Equivalent where the Borrowing was made in
Canadian Dollars) and an integral multiple of US$500,000 (or the
Canadian Dollar Equivalent where the Borrowing was made in
Canadian Dollars) of any Loans be, in the case of Base Rate
Loans, converted into Eurodollar Rate Loans or, in the case of
Eurodollar Rate Loans, be converted into a Base Rate Loan or
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continued as a Eurodollar Rate Loan (in the absence of delivery
of a Continuation/ Conversion Notice with respect to any
Eurodollar Rate Loan at least three Business Days before the last
day of the then current Interest Period with respect thereto,
such Eurodollar Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); provided that no portion of the
outstanding principal amount of any Loans may be continued as, or
be converted into, Eurodollar Rate Loans when any Default has
occurred and is continuing.
SECTION ii.6 Funding. The Bank may, if it so elects,
fulfill its obligation to make, continue or convert Eurodollar
Rate Loans hereunder by causing one of its foreign branches or
Affiliates (or an international banking facility created by the
Bank) to make or maintain such Eurodollar Rate Loan; provided
that such Eurodollar Rate Loan shall nonetheless be deemed to
have been made and to be held by the Bank, and the obligation of
the Company to repay such Eurodollar Rate Loan shall nevertheless
be to the Bank for the account of such foreign branch, Affiliate
or international banking facility. In addition, the Company
hereby consents and agrees that, for purposes of any determina-
tion to be made for purposes of Sections 2.10, 2.11, 2.12 or
2.13, it shall be conclusively assumed that the Bank elected to
fund all Eurodollar Rate Loans by purchasing Dollar deposits in
its Eurodollar Office's interbank eurodollar market.
SECTION ii.7 Note. The Bank's Loans shall be evidenced by
the Note, substantially in the form of Exhibit A, payable to the
order of the Bank in a maximum principal amount equal to the
original Stated Amount. The Company hereby irrevocably
authorizes the Bank to make (or cause to be made) appropriate
notations on the grid attached to the Bank's Note (or on any
continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of,
and the interest rate and Interest Period applicable to the Loans
evidenced thereby. Such notations shall be conclusive and
binding on the Company absent manifest error; provided that the
failure of the Bank to make any such notations or any error
therein shall not limit or otherwise affect any Obligations of
the Company or any other Obligor.
SECTION ii.8 Repayments and Prepayments. The Company shall
repay in full the unpaid principal amount of each Loan upon the
Stated Maturity Date thereof. Prior thereto, the Company
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Loans, such prepayment
to be made in that currency in which the Loan was made;
provided that:
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(i) all such voluntary prepayments shall require
at least three but no more than five Business Days'
prior written notice to the Bank; and
(ii) all such voluntary partial prepayments shall
be in an aggregate minimum amount of US$500,000 (or the
Canadian Dollar Equivalent where the Borrowing was made
in Canadian Dollars) and an integral multiple of
US$500,000 (or the Canadian Equivalent where the
Borrowing was made in Canadian Dollars); and
(b) shall, immediately upon any acceleration of the
Stated Maturity Date of any Loans pursuant to Section 6.3,
repay all Loans.
SECTION ii.9 Interest Provisions. Interest on the out-
standing principal amount of Loans shall accrue and be payable in
accordance with this Section 2.9.
SECTION ii.9.1 Rates. Pursuant to an appropriately
delivered Borrowing Request or Continuation/Conversion
Notice, the Company may elect that Loans comprising a
Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, during each Interest Period applicable
thereto, equal to the sum of the Alternate Base Rate from
time to time in effect plus a margin of 0.0%; and
(b) on that portion maintained as a Eurodollar Rate
Loan, during each Interest Period applicable thereto, equal
to the sum of the Eurodollar Rate (Reserve Adjusted) for
such Interest Period plus a margin of 0.625%.
The "Eurodollar Rate (Reserve Adjusted)" means,
relative to any Loan to be made, continued or maintained as,
or converted into, a Eurodollar Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1.00 - Eurodollar Reserve
Percentage
The Eurodollar Rate (Reserve Adjusted) for any Interest
Period for Eurodollar Rate Loans will be determined by the
Bank on the basis of the Eurodollar Reserve Percentage in
effect two Business Days before the first day of such
Interest Period.
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"Eurodollar Rate" means, relative to any Interest
Period for Eurodollar Rate Loans, the rate of interest equal
to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which US
Dollar deposits (or Canadian Dollar Deposits where the
Borrowing is made in Canadian Dollars) in immediately
available funds are offered to the Bank's Eurodollar Office
in the (London) interbank market as at or about 10:00 a.m.
Atlanta, Georgia time two Business Days prior to the
beginning of such Interest Period for delivery on the first
day of such Interest Period, and in an amount approximately
equal to the amount of the Bank's Eurodollar Rate Loan and
for a period approximately equal to such Interest Period.
"Eurodollar Reserve Percentage" means, relative to any
Interest Period for Eurodollar Rate Loans, the reserve
percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under
regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and
including "Eurocurrency Liabilities", as currently defined
in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.
All Eurodollar Rate Loans shall bear interest from and
including the first day of the applicable Interest Period to (but
not including) the last day of such Interest Period at the
interest rate determined as applicable to such Eurodollar Rate
Loan.
SECTION ii.9.2 Post-Maturity Rates. After the date
any principal amount of any Loan is due and payable (whether
on the Stated Maturity Date, upon acceleration or
otherwise), or after any other monetary Obligation of the
Company shall have become due and payable (and notice of
such Obligation shall have been provided to the Company),
the Company shall pay, but only to the extent permitted by
law, interest (after as well as before judgment) on such
amounts at a rate per annum equal to the Alternate Base Rate
plus a margin of 2.0%.
SECTION ii.9.3 Payment Dates. Interest accrued on
each Loan shall be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole
or in part, of principal outstanding on such Loan;
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(c) with respect to a Base Rate Loan, on each
Quarterly Payment Date occurring after the date the Loan is
made;
(d) with respect to a Eurodollar Rate Loan, the last
day of each applicable Interest Period (and, if such
Interest Period shall exceed 90 days, on the 90th day of
such Interest Period);
(e) with respect to any Base Rate Loans converted into
Eurodollar Rate Loans on a day when interest would not
otherwise have been payable pursuant to clause (c), on the
date of such conversion; and
(f) on that portion of any Loans the Stated Maturity
Date of which is accelerated pursuant to Section 6.2 or
Section 6.3, immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising
under this Agreement or any other Loan Document after the date
such amount is due and payable (whether on the Stated Maturity
Date, upon acceleration or otherwise) shall be payable upon
demand.
SECTION ii.10 Eurodollar Rate Lending Unlawful. If the
Bank shall determine (which determination shall, upon notice
thereof to the Company, be conclusive and binding on the Company)
that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for
the Bank to make, continue or maintain any Loan as, or to convert
any Loan into, a Eurodollar Rate Loan, the obligations of the
Bank to make, continue, maintain or convert any such Loans shall,
upon such determination, forthwith be suspended until the Bank
shall notify the Company that the circumstances causing such
suspension no longer exist, and all Eurodollar Rate Loans shall
automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION ii.11 Deposits Unavailable. If the Bank shall have
determined that:
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Bank in
its relevant market; or
(b) by reason of circumstances affecting the Bank's
relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to
Eurodollar Rate Loans,
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then, upon notice from the Bank to the Company, the obligations
of the Bank under Sections 2.4 and 2.5 to make or continue any
Loans as, or to convert any Loans into, Eurodollar Rate Loans
shall forthwith be suspended until the Bank shall notify the
Company that the circumstances causing such suspension no longer
exist.
SECTION ii.12 Increased Fixed Eurodollar Loan Costs, etc.
The Company agrees to reimburse the Bank for any increase in the
cost to the Bank of, or any reduction in the amount of any sum
receivable by the Bank in respect of, making, continuing or
maintaining (or of its obligation to make, continue or maintain)
any Loans as, or of converting (or of its obligation to convert)
any Loans into, Eurodollar Rate Loans. The Bank will make
reasonable efforts to limit such increased costs or to minimize
the reduction of amounts receivable. The Bank shall promptly
notify the Company in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons
therefor and the additional amount required fully to compensate
the Bank for such increased cost or reduced amount. Such
additional amounts shall be payable by the Company to the Bank
within ten days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and
binding on the Company.
SECTION ii.13 Funding Losses. In the event the Bank shall
incur any loss or expense (including any loss or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by the Bank to make, continue or maintain any
portion of the principal amount of any Loan as, or to convert any
portion of the principal amount of any Loan into, a Eurodollar
Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the
principal amount of any Eurodollar Rate Loans on a date
other than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to Section 2.8 or
otherwise;
(b) any Loans not being made as Eurodollar Rate Loans
in accordance with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted
into, Eurodollar Rate Loans in accordance with the
Continuation/Conversion Notice therefor,
which losses the bank will make reasonable efforts to mitigate,
then, upon the written notice of the Bank to the Company, the
Company shall, within ten days of its receipt thereof, pay to the
Bank such amount as will (in the reasonable determination of the
Bank) reimburse the Bank for such loss or expense. Such written
notice (which shall include calculations in reasonable detail)
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shall, in the absence of manifest error, be conclusive and
binding on the Company.
SECTION ii.14 Increased Capital Costs. If any change in,
or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of
capital required or expected to be maintained by the Bank or any
Person controlling the Bank, and the Bank determines (in its sole
and absolute discretion) that the rate of return on its or such
controlling Person's capital as a consequence of its Loans is
reduced to a level below that which such Bank or such controlling
Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to
time by the Bank to the Company, the Company shall within ten
days pay directly to the Bank additional amounts sufficient to
compensate the Bank or such controlling Person for such reduction
in rate of return. A statement of the Bank as to any such
additional amount or amounts (including calculations thereof in
reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Company. In determining such
amount, the Bank may use any method of averaging and attribution
that it (in its sole and absolute discretion) shall deem
applicable.
SECTION ii.15 Taxes. All payments by the Company of
principal of, and interest on, the Loans and all other amounts
payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or
other taxes, fees, duties, withholdings or other charges of any
nature whatsoever imposed by any taxing authority, other than
franchise taxes and taxes imposed on or measured by the Bank's
net income or receipts (such non-excluded items being called
"Taxes"). In the event that any withholding or deduction from
any payment to be made by the Company hereunder is required in
respect of any Taxes pursuant to any Applicable Law, then the
Company will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Bank an official receipt
or other documentation satisfactory to the Bank evidencing
such payment to such authority; and
(c) pay to the Bank such additional amount or amounts
as is necessary to ensure that the net amount actually
received by the Bank will equal the full amount the Bank
would have received had no such withholding or deduction
been required.
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Moreover, if any Taxes are directly asserted against the Bank
with respect to any payment received by the Bank hereunder, the
Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalties, interest or
expenses) as is necessary in order that the net amount received
by such person after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such
person would have received had not such Taxes been asserted.
If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Bank, the
required receipts or other required documentary evidence, the
Company shall indemnify the Bank for any incremental Taxes,
interest or penalties that may become payable by the Bank as a
result of any such failure.
SECTION ii.16 Payments, Computations, etc. All payments by
the Company pursuant to this Agreement, the Note or any other
Loan Document shall be made by the Company to the Bank, without
setoff, deduction, counterclaim or withholding tax not later than
(10:00 a.m.), Atlanta, Georgia time, on the date due, in same day
or immediately available funds, to such account as the Bank shall
specify from time to time by notice to the Company. Funds
received after that time shall be deemed to have been received by
the Bank on the next succeeding Business Day. All interest and
fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over
a year comprised of 360 days. Whenever any payment to be made
shall otherwise be due on a day which is not a Business Day, such
payment shall (except as otherwise required by clause (c) of the
definition of "Interest Period") be made on the next succeeding
Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such
payment.
ARTICLE iii
REPRESENTATIONS
To induce the Bank to issue the Letter of Credit, the
Company represents to the Bank, as of the date of this Agreement
and as of the Closing Date, that:
SECTION iii.1 Organization. The Company is a limited
partnership duly organized, validly existing and in good standing
under the laws of the Province of Nova Scotia, Canada. The
Company is duly qualified to do business, and in good standing,
in each other jurisdiction where because of the operations or
properties of the Company such qualification is required except
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where the failure to be so qualified would not materially
adversely affect the Company.
SECTION iii.2 Authorization; No Conflict. The execution
and delivery of this Agreement, the obtaining of the issuance of
the Letter of Credit and the performance by the Company of its
Obligations under this Agreement, are within the Company's
partnership powers, have been duly authorized by all necessary
partnership action, have received all necessary governmental
approvals, if any shall be required, and do not and will not
(i) contravene or conflict with any existing provision of law,
with any judicial or administrative order, writ, judgment,
decree, determination or award, with any provision of the
Company's partnership agreement or with any resolution of the
Company's general partners, (ii) result in a breach of (A) any
agreement evidencing or in respect of indebtedness of the Company
or (B) any other indenture, loan agreement, mortgage, deed of
trust or other agreement binding upon or affecting the properties
of the Company or (iii) result in, or require the creation of,
any lien of any nature upon any of the properties now owned or
hereafter acquired by the Company.
SECTION iii.3 Validity and Binding Nature. This Agreement
is the valid and binding obligation of the Company, enforceable
in accordance with its respective terms.
SECTION iii.4 True and Complete Disclosure. (i) All
factual information relating to the Company or the Project
furnished to the Bank heretofore or contemporaneously herewith by
or on behalf of the Company for purposes of or in connection with
this Agreement or any transaction contemplated hereby is true and
complete in all material respects on the date as of which such
information is dated or certified, and (ii) there is no fact
known to the Company on the Closing Date that, in the reasonable
judgment of the Company, materially adversely affects the
business, financial position or results of operations of the
Company that has not been disclosed by the Company in writing to
the Bank.
SECTION iii.5 Litigation. No litigation (including,
without limitation, any derivative action), arbitration
proceeding or governmental proceeding is pending or, to the
knowledge of the Company, threatened against the Company that, if
adversely determined, would, in the reasonable judgment of the
Company, (i) materially impair the Company's ability to perform
its obligations under or in connection with this Agreement or
(ii) impair the validity or enforceability of this Agreement.
SECTION iii.6 Public Utility Holding Company Act. The
Company is an "Exempt Wholesale Generator" as defined in Section
32 of the Public Utility Holding Company Act of 1935.
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SECTION iii.7 Investment Company Act. The Company is not
an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment
Company Act of 1940.
SECTION iii.8 Compliance with Laws. The Company is not in
violation of any provision of law, or of any judicial or
administrative order, writ, judgment, decree, determination or
award, which violation involves a reasonable possibility of
materially and adversely affecting the financial condition or
results of operations of the Company.
ARTICLE iv
COVENANTS
Until (i) the obligation of the Bank to issue and keep
outstanding the Letter of Credit subject to the terms and
conditions of this Agreement is terminated, (ii) the Letter of
Credit is surrendered to the Bank for cancellation and (iii) the
Obligations are paid in full, the Company agrees as follows,
unless the Bank shall otherwise expressly consent in writing:
SECTION iv.1 Further Assurances. The Company shall execute
and deliver at any time and from time to time, upon the written
request of the Bank, such further documents and do such further
acts and things as the Bank may reasonably request in order to
effect the purposes of this Agreement.
ARTICLE v
CONDITIONS TO ISSUANCE OF LETTER OF CREDIT AND LOANS
SECTION v.1 Letter of Credit Conditions. The obligation of
the Bank to issue the Letter of Credit pursuant to Section 2.1.1
is subject to the condition that the Bank shall have received all
of the items set forth in this Article. In the case of the items
specified in Section 5.1 through 5.7, each such item shall be
duly executed and dated the Closing Date (or such other date as
shall be satisfactory to the Bank) and in form and substance
satisfactory to the Bank. The items to be delivered by the
Company to the Bank on or prior to the Closing Date are as
follows:
SECTION v.1.1 Initial Cash Collateral; Substitute
Guaranty. A cash collateral deposit of not less than
C$12,500,000 to be held and maintained by the Bank pursuant
to the Cash Collateral Agreement, substantially in the form
of Exhibit C; provided that the Company may request the
release of such deposit by the Bank following delivery to
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the Bank of a duly executed Guaranty and Suretyship
Agreement by General Public Utilities Corporation, a
Pennsylvania corporation ("GPU"), substantially in the form
of Exhibit D (the "Guaranty"), together with (i) a
certificate of a Secretary or Assistant Secretary of GPU
certifying true and complete copies of any corporate action
taken by GPU to authorize the execution and delivery of the
Guaranty and the incumbency and sample signatures of the
signers of the Guaranty on behalf of GPU; (ii) a true and
complete copy of any action by any governmental or
regulatory agency or authority required in connection with
such execution and delivery, including (without limitation)
any such action by the Securities and Exchange Commission
(the "SEC") under the Public Utility Holding Company Act of
1935 ("PUHCA"); (iii) an opinion of counsel acceptable to
the Bank to the effect that GPU has duly executed and
delivered such Guaranty, that such Guaranty is legal, valid
and binding upon GPU and that all necessary action by any
governmental or regulatory agency or authority required in
connection with such execution has been duly taken or made,
including (without limitation) any such action by the SEC
under PUHCA and otherwise in form and substance satisfactory
to the Bank; and (iv) such other documents in connection
with the forgoing as the Bank shall have reasonably
requested. Promptly following receipt by the Bank thereof,
the Bank will release such deposit to the Company.
SECTION v.1.2 Company Action. Certified copies of all
documents evidencing any necessary partnership action of the
Company, including, without limitation, certified copies of
the resolutions of the general partners of the Company
authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement.
SECTION v.1.3 Company Incumbency and Signatures. A
certificate of the Secretary or an Assistant Secretary of
the Company certifying the names of the officer(s) or other
Person(s) authorized to sign this Agreement and any other
documents provided for in this Agreement for or on behalf of
the Company, together with a sample of the true signature of
each such officer(s) or Person(s). (The Company hereby
agrees that the Bank may conclusively rely on such certi-
ficate until formally advised by a like certificate of any
changes therein.)
SECTION v.1.4 Company Partnership Documents. Duly
certified copies of the Company's partnership agreement, as
in effect on the Closing Date.
SECTION v.1.5 Bring-Down Certificate. A certificate,
dated the Closing Date and signed by the principal financial
or accounting officer of the Company, to the effect that
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(i) the Company has performed all actions to be performed on
its part in order to enter into this Agreement, (ii) the
representations set forth in Article III are true, correct
and complete on the Closing Date and (iii) on the Closing
Date, after giving effect to the execution and delivery of
this Agreement and the issuance of the Letter of Credit, no
Default has occurred and is continuing.
SECTION v.1.6 Other Documents. Such other documents
as the Bank shall have reasonably requested.
SECTION v.2 Loan Conditions. The obligation of the
Bank to make any Loan is subject to the following
conditions:
SECTION v.2.1 Note. The Company shall have duly
executed and delivered to the Bank the Note evidencing such
Loan.
SECTION v.2.2 Bring-Down Certificate. A certificate,
dated the date of the borrowing of such Loan and signed by
the principal financial or accounting officer of the
Company, to the effect that ((i) the representations set
forth in Article III, excluding Section 3.6, are true,
correct and complete on such date and) (ii) on such date,
after giving effect to such Loan and the application of the
proceeds thereof, no Default has occurred and is continuing.
SECTION v.2.3 Other Documents. The Bank shall have
received such other documents as the Bank shall have
reasonably requested.
ARTICLE vi
EVENTS OF DEFAULT; REMEDIES
SECTION vi.1 Listing of Events of Default. Each of the
following events or occurrences described in this Section 6.1
shall constitute an "Event of Default".
SECTION vi.1.1 Non-Payment of Obligations. The
Company shall default in the payment or prepayment when due
of any principal of or interest on any Obligation, or the
Company shall default (and such default shall continue
unremedied for a period of five Business Days) in the
payment when due of any fee or of any other Obligation.
SECTION vi.1.2 Breach of Warranty. Any representation
or warranty of the Company made or deemed to be made
hereunder or in any other Loan Document or any other writing
or certificate furnished by or on behalf of the Company to
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the Bank for the purposes of or in connection with this
Agreement or any such other Loan Document is or shall be
incorrect in any material respect when made.
SECTION vi.1.3 Non-Performance of Certain Covenants
and Obligations. The Company shall default in the due
performance and observance of any of its obligations set
forth herein.
SECTION vi.1.4 Default on Other Indebtedness. A
default shall occur in the payment when due (subject to any
applicable grace period), whether by acceleration or
otherwise, of any Indebtedness of GPU having a principal
amount, individually or in the aggregate, in excess of
$10,000,000 or a default shall occur in the performance or
observance of any obligation or condition with respect to
such Indebtedness if the effect of such default is to
accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period
of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to
cause such Indebtedness to become due and payable prior to
its expressed maturity.
SECTION vi.1.5 Judgments. Any judgment or order for
the payment of money in excess of $10,000,000 shall be
rendered against GPU and there is any period of 10
consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect and the judgment has not
been paid within such period.
SECTION vi.1.6 Bankruptcy, etc. The Company or GPU or
any of the GPU Utilities shall
(a) generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or
other custodian for the Company or any property of any
thereof, or make a general assignment for the benefit
of creditors;
(c) in the absence of such application, consent
or acquiescence, permit or suffer to exist the
appointment of a trustee, receiver, sequestrator or
other custodian for the Company or for a substantial
part of the property of any thereof, and such trustee,
receiver, sequestrator or other custodian shall not be
discharged within 60 days, provided that the Company,
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hereby expressly authorizes the Bank to appear in any
court conducting any relevant proceeding during such
60-day period to preserve, protect and defend its
rights under the Loan Documents;
(d) permit or suffer to exist the commencement of
any bankruptcy, reorganization, debt arrangement or
other case or proceeding under any bankruptcy or
insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of the Company, and,
if any such case or proceeding is not commenced by the
Company, such case or proceeding shall be consented to
or acquiesced in by the Company or shall result in the
entry of an order for relief or shall remain for
60 days undismissed, provided that the Company hereby
expressly authorizes the Bank to appear in any court
conducting any such case or proceeding during such
60-day period to preserve, protect and defend its
rights under the Loan Documents; or
(e) take any action authorizing, or in
furtherance of, any of the foregoing.
SECTION vi.1.7 Impairment of Security, etc. Any Loan
Document, or any Lien granted thereunder, shall (except in
accordance with its terms), in whole or in part, terminate,
cease to be effective or cease to be the legally valid,
binding and enforceable obligation of the Company; the
Company or any other party shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding
nature or enforceability; or any Lien securing any
Obligation shall, in whole or in part, cease to be a
perfected first priority Lien.
SECTION vi.1.8 Impairment of Guarantee. The Guaranty
shall (except in accordance with its terms), in whole or in
part, terminate, cease to be effective or cease to be the
legally valid, binding and enforceable obligation of GPU; or
GPU shall, directly or indirectly, disavow, repudiate or
contest in any manner such effectiveness, validity, binding
nature or enforceability; or GPU fails to observe or perform
any term or agreement under the Guaranty (except for a
failure to perform under Section 8 thereof which shall
constitute an Event of Default only if such failure shall
continue unremedied for a period of 30 days after notice
thereof to GPU from the Bank).
SECTION vi.2 Deemed Disbursements. Upon the occurrence and
during the continuation of any Event of Default, amounts equal to
the respective amounts undrawn and available under the Letter of
Credit shall, at the option of the Bank, and without demand upon
or notice to the Company, be deemed to have been paid or
18
<PAGE>
disbursed by the Bank (notwithstanding that such amounts may not
in fact have been so paid or disbursed) and, upon notification by
the Bank to the Company and to GPU of the Company's obligations
under this Section 6.2, the Company shall be immediately
obligated to reimburse the Bank the amount deemed to have been so
paid or disbursed with respect to the Letter of Credit. Once
paid such amounts by the Company, the Bank shall hold that amount
under the terms of the Cash Collateral Agreement.
SECTION vi.3 Remedies. If any Event of Default occurs and
is continuing, then, and in any such event, the Bank, in its sole
discretion, may either at the same time or at different times
(i) by notice to the Company and to GPU declare the Obligations
to be due and payable and (ii) exercise any remedies available to
the Bank hereunder, under the Loan Documents or otherwise
available at law or in equity. Notwithstanding the foregoing,
the Bank shall only pursue a remedy if it has first sought
payment from GPU under the Guaranty and GPU has refused payment
thereunder.
SECTION vi.4 No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Bank is intended to be
exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to
every other remedy given to the Bank hereunder or otherwise
available. No delay or omission in exercising any right or power
accruing upon any Event of Default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such
right and power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the Bank to
exercise any remedy reserved to it by this Article, the Bank need
not give any notice, other than such notices as may be herein
expressly required.
SECTION vi.5 No Additional Waiver Implied by One Waiver.
In the event any agreement contained in this Agreement is
breached by the Company and thereafter waived by the Bank, such
waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder.
ARTICLE vii
GENERAL
SECTION vii.1 Amendments. No amendment, modification,
supplement, termination or waiver of, or consent with respect to,
any provision of this Agreement shall in any event be effective
unless the same shall be in writing and signed by the Bank.
SECTION vii.2 Notices. Except as otherwise expressly
provided herein, any notice hereunder to any party hereto shall
19
<PAGE>
be in writing and, if by telegram, telecopy or telex, shall be
deemed to have been given when sent and, if mailed, shall be
deemed to have been given the third day next following the date
of mailing. Any notice hereunder sent by mail shall be sent by
registered or certified mail, postage prepaid, and addressed to
the party to be notified at such party's address shown below its
signature hereto, or at such other address as such party may, by
written notice received by the other party hereto, have
designated as its address for such purpose. No notice to or
demand on the Company in any specific case shall entitle the
Company to any other or further notice or demand in similar or
other circumstances where such further notice or demand is not
expressly required by this Agreement to be given to the Company.
SECTION vii.3 Confidentiality. The Bank shall hold all
non-public information (which is identified as such by the
Company) obtained pursuant to the requirements of this Agreement
in accordance with their customary procedures for handling
confidential information of this nature and in accordance with
safe and sound banking practices. In any event, the Bank may
make disclosure to any of its examiners, Affiliates, outside
auditors, counsel and other professional advisors in connection
with this Agreement or as reasonably required by any bona fide
transferee, participant or assignee or as required or requested
by any governmental agency or representative thereof or pursuant
to legal process.
SECTION vii.4 Payment in the Contractual Currency. Each
payment under this Agreement will be made in the relevant
currency specified in this Agreement for that payment (the
"Contractual Currency"). To the extent permitted by Applicable
Law, any Obligation under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any
currency other than the Contractual Currency, except to the
extent such tender results in the actual receipt by the party to
which payment is owed, acting in a reasonable manner and in good
faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason
the amount in the Contractual Currency so received falls short of
the amount in the Contractual Currency payable in respect of this
Agreement, the party required to make the payment will, to the
extent permitted by Applicable Law, immediately pay such addi-
tional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in
the Contractual Currency so received exceeds the amount in the
Contractual Currency payable in respect of this Agreement, the
party receiving the payment will refund promptly the amount of
such excess.
SECTION vii.5 Judgments. To the extent permitted by
Applicable Law, if any judgment or order expressed in a currency
20
<PAGE>
other than the Contractual Currency is rendered (i) for the
payment of any amount owing in respect of this Agreement or
(ii) in respect of a judgment or order of another court for the
payment of any amount described in (i) above, the party seeking
recovery, after recovery in full of the aggregate amount to which
such party is entitled pursuant to the judgment or order, will be
entitled to receive immediately from the other party the amount
of any shortfall of the Contractual Currency received by such
party as a consequence of sums paid in such other currency and
will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of
sums paid in such other currency if such shortfall or such excess
arises or results from any variation between the rate of exchange
at which the Contractual Currency is converted into the currency
of the judgment or order for the purposes of such judgment or
order and the rate of exchange at which such party is able,
acting in a reasonable manner and in good faith in converting the
currency received into the Contractual Currency, to purchase the
Contractual Currency with the amount of the currency of the
judgment or order actually received by such party. The term
"rate of exchange" includes, without limitation, any premiums and
costs of exchange payable in connection with the purchase of or
conversion into the Contractual Currency.
SECTION vii.6 Costs, Expenses and Taxes. The Company
agrees (i) to pay to the Bank, on demand, all out-of-pocket costs
and expenses of the Bank (including, without limitation, the
reasonable fees and the travel, xeroxing, express mail, word
processing and other out-of-pocket expenses incurred by United
States and Canadian counsel for the Bank) in connection with the
preparation, execution and delivery of this Agreement, the Letter
of Credit, any amendments or modifications of or supplements to
any of the foregoing and any and all other instruments or
documents furnished pursuant hereto or in connection herewith,
and all out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys' fees and legal expenses)
incurred by the Bank in connection with the enforcement of this
Agreement, any such other instruments or documents or any
collateral security, (ii) to pay the Bank's customary charges in
connection with any transfer of the Letter of Credit to another
beneficiary, (iii) to pay, and to save the Bank harmless from all
liability for, any stamp or similar taxes that may be payable in
connection with the execution or delivery of this Agreement, the
Letter of Credit or any other instrument or document provided for
herein or delivered or to be delivered hereunder or in connection
herewith and to save the Bank harmless from and against any and
all liabilities with respect to or resulting from any delay in
paying, or any failure to pay, such taxes and (iv) to indemnify,
pay and hold the Bank and the directors, officers, employees and
agents of the Bank (collectively, the "Indemnitees") harmless
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits and costs,
21
<PAGE>
including, without limitation, reasonable attorneys' fees,
expenses and disbursements of any kind or nature whatsoever, that
are not caused by one or more of the Indemnitees' gross
negligence or wilful misconduct including wrongful failure to
honor a lawful demand for payment under the Letter of Credit
strictly conforming with the terms thereof and that are incurred
by the Indemnitees in connection with the transfer of, payment
of, or (pursuant to any judicial order) failure to pay or delay
in paying under, the Letter of Credit (collectively, the
"Indemnified Liabilities").
To the extent that the undertaking to indemnify, pay and
hold harmless set forth in the preceding paragraph may be
unenforceable because it violates any law or public policy, the
Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them; provided that in no event shall the
Bank be required to contribute, in the aggregate, an amount in
excess of the letter of credit fees actually received by the Bank
pursuant to Section 2.3.1. The obligations of the Company under
this Section shall survive the termination of this Agreement and
the discharge of the Company's other Obligations.
SECTION vii.7 Liability of the Bank. Neither the Bank nor
any of its directors, officers, employees or agents shall be
liable or responsible for (i) the use that may be made of the
Letter of Credit, (ii) the validity, sufficiency or genuineness
of documents other than the Letter of Credit, or of any
endorsement(s) thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudu-
lent or forged, (iii) payment by the Bank against presentation of
documents that do not strictly comply with the terms of the
Letter of Credit, including, without limitation, failure of any
documents to bear any reference or adequate reference to the
Letter of Credit or (iv) any other circumstances whatsoever in
making or failing to make payment under the Letter of Credit,
except only that the Company shall have a claim against the Bank,
and the Bank shall be liable to the Company, to the extent, but
only to the extent, of any direct, as opposed to consequential,
damages suffered by the Company that the Company proves were
caused by (a) the Bank's willful misconduct or gross negligence
in (x) making a wrongful payment under the Letter of Credit or
(y) determining whether documents presented under the Letter of
Credit comply with the terms of the Letter of Credit and there
shall have been a wrongful payment as a result thereof, or
(b) the Bank's wrongful failure to pay under the Letter of Credit
after the presentation to it by the Company of a certificate
strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing
and unless the Bank has actual knowledge to the contrary, the
Bank may accept documents that appear on their face to be in
22
<PAGE>
order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
SECTION vii.8 Captions and References. Article, Section
and subsection captions used in this Agreement are for
convenience only and, together with the Table of Contents hereto,
shall not affect the construction of this Agreement. All
references herein to Articles, Sections, subsections and Exhibits
shall be deemed to be references to Articles, Sections,
subsections and Exhibits of this Agreement, unless the context
indicates otherwise.
SECTION vii.9 Governing Law. THIS AGREEMENT SHALL BE A
CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE, AND TO BE PERFORMED, IN THE STATE OF NEW YORK.
ALL OBLIGATIONS OF THE COMPANY AND RIGHTS OF THE BANK EXPRESSED
HEREIN SHALL BE IN ADDITION TO AND NOT IN LIMITATION OF THOSE
PROVIDED BY APPLICABLE LAW.
SECTION vii.10 Successors and Assigns. This Agreement
shall be binding upon the Company and the Bank and their
respective successors and assigns, and shall inure to the benefit
of the Company and the Bank and the successors and assigns of the
Bank. The Company may not assign its rights hereunder or in
connection herewith or any interest herein (voluntarily, by
operation of law or otherwise) without the prior written consent
of the Bank. The Bank may assign, negotiate, pledge or otherwise
hypothecate all or any portion of this Agreement, or grant
participations herein, in the Letter of Credit or in any of its
rights or security hereunder or thereunder; provided, however,
that prior to the occurrence of a Default, the Company approves
the parties involved therewith (which approval shall not be
unreasonably withheld or delayed); and provided further, that no
such assignment, negotiation, pledge, hypothecation or
participation by the Bank will relieve the Bank of its obligation
under the Letter of Credit; and provided further, that no such
assignment, negotiation, pledge, hypothecation or participation
shall be in an amount less than US$1,000,000 (or the Canadian
Dollar Equivalent); and provided further that the Company shall
be entitled to continue to deal solely and directly with the
Bank. In connection with any assignment or participation, the
Bank may disclose to the proposed assignee or participant any
information that the Company is required to deliver to the Bank
and that the Bank is required to keep confidential pursuant to
this Agreement. Any such assignee or participant of the Bank
shall be entitled to the benefits of Section 2.12, Section 2.13
and Section 2.14 as if it were the Bank. This Agreement shall
not be construed so as to confer any right or benefit upon any
person other than the parties to this Agreement and (subject to
the preceding provisions of this Section) their respective
successors and assigns.
23
<PAGE>
SECTION vii.11 Severability of Provisions. Any provision
of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction.
SECTION vii.12 Execution in Counterparts. This Agreement
may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more
counterparts.
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Reimbursement Agreement to be executed by their duly authorized
officers, all as of the day and the year first above written.
BROOKLYN POWER LIMITED PARTNERSHIP
By:
Its general partner
By:
Title:
Address:
Attn:
Telephone Number:
Facsimile Number:
CANADIAN IMPERIAL BANK OF COMMERCE
By:
Title:
Address: 200 West Madison
Suite 2300
Chicago, Illinois 60606
Attn: Utilities
Facsimile Number: 312/750-0927
with copies to:
Canadian Imperial Bank of Commerce
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attn: Loan Administration
Facsimile Number: 404/319-4950
25
<PAGE>
EXHIBIT A
NOTE
$ (Date)
FOR VALUE RECEIVED, the undersigned, BROOKLYN POWER LIMITED
PARTNERSHIP, a limited partnership formed under the laws of the
Province of Nova Scotia (the "Company"), promises to pay to the
order of CANADIAN IMPERIAL BANK OF COMMERCE, New York Agency (the
"Bank") the principal sum of DOLLARS ($
) or, if less, the aggregate unpaid principal
amount of all Loans shown on the schedule attached hereto (and
any continuation thereof) made by the Bank pursuant to that
certain Reimbursement Agreement, dated as of January __, 1994
(together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the "Reimbursement
Agreement"), between the Company and the Bank payable in one
final installment on the Maturity Date of the Loan, as defined in
the Reimbursement Agreement.
The Company also promises to pay to the order of the Bank
interest on the unpaid principal amount hereof from time to time
outstanding from the date hereof until maturity (whether by
acceleration or otherwise) and, after maturity, until paid, at
the rates per annum and on the dates specified in the
Reimbursement Agreement.
Payments of both principal and interest are to be made in
the lawful currency in which the Loan was made in same day or
immediately available funds to the account designated by the Bank
pursuant to the Reimbursement Agreement.
This Note is a Note referred to in, and evidences an
Obligation incurred under, the Reimbursement Agreement, to which
reference is made for a statement of the terms and conditions on
which the Company is permitted and required to make prepayments
and repayments of principal of the Obligation evidenced by this
Note and on which such Obligation may be declared to be
immediately due and payable. Unless otherwise defined, terms
used herein have the meanings provided in the Reimbursement
Agreement.
All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand,
protest and notice of dishonor.
26
<PAGE>
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
BROOKLYN POWER LIMITED PARTNERSHIP
By:
Its general partner
By:
Name Printed:
Title:
27
<PAGE>
<TABLE>
LOANS AND PRINCIPAL PAYMENTS
<CAPTION>
<S> <C> <C> <C> <C>
Amount of Amount of
Amount of Principal Unpaid
Loan Made Repaid Balance
Euro- Interest Euro- Euro-
Base dollar Period (if Base dollar Base dollar Notation
Date Rate Rate applicable) Rate Rate Rate Rate Total Made By
</TABLE>
28
<PAGE>
Exhibit A-3
EXHIBIT D
GUARANTY AND SURETYSHIP AGREEMENT
WHEREAS, Brooklyn Power Limited Partnership (the
"Applicant") and Canadian Imperial Bank of Commerce ("CIBC") have
executed a Reimbursement Agreement, dated as of January ___, 1994
(as amended or modified and in effect from time to time, the
"Agreement"), pursuant to which CIBC has issued for the account
of the Applicant and the benefit of ____________________, as
Beneficiary, standby letter of credit number _______, dated
_______ __, 1994 (the "Credit"); and
WHEREAS, the Obligations (as defined in the Agreement) to
CIBC under the Agreement have been secured by certain cash
collateral, as provided in the Cash Collateral Agreement (the
"Cash Collateral"); and
WHEREAS, the Applicant has requested that CIBC release the
Cash Collateral in exchange for the guaranty of the Obligations
by General Public Utilities Corporation (the "Guarantor"); and
WHEREAS, CIBC is willing to release the Cash Collateral
provided the Guarantor, immediately prior to such release,
executes and delivers this Guaranty and Suretyship Agreement
(this "Guaranty"); and
WHEREAS, the Guarantor is willing to guaranty and be surety
for the Obligations in an amount not exceeding C$12,500,000,
pursuant to the terms of this Guaranty;
NOW, THEREFORE, the Guarantor agrees as follows, intending
to be legally bound:
1. Incorporation of Recitals. The above recitals are
hereby incorporated into and made a part of this Guaranty.
2. Guaranty. For value received, and to induce CIBC to
release the Cash Collateral to the Applicant, the Guarantor, a
corporation organized and existing under the laws of the
Pennsylvania, hereby unconditionally and irrevocably guaranties,
as primary obligor and as surety, whether at stated maturity, by
acceleration or otherwise, the full and punctual payment when due
of the Obligations, as the same may be amended from time to time,
whether for principal, interest, fees, expenses or otherwise, and
agrees to pay any reasonable expenses (including reasonable
counsel fees and expenses, which counsel may be in-house counsel
for CIBC) incurred by CIBC in enforcing any rights under this
Guaranty; provided that the aggregate amount guaranteed shall in
no event exceed C$12,500,000.
<PAGE>
3. Guaranty Absolute. This is a guaranty of payment and
not merely of collection. The Guarantor guaranties that the
Obligations will be paid strictly in accordance with the terms of
the Agreement to the fullest extent permitted by law. The
liability of the Guarantor under this Guaranty shall be absolute
and unconditional and shall not be discharged except by valid,
final and irrevocable payment as herein provided, irrespective
of: (i) any law, regulation or order, or interpretation thereof,
now or hereinafter in effect in any jurisdiction, affecting or
purporting to affect any of the terms or rights of CIBC with
respect to the Obligations or with respect to this Guaranty and;
(ii) any lack of validity or enforceability of the Agreement or
any other agreement or instrument relating thereto; (iii) any
extension or other change in the time, manner or place of payment
of, or any other term of, all or any of the Obligations, or any
amendment or waiver of or any consent to or departure from the
Agreement; (iv) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent
to or departure from any other guaranty, for all or any of the
Obligations; or (v) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, the
Applicant in respect of the Obligations or the Guarantor in
respect of any obligations under this Guaranty (except for any
payment made by CIBC under the Credit to which CIBC is not
entitled to reimbursement under the Agreement). This Guaranty
shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of the Obligations is rescinded or
must otherwise be returned by CIBC upon the insolvency,
bankruptcy or reorganization of the Applicant or otherwise, all
as though such payment had not been made.
4. Waiver. The Guarantor hereby unconditionally waives:
(a) promptness, diligence, notice of acceptance and any other
notice with respect to the Obligations and this Guaranty;
(b) presentment for payment, notice of nonpayment, demand,
protest, notice of protest and notice of dishonor or default to
any party including the Guarantor, and any requirement that CIBC
protect, secure, perfect or insure any security interest or lien
or any property subject thereto or exhaust any right or take any
action against the Applicant or any other person or entity or any
collateral; (c) all other notices to which the Guarantor may be
entitled but which may legally be waived; (d) demand for payment
as a condition of liability under this Guaranty; and (e) all
rights under any state or federal law dealing with or affecting
the rights of creditors. THE GUARANTOR HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING
DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW OR CONTRACT) TO
ASSERT ANY CLAIM AGAINST THE APPLICANT ON ACCOUNT OF PAYMENTS
MADE UNDER THIS GUARANTY, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL RIGHTS OF SUBROGATION, REIMBURSEMENT, EXONERATION, CONTRIBU-
TION OR INDEMNITY.
2
<PAGE>
5. No Waivers; Remedies. No failure or delay on the part
of CIBC in exercising any right, power or privilege hereunder
shall operate as a waiver thereof; and no single or partial
exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof, or the exercise
of any other right, power or privilege. Failure by CIBC to
insist upon strict performance hereof shall not constitute a
relinquishment of its right to demand strict performance at
another time. Receipt by CIBC of any payment by any person of
all or any part of the Obligations, with knowledge of a default
with respect to the Obligations or of a breach of this Guaranty,
or both, shall not be construed as a waiver of the default or
breach. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
6. Right of Set-Off. The Guarantor agrees to and confirms
CIBC's rights of banker's lien and set-off under applicable law
and nothing herein shall be determined a waiver or prohibition of
such right. CIBC agrees promptly to notify the Guarantor after
any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off
and application. The rights of CIBC under this Section are in
addition to other rights and remedies which CIBC may have.
7. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) The Guarantor is duly organized and validly
existing under the laws of the Commonwealth of Pennsylvania
and has the power and authority to execute and deliver, and
to perform its obligations under, this Guaranty.
(b) The execution and delivery of this Guaranty by the
Guarantor and the performance of its obligations hereunder
have been and remain duly authorized by all necessary action
and do not contravene any provision of its Articles of
Incorporation or by-laws or any law, regulation or material
contractual restriction binding on or affecting it or its
property.
(c) All consents, authorizations and approvals
required for the execution and delivery by the Guarantor of
this Guaranty and the performance of its obligations
hereunder have been obtained and remain in full force and
effect, all conditions thereof have been duly complied with,
and no other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for
its execution, delivery or performance, except such notices
as are required under the Public Utility Holding Company Act
of 1935, as amended (which notices the Guarantor agrees to
file timely).
3
<PAGE>
(d) This Guaranty is the Guarantor's legal, valid and
binding obligation, enforceable against the Guarantor in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).
(e) The ultimate determination of all proceedings
pending or, to the best of its knowledge, threatened against
the Guarantor or any of its affiliates, at law or in equity
or before any governmental instrumentality or in any
arbitration, will not, in the aggregate, materially impair
its ability to perform its obligations under this Guaranty,
and no such proceeding purports or is likely to affect the
legality, validity or enforceability of this Guaranty.
SECTION 8. Financial Information and Reports. GPU will
furnish, or will cause to be furnished, to the Bank copies of the
following financial statements, reports, notices and information:
(a) as soon as available and in any event within 60
days after the end of each of the first three Fiscal
Quarters of each Fiscal Year of GPU consolidated and
consolidating balance sheets of GPU as of the end of such
Fiscal Quarter and consolidated and consolidating statements
of earnings and cash flow of each of GPU for such Fiscal
Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal
Quarter, certified by the chief financial officer of GPU;
(b) as soon as available and in any event within 90
days after the end of each Fiscal Year of GPU, a copy of the
annual report for such Fiscal Year for GPU on a consolidated
and consolidating basis, including therein consolidated and
consolidating balance sheets of GPU as of the end of such
Fiscal Year and consolidated and consolidating statements of
earnings and cash flow of GPU for such Fiscal Year, in each
case certified in a manner acceptable to the Bank by
(Coopers & Lybrand) or other independent public accountants.
When used in this Section 8 the following terms shall have
the following respective meaning, which meanings shall be
applicable to both the singular and plural forms of such
terms:
"Fiscal Quarter" shall mean any quarter of a Fiscal
Year and also the period commencing on the Effective Date
and ending on March 31, 1994, inclusive.
"Fiscal Year" shall mean any period of twelve
consecutive calendar months ending on December 31;
provided, however, that the Fiscal Year ending on
December 31, 1994 shall be deemed to have commenced on
4
<PAGE>
the Closing Date hereof. References to a Fiscal Year with
a number corresponding to any calendar year (e.g., the
"1994 Fiscal Year") refer to the Fiscal Year ending on the
December 31 occurring during such calendar year.
9. Continuing Guaranty; Assignment. This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect
until the later of irrevocable payment in full of the Obligations
and payment in full of all other amounts payable under this
Guaranty, (ii) be binding upon the Guarantor, its successors and
assigns, and (iii) inure to the benefit of and be enforceable by
CIBC and its successors, transferees and assigns. Without
limiting the generality of the foregoing, CIBC may assign or
otherwise transfer any evidence of the Obligations to any other
person or entity, and such person or entity shall thereupon
become vested with all the rights in respect thereof granted to
CIBC herein or otherwise. The duties and obligations of the
Guarantor may not be delegated or transferred by the Guarantor
without the prior written consent of CIBC.
10. Validity; Amendments. If any provision hereof shall
for any reason be held invalid or unenforceable, no other
provision shall be affected thereby, and this Guaranty shall be
construed as if the invalid or unenforceable provision had never
been a part of it. No amendment or waiver of any provision of
this Guaranty or consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall
be in writing and signed by CIBC, and then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given.
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11. Addresses for Notices. All notices and other communi-
cations provided for hereunder shall be in writing (including
telecopies communications) and,
if to the Guarantor, addressed to it at
GPU Service Corporation
100 Interpace Parkway
Parsippany, New Jersey 07054
Attention: Don W. Myers, Vice President and Treasurer
Telecopier no.: 201-263-6822
with a copy to:
Douglas E. Davidson
Berlack, Israels & Liberman
120 West 45th Street
New York, NY 10036
and if to CIBC, addressed to it at
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attention: Loan Administrator
Telecopier no.: 404-319-4950
with a copy to:
Canadian Imperial Bank of Commerce
200 West Madison, Suite 2300
Chicago, Illinois 60606
Attention: Utilities
Telecopier no.: 312-750-0927
or, as to each party, at such other address or telecopier number
as shall be designated by such party in a written notice to the
other party. All such notices and other communications shall be
effective when received, addressed as aforesaid.
12. Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of New York,
without reference to principles of conflict of laws.
13. Expiration. This Guarantee shall expire and be of no
further force or effect as of 11:59 P.M. on December 31, 1994.
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IN WITNESS WHEREOF, the party hereto has caused this
Guaranty and Suretyship Agreement to be executed by its duly
authorized officer, all as of the day and the year first above
written.
Dated:_______________, 1994
GENERAL PUBLIC UTILITIES CORPORATION
By:___________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT E
EXCHANGE FACTOR TABLE
<PAGE>
SCHEDULE I
DEFINED TERMS
When used herein, the following terms shall have the
following respective meanings, which meanings shall be applicable
to both the singular and plural forms of such terms:
"Affiliate" of any Person shall mean any other Person which,
directly or indirectly, controls, is controlled by or is under
common control with such Person (excluding any trustee under, or
any committee with responsibility for administering, any Plan).
A Person shall be deemed to be "controlled by" any other Person
if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election
of directors or managing general partners; or
(b) to direct or cause the direction of the management
and policies of such Person whether by contract or
otherwise.
"Alternate Base Rate" shall mean on any particular date, a
rate of interest per annum equal to the higher of: (a) the
United States "Prime Rate" of the Bank as announced by the Bank
from time to time (said rate to change on the date of each change
of such prime rate), and (b) the sum of the Federal Funds Rate
for such date plus 1/2%. The Alternate Base Rate is not
necessarily intended to be the lowest rate of interest charged by
the Bank in connection with extensions of credit.
"Applicable Law" with respect to any Person or matter shall
mean any law, rule, regulation, order, decree or other
requirement having the force of law relating to such Person or
matter and, where applicable, any interpretation thereof by any
Person having jurisdiction with respect thereto or charged with
the administration or interpretation thereof.
"Bank" shall have the meaning set forth in the preamble.
"Base Rate Loan" shall mean a Loan bearing interest at a
fluctuating rate determined by reference to the Alternate Base
Rate.
"Beneficiary" shall have the meaning set forth in Section
2.1.1.
"Borrowing Request" shall mean a loan request and
certificate duly executed by the Borrower.
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"Business Day" shall mean a day (i) on which banking
institutions in Atlanta, Georgia (the city in which offices of
the Bank are located that act with respect to drawings under the
Letter of Credit) are not required or authorized to remain closed
and (ii) on which the New York Stock Exchange is not closed and
(iii) relative to the making, continuing, prepaying or repaying
of any Eurodollar Rate Loans, any day on which dealings in
Dollars are carried on in the (London) interbank market.
"Canadian Dollar" and the C$ sign "C$" shall mean lawful
money of Canada.
"Canadian Dollar Equivalent" of US Dollars shall mean the
amount of Canadian Dollars which results when multiplying (i) the
given amount of US Dollars by (ii) the appropriate exchange rate
taken from the Exchange Factor Table, attached hereto as
Exhibit E.
"Closing Date" shall mean (__________), 1994, being the date
of issuance of the Letter of Credit.
"Company" shall have the meaning set forth in the preamble.
"Contingent Liability" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment,
to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any
limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" shall mean a notice of
continuation or conversion and certificate duly executed by an
Authorized Officer of the Borrower.
"Default" shall mean any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974.
"Eurodollar Office" shall mean the office of the Lender
designated as such below its signature hereto or such other
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office of the Lender as designated from time to time by notice
from the Lender to the Borrower, whether or not outside the
United States, which shall be making or maintaining Eurodollar
Rate Loans of the Lender hereunder.
"Eurodollar Rate Loan" shall mean a Loan bearing interest,
at all times during an Interest Period applicable to such Loan,
at a fixed rate of interest determined by reference to the
Eurodollar Rate (Reserve Adjusted).
"Event of Default" shall mean any of the events described in
Section 6.1.
"Federal Funds Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Bank from three Federal funds
brokers of recognized standing selected by it.
"GPU" shall mean General Public Utilities Corporation, a
corporation organized under the laws of the state of
Pennsylvania.
"GPU Utilities" shall mean Jersey Central Power & Light
Company, a corporation organized under the laws of the state of
New Jersey, Pennsylvania Electric Company, a corporation
organized under the laws of the Commonwealth of Pennsylvania and
Metropolitan Edison Company, a corporation organized under the
laws of the Commonwealth of Pennsylvania.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements,
and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency
exchange rates.
"Indebtedness" of any Person shall mean, without
duplication:
(a) all obligations of such Person for borrowed money
and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit, whether or not
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drawn, and banker's acceptances issued for the account of
such Person;
(c) all obligations of such Person as lessee under
leases which have been or should be, in accordance with
GAAP, recorded as Capitalized Lease Liabilities;
(d) net liabilities of such Person under all Hedging
Obligations;
(e) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay
the deferred purchase price of property or services, and
indebtedness (excluding prepaid interest thereon) secured by
a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or
other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is
limited in recourse; and
(f) all Contingent Liabilities of such Person in
respect of any of the foregoing.
"Indemnified Liabilities" shall have the meaning set forth
in Section 7.3.
"Indemnitees" shall have the meaning set forth in
Section 7.3.
"Interest Period" shall mean, relative to any Eurodollar
Loans, the period beginning on (and including) the date on which
such Eurodollar Rate Loan is made or continued as, or converted
into, a Eurodollar Loan pursuant to Section 2.5 and ending on
(but excluding) the day which is one (1), two (2), three (3) or
six (6) months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), as
the Company may select in its relevant notice pursuant to
Section 2.5; provided, however, that
(a) the Company shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration
dates occurring on more than (five) different dates;
(b) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on
the next following Business Day (unless, if such following
Business Day is the first Business Day of the calendar month, in
which case such Interest Period shall end on the Business Day
next preceding such numerically corresponding day); and
(c) no Interest Period for any Loan may end later than the
Stated Maturity Date for such Loan.
"Lenders" shall have the meaning set forth in the (Project
Financing Documents).
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"Letter of Credit" shall mean the Bank's irrevocable
transferable letter of credit issued, in substantially the form
attached hereto as Exhibit B, on the Closing Date pursuant to
Section 2.1.
"Letter of Credit Fee Rate" at any time and for any purpose
shall mean 62.5 basis points per annum.
"Loan" shall mean either a Eurodollar Rate Loan or a Base
rate Loan, as the context requires or allows, made by the Bank to
the Company equal to the aggregate amount of the Borrowing
requested by the Company on the same day.
"Loan Documents" shall mean this Agreement, the Letter of
Credit associated with it, the Note, the Guaranty and each other
instrument and agreement executed and/or delivered pursuant
hereto or otherwise in connection herewith.
"Note" shall mean a promissory note of the Company payable
to the Bank (as such promissory note may be amended, endorsed or
otherwise modified from time to time) evidencing the aggregate
Indebtedness of the Company to the Bank resulting from out-
standing Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal
thereof.
"Obligations" shall mean all obligations of the Company to
the Bank, howsoever created, absolute or contingent, now or
hereafter existing, or due or to become due, which arise out of
or in connection with this Agreement, the Note and each other
Loan Document, including, without limitation, the reimbursement
obligation of the Company set forth in Section 2.2, the obliga-
tion of the Company to pay the Letter of Credit fees set forth in
Section 2.3, the obligation of the Company to pay the additional
amounts in the circumstances specified in Section 2.4, the
obligation of the Company to pay interest on overdue amounts
under this Agreement set forth in Section 2.5 and the indemni-
fication obligations of the Company set forth in Section 7.3.
"Obligor" shall mean the Company, any guarantor of the
Company under the Loan Documents, or any Person other than the
Bank obligated under any Loan Document.
"Pension Plan" shall mean a "pension plan", as such term is
defined in section 3(2) of ERISA, which is subject to Title IV of
ERISA (other than a multiemployer plan as defined in section
4001(a)(3) of ERISA), and to which the Borrower or any corpora-
tion, trade or business that is, along with the Borrower, a
member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
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"Person" or "person" shall mean any corporation, trust,
partnership, joint venture, association, joint stock association
or other unincorporated entity, or any government or governmental
agency, body or instrumentality, or a natural person.
"Project" shall have the meaning set forth in the preamble.
"Project Financing Documents" shall include the following:
(a) Credit Agreement;
(b) Construction Escrow Agreement;
(c) Assignment, Assumption and Indemnity Agreement;
(d) Debt Service Reserve Escrow Agreement;
(e) Owner's Equity Contribution Agreement; and
"Quarterly Payment Date" shall mean March 31, June 30,
September 30 and December 31 or, if such day is not a Business
Day, then the next succeeding Business Day.
"Stated Amount" shall mean the amount from time to time
available to be drawn under the Letter of Credit.
"Stated Expiration Date" shall mean the date (initially
(December 31, 1994)) specified in the Letter of Credit upon which
the Letter of Credit shall expire, as such date may from time to
time be extended by written agreement of the Bank and the Company
as provided in Section 2.1.2.
"Stated Maturity Date" shall mean, with respect to any Loan,
the Stated Expiration Date.
"Subsidiary" of any Person shall mean any corporation or
other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at
the time directly or indirectly owned by such Person.
"US Dollar" and the US$ sign "US$" shall mean lawful money
of the United States of America.
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EXHIBIT F
January 27, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: General Public Utilities Corporation ("GPU")
Energy Initiatives, Inc. ("EI")
Application on Form U-1
SEC File No. 70-8315
Gentlemen:
We have examined the Application on Form U-1, dated
December 2, 1993, under the Public Utility Holding Company Act of
1935 (the "Act"), filed by GPU and EI with the Securities and
Exchange Commission (the "Commission"), and docketed by the
Commission in SEC File No. 70-8315, Amendment No. 1 thereto,
dated December 23, 1993, Amendment No. 2 thereto, dated January
11, 1994 and Amendment No. 3 thereto, dated this date, of which
this opinion is a part. (The Application, as amended and thus to
be amended, is hereinafter referred to as the "Application").
The Application contemplates, among other things, that
GPU make cash capital contributions to EI in an aggregate amount
of up to U.S.$11.5 million to enable EI (either directly or
through a wholly-owned subsidiary) to acquire a limited
partnership interest ("Partnership Interest") in a Canadian
limited partnership ("Partnership") being formed to construct,
own and operate a 22.5 MW cogeneration project in Brooklyn, Nova
Scotia, Canada. It is expected that the project will be an
"eligible facility" under Section 32(a)(2) of the Act and that
the Partnership will be an "exempt wholesale generator" under
Section 32(a)(1) of the Act and the related regulations of the
Federal Energy Regulatory Commission thereunder.
The Application also contemplates that EI's obligation
to pay the purchase price for the Partnership Interest may be
secured by a letter of credit ("LOC") delivered to the project
lenders, in which case GPU would enter into a letter of credit
reimbursement agreement with the LOC issuing bank ("Reimbursement
Agreement"). Alternatively, GPU may guarantee repayment to the
project lenders of up to $11.5 million of the Partnership's
construction loan for the project ("Guaranty").
<PAGE>
Securities and Exchange Commission
January 27, 1994
Page 2
The Application states that with respect to the
Reimbursement Agreement and Guaranty, GPU and EI meet all of the
"safe harbor" conditions of Rule 53(a) under the Act, and that
none of the conditions in Rule 53(b) are applicable.
We have been counsel to GPU and EI for many years. In
that connection, we have participated in various proceedings
relating to the issuance of securities by GPU and its
subsidiaries, and we are familiar with the terms of the
outstanding securities of the corporations comprising the GPU
holding company system. We have also examined such other
documents and made such further investigation as we have deemed
necessary as a basis for this opinion.
Based upon the foregoing, and assuming that the
transactions therein proposed are carried out in accordance with
the Application, we are of the opinion that, when the Commission
shall have entered an order forthwith granting the Application,
(a) all State laws applicable to the proposed
transactions will have been complied with,
(b) GPU is validly organized and existing,
(c) the Reimbursement Agreement and Guaranty will
be valid and binding obligations of GPU in accordance
with their respective terms, in each case subject to
the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
affecting creditors' rights generally and general
principles of equity limiting the availability of
equitable remedies, and
(d) the consummation of the transactions proposed
in the Application will not violate the legal rights of
the holders of any securities issued by GPU or any
"associate company" thereof, as defined in the Act.
We hereby consent to the filing of this opinion as an
exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN
<PAGE>
