SEC FILE NO. 70-8315
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
GENERAL PUBLIC UTILITIES CORPORATION
ENERGY INITIATIVES, INC.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------
In The Matter of )
)
GENERAL PUBLIC UTILITIES CORPORATION )
)
ENERGY INITIATIVES, INC. ) Certificate Pursuant
) to Rule 24 of
Partial
SEC File No. 70-8315 ) Completion of
) Transactions
(Public Utility Holding )
Company Act of 1935) )
----------------------------------------
TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, General Public Utilities Corporation
("GPU") and Energy Initiatives, Inc. ("EI"), hereby certify
pursuant to Rule 24 of the Rules and Regulations under the Public
Utility Holding Company Act of 1935, that certain of the
transactions proposed in the Application, as amended, filed in
SEC File No. 70-8315, have been carried out in accordance with
the Commission's order dated February 7, 1994 with respect
thereto, as follows:
1. On March 16, 1994, GPU entered into a Guaranty and
Suretyship Agreement in favor of Canadian Imperial Bank of
Commerce ("CIBC"), pursuant to which GPU guaranteed up to
U.S.$9,700,000 of the repayment obligations of Brooklyn Energy
Limited Partnership ("Partnership"), a Nova Scotia limited
partnership, under a Reimbursement Agreement dated as of March
11, 1994, between the Partnership and CIBC ("CIBC Reimbursement
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Agreement"). Pursuant to the CIBC Reimbursement Agreement, CIBC
issued a letter of credit to Mutual Life Assurance Company of
Canada, as agent for the Partnership's construction lenders, in
the face amount of C$12,944,000. The Guaranty and Suretyship
Agreement and said letter of credit expire on January 11, 1996.
2. On March 16, 1994, GPU entered into a reimbursement
agreement ("BNS Reimbursement Agreement") with the Bank of Nova
Scotia ("BNS") in support of a letter of credit in the face
amount of U.S.$1,700,000 issued by BNS to CIBC. The BNS letter
of credit secures the Partnership's payment obligations under
certain currency hedging transactions entered into pursuant to
the Master Foreign Exchange Agreement, dated as of March 11,
1994, between the Partnership and CIBC. The BNS letter of credit
expires on March 8, 1995.
3. Any amounts paid by GPU under the CIBC
Reimbursement Agreement or the BNS Reimbursement Agreement will
constitute capital contributions by GPU to EI, and by 2285241
Nova Scotia Limited ("GP Sub"), a wholly owned subsidiary of EI
Brooklyn Power Limited ("Equity Sub"), to the Partnership. GP
Sub has acquired a general partnership interest, and Equity Sub a
limited partnership interest, in the Partnership. Equity Sub is
a wholly owned subsidiary of EI Canada Holding ("Holding Sub")
which, in turn, is wholly owned by EI.
4. By order dated February 26, 1994, the Federal
Energy Regulatory Commission ("FERC") granted the Partnership
status as an exempt wholesale generator ("EWG") as defined in
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Section 32 of the Act (66 FERC 61,113 (1994)), and on March 10,
1994, GP Sub filed an application with the FERC seeking EWG
status. In addition, on March 11, 1994, Holding Sub and Equity
Sub filed applications with FERC seeking EWG status (applications
previously filed by such companies were withdrawn).
5. The following exhibits are filed in Item 6:
A-1(a) CIBC Letter of Credit
A-1(b) BNS Letter of Credit
A-2 CIBC Reimbursement Agreement
A-3 Guaranty and Suretyship Agreement
A-4 BNS Reimbursement Agreement
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS CERTIFICATE TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:________________________________
Don W. Myers
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:________________________________
B. L. Levy, President
Date: April 8, 1994
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EXHIBITS TO BE FILED BY EDGAR
A-1(a) CIBC Letter of Credit
A-1(b) BNS Letter of Credit
A-2 CIBC Reimbursement Agreement
A-3 Guaranty and Suretyship Agreement
A-4 BNS Reimbursement Agreement
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Exhibit A-1(a)
IRREVOCABLE STANDBY LETTER OF CREDIT
March 11, 1994
Irrevocable Standby Letter of Credit No. U-94-0070
The Mutual Life Assurance Company
of Canada, as Agent
1555 Peel Street, Suite 1000
Montreal H3A 3L8
Attention: Director, Corporate Loans
Re: Brooklyn Energy Project
Ladies and Gentlemen:
1. Introduction. Brooklyn Energy Limited Partnership (the
"Account Party") owns and is developing a certain 23.8 mw (net)
wood and coal and/or oil fired electricity generating facility
located near 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, as Agent (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. U-94-0070 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 March 11, 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$12,944,000
(Twelve Million Nine Hundred Forty Four Thousand Canadian
Dollars) (as reduced from time to time as provided hereunder, the
"Stated Amount").
3. Procedure for Submitting Demands for Payment. Funds
under this Letter of Credit are available to the Beneficiary
against a certificate presented to the Bank at the Atlanta,
Georgia office of the Bank referred to in paragraph 7 hereof,
which shall be in the form, appropriately completed, of
Attachment I hereto. Such certificate may be presented to the
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Bank by facsimile transmission with receipt thereof to be
confirmed by telephone by the Beneficiary. Funds under this
Letter of Credit are available, at the Beneficiary's option, in
either the lawful currency of the United States ("United States
Dollars" or "US$") or the lawful currency of Canada ("Canadian
Dollars" or "C$")
No more than two demands for payment, accompanied by a
completed certificate in the form of Attachment I, hereto, may be
made hereunder during each calendar month.
Partial drawings are permitted. If a drawing made by the
beneficiary hereunder did not, in any instance, conform to the
terms and conditions hereof, the Bank shall give the Beneficiary
prompt notice that the drawing was not effected in accordance
with the terms hereof, stating the reasons and that the Bank will
upon the Beneficiary's instruction hold any documents at the
Beneficiary's request or return the same to the Beneficiary.
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 10:00 a.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 by wire transfer 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
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respect to drawings hereunder), or Montreal, Quebec (the city in
which offices of the Beneficiary 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 to the Beneficiary 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 such funds are advanced by
the Bank to the Beneficiary by multiplying (i) the 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 at the close of business of the Bank's Atlanta, Georgia
office referred to in paragraph 7 hereof on the date which is the
earlier of (i) January 11, 1996 (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 by the Beneficiary for cancellation. The Bank
may, in its sole discretion, 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, or (ii) by facsimile transmission, promptly confirmed in
writing, by first class mail postage prepaid at its address 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.
Bank: Canadian Imperial Bank of Commerce
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attention: Loan Administration
Facsimile: 404/319-4950
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with copies to:
Canadian Imperial Bank of Commerce
200 West Madison, Suite 2300
Chicago, Illinois 60606
Attention: Utilities
Facsimile: 312/750-0927
Beneficiary: The Mutual Life Assurance Company of
Canada, as Agent
Suite 1000, 1555 Peel Street
Montreal, Quebec H3A 3L8
Attention: Director, Corporate Loans
Facsimile: 514/282-6428
with copies to:
The Mutual Life Assurance Company of
Canada, as Agent
227 King Street South
Waterloo, Ontario N2J 4C5
Attention: Securities Administrator,
Corporate Loans
Telephone: 519/888-3666
Account Party: Brooklyn Energy Limited Partnership
Edens Corporate Center
650 Dundee Road, Suite 150
Northbrook, Illinois 60062
8. Transfer of Letter of Credit. The Beneficiary may not
transfer its rights under this Letter of Credit except if there
has been a change of Agent in accordance with the Credit
Agreement in which case such successor Agent shall automatically
become the Beneficiary hereunder.
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") except to the extent that the terms of
the Uniform Customs conflict with express terms of this Letter of
Credit; 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.
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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:
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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 Agent, as Beneficiary (the "Beneficiary"), and for the
account of Brooklyn Energy 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 (C)(US)* $__________.
2. The amount hereby demanded does not exceed the amount
available on the date hereof to be demanded under the Letter of
Credit and [the amount demanded hereby is the amount Beneficiary
is entitled to in accordance with Section 2.01(c) of the Equity
Contribution Agreement dated as of March 11, 1994] [The date
hereof is on or after December 15, 1995, the Letter of Credit
will expire on January 11, 1996 and the Conversion Date (as
defined in said Equity Contribution Agreement) has not yet
occurred].(1)
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 __________, 199__.
THE MUTUAL LIFE ASSURANCE COMPANY OF
CANADA, as Agent, as Beneficiary
By:________________________________
Title:___________________________
_______________________
(1) Use one of these alternatives.
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Attachment II
to Exhibit B
EXCHANGE FACTOR TABLE
Periods Exchange Factor
March 1, 1994 to April 3, 1994 1.3644
April 4, 1994 to May 1, 1994 1.3650
May 2, 1994 to May 31, 1994 1.3657
June 1, 1994 to July 4, 1994 1.3666
July 5, 1994 to August 1, 1994 1.3673
August 2, 1994 to August 31, 1994 1.3681
September 1, 1994 to October 2, 1994 1.3689
October 3, 1994 to October 31, 1994 1.3695
November 1, 1994 to November 30, 1994 1.3702
December 1, 1994 to January 3, 1995 1.3711
January 4, 1995 to January 31, 1995 1.3718
February 1, 1995 to February 28, 1995 1.3726
March 1, 1995 to April 3, 1995 1.3738
April 4, 1995 to May 1, 1995 1.3751
May 2, 1995 to May 31, 1995 1.3764
June 1, 1995 to July 4, 1995 1.3778
July 5, 1995 to August 1, 1995 1.3799
August 2, 1995 to August 31, 1995 1.3804
September 1, 1995 to October 2, 1995 1.3818
October 3, 1995 to October 31, 1995 1.3830
November 1, 1995 to November 30, 1995 1.3844
December 1, 1995 to January 3, 1996 1.3858
January 4, 1996 to January 31, 1996 1.3866
February 1, 1996 to March 3, 1996 1.3874
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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, as Agent (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 Energy Limited
Partnership (the "Account Party"), that, at the request of the
Account Party, the Bank has agreed to extend the Stated Expira-
tion Date of the Letter of Credit from January 11, 1996 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:__________________________
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Exhibit A-1(b)
Scotiabank
THE BANK OF NOVA SCOTIA
New York Agency
One Liberty Plaza
New York, New York 10006
March 8, 1994
LETTER OF CREDIT NO.: 2179/94/80085
BENEFICIARY: APPLICANT:
CANADIAN IMPERIAL BANK
OF COMMERCE GENERAL PUBLIC UTILITIES CORPORATION
NEW YORK AGENCY 100 INTERPACE PARKWAY
425 LEXINGTON AVENUE PARSIPPANY, N.J. 07054
NEW YORK, N.Y. 10017
We, the Bank of Nova Scotia, One Liberty Plaza, New York, NY
10006, hereby issue in your favour our irrevocable transferable
standby Letter of Credit for One Million Six Hundred Thousand
USDollars (US$1,600,000.00) for account of the Applicant to
secure the obligations and liabilities of Brooklyn Energy Limited
Partnership (as the "Counterparty") to you under a master foreign
exchange agreement between Brooklyn Energy Limited Partnership
and yourselves (hereinafter referred to as the "Agreement")
including the Collateral Addendum to Master Agreement dated March
11, 1994.
This Standby Letter of Credit is available for payment
against presentation to us of your sight draft drawn on the Bank
of Nova Scotia, One Liberty Plaza, New York, NY 10006, mentioning
our Standby Letter of Credit number and date, accompanied by our
signed certificate confirming that Brooklyn Energy Limited as
Counterparty under the Agreement has defaulted in the terms of
the Agreement and that the sum of US$1,600,000.00 demanded under
our standby letter of credit no. 2179/94/80085 is to cure such
default.
The amount of this Standby Letter of Credit may only be
reduced by drawings paid and/or by tested telex/swift or
facsimile to us by you authorizing any reduction.
This Standby Letter of Credit expires on March 8, 1995 at
our counters at One Liberty Plaza, New York, NY 10006.
It is a condition of this Standby Letter of Credit that it
shall be deemed to be automatically extended, without amendment,
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for one year from the present or any future expiry date hereof,
unless at least thirty days prior to any such date we shall
notify you by tested telex/swift that we elect not to consider
this Standby Letter of Credit renewed for any such additional
period. Upon receipt by you of such notice, you may draw
hereunder by means of your sight draft accompanied by your
written certification that the amounts drawn will be retained and
used by you to meet any obligations and/or liabilities that
Brooklyn Energy Limited Partnership may incur to you; further
that you will return to us any amounts not required by you.
Drawing(s) by tested telex/swift or facsimile are permitted.
In which event the requirement of a sight draft under the drawing
will be waived.
This Standby Letter of Credit is subject to the "Uniform
Customs and Practice for Documentary Credits (1993 Revision)
International Chamber of Commerce, Publication No. 500" and
engages us in accordance with the terms thereof.
________________________________ _______________________________
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
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Scotiabank
THE BANK OF NOVA SCOTIA
New York Agency
One Liberty Plaza
New York, New York 10006
March 8, 1994
CANADIAN IMPERIAL BANK OF COMMERCE
NEW YORK AGENCY
425 LEXINGTON AVENUE
NEW YORK, NY 10017
Re: L/C 3179/94/80085
Gentlemen:
At the request of General Public Utilities Corporation
we hereby amend our standby letter of credit 2179/94/80085 issued
in your favor as follows:
1. Amount increased by USD100,000.00 to a new avail-
able balance of USD1,700,000.00.
All other terms and conditions remain unchanged.
This standby letter of credit is subject to the
Uniform Customs and Practices for Documentary Credits (1993
Revision) International Chamber of Commerce, Publication No. 500.
________________________________ _______________________________
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
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Exhibit A-2
REIMBURSEMENT AGREEMENT
dated as of March 11, 1994
by and between
BROOKLYN ENERGY LIMITED PARTNERSHIP
and
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY
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TABLE OF CONTENTS
Page
PREAMBLE AND RECITALS 1
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms 1
1.2 Interpretation 2
1.3 Conflict in Credit 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 4
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 8
2.10 Eurodollar Rate Lending Unlawful 9
2.11 Deposits Unavailable 9
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
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3.4 True and Complete Disclosure 13
3.5 Litigation 14
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 Collateral Account 14
4.2 Further Assurances 14
ARTICLE V
CONDITIONS TO ISSUANCE OF LETTER OF CREDIT AND LOANS
5.1 Letter of Credit Conditions 15
5.1.1 Guaranty and Suretyship Agreement 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 16
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 17
6.1.6 Bankruptcy, etc 18
6.1.7 Impairment of Security, etc 18
6.1.8 Impairment of Guarantee 19
6.2 Deemed Disbursements 19
6.3 Remedies 19
6.4 No Remedy Exclusive 20
6.5 No Additional Waiver Implied by One Waiver 20
6.6 Limitation on Set-Off 21
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ARTICLE VII
GENERAL
7.1 Amendments 21
7.2 Notices 21
7.3 Confidentiality 21
7.4 Payment in the Contractual Currency 22
7.5 Judgments 22
7.6 Costs, Expenses and Taxes 22
7.7 Liability of the Bank 23
7.8 Captions and References 24
7.9 Governing Law 24
7.10 Forum Selection and Consent to Jurisdiction 24
7.11 Waiver of Jury Trial 25
7.12 Successors and Assigns 25
7.13 Severability of Provisions 26
7.14 Execution in Counterparts 26
7.15 Sources of Payment 26
EXHIBIT A - Form of Note
EXHIBIT B - Form of Irrevocable Letter of Credit
EXHIBIT C - Form of Cash Collateral Account Agreement
EXHIBIT D - Form of Guaranty
EXHIBIT E - Exchange Factor Table
SCHEDULE I - Defined Terms
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REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT (together with Schedules
and Exhibits, this "Agreement"), dated as of March 11, 1994, is
entered into by and between BROOKLYN ENERGY 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 23.8 mw (net) wood waste and coal and/or oil fired
electricity and steam co-generating facility located near
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$12,944,000 (Twelve Million Nine
Hundred Forty Four Thousand Canadian Dollars) issued by a bank
acceptable to The Mutual Life Assurance Company of Canada, as
agent pursuant to the Credit Agreement (the "Agent") and
available to be drawn from the Closing Date until January 11,
1996;
WHEREAS, the Bank is a bank acceptable to the Agent;
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.
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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;
(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;
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(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 Credit Documents. If there
is any conflict between this Agreement and any other Loan
Document (other than the Letter of Credit), this Agreement and
such other Loan Document shall be interpreted and construed, if
possible, so as to avoid or minimize such conflict 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 Agent (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$12,944,000
(Twelve Million Nine Hundred Forty Four Thousand
Canadian Dollars) and the initial Stated Expiration
Date of the Letter of Credit shall be January 11,
1996.
SECTION ii.1.2 Extensions of Letter of Credit.
Commencing on and from September 1, 1995, 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 extension request
may be rejected only if (i) GPU does not amend its
guarantee to reflect an expiration date which is 33
months after the Closing Date or (ii) a material
adverse change occurs in the business, financial
condition or results of the operations of GPU after
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the Closing Date, as reasonably determined by the
Bank. The Bank shall, no later than 90 days after
receiving such request, notify the Company of its
acceptance or rejection of such request. The
foregoing notwithstanding, 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. Subject to the
foregoing, 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 according to
the terms of this Section 2.1.
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
accordance with Section 2.4 in a principal amount
equal to the amount of such demand and in the currency
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.
Subject to Sections 6.3 and 7.15, 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 unconditional 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
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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.
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
monthly installments in arrears on the last day of
each month; provided that if the Letter of Credit
terminates on a date other than on the last day of a
month then the final monthly 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 that
the first installment of the initial letter of credit
fee shall cover the period from the Closing Date
through March 31, 1994; and provided, further, for
purposes of computing the final monthly 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, in respect of a Borrowing to be
made under Section 2.2 hereof the Company may from time to time
irrevocably request, that a Borrowing be made on that same
Business Day, except that for Borrowings to be made at the
Eurodollar Rate, such Borrowing shall be made on not less than
three nor more than five Business Days' notice. 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$400,000 (or the
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Canadian Dollar Equivalent where the Loan was made in Canadian
Dollars) and an integral multiple of US$400,000 (or the Canadian
Dollar Equivalent where the Loan 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 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 Loans made in US Dollars shall
be evidenced by a Note, substantially in the form of Exhibit A-
1. The Loans made in Canadian Dollars shall be evidenced by a
Note, substantially in the form of Exhibit A-2. Each Loan shall
be payable to the order of the Bank in an amount equal to the
principal amount of such Loan and in the currency of such Loan.
The Company hereby irrevocably authorizes the Bank to make (or
cause to be made) appropriate notations on the grid attached to
the Notes (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
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(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:
(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$400,000 (or the Canadian Dollar Equivalent
where the Loan was made in Canadian Dollars) and
an integral multiple of US$400,000 (or the
Canadian Dollar Equivalent where the Loan 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
outstanding 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:
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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.
"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 Loan 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
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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;
(c) with respect to a Base Rate Loan, on each
Monthly 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
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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) US Dollar deposits (or Canadian Dollar
deposits where the Loan was made in Canadian Dollars)
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,
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
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(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)
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
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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.
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
in the currency provided for in this Agreement, 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
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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
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
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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.
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 Collateral Account. Following the
execution and delivery of the Cash Collateral Account Agreement,
substantially in the form of Exhibit C hereto (the "Cash
Collateral Account Agreement") the Company agrees to pay to the
collateral agent, such party's usual and customary charges and
all other related expenses with regard to the Cash Collateral
Account and all services performed in connection therewith.
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SECTION iv.2 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 Sections 5.1 through 5.1.6, 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 Guaranty and Suretyship Agreement.
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 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.
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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
partner 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 general partner 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 certificate 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
general partner of the Company, to the effect that
(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,
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excluding Section 3.5, 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 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 interest on any Obligation,
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 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
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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, 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
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<PAGE>
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 by GPU pursuant to
the Cash Collateral Account Agreement, 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 granted by GPU pursuant to
the Cash Collateral Account Agreement 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 shall fail 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 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.
SECTION vi.3 Remedies.
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(a) 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 may only pursue a remedy under
Section 6.3(ii) against the Company if it has first
sought payment from GPU under the Guaranty and any
funds available pursuant to the Cash Collateral
Account Agreement and GPU has refused payment
thereunder and the funds available pursuant to the
Cash Collateral Account Agreement are not sufficient
to satisfy the Obligations.
(b) So long as any amount is outstanding under
the Credit Agreement or the Security Documents, Power
Purchase Contract, NSBDC Loan Agreement or the Deposit
Agreement, in each case as defined in the Credit
Agreement, or so long as any Advance, as defined in
the Credit Agreement, is available to be made under
the Credit Agreement, regardless of any failure by the
Company to perform any of its obligations under, or a
breach by the Company of any provision contained in,
this Agreement or any other agreement, note or
instrument between the Company and the Bank, or any
other amount owing by the Company to the Bank, and
notwithstanding any provision contained herein or in
any of the other foregoing agreements, the Bank shall
not exercise any rights or remedies of any nature
whatsoever under the Agreement or otherwise in respect
of the Obligations against the Company, including,
without limiting the generality of the foregoing,
shall not take any action or initiate any proceeding
either alone or with other creditors of the Company to
recover such amounts, including, without limitation,
the commencement of any proceedings which would cause
the Company to be adjudged bankrupt or insolvent under
the Companies Creditors Arrangement Act (Canada), the
Bankruptcy and Insolvency Act, (Canada), the Winding
Up Act (Canada) or any similar or analogous laws
except that in the event that a Permitted Payment (as
hereinafter defined) is not made if due and payable in
accordance with the terms of Section 9.01(ah) of the
Credit Agreement, the Bank shall have the right to
bring suit against the Company for recovery of such
amount provided that the Bank's recourse in respect of
such suit is limited only to the Permitted Payment not
paid. Other than Permitted Payments, the Bank shall
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<PAGE>
not be entitled to receive any amounts from the
Company in respect of the Obligations. "Permitted
Payments" shall mean amounts which the Company is
permitted to pay to the Bank in accordance with
Section 9.01(ah) of the Credit Agreement.
SECTION vi.4 No Remedy Exclusive. Subject to
Sections 6.3 and 7.15 hereof, 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.
SECTION vi.6 Limitation on Set-Off. Notwithstanding
anything to the contrary herein, the Bank agrees that it shall
have no right to set-off or otherwise apply toward payment of the
Obligations any Collateral including letters of credit deposited
with the Bank in respect of that certain Master Foreign Exchange
Agreement, dated March 11, 1994 and the Credit Support Annex
attached thereto.
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
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
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<PAGE>
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 under this Agree-
ment, the party required to make the payment will, to the extent
permitted by Applicable Law, immediately pay such additional
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
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
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<PAGE>
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,
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
27
<PAGE>
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
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
28
<PAGE>
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 Forum Selection and Consent to
Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE BANK OR THE COMPANY SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
BANK'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE COMPANY HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
THE FOREGOING PROVISIONS OF THIS SECTION 7.10 ARE EXPRESSLY
SUBJECT TO SECTIONS 6.3 AND 7.15 HEREOF.
SECTION vii.11 Waiver of Jury Trial. THE BANK AND THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
29
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CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
THE BANK OR THE COMPANY. THE COMPANY ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT
TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE BANK PARTIES ENTERING INTO THE REIMBURSEMENT
AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION vii.12 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.
SECTION vii.13 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.14 Execution in Counterparts. This
Agreement may be executed in any number of counterparts, all of
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which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by
signing one or more counterparts.
SECTION vii.15 Sources of Payment. Notwithstanding
anything to the contrary herein, the Bank hereby acknowledges and
agrees (without limitation of any rights the Bank has under the
Guaranty or Cash Collateral Account Agreement) that any and all
Obligations which are not paid when due hereunder shall be
payable by the Company solely from amounts, if any, permitted to
be paid by the Company to CIBC pursuant to Section 9.01(ah)
(xiii) of the Credit Agreement at such time as such amounts shall
be available to be so paid under and in accordance with such
Section of the Credit Agreement.
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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 ENERGY LIMITED PARTNERSHIP
By:______________________________
Its general partner
By:______________________________
Title:___________________________
Address: c/o Polsky Energy Corporation
650 Dundee Road
Suite 170
Northbrook, Illinois 60062
Attention: Project Manager
Facsimile: 708/559-1805
CANADIAN IMPERIAL BANK OF COMMERCE
By:______________________________
Title:___________________________
Address: 200 West Madison
Suite 2300
Chicago, Illinois 60606
Attention: Utilities
Facsimile: 312/750-0927
with copies to:
Canadian Imperial Bank of Commerce
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attention: Loan Administration
Facsimile: 404/319-4950
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Exhibit A-3
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT, dated as of
March 11, 1994, is entered into by General Public Utilities
Corporation, a corporation duly organized and validly existing
under the laws of the Commonwealth of Pennsylvania (the
"Guarantor"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE (the
"Bank"), a bank duly organized and validly existing under the
laws of Canada and acting by and through its New York Agency.
W I T N E S S E T H:
WHEREAS, Brooklyn Energy Limited Partnership (the
"Applicant") and the Bank have executed a Reimbursement
Agreement, dated as of March 11, 1994 (as amended or modified and
in effect from time to time, the "Agreement"), pursuant to which
the Bank has issued for the account of the Applicant and the
benefit of The Mutual Life Assurance Company of Canada, as
Beneficiary, its standby letter of credit number U-94-0070, dated
March 11, 1994 (the "Credit") (terms used herein and not
otherwise defined having the meanings set forth in the
Agreement); and
WHEREAS, it is a condition precedent to the issuance of the
Credit to the Applicant that the Guarantor execute and deliver
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 the Bank to
issue the Credit, the Guarantor, a corporation organized and
existing under the laws of the Pennsylvania, hereby uncondi-
tionally and irrevocably guaranties, as primary obligor and as
surety, whether at stated maturity, by acceleration or otherwise,
(i) the aggregate amount of outstanding Loans under the Agreement
plus (ii) any unreimbursed amounts disbursed under the Letter of
Credit plus (iii) any amount deemed to be paid or disbursed under
the Letter of Credit pursuant to Section 6.2 of the Agreement
which has not been reimbursed by the Company together with
(x) interest on any amount which GPU has failed to pay hereunder
computed at the Alternate Base Rate plus 2% per annum from the
third Business Day after the Bank shall make a demand on GPU for
payment of such amount and (y) the cost of enforcing and
collecting this Guaranty, provided, however, that in no event
shall the aggregate amount of U.S. dollars guaranteed hereunder
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together with the U.S. dollar equivalent of Canadian dollars
guaranteed hereunder, exceed U.S.$9,700,000. It is understood
that to the extent amounts paid hereunder are in respect of
amounts deemed to have been paid or disbursed by the Bank under
the Letter of Credit pursuant to Section 6.2 of the Agreement,
such amounts shall be held by the Bank under the terms of the
Cash Collateral Account Agreement. The amounts guaranteed
hereunder are collectively referred to as the "Guaranteed
Obligations."
3. Guaranty Absolute. This is a guaranty of payment and
not merely of collection. The Guarantor guaranties that the
Guaranteed 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, irre-
spective 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
the Bank with respect to the Guaranteed 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 Guaranteed 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
Guaranteed Obligations; or (v) any other circumstances which
might otherwise constitute a defense available to, or a discharge
of, the Applicant in respect of the Guaranteed Obligations or the
Guarantor in respect of any obligations (including obligations
under Section 6.3 of the Reimbursement Agreement) under this
Guaranty (except for any payment made by the Bank under the
Credit to which the Bank 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 Guaranteed Obligations is rescinded or must otherwise be
returned by the Bank upon the insolvency, bankruptcy or reor-
ganization 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 Guaranteed 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 the Bank protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any
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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, CONTRIBUTION OR INDEMNITY.
5. No Waivers; Remedies. No failure or delay on the part
of the Bank 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 the Bank to
insist upon strict performance hereof shall not constitute a
relinquishment of its right to demand strict performance at
another time. Receipt by the Bank of any payment by any person
of all or any part of the Guaranteed Obligations, with knowledge
of a default with respect to the Guaranteed 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. Subject to Section 6.6 of the
Agreement, the Guarantor agrees to and confirms the Bank'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.
The Bank 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 the Bank under this Section are in
addition to other rights and remedies which the Bank 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
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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).
(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.
8. Financial Information and Reports. The Guarantor 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 the Guarantor consolidated
and consolidating balance sheets of the Guarantor as of the
end of such Fiscal Quarter and consolidated and consoli-
dating statements of earnings and cash flow of the Guarantor
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 the Guarantor;
(b) as soon as available and in any event within 90
days after the end of each Fiscal Year of the Guarantor, a
copy of the annual report for such Fiscal Year for the
Guarantor and a copy of consolidated and consolidating
balance sheets of the Guarantor as of the end of such Fiscal
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Year and consolidated and consolidating statements of
earnings and cash flow of the Guarantor for such Fiscal
Year, in each case certified 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.
"Fiscal Year" shall mean any period of twelve
consecutive calendar months ending on December 31;
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. Collateral Account. The Guarantor agrees that upon
request of the Bank to execute and deliver the Cash Collateral
Account Agreement.
10. 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 Guaranteed
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 the Bank and its successors, transferees and
assigns. Without limiting the generality of the foregoing, the
Bank may assign or otherwise transfer any evidence of the
Guaranteed 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 the Bank herein or other-
wise. The duties and obligations of the Guarantor may not be
delegated or transferred by the Guarantor without the prior
written consent of the Bank.
11. 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 the Bank, and then such waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given.
12. Addresses for Notices. All notices and other communi-
cations provided for hereunder shall be in writing (including
telecopy communications) and,
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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
Facsimile: 201/263-6397
with a copy to:
Berlack, Israels & Liberman
120 West 45th Street
New York, NY 10036
Attention: Douglas E. Davidson
Facsimile: 212/704-0196
and if to the Bank, addressed to it at
Canadian Imperial Bank of Commerce
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attention: Loan Administrator
Facsimile: 404/319-4950
with a copy to:
Canadian Imperial Bank of Commerce
200 West Madison, Suite 2300
Chicago, Illinois 60606
Attention: Utilities
Facsimile: 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.
13. 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.
14. Expiration. This Guarantee shall expire and be of no
further force or effect as of 11:59 P.M. on January 11, 1996.
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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: March 11, 1994
GENERAL PUBLIC UTILITIES CORPORATION
By:_________________________________
Name:____________________________
Title:___________________________
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Exhibit A-4
REIMBURSEMENT AGREEMENT
FOR STANDBY LETTERS OF CREDIT
TO: THE BANK OF NOVA SCOTIA (the "Bank")
FROM: GENERAL PUBLIC UTILITIES CORPORATION (the "Applicant")
SUBJECT: Standby Letters of Credit or Guarantees (each a
"Letter") issued under written instructions or
applications of the Applicant and/or its subsidiaries
to the Bank in favor of the beneficiary or
beneficiaries named in each such instruction or
application.
IN CONSIDERATION of the Bank issuing each Letter, the
Applicant hereby agrees that it will reimburse the Bank on demand
the amount of each and any draft, bill of exchange or demand
(each a "Draft") presented to and paid by the Bank under such
Letter (even if, under laws applicable to the rights of the
beneficiary of the Letter, a Draft is validly presented after
expiry of such Letter) in the currency expresses in such Letter.
In addition, the Applicant agrees to pay to the Bank on
demand commissions in respect of each Letter and fees and charges
for issuing each letter, all computed on such amounts and payable
at such times and at such rates as are set forth in the February
8, 1994 Offer Letter from the Bank to the Applicant.
The obligations of the Applicant hereunder shall be
absolute, unconditional and irrevocable and shall not be reduced
by any event or occurrence including, without limitation, any
lack of validity or enforceability of a Letter, or any Draft paid
or acted upon by the Bank or any of its correspondents being
fraudulent, forged or insufficient, or by claims which the
Applicant may have against any beneficiary or transferee of any
Letter. The obligations of the Applicant hereunder shall remain
in full force and effect and shall apply to any alteration to or
extension of the expiration date of any Letter or any standby
letter of credit or guarantee issued to replace, extend or alter
any Letter.
Amounts not paid when due under this Reimbursement Agreement
(the "Agreement") shall bear interest until paid at a variable
rate of interest per annum equal to 1.5% above the prevailing
London Interbank Offered Rate as in effect from time to time.
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The Applicant agrees to pay on demand all reasonable costs
and expenses of the Bank incurred in the enforcement of the
Bank's rights under this Agreement and, further, will indemnify
the Bank on demand against all loss or damage to the Bank arising
out of the issuance of or other action taken by the Bank in
connection with any Letter including, without limitation, the
costs relating to any legal process instituted by any party
restraining or seeking to restrain the Bank from accepting or
paying any Draft. In addition, if the introduction of or any
change in or in the interpretation of, or any change in its
application to the Applicant and/or its subsidiaries of, any law
or any regulation or guideline from any central bank or
governmental authority (whether or not having the force of law),
including, without limitation, any reserve or special deposit
requirement or any tax (other than tax on the Bank's general
income) or any capital requirement, has, due to the Bank's
compliance, the effect, directly or indirectly, of (1) increas-
ing the cost to the Bank of performing its obligations under any
Letter; (2) reducing any amount received or receivable by the
Bank hereunder or its effective return hereunder or on its
capital; or (3) causes the Bank to make any payment or to forego
any return on, or calculated by reference to, any amount received
or receivable by the Bank hereunder, then upon demand from time
to time the Applicant shall pay the Bank for any such cost,
reduction, payment or foregone return incurred within 6 months of
such demand, and provided the Bank shall have made reasonable
efforts to mitigate any such cost reduction, payment or foregone
return. Any certificate of the Bank in respect of the foregoing
will be conclusive and binding upon the Applicant, absent
manifest error, provided that the Bank shall determine the
amounts owning to it in good faith using any reasonable averaging
and attribution methods. The Applicant also agrees that the Bank
shall have no liability to it for any reason in respect of the
issuance of the Letter other than on account of the Bank's gross
negligence or wilful misconduct. All payments to be made to the
Bank hereunder shall be made for value on the date due and free
of any withholding tax or levy, other than taxes imposed on the
net income of the Bank, and such taxes or levies, other than as
so excepted, shall be paid by the Applicant. The provisions of
this paragraph will survive payment in full hereunder.
Upon the occurrence of any of the following events, the Bank
may demand, and the Applicant shall pay to the Bank on the day of
such demand in the currency expressed in each Letter, the then
contingent liability of the Bank under all Letters then
outstanding (which amount the Bank shall hold in a segregated,
specifically identified escrow account): the failure of the
Applicant to pay any of its indebtedness and liability to the
Bank hereunder within two business days of notification thereof;
any default by the Applicant or its electric utility subsidiaries
under the terms of any agreement relating to money, in the
2
<PAGE>
principal sum of $10,000,000 or more, borrowed by the Applicant
or its electric utility subsidiaries; the institution of
bankruptcy, insolvency or similar proceedings by or against, the
appointment of a receiver or a trustee under a trust deed of, or
the sale of all or a substantial part of the business or assets
of the Applicant or its subsidiaries; or the change or a
threatened change in the control of the business or assets of the
Applicant or its subsidiaries. Also, upon any Letter becoming
the subject matter of any order, judgment, injunction or other
such determination (an "Order"), or upon the petition or other
application for or the obtaining by the Applicant or any other
party of any order restricting payment by the Bank under such
Letter or extending the Bank's liability under such Letter beyond
the expiration date stated therein, the Bank may demand, and the
Applicant shall pay to the Bank on the day of such demand in the
currency expressed in such Letter, the then contingent liability
of the Bank under such Letter (which amount the Bank shall hold
in a segregated, specifically identified escrow account).
The Bank hereby agrees that (unless the original counterpart
of the applicable Letter has been returned to the Bank for
cancellation or the Bank has been released by the beneficiary
thereof from any further obligations in respect of such Letter)
it will, with respect to each Letter subjected to any demand for
payment by it, upon the later of the expiry of such Letter and
the date on which any final and non-appealable order, judgment or
other such determination has been rendered or issued either
terminating any applicable Order, or permanently enjoining the
Bank from paying under such Letter, pay to the Applicant an
amount equal to any excess of the amount received by such Letter
(the "Received Amount") over the total of amounts applied to
reimburse the Bank for amounts paid by it under or in connection
with such letter (the Bank having the right to so appropriate
such funds), together with an additional amount computed by
applying a per annum rate as set out below to the amount of such
excess from time to time. The applicable per annum rate shall
equal 3% per annum less than the Bank's Base Rate New York. Such
additional amount shall be calculated daily on the basis of a
calendar year for the actual number of days elapsed from and
including the date of payment to the Bank of the Received Amount
to (but not including) the date of return to the Applicant of the
excess.
This Agreement may not be altered or waived, except in
writing. Time and the currency of payment hereunder shall be
deemed to be of the essence hereunder. This Agreement will be
governed by and construed in accordance with the laws of the
State of New York.
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IN WITNESS WHEREOF, the Applicant has caused this agreement
to be duly executed and delivered by its duly authorized officers
on this 18th day of February, 1994.
GENERAL PUBLIC UTILITIES CORPORATION
By:______________________________
Title:___________________________
By:______________________________
Title:___________________________
Sworn to before me this __
day of _____________, 1994
______________________________
Notary Public
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