SEC FILE NO. 70-8793
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
GENERAL PUBLIC UTILITIES CORPORATION<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------
In the Matter of :
:
General Public Utilities Corporation : Certificate
: Pursuant to
File No. 70-8793 : Rule 24 of Partial
: Completion of
(Public Utility Holding : Transactions
Company Act of 1935) :
----------------------------------------
To the Members of the Securities and Exchange Commission:
The undersigned, General Public Utilities Corporation
("GPU"), hereby certifies pursuant to Rule 24 of the General
Rules and Regulations under the Public Utility Holding Company
Act of 1935 that certain of the transactions proposed in the
Declaration, as amended, filed in SEC File No. 70-8793 have been
carried out in accordance with the terms and conditions of, and
for the purposes represented by, said Declaration, as amended,
and the Commission's Order, dated March 20, 1996, with respect
thereto, as follows:
1. On April 1, 1996, GPU executed and delivered to
The First National Bank of Chicago (the "Bank") a Guaranty which
unconditionally guarantees payment and other obligations of GPU
Service Corporation ("Service Company") under a Credit Agreement,
dated as of March 27, 1996 (the "Agreement"), with the Bank. The
Agreement provides, among other things, for the borrowing by
Service Company from the Bank of $35,000,000 for a five-year
term, which bears interest at varying rates selected by Service
Company as provided in the Agreement. The full amount of the
loan was extended by the Bank to Service Company on April 1,
1996.<PAGE>
2. Service Company applied the proceeds of such
borrowing under the Agreement to repay (i) the outstanding
$19,200,000 principal amount, together with accrued interest and
prepayment premium, on Service Company's promissory notes dated
April 29, 1986 issued to Aetna Life Insurance Company pursuant to
a Note Purchase Agreement dated as of April 29, 1986 and secured
by a Trust Indenture and Mortgage dated as of April 29, 1986 with
United Jersey Bank, the issuance of which had been authorized by
the Commission's Order, dated April 24, 1986, in SEC File No. 70-
7241, and (ii) the outstanding $11,500,000 principal amount,
together with accrued interest, on Service Company's unsecured
promissory note dated September 30, 1993 issued to First Fidelity
Bank, National Association, New Jersey (now First Union National
Bank) pursuant to a Term Loan, Revolving Credit and Guaranty
Agreement dated as of September 30, 1993, the issuance of which
had been authorized by the Commission's Order, dated
September 29, 1993, in SEC File No. 70-8223. The balance of the
loan proceeds will be used for working capital and other
corporate purposes.
3. The following exhibits are filed herewith in
Item 6:
B-1(a) - Form of GPU Guaranty --
incorporated by reference to
Exhibit "B" to Exhibit B-2.
B-2 - Credit Agreement, dated as of
March 27, 1996.<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANY HAS DULY
CAUSED THIS STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:
T. G. Howson
Vice President and Treasurer
Date: April 5, 1996<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
B-2 - Credit Agreement, dated as of March 27,
1996.<PAGE>
Exhibit B-2
CREDIT AGREEMENT
Dated as of March 27, 1996
AMONG
GPU SERVICE CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Agent
THE LENDER OR LENDERS FROM TIME TO TIME PARTY HERETO<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . 1
ARTICLE II. THE CREDIT . . . . . . . . . . . . . . . . . 8
2.1. Commitment . . . . . . . . . . . . . . . . . . . . 8
2.2. Required Payments . . . . . . . . . . . . . . . . . 8
2.3. Ratable Loans . . . . . . . . . . . . . . . . . . . 9
2.4. Types of Advances . . . . . . . . . . . . . . . . . 9
2.5. Minimum Amount of Each Advance 9
2.6. Optional Principal Payments 9
2.7. Method of Selecting Types and Interest
Periods for Initial Advance . . . . . . . . . . . . 9
2.8. Conversion and Continuation of
Outstanding Advances . . . . . . . . . . . . . . . 10
2.9. Changes in Interest Rate, etc . . . . . . . . . . . 10
2.10. Rates Applicable After Default . . . . . . . . . . 11
2.11. Method of Payment . . . . . . . . . . . . . . . . . 11
2.12. Notes; Telephonic Notices . . . . . . . . . . . . . 11
2.13. Interest Payment Dates and Interest
Calculation Basis . . . . . . . . . . . . . . . . . 12
2.14. Notification of Advances, Interest Rates
and Prepayments . . . . . . . . . . . . . . . . . . 12
2.15. Lending Installations . . . . . . . . . . . . . . . 12
2.16. Non-Receipt of Funds by the Agent . . . . . . . . . 12
2.17. Agent and Arranger Fees . . . . . . . . . . . . . . 13
ARTICLE III. CHANGE IN CIRCUMSTANCES . . . . . . . . . . . 13
3.1. Yield Protection . . . . . . . . . . . . . . . . . 13
3.2. Changes in Capital Adequacy Regulations . . . . . . 14
3.3. Availability of Eurodollar Rate Advances . . . . . 14
3.4. Funding Indemnification . . . . . . . . . . . . . . 14
3.5. Lender Statements; Survival-of Indemnity . . . . . 15
ARTICLE IV. CONDITIONS PRECEDENT; WITHHOLDING
TAX EXEMPTION . . . . . . . . . . . . . . . 15
4.1. Initial Advance . . . . . . . . . . . . . . . . . . 15
4.2. Additional Conditions Precedent to Initial Advance 16
4.3. Withholding Tax Exemption . . . . . . . . . . . . . 17
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . 17
5.1. Corporate Existence and Subsidiaries . . . . . . . 17
5.2. Authorization and Validity . . . . . . . . . . . . 18
5.3. No Conflict; Government Consent . . . . . . . . . . 18
5.4. Material Adverse Change . . . . . . . . . . . . . . 18
5.5. Litigation and Contingent Obligations . . . . . . . 18
5.6. ERISA . . . . . . . . . . . . . . . . . . . . . . 19
5.7. Accuracy of Information . . . . . . . . . . . . . . 19
5.8. Regulation U . . . . . . . . . . . . . . . . . . . 19
5.9. Material Agreements . . . . . . . . . . . . . . . . 19<PAGE>
Page
5.10. Compliance With Laws . . . . . . . . . . . . . . . 19
5.11. Environmental Matters . . . . . . . . . . . . . . . 19
5.12. Investment Company Act . . . . . . . . . . . . . . 19
ARTICLE VI. COVENANTS . . . . . . . . . . . . . . . . . . . 20
6.1. Reporting . . . . . . . . . . . . . . . . . . . . . 20
6.2. Use of Proceeds . . . . . . . . . . . . . . . . . . 20
6.3. Notice of Default . . . . . . . . . . . . . . . . . 20
6.4. Conduct of Business . . . . . . . . . . . . . . . . 20
6.5. Insurance . . . . . . . . . . . . . . . . . . . . . 20
6.6. Compliance with Laws . . . . . . . . . . . . . . . 20
6.7. Maintenance of Properties . . . . . . . . . . . . . 21
6.8. Inspection . . . . . . . . . . . . . . . . . . . . 21
6.9. Merger . . . . . . . . . . . . . . . . . . . . . . 21
6.10. Amendments to Agreements . . . . . . . . . . . . . 21
ARTICLE VII. DEFAULTS . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII. ACCELERATION, WAIVERS,
AMENDMENTS AND REMEDIES . . . . . . . . . . 23
8.1. Acceleration . . . . . . . . . . . . . . . . . . . 23
8.2. Amendments . . . . . . . . . . . . . . . . . . . . 23
8.3. Preservation of Rights . . . . . . . . . . . . . . 24
ARTICLE IX. GENERAL PROVISIONS . . . . . . . . . . . . . . 24
9.1. Survival of Representations . . . . . . . . . . . . 24
9.2. Governmental Regulation . . . . . . . . . . . . . . 24
9.3. Headings . . . . . . . . . . . . . . . . . . . . . 25
9.4. Entire Agreement . . . . . . . . . . . . . . . . . 25
9.5. Several Obligations; Benefits of this Agreement . . 25
9.6. Expenses; Indemnification . . . . . . . . . . . . . 25
9.7. Numbers of Documents . . . . . . . . . . . . . . . 25
9.8. Severability of Provisions . . . . . . . . . . . . 26
9.9. Nonliability of Lenders . . . . . . . . . . . . . . 26
9.10. Confidentiality . . . . . . . . . . . . . . . . . . 26
9.11. Nonreliance . . . . . . . . . . . . . . . . . . . . 26
ARTICLE X. THE AGENT . . . . . . . . . . . . . . . . . . . 27
10.1. Appointment; Nature of Relationship . . . . . . . . 27
10.2. Powers . . . . . . . . . . . . . . . . . . . . . . 27
10.3. General Immunity . . . . . . . . . . . . . . . . . 27
10.4. No Responsibility for Loans, Recitals, etc. . . . . 27
10.5. Action on Instructions of Lenders . . . . . . . . . 28
10.6. Employment of Agents and Counsel . . . . . . . . . 28
10.7. Reliance on Documents; Counsel . . . . . . . . . . 28
10.8. Agent's Reimbursement and Indemnification . . . . . 28
(ii)<PAGE>
Page
10.9. Notice of Default . . . . . . . . . . . . . . . . 29
10.10. Rights as a Lender . . . . . . . . . . . . . . . . 29
10.11. Lender Credit Decision . . . . . . . . . . . . . . 29
10.12. Successor Agent . . . . . . . . . . . . . . . . . 29
ARTICLE XI. SETOFF; RATABLE PAYMENTS . . . . . . . . . . . 30
11.1. Setoff . . . . . . . . . . . . . . . . . . . . . . 30
11.2. Ratable Payments . . . . . . . . . . . . . . . . . 30
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS . . . . . . . . . . . . . . . 31
12.1. Successors and Assigns . . . . . . . . . . . . . . 31
12.2. Participations . . . . . . . . . . . . . . . . . . 31
12.2.1 Permitted Participants; Effect . . . . . . 31
12.2.2. Voting Rights . . . . . . . . . . . . . . 31
12.2.3. Benefit of Setoff . . . . . . . . . . . . 32
12.3. Assignments . . . . . . . . . . . . . . . . . . . 32
12.3.1. Permitted Assignments . . . . . . . . . . 32
12.3.2. Effect; Effective Date . . . . . . . . . . 32
12.4. Dissemination of Information . . . . . . . . . . . 33
12.5. Tax Treatment . . . . . . . . . . . . . . . . . . 33
ARTICLE XIII. NOTICES . . . . . . . . . . . . . . . . . . . 33
13.1. Notices . . . . . . . . . . . . . . . . . . . . . 33
13.2. Change of Address . . . . . . . . . . . . . . . . 34
ARTICLE XIV. COUNTERPARTS . . . . . . . . . . . . . . . . . 34
ARTICLE XV. CHOICE OF LAW, CONSENT TO JURISDICTION,
WAIVER OF JURY TRIAL . . . . . . . . . . . . 34
15.1. CHOICE OF LAW . . . . . . . . . . . . . . . . . . 34
15.2. CONSENT TO JURISDICTION . . . . . . . . . . . . . 34
15.3. WAIVER OF JURY TRIAL 35
Exhibit "A" - Promissory Note
Exhibit "B" - Guaranty
Exhibit "C-1" - Opinion of Counsel to the Borrower
Exhibit "C-2" - Opinion of Counsel to the Guarantor
Exhibit "D" - Assignment Agreement
Exhibit "E" - Loan/Credit Related Money Transfer
Instructions
(iii)<PAGE>
CREDIT AGREEMENT
This Credit Agreement, dated as of March 27, 1 996, is among
GPU Service Corporation, a Pennsylvania corporation, the lender
or lenders from time to time party hereto, and The First National
Bank of Chicago, as Agent. The parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE I.
DEFINITIONS
As used in this Credit Agreement:
"Advance" means a borrowing hereunder (or conversion or
continuation thereof) consisting of the aggregate amount of the
several Loans made, converted or continued on the Borrowing Date
or the date of conversion or continuation, as the case may be, by
the Lenders to the Borrower of the same Type and, in the case of
Eurodollar Rate Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control
with such Person. A Person shall be deemed to control another
Person if the controlling Person owns 50% or more of any class of
voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power
to direct or cause the direction, of the management or policies
of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means The First National Bank of Chicago in its
capacity as agent for the Lenders pursuant to Article X, and not
in its individual capacity as a Lender, and any successor Agent
appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the
Commitments of all the Lenders.
"Agreement" means this credit agreement, as it may be
amended, supplemented or otherwise modified and in effect from
time to time.
"Alternate Base Rate" means, for any day, a rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for
such day and (ii) the sum of Federal Funds Effective Rate for
such day plus 1/2% per annum.
"Arranger" is defined in Section 2.17.
"Article" means an article of this Agreement unless another
document is specifically referenced.<PAGE>
"Authorized Officer" means any of the Executive Vice
President and Chief Financial Officer, the Vice President and
Treasurer or any Assistant Treasurer of the Borrower, acting
singly.
"Borrower" means GPU Service Corporation, a Pennsylvania
corporation, and its successors and assigns.
"Borrowing Date" means the date on which the initial Advance
is made hereunder.
"Borrowing Notice" is defined in Section 2.7.
"Business Day" means (i) with respect to any borrowing,
payment or rate selection of Eurodollar Rate Advances, a day
(other than a Saturday or Sunday) on which banks generally are
open in Chicago and New York for the conduct of substantially all
of their commercial lending activities and on which dealings in
United States dollars are carried on in the London interbank
market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago
for the conduct of substantially all of their commercial lending
activities.
"Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with generally
accepted accounting principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with generally accepted accounting
principles.
"Change" is defined in Section 3.2.
"Change in Control" means the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 25% or
more of the outstanding shares of voting stock of the Guarantor.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such
Lender to make a Loan not exceeding the amount set forth opposite
its signature below.
"Controlled Group" means all members of a controlled group
of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the
Guarantor or any of its Subsidiaries, are treated as a single
employer under Section 414 of the Code.
Page 2<PAGE>
"Conversion/Continuation Notice" is defined in Section 2.8.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by FNBC from time to
time, changing when and as said corporate base rate changes.
"D&P Rating" means, as of any time with respect to any
Utility, the rating of such Utility's senior secured debt
most recently announced by Duff & Phelps, Inc., or any
successor thereto.
"Default" means an event described in Article VII.
"Environmental Laws" means any and all federal, state and
local statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i)
the protection of the environment, (ii) the effect of the
environment on human health, (iii) emissions, discharges or
releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation
issued thereunder.
"Eurodollar Rate Advance" means an Advance which bears
interest at a Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Rate Advance for the relevant Interest Period, the rate
determined by the Agent to be the rate at which FNBC offers to
place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11 a.m. (London time)
two Business Days prior to the first day of such Interest Period,
in the approximate amount of FNBC's relevant Eurodollar Rate Loan
and having a maturity approximately equal to such Interest
Period.
"Eurodollar Rate Loan" means a Loan which bears interest at
a Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Rate
Advance for the relevant Interest Period, the sum of (i) the
quotient of (a) the Eurodollar Base Rate applicable to such
Interest Period, divided by (b) one minus the Reserve Requirement
(expressed as a decimal) applicable to such Interest Period, plus
(ii) 0.30% per annum through and including the third anniversary
of the Borrowing Date, and (ii) 0.40% per annum thereafter. The
Page 3<PAGE>
Eurodollar Rate shall be rounded to the next higher multiple of
1/16 of 1% if the rate is not such a multiple.
"Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such
day, as published for such day (or, if such day is not a Business
Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the
quotations at approximately 10 a.m. (Chicago time) on such day on
such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by the Agent in its sole
discretion.
"Fee Letter" is defined in Section 2.17.
"Floating Rate Advance" means an Advance which bears
interest at a rate per annum based on the Alternate Base Rate.
"Floating Rate Loan" means a Loan which bears interest at a
rate per anum based on the Alternate Base Rate.
"FNBC" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Guarantor" means General Public Utilities Corporation, a
Pennsylvania corporation, and its successors and assigns.
"Guaranty" means a Guaranty in substantially the form
attached hereto as Exhibit "B" executed by the Guarantor in favor
of the Lenders, as it may be amended, supplemented or otherwise
modified and in effect from time to time.
"Indebtedness" of a Person means such Person's (i)
obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person's
business payable on terms customary in the trade), (iii)
obligations which are evidenced by notes, acceptances, or other
similar instruments, and (iv) Capitalized Lease Obligations.
"Interest Period" means, with respect to a Eurodollar Rate
Advance, a period of one, two, three or six months commencing on
a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six
months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third or
sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding
month. If an Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
succeeding Business Day; provided, however, that if said next
succeeding Business Day falls in a new calendar month, such
Page 4<PAGE>
Interest Period shall end on the immediately preceding Business
Day.
"Lenders" means the lending institutions listed on the
signature pages of this Agreement and their respective successors
and assigns.
"Lending Installation" means, with respect to a Lender or
the Agent, any office, branch, subsidiary or affiliate of such
Lender or the Agent.
"Lien" means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other
title retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan
made pursuant to Article If (or any conversion or continuation
thereof).
"Loan Documents" means this Agreement and the Notes and the
other documents and agreements contemplated hereby and executed
by the Borrower in favor of the Agent or any Lender.
"Material Adverse Effect" means a material adverse effect on
(i) the business, Property, condition (financial or otherwise),
results of operations, or prospects of the Borrower, (ii) the
business, Property, condition (financial or otherwise), results
of operations, or prospects of the Guarantor and its Subsidiaries
taken as a whole, (iii) the ability of the Borrower to perform
its obligations under the Loan Documents, (iv) the ability of the
Guarantor to perform its obligations under the Guaranty, or (v)
the validity or enforceability of any of the Loan Documents or
the Guaranty or the rights or remedies of the Agent or the
Lenders thereunder.
"Material Indebtedness" is defined in Section 7.5.
"Maturity Date" is defined in Section 2.2.
"Moody's Rating" means, as of any time with respect to any
Utility, the rating of such Utility's senior secured debt most
recently announced by Moody's Investors Service, Inc., or any
successor thereto.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which
the Borrower or any member of the Controlled Group is a party to
which more than one employer is obligated to make contributions.
"Note" means a promissory note, in substantially the form of
Exhibit "A" hereto, duly executed by the Borrower and payable on
the Maturity Date to the order of a Lender in the amount of its
Page 5<PAGE>
Loan, including any amendment, modification, renewal or
replacement of such promissory note.
"Notice of Assignment" is defined in Section 1 2.3.2.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of
the Borrower to the Lenders or to any Lender, the Agent or any
indemnified party hereunder arising under the Loan Documents.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June,
September and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other
entity or organization, or any government or political
subdivision or any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 41 2 of the Code as to which the Borrower
or any member of the Controlled Group may have any liability.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person,
or other assets owned, leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve
System.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor or other regulation or official interpretation of
said Board of Governors relating to the extension of credit by
banks for the purpose of purchasing or carrying margin stocks
applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events
as to which the PBGC by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event; provided, however, that a failure
to meet the minimum funding standard of Section 412 of the Code
Page 6<PAGE>
and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at
least 66-2/3% of the aggregate unpaid principal amount of the
outstanding Advances.
"Reserve Requirement" means, with respect to an Interest
Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on Eurocurrency liabilities.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"S&P Rating" means, as of any time with respect to any
Utility, the rating of such Utility's senior secured debt most
recently announced by Standard & Poor's Ratings Group, a division
of McGraw-Hill, Inc., or any successor thereto.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced. -"Single Employer
Plan" means a Plan maintained by the Borrower or any member of
the Controlled Group for employees of the Borrower or any member
of the Controlled Group.
"Single Employe Plan" means a Plan maintained by the
Borrower or any member of the Controlled Group for employees of
the Borrower or any member of the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries
or by such Person and one or more of its Subsidiaries, or (ii)
any partnership, limited liability company, association, joint
venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall
at the time be so owned or controlled.
"Substantial Portion" means, with respect to the Property of
any Person, Property which (i) represents more than 25% of the
assets of such Person as would be shown in its financial
statements as at the beginning of the twelve-month period ending
with the month in which such determination is made, or (ii) is
responsible for more than 25% of the revenues or of the net
income of such Person as reflected in the financial statements
referred to in clause (i) above.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or Eurodollar Rate Advance.
Page 7<PAGE>
"Unfunded Liabilities" means the amount (if any) by which
the present value of all vested and unvested accrued benefits
under all Single Employer Plans exceeds the fair market value of
all such Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plans using
PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse
of time or the giving of notice, or both, would constitute a
Default.
"Utility" means each of Jersey Central Power & Light
Company, a New Jersey corporation, Metropolitan Edison Company, a
Pennsylvania corporation, and Pennsylvania Electric Company, a
Pennsylvania corporation.
"Wholly-Owned Subsidiary" of a Person means (i) any
Subsidiary all of the outstanding voting securities of which
shall at the time be owned or controlled, directly or indirectly,
by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms.
ARTICLE II.
THE CREDIT
2.l. Commitment. Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make a Loan to the
Borrower on a single date on or before April 1 5, 1996 in an
amount not to exceed in the amount of its Commitment. The
Commitments to lend hereunder shall expire on April 15, 1996.
2.2. Required Payments. All outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrower on
the fifth anniversary of the Borrowing Date (the "Maturity
Date").
2.3. Ratable Loans. Each Advance hereunder shall consist of
Loans made by the several Lenders ratably in proportion to the
ratio that their respective Commitments bear to the Aggregate
Commitment.
2.4. Types of Advances. The Advances may be Floating Rate
Advances or Eurodollar Rate Advances, or a combination thereof,
selected by the Borrower in accordance with Sections 2.7 and 2.8.
2.5. Minimum Amount of Each Advance. Each Eurodollar Rate
Advance shall be in the minimum amount of $1,000,000 (and in
multiples of $1,000,000 if in excess thereof), and each Floating
Page 8<PAGE>
Rate Advance shall be in the minimum amount of $100,000 (and in
multiples of $100,000 if in excess thereof).
2.6. Optional Principal Payments. The Borrower may from
time to time pay, without penalty or premium, all outstanding
Floating Rate Advances, or, in a minimum aggregate amount of
$100,000 or any integral multiple of $100,000 in excess thereof,
any portion of the outstanding Floating Rate Advances upon one
Business Days' prior notice to the Agent. The Borrower may also
from time to time pay, without penalty or premium other than the
payment of all amounts due under Section 3.4 as a result of such
prepayment, all outstanding Eurodollar Rate Advances, or, in a
minimum aggregate amount of $1,000,000 or any integral multiple
of $1,000,000 in excess thereof, any portion of the outstanding
Eurodollar Rate Advances upon one Business Days' prior notice to
the Agent.
2.7. Method of Selecting Types and Interest Periods for
Initial Advance. The Borrower shall select the Type of Advance,
and in the case of each Eurodollar Rate Advance the Interest
Period, applicable to each initial Advance. The Borrower shall
give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day
before the Borrowing Date if the initial Advance is to be only a
Floating Rate Advance and three Business Days before the
Borrowing Date if any Eurodollar Rate Advance is to be made on
the Borrowing Date, specifying:
(i) the Borrowing Date, which shall be a Business Day,
of the initial Advance(s),
(ii) the aggregate amount of such Advance(s),
(iii)the Type of Advance selected, and
(iv) in the case of each Eurodollar Rate Advance, the
Interest Period applicable thereto.
Not later than Noon (Chicago time) on the Borrowing Date, each
Lender shall make available its Loan or Loans, in funds
immediately available in Chicago to the Agent at its address
specified pursuant to Article XIII. The Agent will promptly make
the funds so received from the Lenders available to the Borrower
at the Agent's aforesaid address in the same type of funds as
received by the Agent from the Lenders.
2.8. Conversion and Continuation of Outstanding Advances.
Floating Rate Advances shall continue as Floating Rate Advances
unless and until such Floating Rate Advances are converted into
Eurodollar Rate Advances. Each Eurodollar Rate Advance shall
continue as a Eurodollar Rate Advance until the end of the then
applicable Interest Period therefor, at which time such
Eurodollar Rate Advance shall be automatically converted into a
Floating Rate Advance unless the Borrower shall have given the
Agent a Conversion/Continuation Notice requesting that, at the
end of such Interest Period, such Eurodollar Rate Advance either
Page 9<PAGE>
continue as a Eurodollar Rate Advance for the same or another
Interest Period or be converted into a Floating Rate Advance.
Subject to the terms of Section 2.5, the Borrower may elect from
time to time to convert all or any part of an Advance of either
Type into any other Type or Types of Advances; provided, however,
that any conversion of any Eurodollar Rate Advance shall be made
on, and only on, the last day of the Interest Period applicable
thereto. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an
Advance or continuation of a Eurodollar Rate Advance not later
than 10:00 a.m. (Chicago time) at least one Business Day, in the
case of a conversion into a Floating Rate Advance, or three
Business Days, in the case of a conversion into or continuation
of a Eurodollar Rate Advance, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date which shall be a Business Day,
of such conversion or continuation,
(ii) the aggregate amount and Type of the Advance which
is to be converted or continued, and
(iii) the amount and Type(s) of Advance(s) into which
such Advance is to be converted or continued and, in
the case of a conversion into or continuation of a
Eurodollar Rate Advance, the duration of the Interest
Period applicable thereto.
2.9. Changes in Interest Rate, etc. Each Floating Rate
Advance shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is
made or is converted from a Eurodollar Rate Advance into a
Floating Rate Advance pursuant to Section 2.8 to but excluding
the date it becomes due or is converted into a Eurodollar Rate
Advance pursuant to Section 2.8, at a rate per annum equal to the
Alternate Base Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Rate Advance shall bear
interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto
to (but not including) the last day of such Interest Period at
the interest rate determined as applicable to such Eurodollar
Rate Advance. No Interest Period may end after the Maturity
Date. The Borrower shall select Interest Periods so that it is
not necessary to repay any portion of a Eurodollar Rate Advance
prior to the last day of the applicable Interest Period in order
to make the payment on the Maturity Date required by Section 2.2.
2.10. Rates Applicable After Default. Notwithstanding
anything to the contrary contained in Section 2.8, during the
continuance of a Default or Unmatured Default the Required
Lenders may, at their option, by notice to the Borrower (which
notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous
consent of the Lenders to changes in interest rates), declare
Page 10<PAGE>
that for so long as any Default or Unmatured Default is
continuing no Advance may be made as, converted into or continued
past the end of its then current Interest Period as a Eurodollar
Rate Advance. If any Advance is not paid at maturity, whether by
acceleration or otherwise, (i) each Eurodollar Rate Advance shall
(A) bear interest for the remainder of the applicable Interest
Period at the rate otherwise applicable to such Interest Period
plus 2% per annum and (B) be automatically converted into a
Floating Rate Advance at the end of the applicable Interest
Period and shall thereafter bear interest at a rate per annum
equal to the Alternate Base Rate plus 2% per annum, and (ii) each
Floating Rate Advance shall bear interest at a rate per annum
equal to the Alternate Base Rate plus 2% per annum.
2.11. Method of Payment. All payments of the
Obligations hereunder shall be made, without setoff, deduction,
or counterclaim, in immediately available funds to the Agent at
the Agent's address specified pursuant to Article XIII, or at any
other Lending Installation of the Agent specified in writing by
the Agent to the Borrower, by Noon (local time) on the date when
due and shall be applied ratably by the Agent among the Lenders.
Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender in the
same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender.
2.12. Notes: Telephonic Notices. Each Lender is hereby
authorized to record the principal amount of each of its Loans
and each repayment on the schedule attached to its Note;
provided, however, that neither the failure to so record nor any
error in such recordation shall affect the Borrower's obligations
under such Note. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on
telephonic notices made by any person or persons the Agent or any
Lender in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the
Agent or any Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Agent and the
Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.13. Interest Payment Dates and Interest Calculation
Basis. Interest accrued on each Floating Rate Advance shall be
payable on each Payment Date, commencing with the first such date
to occur after the date hereof, on any date on which the Floating
Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of
the outstanding principal amount of any Floating Rate Advance
converted into a Eurodollar Rate Advance on a day other than a
Payment Date shall be payable on the date of conversion.
Interest accrued on each Eurodollar Rate Advance shall be payable
on the last day of its applicable Interest Period, on any date on
Page 11<PAGE>
which the Eurodollar Rate Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on
each Eurodollar Rate Advance having an Interest Period longer
than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest shall
be calculated for actual days elapsed on the basis of a 360-day
year. Interest shall be payable for the day an Advance is made
but not for the day of any payment on the amount paid if payment
is received prior to Noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance shall
become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.14. Notification of Advances, Interest Rates and
Prepayments. Promptly after receipt thereof, the Agent will
notify each Lender of the contents of each Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by
it hereunder. The Agent will notify each Lender of the interest
rate applicable to each Eurodollar Rate Advance promptly upon
determination of such interest rate and will give each Lender
prompt notice of each change in the Alternate Base Rate.
2.15. Lending Installations. Each Lender may book its
Loans at any Lending Installation selected by such Lender and may
change its Lending Installation from time to time. All terms of
this Agreement shall apply to any such Lending Installation and
the Notes shall be deemed held by each Lender for the benefit of
such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose
account Loan payments are to be made.
2.16. Non-Receipt of Funds by the Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Agent
prior to the date on which it is scheduled to make payment to the
Agent of (i) in the case of a Lender, the proceeds of a Loan or
(ii) in the case of the Borrower, a payment of principal or
interest to the Agent for the account of the Lenders, that it
does not intend to make such payment, the Agent may assume that
such payment has been made. The Agent may, but shall not be
obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such
Lender or the Borrower, as the case may be, has not in fact made
such payment to the Agent, the recipient of such payment shall,
on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by
a Lender, the Federal Funds Effective Rate for such day or (ii)
in the case of payment by the Borrower, the interest rate
applicable to the relevant Loan.
Page 12<PAGE>
2.17. Agent and Arranger Fees. The Borrower will pay
(i) First Chicago Capital Markets, Inc.(the "Arranger") the
arrangement fee specified in the Agent and Arranger fee letter
dated March 5, 1996 among FNBC, the Agent, the Arranger and the
Borrower (the "Fee Letter"), and (ii) the Agent for its own
account the annual administrative agent's fee specified in the
Fee Letter.
ARTICLE III.
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If any change in law or any
governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law),
or any change in interpretation thereof, or the compliance of any
Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on
or from payments due from the Borrower (excluding
federal taxation of the overall net income of any
Lender or applicable Lending Installation), or changes
the basis of taxation of payments to any Lender in
respect of its Loans or other amounts due it hereunder,
or
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit
or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any
Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar
Rate Advances), or
(iii)imposes any other condition the result of which is
to increase the cost to any Lender or any applicable
Lending Installation of making, funding or maintaining
loans or reduces any amount receivable by any Lender or
any applicable Lending Installation in connection with
loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by
reference to the amount of loans held or interest
received by it, by an amount deemed material by such
Lender,
then, within 1 5 days of demand by such Lender, the Borrower
shall pay such Lender that portion of such increased expense
incurred or reduction in an amount -received which such Lender
determines is attributable to making, funding and maintaining its
Loans and its Commitment.
3.2 Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be
maintained by such Lender, any Lending Installation of such
Lender or any corporation controlling such Lender is increased as
Page 13<PAGE>
a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary
to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans or its obligation to
make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change
after the date of this Agreement in the Risk-Based Capital
Guidelines, or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having
the force of law) after the date of this Agreement which affects
the amount of capital required or expected to be maintained by
any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules,
and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition
rules, and any amendments to such regulations adopted prior to
the date of this Agreement.
3.3. Availability of Eurodollar Rate Advances. If any
Lender determines that maintenance of its Eurodollar Rate Loans
at a suitable Lending Installation would violate any applicable
law, rule, regulation, or directive, whether or not having the
force of law, or if the Required Lenders determine that (i)
deposits of a type and maturity appropriate to match fund
Eurodollar Rate Advances are not available or (ii) the interest
rate applicable to a Eurodollar Rate Advance does not accurately
reflect the cost of making or maintaining such Advance, then the
Agent shall suspend the availability of the Eurodollar Rate
Advances and require any Eurodollar Rate Advances to be converted
into a Floating Rate Advance.
3.4. Funding lndemnification. If any payment of a
Eurodollar Rate Advance occurs on a date which is not the last
day of the applicable Interest Period, whether because of
acceleration, prepayment or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or
cost in liquidating or employing deposits acquired to fund or
maintain the Eurodollar Rate Advance.
3.5. Lender Statements; Survival of Indemnity. To the
extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar
Rate Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1 and 3.2 or to avoid the unavailability of
Eurodollar Rate Advances under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender
Page 14<PAGE>
shall deliver a written statement of such Lender to the Borrower
(with a copy to the Agent) as to the amount due, if any, under
Section 3.1, 3.2 or 3.4. Such written statement shall set forth
in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding
on the Borrower in the absence of manifest error. Determination
of amounts payable under such Sections in connection with a
Eurodollar Rate Loan shall be calculated as though each Lender
funded its Eurodollar Rate Loan through the purchase of a deposit
of the type and maturity corresponding to the deposit used as a
reference in determining the Eurodollar Rate applicable to such
Loan, whether in fact that is the case or not. Unless otherwise
provided herein, the amount specified in the written statement of
any Lender shall be payable on demand after receipt by the
Borrower of such written statement. The obligations of the
Borrower under Sections 3.1, 3.2 and 3.4 shall survive payment of
the Obligations and termination of this Agreement.
Notwithstanding anything in this Agreement to the contrary, the
Borrower shall not be required to pay any amounts under Sections
3.1 and 3.2 incurred more than 90 days prior to the delivery to
the Borrower of a notice claiming amounts due under such
Sections.
ARTICLE IV.
CONDITIONS PRECEDENT; WITHHOLDING TAX EXEMPTION
4.l. Initial Advance. The Lenders shall not be required to
make the initial Advance hereunder unless the Borrower has
furnished to the Agent, with sufficient copies for the Lenders,
all of the following:
(i) A Note payable to the order of each of the
Lenders.
(ii) The Guaranty signed by the Guarantor
(iii) Copies certified by the Secretary or an Assistant
Secretary of the Guarantor of the order of the Securities
and Exchange Commission under the Public Utility Holding
Company Act of 1935, as amended, which authorizes the
execution of the Guaranty.
(iv) Copies of the articles of incorporation of the
Borrower, together with all amendments, and a certificate of
good standing, both certified by the appropriate
governmental officer in its jurisdiction of incorporation.
(v) Copies, certified by the Secretary or Assistant
Secretary of the Borrower, of its by-laws and of its Board
of Directors' resolutions authorizing the execution of the
Loan Documents.
(vi) An incumbency certificate, executed by the
Secretary or Assistant Secretary of the Borrower, which
shall identify by name and title and bear the signature of
the officers of the Borrower authorized to sign the Loan
Page 15<PAGE>
Documents and to make borrowings hereunder, upon which
certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the
Borrower.
(vii) Copies of the articles of incorporation of the
Guarantor, together with all amendments, and a certificate
of good standing, both certified by the appropriate
governmental officer in its jurisdiction of incorporation.
(viii) Copies, certified by the Secretary or Assistant
Secretary of the Guarantor, of its by-laws and of its Board
of Directors' resolutions authorizing the execution of the
Guaranty.
(ix) An incumbency certificate, executed by the
Secretary or Assistant Secretary of the Guarantor, which
shall identify by name and title and bear the signature of
the officers of the Guarantor authorized to sign the
Guaranty.
(x) A certificate, signed by the chief financial
officer of the Borrower, stating that on the Borrowing Date
no Default or Unmatured Default has occurred and is
continuing.
(xi) A written opinion of Berlack, Israels & Liberman
LLP, counsel to the Borrower, addressed to the Lenders in
substantially the form of Exhibit "C- 1 " hereto.
(xii) A written opinion of Berlack, Israels & Liberman
LLP, counsel to the Guarantor, addressed to the Lenders in
substantially the form of Exhibit "C-2" hereto.
(xiii) Written money transfer instructions, in
substantially the form of Exhibit "E" hereto, addressed to
the Agent and signed by an Authorized Officer, together with
such other related money transfer authorizations as the
Agent may have reasonably requested.
(xiv) Such other documents as any Lender or its counsel
may have reasonably requested.
4.2. Additional Conditions Precedent to Initial Advance.
The Lenders shall not be required to make the initial Advance
hereunder unless on the Borrowing
Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article
V are true and correct as of the Borrowing Date except to
the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such
Page 16<PAGE>
representation or warranty shall be true and correct on and
as of such earlier date.
(iii) All legal matters incident to the making of such
Advance shall be satisfactory to the Lenders and their
counsel.
The initial Borrowing Notice shall constitute a representation
and warranty by the Borrower that the conditions contained in
Sections 4.2(i) and (ii) have been satisfied.
4.3. Withholding Tax Exemption. At least five Business Days
prior to the first date on which interest is payable hereunder
for the account of any Lender, each Lender that is not
incorporated under the laws of the United States of America, or a
state thereof, agrees that it will deliver to each of the
Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any
United States federal income taxes. Each Lender which so
delivers a Form 1001 or 4224 further undertakes to deliver to
each of the Borrower and the Agent two additional copies of such
form (or a successor form) on or before the date that such form
expires (currently, three successive calendar years for Form 1001
and one calendar,year for Form 4224) or becomes obsolete or after
the occurrence of any event requiring a change in the most recent
forms so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by
the Borrower or the Agent, in each case certifying that such
Lender is entitled to receive payments under this Agreement and
the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises the Borrower and
the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Corporate Existence and Subsidiaries. The Borrower (i)
is a corporation duly incorporated and validly subsisting as a
corporation under the laws of the Commonwealth of Pennsylvania,
(ii) has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted except where
failure to have such authority would not have a Material Adverse
Effect, and (iii) does not have any Subsidiaries.
5.2. Authorization and Validity. The Borrower has the
corporate power and authority and legal right to execute and
Page 17<PAGE>
deliver the Loan Documents and to perform its obligations
thereunder. The execution and delivery by the Borrower of the
Loan Documents and the performance of its obligations thereunder
have been duly authorized by proper corporate proceedings, and
the Loan Documents constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting the enforcement of creditors' rights
generally and general principles of equity.
5.3. No Conflict; Government Consent. Neither the execution
and delivery by the Borrower of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate any law,
rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Borrower or the Guarantor or the Borrower's
articles of incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which the Borrower or the
Guarantor is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien
in, of or on the Property of the Borrower pursuant to the terms
of any such indenture, instrument or agreement. No order,
consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other
action in respect of any governmental or public body or
authority, or any subdivision thereof, is required to authorize,
or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents.
5.4. Material Adverse Change. Since December 31, 1995,
there has been no change in the business, Property, prospects,
condition (financial or otherwise) or results of operations of
the Borrower which could reasonably be expected to have a
Material Adverse Effect.
5.5. Litigation and Contingent Obligations. There is no
litigation, arbitration, governmental investigation, proceeding
or inquiry pending or, to the knowledge of any of its executive
officers, threatened against or affecting the Borrower which
could reasonably be expected to have a Material Adverse Effect or
which seeks to prevent, enjoin or delay the making of the Loans
or Advances. Other than any liability incident to such
litigation, arbitration or proceedings, the Borrower has no
material contingent obligations not provided for or disclosed in
the financial statements referred to in Section 5(e) of the form
of Guaranty attached hereto as Exhibit "B" which are required to
be disclosed by generally accepted accounting principles.
5.6. ERISA. The Unfunded Liabilities of all Single Employer
Plans are not reasonably expected to result in a Material Adverse
Effect. Neither the Borrower nor any other member of the
Controlled Group has incurred, or is reasonably expected to
incur, any withdrawal liability to Multiemployer Plans which
Page 18<PAGE>
would have a Material Adverse Effect. Each Plan complies in all
material respects with all applicable requirements of law and
regulations, and no Reportable Event has occurred with respect to
any Plan which would have a Material Adverse Effect.
5.7. Accuracy of Information. No information, exhibit or
report furnished by the Borrower to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan
Documents contained as of its date any misstatement of material
fact or omitted to state a material fact necessary to make the
statements contained therein not misleading in light of the
circumstances under which they were made.
5.8. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower which
are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.9. Material Agreements. The Borrower is not in default in
the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement
to which it is a party, which default could reasonably be
expected to have a Material Adverse Effect.
5.10. Compliance With Laws. The Borrower is in compliance
with all applicable statutes, rules, regulations, orders and
restrictions of any Federal, state or local government, or any
instrumentality or agency thereof, having jurisdiction over the
conduct of its business or the ownership of its Property
(including, without limitation, Environmental Laws) except where
failure to comply could not reasonably be expected to have a
Material Adverse Effect.
5.11. Environmental Matters. The Borrower has not received
any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable
Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance
into the environment, which non-compliance or remedial action
could reasonably be expected to have a Material Adverse Effect.
5.12. Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of
1940, as amended.
ARTICLE VI.
COVENANTS
During the term of this Agreement, unless the Required
Lenders shall otherwise consent in writing:
6.1. Reporting. The Borrower will maintain a system of
accounting established and administered in accordance with
Page 19<PAGE>
generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 60 days after the close of each quarterly period
of each of the fiscal years of the Borrower, a certificate
signed by the Borrower's chief financial officer or Vice
President and Treasurer certifying that as of the date of
such certificate there exists no Default or Unmatured
Default, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(ii) Such other information (including non-financial
information) as the Agent or any Lender may from time to
time reasonably request.
6.2. Use of Proceeds. The Borrower will use the proceeds of
the Advances to refinance existing indebtedness of the Borrower
relating to real estate in Parsippany, New Jersey and Reading,
Pennsylvania and for other general corporate purposes. The
Borrower will not use any of the proceeds of the Advances to
purchase or carry any "margin stock" (as defined in Regulation
U).
6.3. Notice of Default. The Borrower will, upon acquiring
knowledge of same, give prompt notice in writing to the Lenders
of the occurrence of any Default or Unmatured Default.
6.4. Conduct of Business. The Borrower will carry on and
conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly
incorporated, validly subsisting as a domestic corporation and in
good standing in its jurisdiction of incorporation and maintain
all requisite authority to conduct its business in each
jurisdiction in which its business is conducted except where
failure to have such authority would not reasonably be expected
to have a Material Adverse Effect.
6.5. Insurance. The Borrower will maintain with financially
sound and reputable insurance companies insurance on all its
Property in such amounts and covering such risks as is consistent
with sound business practice, and the Borrower will furnish to
any Lender upon request full information as to the insurance
carried.
6.6. Compliance with Laws. The Borrower will comply with
all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject except
where failure to so comply would not reasonably be expected to
have a Material Adverse Effect.
6.7. Maintenance of Properties. The Borrower will do all
things necessary to maintain, preserve, protect and keep its
material Property in good repair, working order and condition,
and make all necessary and proper repairs, renewals and
Page 20<PAGE>
replacements so that its business carried on in connection
therewith may be properly conducted at all times.
6.8. Inspection. The Borrower will permit the Agent and the
Lenders, by their respective representatives and agents, to
inspect any of the Property, corporate books and financial
records of the Borrower, to examine and make copies of the books
of accounts and other financial records of the Borrower, and to
discuss the affairs, finances and accounts of the Borrower with,
and to be advised as to the same by, its officers at such
reasonable times and intervals as the Lenders may designate.
6.9. Merger. The Borrower will not merge or consolidate
with or into any other Person.
6.10. Amendments to Agreements. The Borrower will maintain
in full force and effect without material change the service
agreements between it and the Utilities which are in effect on
the date hereof.
ARTICLE VII.
DEFAULTS
The occurrence of any one or more of the following events
shall constitute a Default:
7.1. Any representation or warranty made or deemed made by
or on behalf of the Borrower to the Lenders or the Agent under
this Agreement shall be materially false on the date as of which
made.
7.2. Nonpayment of principal of any Note when due, or
nonpayment of interest upon any Note or nonpayment of any other
Obligations under any of the Loan Documents within five Business
Days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or
provisions of Section 6.3, 6.9 or 6.10.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of
the terms or provisions of this Agreement which is not remedied
within thirty days after written notice from the
Agent or any Lender.
7.5. Failure of the Borrower, any of its Subsidiaries, the
Guarantor or any Utility to pay when due (whether at stated
maturity, by acceleration or otherwise) any Indebtedness
aggregating in excess of $20,000,000 ("Material Indebtedness");
or the default by the Borrower, any of its Subsidiaries, the
Guarantor or any Utility in the performance of any term,
provision or condition contained in any agreement under which any
such Material Indebtedness was created or is governed, or any
other event shall occur or condition exist, the effect of which
is to cause, or to permit the holder or holders of such Material
Indebtedness to cause, such Material Indebtedness to become due
Page 21<PAGE>
prior to its stated maturity; or the Borrower, any of its
Subsidiaries, the Guarantor or any Utility shall not pay, or
admit in writing its inability to pay, its debts generally as
they become due.
7.6. The Borrower, any of its material Subsidiaries, the
Guarantor or any Utility shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the
benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any
proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or
fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (v) take any
corporate action to authorize or effect any of the foregoing
actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section
7.7.
7.7. Without the application, approval or consent of the
Borrower, any of its material Subsidiaries, the Guarantor or any
Utility, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower, any of its material
Subsidiaries, the Guarantor or any Utility or any Substantial
Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower, any of its
material Subsidiaries, the Guarantor or any Utility and such
appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 60 consecutive days.
7.8. The Borrower, any of its Subsidiaries, the Guarantor or
any Utility shall fail within 60 days to pay, bond or otherwise
discharge any judgment or order for the payment of money in
excess of $20,000,000, which is not stayed on appeal or otherwise
being appropriately contested in good faith.
7.9. Any Change in Control shall occur and after such Change
of Control the investment rating of the senior secured debt of
any Utility (based in the case of each Utility on the second
highest of the S&P Rating, the Moody's Rating and the D&P Rating
of such Utility; provided, however, that if any two of such
ratings are equivalent ratings, such equivalent rating will be
used in this determination) shall be less than BBB-, Baa3 or BBB-
, respectively, or an equivalent rating if such rating agencies
change their terminology for such ratings.
7.10. The Guarantor shall cease to own, directly or
indirectly, 100% of the outstanding shares of voting stock of the
Borrower free and clear of all Liens or other encumbrances.
Page 22<PAGE>
7.11. The Guaranty shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert
the invalidity or unenforceability of the Guaranty, or any "Event
of Default" referred to in Section 8 of the Guaranty shall occur
and be continuing, or the Guarantor denies that it has any
further liability under the Guaranty or gives notice to such
effect.
ARTICLE VIII.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6
or 7.7 occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder shall automatically terminate
and the Obligations shall immediately become due and payable
without any election or action on the part of the Agent or any
Lender. If any other Default occurs, the Required Lenders (or
the Agent with the consent of the Required Lenders) may terminate
or suspend the obligations of the Lenders to make Loans
hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any
kind, all of which the Borrower hereby expressly waives.
If, within ten days after acceleration of the maturity of
the Obligations or termination of the obligations of the Lenders
to make Loans hereunder as a result of any Default (other than
any Default as described in Section 7.6 or 7.7 with respect to
the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article
VIII, the Required Lenders (or the Agent with the consent in
writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or
modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such
supplemental agreement shall, without the consent of each Lender
affected thereby:
(i) Extend the maturity of any Loan or Note or forgive all
or any portion ofthe principal amount thereof, or reduce the
rate or extend the time of paymentof interest thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Increase the amount of the Commitment of any Lender
hereunder, or permit the Borrower to assign its rights under this
Agreement.
(iv) Amend this Section 8.2.
Page 23<PAGE>
(v) Amend the Guaranty other than as provided for in
Section 10 of the Guaranty.
No amendment of any provision of this Agreement relating to the
Agent shall be effective without the written consent of the
Agent. The Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party
to this Agreement.
8.3. Preservation of Rights. No delay or omission of the
Lenders or the Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver
of any Default or an acquiescence therein, and the making of a
Loan notwithstanding the existence of a Default or the inability
of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right, and
no waiver, amendment or other variation of the terms, conditions
or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to
Section 8.2, and. then only to the extent in such writing
specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have
been paid in full.
ARTICLE IX.
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall
survive delivery of the Notes and the making of the Loans herein
contemplated.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or
regulation.
9.3. Headings. Section headings in the Loan Documents are
for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the
Lenders and supersede all prior agreements and understandings
among the Borrower, the Agent and the Lenders relating to the
subject matter thereof other than the Fee Letter.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and
not joint and no Lender shall be the partner or agent of any
other (except to the extent to which the Agent is authorized to
act as such). The failure of any Lender to perform any of its
Page 24<PAGE>
obligations hereunder shall not relieve any other Lender from any
of its obligations hereunder. 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 their respective
successors and assigns.
9.6. Expenses; Indemnification. The Borrower shall
reimburse the Agent for up to $15,000 of the costs, internal
charges and out-of-pocket expenses (including reasonable
attorneys' fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent) paid or incurred
by the Agent in connection with the preparation, negotiation,
execution, delivery, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees
to reimburse the Agent and the Lenders for any costs, internal
charges and out-of-pocket expenses (including reasonable
attorneys' fees and time charges of attorneys for the Agent and
the Lenders, which attorneys may be employees of the Agent or the
Lenders) paid or incurred by the Agent or any Lender in
connection with the collection and enforcement of the Loan
Documents. The Borrower further agrees to indemnify the Agent
and each Lender, its directors, officers and employees against
all losses, claims, damages, penalties, judgments, liabilities
and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Agent or
any Lender is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of
any Loan hereunder except to the extent that they are determined
by a court of competent jurisdiction in a final and non-
appealable order to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The
obligations of the Borrower under this Section 9.6 shall survive
the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent
with sufficient counterparts so that the Agent may furnish one to
each of the Lenders.
9.8. Severability of Provisions. Any provision in a ny Loan
Document that is held to be inoperative, unenforceable, or
invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
9.9. Nonliability of Lenders. The relationship between the
Borrower and the Lenders and the Agent shall be solely that of
borrower and lender. Neither the Agent nor any Lender shall have
any fiduciary responsibilities to the Borrower. Neither the
Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in
Page 25<PAGE>
connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent nor any
Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower
in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined by a court of
competent jurisdiction in a final and non-appealable order that
such losses resulted from the gross negligence or willful
misconduct of the party from which recovery is sought. Neither
the Agent nor any Lender shall have any liability with respect
to, and the Borrower hereby waives, releases and agrees not to
sue for, any special, indirect or consequential damages suffered
by the Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated
thereby.
9.10. Confidentiality. Each Lender agrees to hold any
confidential information which it may receive from the Borrower
pursuant to this Agreement in confidence, except for disclosure
(i) to its Affiliates and to other Lenders and their respective
Affiliates provided that they are advised of the confidential
nature of the information, (ii) to legal counsel, accountants,
and other professional advisors to that Lender or to a Transferee
provided that they are advised of the confidential nature of the
information, (iii) to regulatory officials, (iv) to any Person as
requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal
proceeding to which that Lender is a party, and (vi) permitted by
Section 12.4.
9.11. Nonreliance. Each Lender hereby represents that it is
not relying on or looking to any margin stock (as defined in
Regulation U of the Board of Governors of the Federal Reserve
System) for the repayment of the Loans provided for herein.
ARTICLE X.
THE AGENT
10.1. Appointment; Nature of Relationship. The First
National Bank of Chicago is hereby appointed by the Lenders as
the Agent hereunder and under each other Loan Document, and each
of the Lenders irrevocably authorizes the Agent to act as the
contractual representative of such Lender with the rights and
duties expressly set forth herein and in the other Loan
Documents. The Agent agrees to act as such contractual
representative upon the express conditions contained in this
Article X. Notwithstanding the use of the defined term "Agent,"
it is expressly understood and agreed that the Agent shall not
have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the Agent is
merely acting as the representative of the Lenders with only
those duties as are expressly set forth in this Agreement and the
other Loan Documents. In its capacity as the Lenders'
Page 26<PAGE>
contractual representative, the Agent (i) does not hereby assume
any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-
105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to
the Agent by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders
to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the
Borrower, the Lenders or any Lender for any action taken or
omitted to be taken by it or them hereunder or under any other
Loan Document or in connection herewith or therewith except for
its or their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither
the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire
into, or verify (i) any statement, warranty or representation
made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to
furnish information directly to each Lender; (iii) the
satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered to the Agent; (iv) the
validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; or (v) the value,
sufficiency, creation, perfection or priority of any interest in
any collateral security. The Agent shall have no duty to
disclose to the Lenders information that is not required to be
furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its
capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in
all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance
with written instructions signed by the Required Lenders, and
such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders and on all holders
of Notes. The Lenders hereby acknowledge that the Agent shall be
under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement or any
Page 27<PAGE>
other Loan Document unless it shall be requested in writing to do
so by the Required Lenders. The Agent shall be fully justified
in failing or refusing to take any action hereunder and under and
under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against
any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-
fact and shall not be answerable to the Lenders, except as to
money or securities received by it or its authorized agents, for
the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled
to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder and under any
other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed
or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Agent ratably in
proportion to their respective Commitments (or, if the
Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any
amounts not reimbursed by the Borrower for which the Agent is
entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on
behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents; provided, however, that
no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the
Agent. The obligations of the Lenders under this Section 10.8
shall survive payment of the Obligations and termination of this
Agreement.
10.9. Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Unmatured Default hereunder unless the Agent has received written
notice from a Lender or the Borrower referring to this Agreement
describing such Default or Unmatured Default and stating that
Page 28<PAGE>
such notice is a "notice of default". In the event that the
Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a
Lender, the Agent shall have the same rights and powers hereunder
and under any other Loan Document as any Lender and may exercise
the same as though it were not the Agent, and the term "Lender"
or "Lenders" shall, at any time when the Agent is a Lender,
unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity
or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower, the
Guarantor or any of their respective Subsidiaries. The Agent, in
its individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or
any other Lender and based on the financial statements prepared
by the Borrower and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement and the other Loan Documents. Each
Lender also acknowledges that it will, independently and without
reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a
successor Agent reasonably acceptable to the Borrower or, if no
such successor Agent has been appointed, forty-five days after
the retiring Agent gives notice of its intention to resign. Upon
any such resignation, the Required Lenders shall have the right
to appoint, on behalf of the Borrower and the Lenders, a
successor Agent reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving
notice of its intention to resign, then the resigning Agent may
appoint, on behalf of the Borrower and the Lenders, a successor
Agent. If the Agent has resigned and no successor Agent has been
appointed, the Lenders may perform all the duties of the Agent
hereunder and the Borrower shall make all payments in respect of
the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor
Agent shall be a commercial bank having capital and retained
earnings of at least $750,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigning
Agent. Upon the effectiveness of the resignation of the Agent,
the resigning Agent shall be discharged from its duties and
Page 29<PAGE>
obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation of an Agent, the provisions of
this Article X shall continue in effect for the benefit of such
Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other
Loan Documents.
ARTICLE XI.
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of,
any rights of the Lenders under applicable law, if the
Obligations become due and payable on the Maturity Date or
pursuant to Section 8.1, any and all deposits (including all
account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time
held or owing by any Lender to or for the credit or account of
the Borrower may, to the fullest extent permitted by applicable
law, be offset and applied toward the payment of the Obligations
owing to such Lender, whether or not the Obligations, or any part
hereof, shall then be due. Notwithstanding the foregoing, in no
event shall a Lender be permitted to setoff against any funds or
property of the Borrower on deposit with the Lender that are
being held specifically in connection with any obligation of the
Borrower or the Guarantor, or any Subsidiary of the Guarantor, to
decommission any generation facility pursuant to any rule,
regulation or order of any government body or agency.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than
payments received pursuant to Section 3.1, 3.2 or 3.4) in a
greater proportion than that received by any other Lender, such
Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of Loans. If any Lender,
whether in connection with setoff or amounts which might be
subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
ARTICLE XII.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lenders and their respective successors
and assigns, except that (i) the Borrower shall not have the
right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by any Lender must be made in
compliance with Section 1 2.3. Notwithstanding clause (ii) of
this Section 1 2. 1, any Lender may at any time, without the
Page 30<PAGE>
consent of the Borrower or the Agent, assign all or any portion
of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment to a
Federal Reserve Bank shall release the transferor Lender from its
obligations hereunder. The Agent may treat the payee of any Note
as the owner thereof for all purposes hereof unless and until
such payee complies with Section 12.3 in the case of an
assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Note agrees by acceptance thereof to
be bound by all the terms and provisions of the Loan Documents.
Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the
holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any
Note or Notes issued in exchange therefor.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender
may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or
more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other
interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall
remain the holder of any such Note for all purposes under
the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender
had not sold such participating interests, and the Borrower
and the Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the
sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which
forgives principal or interest or reduces the interest rate
payable with respect to any such Loan or Commitment,
postpones any date fixed for any regularly-scheduled payment
of principal of, or interest on, any such Loan or
Commitment, releases any guarantor of any such Loan or
releases any substantial portion of collateral, if any,
securing any such Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that
each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating
Page 31<PAGE>
interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan
Documents, provided that each Lender shall retain the right
of setoff provided in Section 11.1 with respect to the
amount of participating interests sold to each Participant
so long as the aggregate amount setoff by each Lender and
its Participants do not exceed the Obligations owing to such
Lender. The Lenders agree to share with each Participant,
and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender,
any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section
11.2 as if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with
applicable law, at any time assign to one or more banks or
other entities ("Purchasers") all or any part of its rights
and obligations under the Loan Documents; provided, however,
that, unless a Default has occurred and is continuing, FNBC
and its Affiliates shall all times after the Borrowing Date
hold at least 3/7ths of the outstanding Loans and no Lender
shall assign less than 1/7th of the outstanding Loans to any
one Purchaser. Such assignment shall be substantially in
the form of Exhibit "D" hereto or in such other form as may
be agreed to by the parties thereto. The consent of the
Borrower and the Agent shall be required prior to an
assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof;provided,
however, that if a Default has occurred and is continuing,
the consent of the Borrower shall not be required. Such
consent shall not be unreasonably withheld or delayed.
12.3.2. Effect; Effective Date. Upon (i) delivery to
the Agent of a notice of assignment, substantially in the
form attached as Exhibit "I" to Exhibit "D" hereto (a
"Notice of Assignment"), together with any consents required
by Section 12.3.1, and (ii) payment of a $2,500 fee to the
Agent for processing such assignment, such assignment shall
become effective on the effective date specified in such
Notice of Assignment. The Notice of Assignment shall
contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the
Commitment and Loans under the applicable assignment
agreement are "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the
Loan Documents will not be "plan assets" under ERISA. On
and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the
Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it
were an original party hereto, and no further consent or
Page 32<PAGE>
action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to
the percentage of the Aggregate Commitment and Loans
assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2,
the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting
their Commitment, as adjusted pursuant to such assignment.
12.4. Dissemination of Information. The Borrower authorizes
each Lender to disclose to any Participant or Purchaser or any
other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective
Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its
Subsidiaries; provided that each Transferee and prospective
Transferee agrees to be bound by Section 9.10.
12.5. Tax Treatment. If any interest in any Loan Document
is transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any
State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 4.3.
ARTICLE XIII.
NOTICES
13.1. Notices. Except as otherwise permitted by Section
2.12 with respect to the Borrowing Notice and
Conversion/Continuation Notices, all notices, requests and other
communications to any party hereunder shall be in writing
(including bank wire, facsimile transmission or similar writing)
and shall be given to such party: (x) in the case of the
Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, and (y) in the case of any
Lender, at its address or facsimile number set forth below its
signature hereto or as may be specified in the administrative
questionnaire attached to the Notice of Assignment pursuant to
which it becomes a Lender. Each such notice, request or other
communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified
in this Section 13.1 and confirmation of receipt is received,
(ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section 13.1; provided
that notices to the Agent under Article 11 shall not be effective
until received.
13.2. Change of Address. The Borrower, the Agent and any
Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
Page 33<PAGE>
ARTICLE XIV.
COUNTERPARTS
This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement shall
be effective when it has been executed by the Borrower, the Agent
and the Lenders and each party has notified the Agent by telex or
telephone, that it has taken such action.
ARTICLE XV.
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS
TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
Page 34<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent
have executed this Credit Agreement as of the date first above
written.
GPU SERVICE CORPORATION
By: /s/ John G. Graham
Print Name: John G. Graham
Title: Executive Vice President &
Chief Financial Officer
100 Interpace Parkway
Parsippany, New Jersey 07054
Attn: Vice President and Treasurer
Facsimile No.: 201-263-6397
Commitments
$35,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Agent
By: /s/ Kenneth J. Bauer
Print Name: Kenneth J. Bauer
Title: Authorized Agent
Mail Suite 0363
One First National Plaza
Chicago, Illinois 60670-0363
Attn: Utilities Division
Facsimile No.: 312-732-3055
$35,000,000
Page 35<PAGE>
EXHIBIT "A"
PROMISSORY NOTE
$ 1996
GPU Service Corporation, a Pennsylvania corporation (the
"Borrower"), promises to pay to the order of (the
"Lender") the principal sum of and No/100 Dollars
in immediately available funds at the main office of The First
National Bank of Chicago in Chicago, Illinois, as Agent, together
with interest on the unpaid principal amount hereof at the rates
and on the dates set forth in the Agreement (as defined below).
The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on 2001.
The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance
with its usual practice, the date and amount of each Loan and the
date and amount of each principal payment hereunder.
This Promissory Note is one of the Notes issued pursuant to,
and is entitled to the benefits of, the Credit Agreement dated as
of March 27, 1996 (which, as it may be amended, supplemented or
otherwise modified and in effect from time to time, is herein
called the "Agreement"), among the Borrower, the lenders party
thereto, including the Lender, and The First National Bank of
Chicago, as Agent, to which Agreement reference is hereby made
for a statement of the terms and conditions governing this
Promissory Note, including the terms and conditions under which
this Promissory Note may be prepaid or its maturity date
accelerated. This Promissory Note is guaranteed pursuant to the
Guaranty, all as more specifically described in the Agreement,
and reference is made thereto for a statement of the terms and
provisions thereof. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to
them in the Agreement.
GPU SERVICE CORPORATION
By:
Print Name:
Title:<PAGE>
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
PROMISSORY NOTE OF GPU SERVICE CORPORATION
DATED , 1996
Maturity
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance<PAGE>
EXHIBIT "B"
GUARANTY
GUARANTY (this "Guaranty"), dated as of the _ day of 1996,
made by GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania
corporation (the "Guarantor"), in favor of each of the Lenders as
parties to the Credit Agreement (as defined below).
PRELIMINARY STATEMENTS:
(1) The Lenders and The First National Bank of Chicago as
Agent for the Lenders have entered into a Credit Agreement, dated
as of March 27, 1996 (said Agreement, as it may hereafter be
amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined),
with GPU Service Corporation, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania (the
"Borrower").
(2) It is a condition precedent to the- effectiveness of
the Credit Agreement that the Guarantor, as owner of 100% percent
of the outstanding shares of stock of the Borrower, shall have
executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lenders to enter into the Credit Agreement,
the Guarantor, intending to be legally bound hereby, hereby
agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all principal,
interest and other obligations of the Borrower under the Credit
Agreement (collectively, the 'Obligations"), and agrees to pay
any and all reasonable expenses (including reasonable counsel
fees and expenses) incurred by the Lenders in enforcing any
rights under this Guaranty.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that
the Obligations will be paid strictly in accordance with the
terms of the Credit Agreement, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Lenders with respect
thereto. The obligations of the Guarantor under this Guaranty
are independent of the Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to
enforce this Guaranty, irrespective of whether any action is
brought against the Borrower or whether the Borrower is joined in
any such action or actions. The liability of the Guarantor under
this Guaranty shall, to the fullest extent permitted by law, be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Credit
Agreement or any other agreement or instrument relating thereto;<PAGE>
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to departure from the
Credit Agreement, including, without limitation, any increase in
the Obligations resulting from the extension of additional credit
to the Borrower or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of
the Obligations;
(iv) any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale
or other disposition of any collateral for all or any of the
Obligations or any other assets of the Borrower or any of its
Subsidiaries;
(v) any change, restructuring or termination of the
corporate structure or existence of the Borrower or any of its
Subsidiaries; or
(vi) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, the Borrower or a
guarantor.
This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by any
Lender upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been
made.
SECTION 3. Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect
to any of the Obligations and this Guaranty and any requirement
that any Lender protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any
right or take any action against the Borrower or any other Person
or any collateral.
SECTION 4. Subrogation. The Guarantor will not exercise any
rights which it may acquire by way of subrogation under this
Guaranty, by any payment made hereunder or otherwise, until all
the Obligations and all other amounts payable under this Guaranty
shall have been paid in full and the Commitments shall have
expired or terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time prior
to the later of (x) the payment in full of the Obligations and
all other amounts payable under this Guaranty and (y) the
expiration or termination of the Commitments, such amount shall
be held in trust for the benefit of the Lenders and shall
forthwith be paid to the Agent to be credited and applied upon
the Obligations, whether matured or unmatured, in accordance with
the terms of the Credit Agreement or to be held by the Agent as
Page 2<PAGE>
collateral security for any Obligations thereafter existing. If
(i) the Guarantor shall make payment to the Lenders of all or any
part of the Obligations, (ii) all the Obligations and all other
amounts payable under this Guaranty shall be paid in full and
(iii) the Commitments shall have expired or terminated, the
Lenders will, at the Guarantor's request, execute and deliver to
the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Obligations
resulting from such payment by the Guarantor.
SECTION 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor is duly incorporated and validly
subsisting as a corporation under the laws of the Commonwealth of
Pennsylvania.
(b) The execution, delivery and performance by the
Guarantor of this Guaranty are within the Guarantor's corporate
powers, have been duly authorized by all necessary corporate
action, and do not contravene (i) the Guarantor's charter or by-
laws, (ii) any applicable law or (iii) any material contractual
restriction binding on or affecting the Guarantor, and do not
result in or require the creation of any lien upon or with
respect to any of its properties.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Guarantor of this Guaranty except for an order
of the Securities and Exchange Commission under the Public
Utility Holding Company Act of 1935, as amended, which order has
been duly obtained, is in full force and effect, is sufficient
for its purpose and is not subject to any pending or, to the
knowledge of the Guarantor, threatened appeal or other proceeding
seeking reconsideration or review thereof.
(d) This Guaranty is the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and other similar laws affecting
creditors' rights generally and by general principles of equity.
(e) The audited consolidated balance sheets of the
Guarantor and its Subsidiaries as at December 31, 1 995, and the
related consolidated statements of income and retained earnings
of the Guarantor and its Subsidiaries for the period then ended,
copies of which have been furnished to each Lender as of the date
of this Guaranty, fairly present the financial condition of the
Guarantor and its Subsidiaries as at such date and the results of
the operations of the Guarantor and its Subsidiaries for the
period ended on such date, all in accordance with generally
accepted accounting principles consistently applied, and since
Page 3<PAGE>
December 31, 1 995, there has been no material adverse change in
such financial condition or results of operations.
(f) The Guarantor owns beneficially and of record 100% of
the common stock of the Borrower and at least 75% of the common
stock of each of Jersey Central Power & Light Company, a New
Jersey corporation, Metropolitan Edison Company, a Pennsylvania
corporation, and Pennsylvania Electric Company, a Pennsylvania
corporation (collectively, the "Operating Subsidiaries").
(g) Except as disclosed in the Guarantor's Annual Report on
Form 10-K for the year ended December 31, 1 995, a copy of which
has been delivered to the Agent, there is no pending or, to the
Guarantor's knowledge, threatened action or proceeding affecting
the Guarantor or any of its Subsidiaries before any court,
governmental agency or arbitrator, which could reasonably be
expected to materially adversely affect the financial condition
or operations of the Guarantor or of the Guarantor and its
Subsidiaries, taken as a whole.
(h) The Guarantor has filed all consolidated United States
federal tax returns and all other material tax returns which are
required to be filed by it, the Borrower and the Utilities and
has paid all taxes due pursuant to said returns or pursuant to
any assessment received, except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have
been provided in accordance with generally accepted accounting
principles and as to which no Lien in respect of a material
obligation exists. No tax liens in respect of a material
obligation have been filed and no material claims are being
asserted with respect to any such taxes. The charges, accruals
and reserves on the books of the Guarantor in respect of any
taxes or other governmental charges are adequate.
SECTION 6. Affirmative Covenants. The Guarantor covenants
and agrees that, so long as any part of the Obligations shall
remain unpaid or any Lender shall have any Commitment, the
Guarantor will, unless the Required Lenders shall otherwise
consent in writing:
(a) Performance and Compliance with Other Agreements.
Perform and comply with each of the material provisions of each
material indenture, credit agreement, contract or other agreement
by which the Guarantor is bound, non-performance or non-
compliance with which would have a material adverse effect upon
its business or credit or in any way affect its ability to
perform its obligations hereunder except material contracts or
other agreements being contested in good faith.
(b) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence in the jurisdiction of its
incorporation, and qualify and remain qualified as a foreign
corporation in good standing in each jurisdiction in which such
qualification is necessary or desirable in view of its business
and operations or the ownership of its properties, except where
the failure to be so qualified would not materially adversely
Page 4<PAGE>
affect its financial condition, operations, properties or
business, and preserve its material rights, franchises and
privileges to conduct its business substantially as conducted on
the date hereof.
(c) Compliance with Laws, Etc. Comply with the
requirements of all applicable laws, rules, regulations and
orders of any governmental authority, non-compliance with which
would have a material adverse effect upon its business or credit
or in any way affect its ability to perform its obligations
hereunder except laws, rules, regulations and orders being
contested in good faith.
(d) Inspection Rights. At any reasonable time and from
time to time, permit any Lender or any agents or representatives
thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the
Guarantor and to discuss the affairs, finances and accounts of
the Guarantor with any of its officers or directors.
(e) Ownership of Operating Subsidiaries. Maintain at all
times beneficial ownership of at least 75% of all outstanding
shares of common stock of each Operating Subsidiary; provided
that the foregoing shall not prohibit a merger or consolidation
among two or more of the Operating Subsidiaries provided,
further, that the Guarantor will maintain at all times beneficial
ownership of at least 75% of all outstanding shares of common
stock of the surviving entity.
(f) Annual Financial Statements. Within 90 days after the
close of each of its fiscal years, the Guarantor will furnish to
the Lenders an audit report certified by Coopers & Lybrand L.L.P.
or another nationally recognized independent certified public
accountant prepared in accordance with generally accepted
accounting principles on a consolidated and consolidating basis
(consolidating statements need not be certified by such
accountants) for it and its Subsidiaries, including balance
sheets as of the end of such period and related profit and loss
statements and statements of cash flows.
(g) Quarterly Financial Statements. Within 60 days after
the close of each of the first three quarterly periods of each of
its fiscal years, the Guarantor will furnish to the Lenders, for
it and its Subsidiaries, consolidated and consolidating unaudited
balance sheets as at the close of each such period and
consolidated and consolidating profit and loss statements and
statements of cash flows for the period from the beginning of
such fiscal year to the end of such quarter, all certified by its
chief financial officer or Vice President and Treasurer as having
been prepared in accordance with generally accepted accounting
principles.
(h) Shareholder Reports. Promptly upon the furnishing
thereof to the shareholders of the Guarantor generally, the
Guarantor will furnish to the Lenders copies of all financial
statements, reports and proxy statements so furnished.
Page 5<PAGE>
(i) Reportable Event Notices. As soon as Possible and in
any event within 30 days after the Guarantor knows that any
Reportable Event has occurred with respect to any Plan, the
Guarantor will furnish to the Lenders a statement, signed by its
chief financial officer or Vice President and Treasurer,
describing said Reportable Event and the action which the
Guarantor proposes to take with respect thereto.
(i) Taxes. The Guarantor will pay when due all material
taxes, assessments and governmental charges and levies upon it or
its consolidated income, profits or Property, except those which
are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been set aside in
accordance with generally accepted accounting principles.
SECTION 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Obligations shall remain
unpaid or any Lender shall have any Commitment, the Guarantor
will not, without the prior written consent of the Required
Lenders:
(a) Sale of Assets, Etc. Sell, transfer, lease, assign or
otherwise convey or dispose of more than 25% of its assets
(whether now owned or hereafter acquired), in any single or
series of transactions, whether or not related, except for
dispositions of current assets in the ordinary course of business
as presently conducted.
(b) Pledge of Stock. Pledge, grant options on, create any
charge on or security interest in, or otherwise subject to any
charge or encumbrance, any of the common stock of its Operating
Subsidiaries unless the obligations of the Guarantor hereunder
are secured ratably and with equal priority, in form and
substance reasonably satisfactory to the Required Lenders.
(c) Net Worth. Fail to maintain its consolidated
stockholders equity, as reported from time to time in Guarantor's
periodic reports filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, of at least $1,000,000,000.
SECTION 8. Event of Default. The occurrence of any one or
more of the following events shall constitute an Event of
Default:
(a) Any representation or warranty made or deemed made by
or on behalf of the Guarantor to the Lenders or the Agent under
this Guaranty shall be materially false on the date as of which
made.
(b) The breach by the Guarantor of any of the terms or
provisions of Section 1 or Section 7 of this Guaranty.
(c) The breach by the Guarantor (other than a breach which
constitutes an Event of Default under Section 8(a) or 8(b) of
this Guaranty) of any of the terms or provisions of this Guaranty
Page 6<PAGE>
which is not remedied within thirty days after written notice
from the Agent or any Lender.
(d) Any "Default" (as defined in-the Credit Agreement)
described in Section 7.6 or 7.7 of the Credit Agreement shall
occur and be continuing, and the Guarantor shall fail to pay the
Obligations in full.
(e) Any other "Default" (as defined in the Credit
Agreement) shall occur and be continuing, the Required Lenders
(or the Agent with the consent of the Required Lenders) shall
declare the Obligations to be due and payable, and the Guarantor
shall fail to pay the Obligations in full.
SECTION 9. Acceleration. If any Event of Default (as
defined in Section 8 of this Guaranty) occurs as a result of a
Default described in Section 7.6 or 7.7 of the Credit Agreement
occurring with respect to the Borrower, the Obligations shall
immediately become due and payable without any election or action
on the part of the Agent or any Lender and the Guarantor shall
pay the Obligations in full. If any other Event of Default
occurs, the Required Lenders (or the Agent with the consent of
the Required Lenders) may declare the Obligations to be due and
payable, whereupon the Guarantor shall pay the Obligations in
full. If, within ten days after acceleration of the maturity of
the Obligations as a result of any Event of Default (other than
an Event of Default resulting from a Default described in Section
7.6 or 7.7 of the Credit Agreement with respect to the Borrower)
and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Agent
shall, by notice to the Guarantor and the Borrower, rescind and
annul such acceleration and/or termination.
SECTION 10. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty, and no 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 Required Lenders,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, (a) limit the
liability of the Guarantor hereunder, lb) postpone any date fixed
for payment hereunder, or (c) change the number of Lenders
required to take any action hereunder.
SECTION 11. Address for Notices. All notices and other
communications provided for hereunder shall be in writing and
sent by first class mail, postage prepaid, telecopier, or hand
delivery to it, if to the Guarantor, at its address at 100
Interpace Parkway, Parsippany, New Jersey 07054, Attention: Vice
President and Treasurer, and if to any Lender, at its address
specified in the Credit Agreement, or, as to any party, at such
other address as shall be designated by such party in a written
notice to each other party.
Page 7<PAGE>
SECTION 12. No Waiver; Remedies. No failure on the part of
any Lender to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 13. Right of Set-Off. Upon (i) the occurrence and
during the continuance of any Event of Default (as defined in
Section 8 of this Guaranty) and (ii) the making by the Agent or
the Required Lenders of any declaration of acceleration under the
Credit Agreement, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the
credit or the account of the Guarantor against any and all of the
obligations of the Guarantor now or hereafter existing under this
Guaranty whether or not such Lender shall have made any demand
under this Guaranty and although such obligations may be
contingent and unmatured. Each Lender agrees promptly to notify
the Guarantor after any such setoff and application made by such
Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights
of each Lender under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-
off) that such Lender may have. Notwithstanding the foregoing,
in no event shall a Lender be permitted to setoff against any
funds or property of the Guarantor on deposit with the Lender
that are being held specifically in connection with any
obligation of the Borrower or the Guarantor, or any Subsidiary of
the Guarantor, to decommission any generation facility pursuant
to any rule, regulation or order of any government body or
agency.
SECTION 14. Continuing Guaranty; Assignment under Credit
Agreement. This Guaranty is a continuing guaranty and shall (i)
remain in full force and effect until the later of (x) the
payment in full of the Obligations and all other amounts payable
under this Guaranty and (y) the expiration or termination of the
Commitments, (ii) be binding upon the Guarantor, its successors
and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Lenders and their respective successors,
transferees and assigns.
SECTION 15. Governing Law. This Guaranty shall be governed
by, and construed in accordance with, the laws of the State of
New York without giving effect to conflict of law principles.
Page 8<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty
to be executed by its officer thereunto duly authorized, as of
the date first above written.
GENERAL PUBLIC UTILITIES CORPORATION
By:
Name:
Title:
Page 9<PAGE>
EXHIBIT "C-1"
FORM OF OPINION OF COUNSEL TO THE BORROWER
, 1996
The Agent and the Lenders who are parties to
the Credit Agreement described below.
Re: GPU Service Corporation
Ladies and Gentlemen:
This opinion is furnished to your pursuant to Section 4.1
(xi) of the Credit Agreement (the "Agreement") dated as of March
27, 1996 among GPU Service Corporation, a Pennsylvania
corporation (the "Borrower"), the Lenders who are parties thereto
(the "Lenders") and The First National Bank of Chicago, as Agent
(the "Agent"). Capitalized terms used herein which are defined
in the Agreement shall have the respective meanings set forth in
the Agreement unless otherwise defined herein.
We have acted as counsel to the Borrower in connection with
its execution and delivery of the Agreement. In connection with
this opinion, we have examined the articles of incorporation and
by-laws of the Borrower, each as amended to date, and the Loan
Documents. We have also examined and relied upon, as to factual
matters, the representations and warranties contained in and made
pursuant to the Agreement, and examined and relied upon
originals, or copies certified or otherwise identified to our
satisfaction, of such records, documents, certificates and other
instruments as we considered appropriate.
We have assumed the due execution and delivery, pursuant to
due authorization, of the Agreement by the Lenders and the Agent.
We have also assumed the authenticity of all documents submitted
to us as originals, the genuineness of all signatures and the
conformity to originals of all documents submitted to us as
copies. We have also made such other investigations as we have
deemed necessary as a basis for this opinion.
We are members of the bar of the State of New York, and do
not purport to be expert in the laws of any jurisdiction other
than such State and the Federal laws of the United States. As to
all matters covered hereby which are governed by the laws of the
Commonwealth of Pennsylvania, we have relied upon the annexed
opinion of Ballard Spahr Andrews & Ingersoll.
Based on and subject to the foregoing, we are of the opinion
that:
(i) The Borrower is duly incorporated and validly
subsisting as a corporation under the laws of the Commonwealth of
Pennsylvania, and has all requisite corporate power to conduct
its business as presently conducted.<PAGE>
(ii) The execution and delivery of the Loan Documents by the
Borrower and the performance by the Borrower of the Obligations
have been duly authorized by all necessary corporate action on
the part of the Borrower (including any necessary action by
shareholders of the Borrower) and do not (a) violate any law,
rule or regulation, or order, writ, judgment, injunction, decree
or award of which we are aware binding upon the Borrower or the
Guarantor, or the Borrower's articles of incorporation or by-
laws, or any material indenture, instrument or agreement of which
we are aware binding upon the Borrower or the Guarantor; or (b)
result in, or require, the creation or imposition of any Lien
pursuant to the provisions of any material indenture, instrument
or agreement of which we are aware binding upon the Borrower or
the Guarantor.
(iii) The Loan Documents have been duly executed and
delivered by the Borrower and constitute legal, valid and binding
obligations of the Borrower enforceable in accordance with their
terms, except to the extent the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws affecting the enforcement
of creditors' rights generally and general principles of equity.
(iv) No approval, authorization, consent or order of any
governmental authority is required to be obtained by the Borrower
or the Guarantor in connection with the execution and delivery of
the Loan Documents by the Borrower, the borrowings under the
Agreement or the payment by the Borrower of the Obligations.
There is no litigation or proceeding to which the Borrower
is a party of which we are aware which could reasonably be
expected to have a Material Adverse Effect.
This opinion is solely for your benefit and may not be
relied upon by any other Person without our express written
consent, except that it may be relied upon, as of the date
hereof, by any Purchaser.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN LLP<PAGE>
EXHIBIT "C-2"
FORM OF OPINION OF COUNSEL TO THE GUARANTOR
, 1996
The Agent and the Lenders who are parties to the Credit Agreement
described below.
Re: General Public Utilities Corporation
Ladies and Gentlemen:
This opinion is furnished to your pursuant to Section 4.1
(xii) of the Credit Agreement (the "Agreement") dated as of March
27, 1 996 among GPU Service Corporation, a Pennsylvania
corporation, the Lenders who are parties thereto (the "Lenders")
and The First National Bank of Chicago, as Agent (the "Agent").
Capitalized terms used herein which are defined in the Agreement
shall have the respective meanings set forth in the Agreement
unless otherwise defined herein.
We have acted as counsel to General Public Utilities
Corporation, a Pennsylvania corporation (the "Guarantor"), in
connection with its execution and delivery of the Guaranty (the
"Guaranty") dated as of , 1 996, in favor of the Lenders. In
connection with this opinion, we have examined the articles of
incorporation and by-laws of the Guarantor, each as amended to
date, and the Guaranty. We have also examined and relied upon,
as to factual matters, the representations and warranties
contained in and made pursuant to the Guaranty, and examined and
relied upon originals, or copies certified or otherwise
identified to our satisfaction, of such records, documents,
certificates and other instruments as we considered appropriate.
We have assumed the due execution and delivery, pursuant to
due authorization, of the Agreement by the Lenders and the Agent.
We have also assumed the authenticity of all documents submitted
to us as originals, the genuineness of all signatures and the
conformity to originals of all documents submitted to us as
copies. We have also made such other investigations as we have
deemed necessary as a basis for this opinion.
We are members of the bar of the State of New York, and do
not purport to be expert in the laws of any jurisdiction other
than such State and the Federal laws of the United States. As to
all matters covered hereby which are governed by the laws of the
Commonwealth of Pennsylvania, we have relied upon the annexed
opinion of Ballard Spahr Andrews & Ingersoll.
Based on and subject to the foregoing, we are of the opinion
that:
(i) The Guarantor is duly incorporated and validly
subsisting as a corporation under the laws of the
Commonwealth of Pennsylvania, and has all requisite<PAGE>
corporate power to conduct its business as presently
conducted.
(ii) The execution and delivery of the Guaranty by the
Guarantor and the performance by the Guarantor of its
obligations under the Guaranty have been duly authorized by
all necessary corporate action on the part of the Guarantor
(including any necessary action by shareholders of the
Guarantor) and do not (a) violate any law, rule or
regulation, or order, writ, judgment, injunction, decree or
award of which we are aware binding upon the Guarantor, or
the Guarantor's articles of incorporation or by-laws, or any
material indenture, instrument or agreement of which we are
aware binding upon the Guarantor; or (b) result in, or
require, the creation or imposition of any Lien pursuant to
the provisions of any material indenture, instrument or
agreement of which we are aware binding upon the Guarantor.
(iii) The Guaranty has been duly executed and delivered
by the Guarantor and constitutes the legal, valid and
binding obligation of the Guarantor enforceable in
accordance with their terms, except to the extent the
enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting the enforcement of
creditors' rights generally and general principles of
equity. We note, however, that the consent of the
Securities and Exchange Commission ("SEC"), the New Jersey
Board of Public Utilities and the Pennsylvania Public
Utility Commission, as the case may be, may be required
prior to any transfer of the common stock of the Utilities.
(iv) No approval, authorization, consent or order of any
governmental authority is required to be obtained by the
Guarantor in connection with the execution and delivery of
the Guaranty or the performance by the Guarantor of its
obligations under the Guaranty, except for an appropriate
order of the SEC under the Public Utility Holding Company
Act of 1 935, which order has been obtained and is in full
force and effect.
Except as set forth in the Guarantor's Annual Report on Form
10-K for the year ended December 31, 1995, as filed with the SEC,
there is no litigation or proceeding to which the Guarantor is a
party of which we are aware which could reasonably be expected to
have a Material Adverse Effect.
This opinion is solely for your benefit and may not be
relied upon by any other Person without our express written
consent, except that it may be relied upon, as of the date
hereof, by any Purchaser.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN LLP<PAGE>
EXHIBIT "D"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
(the "Assignor") and (the "Assignee") is dated
as of
The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a
Credit Agreement (which, as it may be amended, modified, renewed
or extended from time to time is herein called the "Agreement")
described in Item 1 of Schedule 1 attached hereto ("Schedule 1
"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the
Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells
and assigns to the Assignee, and the Assignee hereby purchases
and assumes from the Assignor, an interest in and to the
Assignor's rights and obligations under the Agreement such that
after giving effect to such assignment the Assignee shall have
purchased pursuant to this Assignment Agreement the percentage
interest specified in Item 3 of Schedule 1 of all outstanding
rights and obligations under the Agreement relating to the
facilities listed in Item 3 of Schedule 1 and the other Loan
Documents. The aggregate Commitment (or Loans, if the applicable
Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item,4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment
Agreement (the "Effective Date") shall be the later of the date
specified in Item 5 of Schedule 1 or two Business Days (or such
shorter period agreed to by the Agent) after a Notice of
Assignment substantially in. the form of Exhibit "I" attached
hereto has been delivered to the Agent. Such Notice of
Assignment must include any consents required to be delivered to
the Agent by Section 1 2.3. 1 of the Agreement. In no event will
the Effective Date occur if the payments required to be made by
the Assignee to the Assignor on the Effective Date under Sections
4 and 5 hereof are not made on the proposed Effective Date. The
Assignor will notify the Assignee of the proposed Effective Date
no later than the Business Day prior to the proposed Effective
Date. As of the Effective Date, (i) the Assignee shall have the
rights and obligations of a Lender under the Loan Documents with
respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and
be released from its corresponding obligations under the Loan
Documents with respect to the rights and obligations assigned to
the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date,
the Assignee shall be entitled to receive from the Agent all
payments of principal, interest with respect to the interest
assigned hereby. The Assignee shall advance funds directly to
the Agent with respect to all Loans and reimbursement payments
made on or after the Effective Date with respect to the interest<PAGE>
assigned hereby. [In consideration for the sale and assignment of
Loans hereunder, (i) the Assignee shall pay the Assignor, on the
Effective Date, an amount equal to the principal amount of the
portion of all Floating Rate Loans assigned to the Assignee
hereunder and (ii) with respect to each Eurodollar Rate Loan made
by the Assignor and assigned to the Assignee hereunder which is
outstanding on the Effective Date, (a) on the last day of the
Interest Period therefor or (b) on such earlier date agreed to by
the Assignor and the Assignee or (c) on the date on which any
such Eurodollar Rate Loan either becomes due (by acceleration or
otherwise) or is prepaid (the date as described in the foregoing
clauses (a), (b) or (c) being hereinafter referred to as the
"Payment Date"), the Assignee shall pay the Assignor an amount
equal to the principal amount of the portion of such Eurodollar
Rate Loan assigned to the Assignee which is outstanding on the
Payment Date. If the Assignor and the Assignee agree that the
Payment Date for such Eurodollar Rate Loan shall be the Effective
Date, they shall agree to the interest rate applicable to the
portion of such Loan assigned hereunder for the period from the
Effective Date to the end of the existing Interest Period
applicable to such Eurodollar Rate Loan (the "Agreed Interest
Rate") and any interest received by the Assignee in excess of the
Agreed Interest Rate shall be remitted to the Assignor. In the
event interest for the period from the Effective Date to but not
including the Payment Date is not paid by the Borrower with
respect to any Eurodollar Rate Loan sold by the Assignor to the
Assignee hereunder, the Assignee shall pay to the Assignor
interest for such period on the portion of such Eurodollar Rate
Loan sold by the Assignor to the Assignee hereunder at the
applicable rate provided by the Agreement. In the event a
prepayment of any Eurodollar Rate Loan which is existing on the
Payment Date and assigned by the Assignor to the Assignee
hereunder occurs after the Payment Date but before the end of the
Interest Period applicable to such Eurodollar Rate Loan, the
Assignee shall remit to the Assignor the excess of the prepayment
penalty paid with respect to the portion of such Eurodollar Rate
Loan assigned to the Assignee hereunder over the amount which
would have been paid if such prepayment penalty was calculated
based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (i) any principal payments
received from the Agent with respect to Eurodollar Rate Loans
prior to the Payment Date and (ii) any amounts of interest on
Loans received from the Agent which relate to the portion of the
Loans assigned to the Assignee hereunder for periods prior to the
Effective Date, in the case of Floating Rate Loans, or the
Payment Date, in the case of Eurodollar Rate Loans, and not
previously paid by the Assignee to the Assignor.](1) In the event
that either party hereto receives any payment to which the other
party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit it to the
other party hereto.
(1) Each Assignor may insert its standard payment provisions in
lieu of the payment terms included in this Assignment Agreement.<PAGE>
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay
to the Assignor a fee on each day on which a payment of interest
is made under the Agreement with respect to the amounts assigned
to the Assignee hereunder (other than a payment of interest for
the period prior to the Effective Date or, in the case of
Eurodollar Rate Loans, the Payment Date, which the Assignee is
obligated to deliver to the Assignor pursuant to Section 4
hereof). The amount of such fee shall be the difference between
(i) the interest paid with respect to the amounts assigned to the
Assignee hereunder and (ii) the interest which would have been
paid with respect to the amounts assigned to the Assignee
hereunder if each interest rate was - of 1% less than the
interest rate paid by the Borrower. In addition, the Assignee
agrees to pay __% of the recordation fee required to be paid to
the Agent in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE
ASSIGNOR'S LIABILITY. The Assignor represents and warrants that
it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear
of any adverse claim created by the Assignor. It is understood
and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no
other representation or warranty of any kind to the Assignee.
Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) the
due execution, legality, validity, enforceability, genuineness,
sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any
guarantor, (ii) any representation, warranty or statement made in
or in connection with any of the Loan Documents, (iii) the
financial condition or creditworthiness of the Borrower or any
guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting
any of the Property, books or records of the Borrower, (vi) the
validity, enforceability, perfection, priority, condition, value
or sufficiency of any collateral securing or purporting to secure
the Loans or (vii) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the
Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Agreement, together
with copies of the financial statements requested by the Assignee
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor
or any other Lender and based on such documents and information
at it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the
Loan Documents, (iii) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably
incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the<PAGE>
terms of the Loan Documents are required to be performed by it as
a Lender, (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1,
(vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption
hereunder are "plan assets" as defined under ERISA and that its
rights, benefits and interests in and under the Loan Documents
will not be "plan assets" under ERISA, [and (vii) attaches the
forms prescribed by the Internal Revenue Service of the United
States certifying that the Assignee is entitled to
receive payments under the Loan Documents without deduction or
withholding of any United States federal income taxes].(2)
8. INDEMNITY. The Assignee agrees to indemnify and hold
the Assignor harmless against any and all losses, costs and
expenses (including, without limitation, reasonable attorneys'
fees) and liabilities incurred by the Assignor in connection with
or arising in any manner from the Assignee's non-performance of
the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the
Assignee shall have the right pursuant to Section 1.2.3.1 of the
Agreement to assign the rights which are assigned to the Assignee
hereunder to any entity or person, provided that (i) any such
subsequent assignment does not violate any of the terms and
conditions of the Loan Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained
and (ii) unless the prior written consent of the Assignor is
obtained, the Assignee is not thereby released from its
obligations to the Assignor hereunder, if any remain unsatisfied,
including, without limitation, its obligations under Sections 4,
5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction
in the Aggregate Commitment occurs between the date of this
Assignment Agreement and the Effective Date, the percentage
interest specified in Item 3 of Schedule 1 shall remain the same,
but the dollar amount purchased shall be recalculated based on
the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the
attached Notice of Assignment embody the entire agreement and
understanding between the parties hereto and supersede all prior
agreements and understandings between the parties hereto relating
to the subject matter hereof.
12. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
(2) to be inserted if the Assignee is not incorporated under
the laws of the United States, or a state thereof.<PAGE>
13. NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Agreement. For the
purpose hereof, the addresses of the parties hereto (until notice
of a change is delivered) shall be the address set forth in the
attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement by their duly authorized officers as of the
date first above written.
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:<PAGE>
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement:
3. Amounts (As of Date of Item 2 above):
a. Total of Loans under
Credit Agreement $
b. Assignee's Percentage
purchased under the
Assignment Agreement %(1)
c. Amount of Assigned Share
purchased under the
Assignment Agreement $
4. Assignee's Aggregate Loan
Amount Purchased Hereunder $
5. Proposed Effective Date:
ACCEPTED AND AGREED:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Title: Title:
(1) Percentage taken to 10 decimal places.<PAGE>
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee<PAGE>
EXHIBIT "I"
to Assignment Agreement
NOTICE OF ASSIGNMENT
,
To: [NAME OF BORROWER](1)
[NAME OF AGENT]
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that certain Credit Agreement (the
"Agreement") described in Item 1 of Schedule 1 attached hereto
("Schedule 1"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and
delivered to [the Borrower and](2) the Agent pursuant to Section
12.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an
Assignment Agreement, dated as of , (the
"Assignment"), pursuant to which, among other things, the
Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed
from the Assignor the percentage interest specified in Item 3 of
Schedule 1 of all
(1) To be included only if consent must be obtained from the
Borrower pursuant to Section 12.3.1 of the Credit Agreement.
(2) To be included only if consent must be obtained from the
Borrower pursuant to Section 12.3.1 of the Credit Agreement.<PAGE>
outstandings, rights and obligations under the Credit Agreement
relating to the facilities listed in Item 3 of Schedule 1. The
Effective Date of the Assignment shall be the later of the date
specified in Item 5 of Schedule 1 or two Business Days (or such
shorter period as agreed to by the Agent) after this Notice of
Assignment and any consents and fees required by Sections 12.3.1
and 12.3.2 of the Credit Agreement have been delivered to the
Agent, provided that the Effective Date shall not occur if any
condition precedent agreed to by the Assignor and the Assignee
has not been satisfied.
4. The Assignor and the Assignee hereby give to the
Borrower and the Agent notice of the assignment and delegation
referred to herein. The Assignor will confer with the Agent
before the date specified in Item 5 of Schedule 1 to determine if
the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to
determine the Effective Date pursuant to Section 3 hereof if it
occurs thereafter. The Assignor shall notify the Agent if the
Assignment Agreement does not become effective on any proposed
Effective Date as a result of the failure to satisfy the
conditions precedent agreed to by the Assignor and the Assignee.
At the request of the Agent, the Assignor will give the Agent
written confirmation of the satisfaction of the conditions
precedent.
5. The Assignor or the Assignee shall pay to the Agent on
or before the Effective Date the processing fee of $2,500
required by Section 12.3.2 of the Credit Agreement.
6. The Assignor and the Assignee request and direct that
the Agent prepare and cause the Borrower to execute and deliver
new Notes or, as appropriate, replacements notes, to the Assignor
and the Assignee. The Assignor and, if applicable, the Assignee
each agree to deliver to the Agent the original Note received by
it from the Borrower upon its receipt of a new Note in the
appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none
of the funds, monies, assets or other consideration being used to
make the purchase pursuant to the Assignment are "plan assets" as
defined under ERISA and that its rights, benefits, and interests
in and under the Loan Documents will not be "plan assets" under
ERISA.<PAGE>
9. The Assignee authorizes the Agent to act as its agent
under the Loan Documents in accordance with the terms thereof.
The Assignee acknowledges that the Agent has no duty to supply
information with respect to the Borrower or the Loan Documents to
the Assignee until the Assignee becomes a party to the Credit
Agreement.(3)
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
Title: Title:
ACKNOWLEDGED ACKNOWLEDGED
[AND CONSENTED TO] [AND CONSENTED TO]
BY [NAME OF AGENT] BY [NAME OF BORROWER]
By: By:
Title: Title:
[Attach photocopy of Schedule 1 to Assignment]
(3) May be eliminated if Assignee is a party to the Credit
Agreement prior to the Effective Date.<PAGE>
EXHIBIT "E"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated as of March 27, 1 996 (as the
same may be amended, supplemented or otherwise
modified, the "Credit Agreement"), among GPU Service
Corporation (the "Borrower"), the Lenders named therein
and the Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with
respect to the proceeds of Advances or other extensions of credit
from time to time until receipt by the Agent of a specific
written revocation of such instructions by the Borrower;
provided, however, that the Agent may otherwise transfer funds as
hereafter directed in writing by the Borrower in accordance with
Section 13.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.12 of the Credit
Agreement.
Facility Identification Number(s)
Customer/Account Name
Transfer Funds To
For Account No.
Reference/Attention To
Authorized Officer (Customer Representative) Date
(Please Print) Signature
Bank Officer Name Date
(Please Print) Signature
(Deliver Completed Form to Credit Support
Staff For Immediate Processing)<PAGE>
