SEC FILE NO. 70-8323
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
JERSEY CENTRAL POWER & LIGHT COMPANY
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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In The Matter of )
)
JERSEY CENTRAL POWER ) Certificate Pursuant
& LIGHT COMPANY ) to Rule 24 of Partial
SEC File No. 70-8323 ) Completion of
) Transactions
(Public Utility Holding )
Company Act of 1935) )
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TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, Jersey Central Power & Light Company
("JCP&L"), hereby certifies pursuant to Rule 24 of the Rules and
Regulations under the Public Utility Holding Company Act of 1935
(the "Act") that certain of the transactions proposed in the
Declaration on Form U-1, as amended, filed in SEC File No. 70-
8323, have been carried out in accordance with the Commission's
Order, dated March 5, 1994 (HCAR No. 35-26003) with respect
thereto, as follows:
1. To secure its obligation to Utilities Mutual
Insurance Company ("Insurer") to pay a deductible under its
Worker's Compensation and Employer's Liability Insurance Policy
(which policy was issued on January 1, 1994 and expires on
December 31, 1994), on April 1, 1994 JCP&L furnished the Insurer
with a letter of credit in the amount of $2,858,000 issued by
Canadian Imperial Bank of Commerce ("CIBC") and expiring on March
31, 1996. In connection therewith, JCP&L entered into a Fee
Letter with CIBC providing, among other things, for the payment
of a letter of credit fee of .35% per annum on the face amount of
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the letter of credit and obligating JCP&L to repay the amount of
any drawings thereunder together with interest thereon at the
rate of 2% plus the greater of (x) CIBC's prime rate as then in
effect and (y) the federal funds rate.
2. The following exhibits are filed herewith:
A-1 - Letter of Credit dated April 1, 1994.
A-2 - Fee Letter.
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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.
JERSEY CENTRAL POWER & LIGHT COMPANY
By:
Don W. Myers
Vice President and Treasurer
Date: May 26, 1994
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EXHIBITS TO BE FILED BY EDGAR
Exhibits:
A-1 - Letter of Credit dated April 1, 1994.
A-2 - Fee Letter.
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Exhibit A-1
CANADIAN IMPERIAL BANK OF COMMERCE
APRIL 1, 1994
IRREVOCABLE LETTER OF CREDIT NO. U-94-0091
Utilities Mutual Insurance Company
56 Pine Street
New York, NY 10005
Attn: Mr. John Maher, Vice President
Beneficiaries:
By order of our client, Jersey Central Power & Light Company, we
hereby establish this Irrevocable Letter of Credit No. U-94-0091
in your favor for an amount up to but not exceeding the aggregate
sum of U.S. Two Million Eight Hundred Fifty-Eight Thousand
Dollars and Zero Cents (US $2,858,000), effective immediately,
and expiring at the offices of the bank on March 31, 1996 unless
renewed as hereinafter provided.
Funds under this Letter of Credit are available to you against
your sight draft(s) signed by your authorized corporate officer
drawn on us bearing the clause "Drawn under Credit No.
U-94-0091." The sight draft must be accompanied by the original
Letter of Credit, and a statement by you that the applicant has
not performed its obligations as outlined in the Deductible
Endorsement to the Workers' Compensation and Employer's Liability
Insurance Policy No. PAC-9342 of the applicant in an amount equal
to or greater than the amount of the draft. The sight draft and
accompanying documentation shall be presented to us at our
Atlanta office located at 2727 Paces Ferry Road, Suite 1200,
Atlanta, Georgia 30339.
This Letter of Credit will be automatically renewed for a
one-year period upon the expiration date set forth above and upon
each anniversary of such date, unless at least sixty (60) days
prior to such expiration date, or prior to an anniversary of such
date, we notify both you and your client in writing by registered
mail that we elect not to so renew this Letter of Credit.
Upon receipt by you of our notice of election not to renew this
Letter of Credit, you may draw hereunder by your sight draft(s)
drawn on us and bearing the clause "Drawn under Credit No. U-94-
0091." The sight draft must be accompanied by the original
Letter of Credit and a statement by you that the applicant has
not delivered a substitute Letter of Credit as required by the
Deductible Endorsement.
This Letter of Credit sets forth in full the terms of our under-
taking. Such undertaking shall not in any way be modified,
amended or amplified by reference to any document or referred to
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herein or in which this Letter of Credit is referred or to which
this Letter of Credit relates and any such reference shall not be
deemed to incorporate herein by reference to any document or
instrument.
All bank charges and commissions incurred in this transaction are
for the applicant's account.
We hereby agree with the drawer of the drafts drawn under and in
compliance with the terms of this credit that such drafts will be
duly honored upon presentation to the drawee.
This Letter of Credit is subject to and governed by the Laws of
the State of New York and the 1993 Revision of the Uniform
Customs and Practice for Documentary Credits of the International
Chamber of Commerce (Publication 500) and, in the event of any
conflict, the Laws of the State of New York will control. If
this credit expires during an interruption of business as
described in Article 17 of said Publication 500, the bank hereby
specifically agrees to effect payment if this Credit is drawn
against within 30 days after the resumption of business."
Very truly yours,
CANADIAN IMPERIAL BANK OF COMMERCE
COUNTERSIGNED AUTHORIZED SIGNATURE
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Exhibit A-2
CONFIDENTIAL
January 1, 1994
Jersey Central Power & Light Company
c/o GPU Service Corporation
P.O. Box 15152
Reading, Pennsylvania 19612-5152
Attention: Treasurer
Re: Fees and Interest for Letter of Credit No.
Ladies/Gentlemen:
Reference is hereby made to that certain Application for
Standby Letter of Credit, dated April 1, 1994 (the "Application")
by Jersey Central Power & Light Company (the "Applicant") to
Canadian Imperial Bank of Commerce (the "Bank") requesting the
issuance of letter of credit no. (the "Letter of
Credit") in favor of Utilities Mutual Insurance Company in the
maximum stated amount of $2,858,000.
As an inducement to the Bank's issuance of the Letter of
Credit, this is to confirm that the Applicant hereby agrees as
follows:
1. The Applicant will pay to the Bank, for the Bank's own
account, a letter of credit fee for the period from and including
the date of the issuance of the Letter of Credit to the date the
Letter of Credit expires or is canceled, of 0.35% per annum on
the daily outstanding amount of the Letter of Credit, computed
for the actual number of days elapsed on the basis of a year
consisting of 360 days. Such letter of credit fee shall be paid
quarterly arrears on the last business day of each calendar
quarter, beginning with June 30, 1994, and on the date the Letter
of Credit expires or is canceled for any period then ending for
which such letter of credit fee shall not have theretofore been
paid. Such letter of credit fee shall, upon payment thereof, not
be refundable under any circumstances.
Such fee shall be paid to the Bank at its office at Two
Paces West, 2727 Paces Ferry Road, Suite 1200, Atlanta, Georgia
30339, without set-off, deduction, recoupment or counterclaim.
2. The Applicant shall pay interest on the amount of any
unreimbursed disbursement by the Bank under the Letter of Credit
from the date of such disbursement until paid at a rate per annum
equal to the Alternate Base Rate plus 2%, computed for the actual
number of days elapsed on the basis of a year consisting of 365
(or 366) days. Such interest shall be payable immediately by the
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Applicant upon demand by the Bank. The "Alternate Base Rate"
means on any particular date, a rate of interest per annum equal
to the higher of (i) the United States "Prime Rate" of the Bank
as announced by the Bank from time to time (said rate to change
on the date of each change of such prime rate), and (ii) the sum
of the Federal Funds Rate for such date plus 0.50%. The
Alternate Base Rate is not necessarily intended to be the lowest
rate of interest charged by the Bank in connection with
extensions of credit. The "Federal Funds Rate" means on any
particular date, a rate of interest 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, as published for such date (or, if such
date is not a business day, for the next preceding business day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a business day, the average of
the quotations for such day on such transactions received by the
Bank from three Federal funds brokers of recognized standing
selected by it.
3. If as a result of any change in interpretation,
implementation or administration of any law, regulation or
guideline (including, without limitation, guidelines issued in
connection with capital adequacy) or compliance with any future
law, regulation or guideline (including, without limitation,
guidelines issued in connection with capital adequacy), the Bank
determines that the cost to the Bank of maintaining the Letter of
Credit is materially increased, or any amount received or
receivable by the Bank hereunder or under the Application is
materially reduced, or the Bank is required to make any material
payment in connection with any transaction contemplated hereby,
then the Bank shall notify the Applicant and the Applicant shall
pay to the Bank such additional amount or amounts as the Bank
determines will compensate the Bank for such increased cost,
reduction or payment incurred on or after the 60th day preceding
the Applicant's receipt of such notice, provided, however, that
the Applicant shall not be required to compensate the Bank for
such increased cost, reduction or payment resulting from changes
in the tax or the rate of tax imposed on or measured by the
overall net income of the Bank or its issuing office by the
jurisdictions in which the Bank has its principal office or its
issuing office.
4. The Applicant agrees to pay to the Bank, on demand, all
reasonable legal fees and expenses incurred by the Bank in
connection with the preparation, execution, administration
(including without limitation any amendments) and enforcement of
the Application and this letter agreement.
5. The Applicant and the Bank agree that for purposes of
the Application, the Terms and Conditions of the Standby Letter
of Credit Application Form are modified as follows:
(i) "Local Currency" means lawful money of the United States
of America.
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(ii) The Applicant shall reimburse the Bank for any
Drawing on the same day the Bank makes payment on such
Drawing.
(iii) Paragraphs 7 and 13 of the Terms and Conditions of
the Standby Letter of Credit Application Form are
deleted.
By its signature hereto, the Applicant represents to the
Bank that: (a) the execution, delivery and performance by the
Applicant of the Application and this letter agreement are
within the Applicant's corporate powers, have been duly
authorized by necessary corporate action, have received all
necessary governmental approvals, if any shall be required, and
do not conflict or contravene any applicable law or material
agreement binding upon or affecting the Applicant; and (b) the
Application and this letter agreement are the valid and binding
obligations of the Applicant, enforceable in accordance with
their respective terms.
This letter may not be amended or any provision hereof
waived or modified except by an instrument in writing signed by
the Bank and the Applicant.
The terms of this letter shall be governed by the internal
laws of the State of New York. This letter may be signed in one
or more counterparts.
If you are in agreement with the foregoing, please sign and
return the enclosed counterpart of this letter to the Bank.
Very truly yours,
CANADIAN IMPERIAL BANK OF COMMERCE
By:
Title:
Agreed to and Accepted
this 1 day of April, 1994:
JERSEY CENTRAL POWER & LIGHT COMPANY
By:
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