Post-Effective Amendment No. 3 to
SEC File No. 70-8369
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
ENERGY INITIATIVES, INC. ("EI")
One Upper Pond Road
Parsippany, New Jersey 07054
(Names of companies filing this statement and addresses
of principal executive offices)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company parent of applicants)
T.G. Howson, Vice President Douglas E. Davidson, Esq.
and Treasurer Berlack, Israels & Liberman
M.A. Nalewako, Secretary 120 West 45th Street
GPU Service Corporation New York, New York 10036
100 Interpace Parkway
Parsippany, New Jersey 07054
B.L. Levy, President
K.A. Tomblin, Secretary
Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
_________________________________________________________________
(Names and addresses of agents for service)<PAGE>
GPU and EI(1) hereby amend their Application on Form
U-1, docketed in SEC File No. 70-8369, as heretofore amended, as
follows:
1. By amending the first sentence of paragraph D of
Post-Effective Amendment No. 1 to read in its entirety as
follows:
D. Issuance of the Notes would be
subject to certain conditions, and the Notes
would be subject to acceleration under
certain circumstances, which conditions and
circumstances would be customary for
agreements of the type contemplated by the
Loan Agreement.
2. By adding the following sentence to the end of
paragraph G of Post-Effective Amendment No. 1 thereof:
Accordingly, the Notes would have a maximum
maturity of six years from the execution of
the Loan Agreement (expected to occur by
December 31, 1994.)
3. By amending paragraph L to read in its entirety as
follows:
L. The estimated fees, commissions and
expenses expected to be incurred by Applicants in
connection with the proposed transactions will be
as follows:
Legal Fees:
Berlack, Israels & Liberman $37,500.00
Ballard Spahr Andrews & Ingersoll 750.00
Bank Counsel Fees
King & Spalding 50,000.00
Miscellaneous 11,750.00
$100,000.00
___________________________
(1) On April 29, 1994, pursuant to Commission Order dated
April 29, 1994 (HCAR No. 35-26040), General Portfolios
Corporation merged into EI and, accordingly, EI became
a wholly-owned subsidiary of GPU.
1<PAGE>
4. By filing the following exhibits in Item 6
thereof:
B-10 - Form of Loan Agreement.
B-11 - Form of EI Note--included in Exhibit B-
10.
B-14 - Form of GPU Support Agreement with
respect to EI Notes--included in Exhibit
B-10.
B-15 - Form of LC Reimbursement Agreement--
included in Exhibit B-10.
F-1 - Opinion of Berlack, Israels & Liberman.
F-2 - Opinion of Ballard Spahr Andrews &
Ingersoll.
5. Applicants affirm their request that the
Commission reserve jurisdiction pending completion of the record
over EI's provision of management services to the project
partnerships owned by North Canadian Power Incorporated (now
known as NCP Energy, Inc.), a subsidiary of EI, to the extent
such services are not limited to the cost thereof.
2<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:______________________________
T.G. Howson
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:______________________________
B.L. Levy
President
Date: November 23, 1994<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
B-10 - Form of Loan Agreement.
F-1 - Opinion of Berlack, Israels & Liberman.
F-2 - Opinion of Ballard Spahr Andrews &
Ingersoll.<PAGE>
Exhibit B-10
K&S Draft 11/18/94
U.S. $30,000,000
CREDIT AGREEMENT
Dated as of December __, 1994
Among
ENERGY INITIATIVES, INC.
as Borrower
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A.
as Agent<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . 1
1.02 Computation of Time Periods . . . . . . . . . . . . . . 13
1.03 Accounting Terms . . . . . . . . . . . . . . . . . . . 13
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES . . . . . . . . . . . . . . 13
2.01 Advances . . . . . . . . . . . . . . . . . . . . . . . 13
2.02 Making the Advances . . . . . . . . . . . . . . . . . . 14
2.03 Computations of Outstandings . . . . . . . . . . . . . 15
2.04 Fees . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.05 Reduction of the Commitments . . . . . . . . . . . . . 16
2.06 Repayment of Advances . . . . . . . . . . . . . . . . . 17
2.07 Interest on Advances . . . . . . . . . . . . . . . . . 17
2.08 Additional Interest on Advances . . . . . . . . . . . . 18
2.09 Interest Rate Determination . . . . . . . . . . . . . . 18
2.10 Conversion of Advances . . . . . . . . . . . . . . . . 19
2.11 Prepayments . . . . . . . . . . . . . . . . . . . . . . 20
2.12 Increased Costs . . . . . . . . . . . . . . . . . . . . 21
2.13 Illegality . . . . . . . . . . . . . . . . . . . . . . 23
2.14 Payments and Computations . . . . . . . . . . . . . . . 23
2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.16 Sharing of Payments, Etc . . . . . . . . . . . . . . . 28
2.17 Extension of Amortization Period Commencement Date . . 28
ARTICLE III
LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . 29
3.01 LC Banks . . . . . . . . . . . . . . . . . . . . . . . 29
3.02 Letters of Credit . . . . . . . . . . . . . . . . . . . 29
3.03 LC Bank Fees . . . . . . . . . . . . . . . . . . . . . 30
3.04 Reimbursement to LC Banks . . . . . . . . . . . . . . . 30
3.05 Obligations Absolute . . . . . . . . . . . . . . . . . 32
3.06 Liability of LC Banks and the Lenders . . . . . . . . . 33
ARTICLE IV
CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . 34
4.01 Conditions Precedent to Initial Extensions of Credit . 34
4.02 Conditions Precedent to Each Extension of Credit . . . 36
4.03 Condition Precedent to Certain Conversions . . . . . . 37
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . 37
5.01 Representations and Warranties of the Borrower . . . . 37<PAGE>
ARTICLE VI
COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . 41
6.01 Affirmative Covenants . . . . . . . . . . . . . . . . . 41
6.02 Negative Covenants . . . . . . . . . . . . . . . . . . 46
ARTICLE VII
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 51
7.01 Events of Default . . . . . . . . . . . . . . . . . . . 51
7.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VIII
THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.01 Authorization and Action . . . . . . . . . . . . . . . 54
8.02 Agent's Reliance, Etc . . . . . . . . . . . . . . . . . 55
8.03 Citibank and Affiliates . . . . . . . . . . . . . . . . 56
8.04 Lender Credit Decision . . . . . . . . . . . . . . . . 56
8.05 Indemnification . . . . . . . . . . . . . . . . . . . . 56
8.06 Successor Agent . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 57
9.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . 57
9.02 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . 58
9.03 No Waiver; Remedies . . . . . . . . . . . . . . . . . . 58
9.04 Costs and Expenses; Indemnification . . . . . . . . . . 59
9.05 Right of Set-off . . . . . . . . . . . . . . . . . . . 61
9.06 Binding Effect . . . . . . . . . . . . . . . . . . . . 61
9.07 Assignments and Participations . . . . . . . . . . . . 61
9.08. Confidentiality. . . . . . . . . . . . . . . . . . . . 65
9.09 Governing Law . . . . . . . . . . . . . . . . . . . . . 66
9.10 Waiver of Jury Trial . . . . . . . . . . . . . . . . . 66
9.11 Execution in Counterparts . . . . . . . . . . . . . . . 66
Schedule I - List of Applicable Lending Offices
Schedule II - Existing Liens
[Schedule III - Disclosure Schedule]
Exhibit A - Form of Note
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Conversion
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of LC Bank Agreement
Exhibit E - Form of Support Letter
Exhibit F - Form of Opinion of Counsel
for the Borrower and the Parent<PAGE>
Exhibit G - Form of Opinion of Special New York
Counsel to the Agent<PAGE>
THIS CREDIT AGREEMENT (the "Agreement"), dated as of
December __, 1994 among ENERGY INITIATIVES, INC., a Delaware
corporation (the "Borrower"), the banks (the "Banks") listed on
the signature pages hereof and CITIBANK, N.A. ("Citibank") as
agent (the "Agent") for the Lenders hereunder, agree as follows:
PRELIMINARY STATEMENT
The Borrower has requested the Banks to provide the credit
facility hereinafter described in the amounts and on the terms
and conditions set forth herein. The Banks have so agreed on the
terms and conditions set forth herein and the Agent has agreed to
act as agent in such capacity as provided herein.
Based upon the foregoing and subject to the terms and
conditions set forth in this Agreement, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Advance" means an advance by a Lender to the Borrower
pursuant to Section 2.01 (or deemed made pursuant to Section
3.04(d)) as part of a Borrowing and refers to an Alternate
Base Rate Advance or a Eurodollar Rate Advance, each of
which shall be a "Type" of Advance. All Advances by a
Lender of the same Type, having the same Interest Period and
made or Converted on the same day shall be deemed to be a
single Advance by such Lender until repaid or next
Converted.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or
is under common control with such Person or is a director or
officer of such Person.
"Alternate Base Rate" means, for any period, a
fluctuating interest rate per annum as shall be in effect
from time to time which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate; and
(b) 1/2 of 1% per annum above the Federal Funds
Rate in effect from time to time.
1<PAGE>
"Alternate Base Rate Advance" means an Advance that
bears interest as provided in Section 2.07(a).
"Amortization Date" means (i) the last day of each
December, March, June and September, commencing with the
first such date, and ending with the seventh such date, to
occur following the Amortization Period Commencement Date,
and (ii) the second anniversary of the Amortization Period
Commencement Date.
"Amortization Period Commencement Date" means the third
anniversary of this Agreement or such later date as the
Lenders may agree pursuant to Section 2.17.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of
an Alternate Base Rate Advance and such Lender's Eurodollar
Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means for any Eurodollar Rate
Advance, 1/2 of 1%.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Agent, in substantially the
form of Exhibit C hereto.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act
of 1978, as amended, as the same may be further amended, and
any other applicable state or federal law with respect to
bankruptcy, liquidation, insolvency or reorganization.
"Barranquilla Project" means the repowering and
expansion of an existing 240-megawatt plant to an
approximately 750-megawatt gas-fired, combined-cycle plant
at the Termobarranquilla plant in Columbia.
"Borrowing" means a borrowing consisting of
simultaneous Advances of the same Type, having the same
Interest Period (in the case of Eurodollar Rate Advances)
and made or Converted on the same day by each of the
Lenders, ratably in accordance with their respective
Percentages. All Advances of the same Type, having the same
Interest Period (in the case of Eurodollar Rate Advances)
and made or Converted on the same day shall be deemed a
single Borrowing hereunder until repaid or next Converted.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City
and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market.
"Cash Escrow Account" has the meaning set forth in
Section 2.11(c).
2<PAGE>
"Code" means the Internal Revenue Code of 1986 and the
regulations promulgated and rulings issued thereunder, each
as in effect and amended or modified from time to time.
"Commitment" means, for each Lender, the obligation of
such Lender to make Advances to the Borrower and to
participate in Extensions of Credit resulting from the
issuance (or extension, modification or amendment) of any
Letter of Credit in an aggregate amount no greater than the
amount set forth opposite such Lender's name on the
signature pages hereof or, if such Lender has entered into
one or more Assignment and Acceptances, set forth for such
Lender in the Register maintained by the Agent pursuant to
Section 9.07(c), in each such case as such amount may be
reduced from time to time pursuant to Section 2.05.
"Consolidated Net Worth" means, as to any Person, the
Net Worth of such Person and its Subsidiaries determined on
a consolidated basis after appropriate deduction for any
minority interests in Subsidiaries.
"Convert", "Conversion" and "Converted" each refers to
a conversion of Advances of one Type into Advances of
another Type or the selection of a new, or the renewal of
the same, Interest Period for Advances pursuant to
Section 2.09 or 2.10.
"Current Assets" means, as to any Person, the current
assets of such Person (the unused portion of the Commitments
shall not be considered a current asset of the Borrower in
making the foregoing determination as to the Borrower).
"Current Liabilities" means, as to any Person, the
current liabilities of such Person (the current portion of
Extensions of Credit shall be considered current liabilities
for purposes of making the foregoing determination).
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness of such Person
(i) for borrowed money, (ii) evidenced by bonds, indentures,
notes, or other similar instruments, (iii) to pay the
deferred purchase price of property or services, (iv) as
lessee under leases that shall have been or should be, in
accordance with generally accepted accounting principles,
recorded as capital leases, (v) under reimbursement
agreements or similar agreements with respect to the
issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the
payment of goods or services purchased in the ordinary
course of business), (vi) in respect of equity or debt
commitments or to pay liquidated damages under any contract,
guaranty, support or maintenance agreement or otherwise
(whether such obligations are contingent or otherwise),
(vii) under any interest rate, swap, "cap", "collar", or
other hedging agreement, (viii) to pay rent or other amounts
3<PAGE>
under leases entered into in connection with sale and
leaseback transactions, (ix) under direct guaranties and
indemnities in respect of, and to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in
respect of, or to assure an obligee against failure to make
payment in respect of, liabilities, obligations or
indebtedness of others of the kinds referred to in clauses
(i) through (viii) above, and (x) for liabilities in respect
of unfunded vested benefits under plans covered by Title IV
of ERISA.
"Default Rate" means a rate per annum equal at all
times to 2% per annum above the interest rate in effect from
time to time for Alternate Base Rate Advances.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
"EI Subsidiary" means any Affiliate of the Borrower
controlled by the Borrower directly, or indirectly through
one or more intermediaries. For purposes of this
definition, "control" means the possession, direct or
indirect, of the power to direct or cause the direction of
the management and policies of an Affiliate, whether through
the ownership of voting securities, by contract or
otherwise.
"Eligible Assignee" means (i) a commercial bank
organized under the laws of the United States, or any State
thereof; (ii) a commercial bank organized under the laws of
any other country that is a member of the OECD or has
concluded special lending arrangements with the
International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any
such country, provided that such bank is acting through a
branch or agency located in the United States; (iii) the
central bank of any country that is a member of the OECD; or
(iv) any Bank; provided, however, that (A) any such Person
described in clause (i), (ii) or (iii) above shall also (x)
have outstanding unsecured indebtedness that is rated A- or
better by Standard & Poor's Corporation (or any successor
thereto) or A3 or better by Moody's Investors Service, Inc.
(or any successor thereto) (or an equivalent rating by
another nationally recognized credit rating agency of
similar standing if neither such corporations is in the
business of rating unsecured indebtedness of entities
engaged in such businesses) and (y) have combined capital
and surplus (as established in its most recent report of
condition to its primary regulator) of not less than
$500,000,000 (or its equivalent in foreign currency), (B)
any Person described in clause (ii) or (iii) above shall, on
4<PAGE>
the date on which it is to become a Lender hereunder, be
entitled to receive payments hereunder without deduction or
withholding of any United States Federal income taxes (as
contemplated by Section 2.15(d)), and (C) any Person
described in clause (i), (ii) or (iii) above shall, in
addition, be acceptable to the Agent.
"Equity Securities" means those securities held of
record and beneficially by the Borrower as of the date
hereof consisting of (i) 510,298 ordinary shares of ACE
Limited and (ii) 78,660 ordinary shares of EXEL Limited,
together with such additional shares of such securities that
the Borrower may directly or indirectly acquire or receive
hereafter, whether by purchase, stock split, dividend,
conversion or otherwise.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder, each
as in effect and amended and modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member
of a group of which such person or entity is a member and
that is under common control with such person or entity
within the meaning of Section 414 of the Code.
"ERISA Plan Termination Event" means (i) a Reportable
Event described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject
to the provision for 30-day notice to PBGC), or (ii) the
withdrawal of the Borrower or any of its ERISA Affiliates
from a Plan or Multiemployer Plan during a plan year in
which the Borrower or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of
ERISA, or (iii) the filing of a notice of intent to
terminate a Plan or a Multiemployer Plan or the treatment of
a Plan or a Multiemployer Plan under Section 4041 of ERISA,
or (iv) the institution of proceedings to terminate a Plan
or a Multiemployer Plan by the PBGC or to appoint a trustee
to administer any Plan or a Multiemployer Plan, or (v) any
other event or condition that would constitute grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer any Plan or a
Multiemployer Plan.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which
5<PAGE>
it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for the Interest Period for
each Eurodollar Rate Advance made as part of the same
Borrowing, an interest rate per annum equal to the rate per
annum at which deposits in U.S. dollars are offered by the
principal office of the Reference Bank in London, England,
to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such
Reference Bank's Eurodollar Rate Advance made as part of
such Borrowing and for a period equal to such Interest
Period. The Eurodollar Rate for the Interest Period for
each Eurodollar Rate Advance made as part of the same
Borrowing shall be determined by the Agent on the basis of
the rate furnished to, and received by, the Agent from the
Reference Bank two Business Days before the first day of
such Interest Period, subject, however, to the provisions of
Section 2.09.
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.07(b).
"Eurodollar Rate Reserve Percentage" of any Lender for
the Interest Period for any Eurodollar Rate Advance means
the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those
days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued
from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section
7.01.
"Exchange Act" means the Securities Exchange Act of
1934, and the regulations promulgated thereunder, in each
case as amended from time to time.
"Extension of Credit" means (i) the making of a
Borrowing (including, without limitation, any Conversion),
(ii) the issuance of a Letter of Credit, or (iii) the
amendment of any Letter of Credit having the effect of
extending the stated termination date thereof, increasing
the LC Outstandings thereunder, or otherwise altering any of
the material terms or conditions thereof.
6<PAGE>
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Agent from three Federal funds brokers of recognized
standing selected by it.
"Interest Period" means, for each Eurodollar Rate
Advance made as part of the same Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or
the date of the Conversion of any Alternate Base Rate
Advance into such Eurodollar Rate Advance and ending on the
last day of the period selected by the Borrower pursuant to
the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below.
The duration of each such Interest Period shall be 1, 2, 3
or 6, months in each case as the Borrower may select, upon
notice received by the Agent not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the first
day of such Interest Period; provided, however, that:
(i) the Borrower may not select any Interest
Period that ends after the Termination Date;
(ii) Interest Periods commencing on the same date
for Eurodollar Rate Advances made as part of the same
Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day, provided that if such extension would
cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding
Business Day.
"LC Bank" means a Lender designated by the Borrower,
and acceptable to the Agent, in accordance with Section 3.01
as the issuer of a Letter of Credit pursuant to an LC Bank
Agreement.
"LC Bank Agreement" means an agreement between an LC
Bank and the Borrower, in form and substance satisfactory to
the Agent, providing for the issuance of one or more Letters
7<PAGE>
of Credit, in substantially the form of Exhibit D hereto, in
support of a general corporate activity of the Borrower.
"LC Payment Notice" has the meaning assigned to that
term in Section 3.04(b).
"LC Outstandings" means, for any Letter of Credit on
any date of determination, the maximum amount available to
be drawn under such Letter of Credit (assuming the
satisfaction of all conditions for drawing enumerated
therein).
"Lenders" means the Banks listed on the signature pages
hereof, each Eligible Assignee that shall become a party
hereto pursuant to Section 9.07 and, if and to the extent so
provided in Section 3.04(c), each LC Bank.
"Letter of Credit" means a letter of credit issued by
an LC Bank pursuant to Section 3.02, as such letter of
credit may from time to time be amended, modified or
extended in accordance with the terms of this Agreement and
the LC Bank Agreement to which it relates.
"Loan Documents" means this Agreement, the Notes, the
Support Letter, each LC Bank Agreement and all other
agreements, instruments and documents now or hereafter
executed and delivered pursuant hereto or thereto.
"Majority Lenders" means, on any date of determination,
Lenders that, collectively, on such date have in the
aggregate at least 66-2/3% of the Commitments (without
giving effect to any termination in whole of the Commitments
pursuant to Section 7.02), (provided that, for purposes
hereof, neither the Borrower, nor any of its Affiliates, if
a Lender, shall be included in (i) the Lenders having such
amount of the Commitments or (ii) determining the total
amount of the Commitments). Any determination of those
Lenders constituting the Majority Lenders shall be made by
the Agent and shall be conclusive and binding on all
parties, absent manifest error.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA maintained for
employees of the Borrower or any ERISA Affiliate of the
Borrower.
"Net Worth" means, with respect to any Person, the
excess of such Person's total assets over its total
liabilities, with total assets and total liabilities each to
be determined in accordance with generally accepted
accounting principles consistently applied, excluding,
however, from the determination of total assets (i)
goodwill, organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, and
8<PAGE>
other similar intangibles (other than, in the case of the
Borrower, any such intangibles reflected on the balance
sheet of the Borrower as at June 30, 1994), (ii) cash held
in a sinking or other analogous fund established for the
purpose of redemption, retirement or prepayment of capital
stock or Debt (provided that the corresponding liability is
also excluded from the calculation of Net Worth) and (iii)
any items not included in clauses (i) or (ii) above that are
treated as intangibles in conformity with generally accepted
accounting principles.
"Note" means a promissory note of the Borrower payable
to the order of a Lender, in substantially the form of
Exhibit A hereto, evidencing the aggregate indebtedness of
the Borrower to such Lender resulting from the Advances made
by such Lender.
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Conversion" has the meaning specified in
Section 2.10(a).
"OECD" means the Organization for Economic Cooperation
and Development.
"Parent" means General Public Utilities Corporation, a
Pennsylvania corporation.
"Parent's 1993 10-K" means the Parent's Annual Report
on Form 10-K for the year ended December 31, 1993, as filed
with the SEC.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions
under ERISA.
"Percentage" means, for any Lender on any date of
determination, the percentage obtained by dividing such
Lender's Commitment on such day by the total of the
Commitments on such date (in each case, without giving
effect to any termination of the Commitments pursuant to
Section 7.02), and multiplying the quotient so obtained by
100%.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency
thereof.
"Plan" means an employee benefit plan (other than a
Multiemployer Plan) maintained for employees of the Borrower
or any ERISA Affiliate of the Borrower and covered by Title
IV of ERISA.
9<PAGE>
"PUHCA" means the Public Utility Holding Company Act of
1935 and the regulations issued thereunder, each as in
effect and as amended or modified from time to time.
"PURPA" means the Public Utility Regulatory Policies
Act of 1978 and the regulations issued thereunder, each as
in effect and amended or modified from time to time.
"Reference Bank" means Citibank, N.A. or any Lender
designated as a successor or replacement reference bank
pursuant to Section 2.09(a).
"Register" has the meaning specified in Section
9.07(c).
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"Request for Issuance" has the meaning assigned to that
term in Section 3.02(a).
"SEC" means the Securities and Exchange Commission and
any entity succeeding to its functions under the Securities
Act of 1933, as amended, the Exchange Act or PUHCA.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which more than 50% of (i)
the outstanding capital stock having ordinary voting power
to elect a majority of the board or directors of such
corporation (irrespective of whether or not at the time
capital stock of any other class or classes of such
corporation shall or might have voting power upon the
occurrence of any contingency) or (ii) other comparable
equity interest, is at the time directly or indirectly owned
by such Person, by such Person and one or more other
Subsidiaries, or by one or more other Subsidiaries.
"Support Letter" means that certain Letter of Support,
dated as of December ___, 1994, duly executed by the chief
financial officer of the Parent or other senior officer of
the Parent acceptable to the Agent, from the Parent to the
Lenders in the form of Exhibit E hereto.
"Termination Date" means the earlier to occur of (i)
the eighth Amortization Date and (ii) the date of
termination in whole of the Commitments pursuant to Section
2.05 or Section 7.02 hereof.
"Unmatured Default" means an event that, with the
giving of notice or lapse of time or both, would constitute
an Event of Default.
"Utility" means each of Jersey Central Power & Light
Company, a New Jersey corporation, Metropolitan Edison
10<PAGE>
Company, a Pennsylvania corporation and Pennsylvania
Electric Company, a Pennsylvania corporation.
"Working Capital" means, as to any Person, the Current
Assets of such Person minus the Current Liabilities of such
Person.
SECTION 1.02 Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but
excluding".
SECTION 1.03 Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Section 5.01(g) hereof.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make Advances
to the Borrower and to participate in the issuance of Letters of
Credit (and the LC Outstandings thereunder) from time to time on
any Business Day during the period from the date hereof until the
Termination Date in an aggregate amount not to exceed at any time
such Lender's Commitment. Each Borrowing shall consist of an
Advance made by each Lender in the amount of $500,000 or an
integral multiple of $100,000 in excess thereof and shall consist
of Advances of the same Type and having the same Interest Period
(in the case of any Borrowing comprising Eurodollar Rate
Advances) made or Converted on the same day by the Lenders in
accordance with their respective Percentages. Within the limits
of each Lender's Commitment and subject to the conditions
hereinafter set forth, the Borrower may request Extensions of
Credit hereunder, prepay Advances, or reduce or cancel Letters of
Credit, and use the resulting increase in the unused Commitments
for further Extensions of Credit in accordance with the terms
hereof.
SECTION 2.02 Making the Advances. (a) Each Borrowing
shall be made on notice, given not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of
any proposed Borrowing comprising Eurodollar Rate Advances, and
on the date of any proposed Borrowing comprising Alternate Base
Rate Advances, by the Borrower to the Agent, which shall give to
each Lender prompt notice thereof. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telecopier, telex
or cable, confirmed immediately in writing, in substantially the
form of Exhibit B-1 hereto, specifying therein the requested
(i) date of such Borrowing, (ii) Type of Advances to be made in
11<PAGE>
connection with such Borrowing, (iii) aggregate amount of such
Borrowing, and (iv) in the case of a Borrowing comprising
Eurodollar Rate Advances, initial Interest Period for each such
Advance. Each Lender shall, before 12:00 noon (New York City
time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Agent at its
address referred to in Section 9.02, in same day funds, such
Lender's Percentage of such Borrowing. After the Agent's receipt
of such funds and upon fulfillment of the applicable conditions
set forth in Article IV, the Agent will make such funds available
to the Borrower at the Agent's aforesaid address.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the
related Notice of Borrowing specifies is to comprise Eurodollar
Rate Advances, the Borrower shall indemnify each Lender against
any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions
set forth in Article IV, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender
to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not
made on such date.
(c) Unless the Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will
not make available to the Agent such Lender's Percentage of such
Borrowing, the Agent may assume that such Lender has made such
amount available to the Agent on the date of such Borrowing in
accordance with Section 2.02(a) and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date
a corresponding amount. If and to the extent that such Lender
shall not have so made such Percentage of such Borrowing
available to the Agent, such Lender and the Borrower severally
agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to
Advances made in connection with such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Agent such corresponding amount, such amount
so repaid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement. Nothing in this
subsection shall be deemed to relieve any Lender from its
obligation to make any Advance required to be made by such Lender
hereunder or to prejudice any rights the Borrower may have
against any Lender as a result of any default by such Lender
hereunder.
(d) The failure of any Lender to make the Advance to be
made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance
12<PAGE>
on the date of such Borrowing, but no Lender shall be responsible
for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
(e) Notwithstanding anything to the contrary contained
herein, no more than six Borrowings comprising Eurodollar Rate
Advances may be outstanding at any time, and the aggregate LC
Outstandings at any time may not exceed $15,000,000.
SECTION 2.03 Computations of Outstandings. Whenever
reference is made in this Agreement to the principal amount
outstanding on any date under this Agreement, such reference
shall refer to the sum of (i) the aggregate principal amount of
all Advances outstanding on such date plus (ii) the aggregate LC
Outstandings on such date, in each case after giving effect to
all Extensions of Credit to be made on such date and the
application of the proceeds thereof. References to the unused
portion of the Commitments shall refer to the excess, if any, of
the Commitments over the principal amount outstanding hereunder;
and references to the unused portion of any Lender's Commitment
shall refer to such Lender's Percentage of the unused
Commitments.
SECTION 2.04 Fees. (a) The Borrower agrees to pay to
the Agent for the account of each Lender a facility fee on the
average daily aggregate amount of such Lender's Commitment
(without regard to the principal amount of Advances outstanding
and the amount of LC Outstandings) from the date hereof, in the
case of each Bank, and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender,
in the case of each other Lender, until the Termination Date,
payable in arrears on the last day of each December, March, June
and September during such period and on the Termination Date, at
the rate of 3/8 of 1% per annum.
(b) The Borrower agrees to pay to the Agent for the account
of each Lender a letter of credit fee on such Lender's Percentage
of the average daily aggregate amount of LC Outstandings from the
date hereof, in the case of each Bank, and from the effective
date specified in the Assignment and Acceptance pursuant to which
it became a Lender, in the case of each other Lender, until the
Termination Date, payable in arrears on the last day of each
December, March, June and September during such period and on the
Termination Date, at the rate of 1/2 of 1% per annum.
(c) The Borrower agrees to pay to the Agent the
administrative agent fee described in the Administrative Agent
Letter, of even date herewith, between the Agent and the Borrower
at the times and in the amounts specified in such letter.
SECTION 2.05 Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least two
Business Days' notice to the Agent, to terminate in whole or
reduce ratably in part the unused portions of the respective
Commitments of the Lenders, provided that the aggregate amount of
13<PAGE>
the Commitments of the Lenders shall not be reduced to an amount
that is less than the aggregate principal amount then outstanding
hereunder and provided, further, that each partial reduction
shall be in the aggregate amount of $500,000 or an integral
multiple thereof.
(b) Mandatory. The Commitment of each Lender shall
automatically reduce (i) on each Amortization Date by an amount
equal to 1/8 of the amount of such Lender's Commitment as of (and
immediately prior to any reductions on) the Amortization Period
Commencement Date, (ii) on each day following the Amortization
Period Commencement Date on which the Commitment of such Lender
shall be greater than such Lender's Percentage of the aggregate
principal amount outstanding on such date under this Agreement,
such Lender's Commitment shall automatically reduce to an amount
equal to such Lender's Percentage of such aggregate principal
amount, and (iii) upon each disposition of assets described in
clause (ii), (iv) or (v) of Section 6.02(b) by an amount equal to
the product of such Lender's Percentage and the amount of the
Asset Sale Proceeds (as defined in Section 6.02(b)), if any,
received by the Borrower in respect of such assets.
SECTION 2.06 Repayment of Advances. The Borrower
shall repay the principal amount of each Advance that is
outstanding on the Amortization Period Commencement Date (after
giving effect to all Advances and prepayments made on such date)
in eight equal installments, payable on each Amortization Date;
provided, however, that the aggregate principal amount
outstanding of all Advances shall be due and payable in full on
the Termination Date.
SECTION 2.07 Interest on Advances. The Borrower shall
pay interest on the unpaid principal amount of each Advance made
by each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) Alternate Base Rate Advances. If such Advance is an
Alternate Base Rate Advance, at a rate per annum equal at all
times to the Alternate Base Rate in effect from time to time,
payable quarterly on the last day of each December, March, June
and September during such periods and on the date such Alternate
Base Rate Advance shall be Converted or paid in full.
(b) Eurodollar Rate Advances. Subject to Section 2.08, if
such Advance is a Eurodollar Rate Advance, at a rate per annum
equal at all times during the Interest Period for such Advance to
the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin for such Eurodollar Rate Advance in effect from
time to time, payable on the last day of each Interest Period for
such Eurodollar Rate Advance (and, in the case of any Interest
Period of six months, on the last day of the third month of such
Interest Period) and on the date such Eurodollar Rate Advance
shall be Converted or paid in full.
14<PAGE>
SECTION 2.08 Additional Interest on Advances. The
Borrower shall pay to each Lender, so long as such Lender shall
be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount
of each Eurodollar Rate Advance of such Lender, from the date of
such Advance until such principal amount is paid in full, at an
interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Advance from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is
payable on such Advance. Such additional interest shall be
determined by such Lender and notified to the Borrower through
the Agent, and such determination shall be conclusive and binding
for all purposes, absent manifest error.
SECTION 2.09 Interest Rate Determination. (a) The
Reference Bank agrees to furnish to the Agent timely information
for the purpose of determining the Eurodollar Rate. If the
Reference Bank shall no longer be a Lender hereunder, shall no
longer wish to serve as a Reference Bank hereunder or shall fail
to perform hereunder, the Agent and the Borrower may appoint
another Lender to serve as a successor or replacement Reference
Bank hereunder.
(b) The Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the
Agent for purposes of Section 2.07(a) or (b) and the applicable
rate, if any, furnished by the Reference Bank for the purpose of
determining the applicable interest rate under Section 2.07(b).
(c) If the Reference Bank fails to furnish timely
information to the Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for
such Eurodollar Rate Advances,
(ii) each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert
into an Alternate Base Rate Advance (or if such Advance is
then an Alternate Base Rate Advance, will continue as an
Alternate Base Rate Advance), and
(iii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no
longer exist.
15<PAGE>
(d) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders notify the Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect
the cost to such Majority Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such
Interest Period, the Agent shall forthwith so notify the Borrower
and the Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period
therefor, Convert into an Alternate Base Rate Advance, and
(ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no
longer exist.
SECTION 2.10 Conversion of Advances. (a) Voluntary. The
Borrower may on any Business Day, by delivering a notice of
Conversion (a "Notice of Conversion") to the Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior
to the date of any proposed Conversion into or with respect to
Eurodollar Rate Advances, and on the date of any proposed
Conversion into Alternate Base Rate Advances, and subject to the
provisions of Sections 2.09 and 2.13, Convert all Advances of one
Type made in connection with the same Borrowing into Advances of
another Type or Types or Advances of the same Type having the
same or a new Interest Period; provided, however, that any
Conversion of, or with respect to, any Eurodollar Rate Advances
shall be made on, and only on, the last day of an Interest Period
for such Eurodollar Rate Advances, unless the Borrower shall also
reimburse the Lenders in respect thereof pursuant to Section
9.04(b) on the date of such Conversion. The Agent shall give
each Lender prompt notice of each Notice of Conversion. Each
Notice of Conversion shall be in substantially the form of
Exhibit B-2 and shall specify (i) the date of such Conversion,
(ii) if such Conversion is into, or with respect to, Eurodollar
Rate Advances, the duration of the Interest Period for each such
Advance, (iii) the Type of Advances to which such Advances (or
portions thereof) are proposed to be Converted, and (iv) the
aggregate amount of Advances (or portions thereof) proposed to be
Converted.
(b) Mandatory. If the Borrower shall fail to select the
Type of any Advance or the duration of any Interest Period for
any Borrowing comprising Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest
Period" in Section 1.01 and Section 2.10(a), or if any proposed
Conversion of a Borrowing that is to comprise Eurodollar Rate
Advances upon Conversion shall not occur as a result of the
circumstances described in paragraph (c) below, the Agent will
forthwith so notify the Borrower and the Lenders and such
Advances will automatically, on the last day of the then existing
16<PAGE>
Interest Period therefor, Convert into Alternate Base Rate
Advances.
(c) Failure to Convert. Each Notice of Conversion given
pursuant to subsection (a) above shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that is to
comprise Eurodollar Rate Advances upon Conversion, the Borrower
shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on
the date specified for such Conversion the applicable conditions
set forth in Article IV, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender
to fund such Eurodollar Rate Advances, as the case may be, upon
such Conversion, when such Conversion, as a result of such
failure, does not occur.
SECTION 2.11 Prepayments. (a) Optional. The Borrower
may, upon at least two Business Days' notice (or same day notice
in the case of any prepayment of Alternate Base Rate Advances) to
the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given, the
Borrower shall, prepay the outstanding principal amounts of the
Advances made as part of the same Borrowing in whole or ratably
in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however,
that (i) each partial prepayment of any Borrowing shall be in an
aggregate principal amount not less than $500,000 and (ii) in the
case of any such prepayment of Eurodollar Rate Advances, the
Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 9.04(b) on the date of such
prepayment.
(b) Mandatory. If and to the extent that the aggregate
principal amount outstanding on any date hereunder shall exceed
the aggregate amount of the Commitments hereunder on such date,
the Borrower shall prepay on such date a principal amount of
Advances, and/or shall deposit an amount of cash with the Agent
to be held as collateral in the Cash Escrow Account at least
equal to such excess, together with accrued interest to the date
of such prepayment on such principal amount of Advances and, in
the case of any such prepayment of Eurodollar Rate Advances, the
Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 9.04(b) on the date of such
prepayment.
(c) Application. Upon the date of any termination or
optional or mandatory reduction of the Commitments pursuant to
Section 2.05, the Borrower shall pay or prepay so much of the
principal amount outstanding under this Agreement as shall be
necessary in order that the aggregate principal amount
outstanding hereunder will not exceed the Commitments following
such termination or reduction, and the Agent shall apply such
amounts received from the Borrower, as well as any other amounts
received in respect of prepayments hereunder, to the prepayment
17<PAGE>
of the principal amount of Advances outstanding and the cash
collateralization of LC Outstandings hereunder in the following
order of priority and manner:
First, to the prepayment in whole or ratably in part of
the principal amount of all outstanding Alternate Base Rate
Advances,
Second, to the prepayment in whole or ratably in part
of the principal amount of outstanding Eurodollar Rate
Advances, and
Third, to the cash collateralization of LC Outstandings
by depositing such amounts in a special interest-bearing
escrow account maintained by the Agent at the Agent's office
(the "Cash Escrow Account") and pledged to the Agent for the
benefit of the Lenders pursuant to documentation reasonably
satisfactory to the Agent.
Any prepayment of principal following the Amortization Period
Commencement Date shall be applied to reduce scheduled payments
of principal due under Section 2.06 after the date of such
prepayment in the inverse order of maturity.
SECTION 2.12 Increased Costs. (a) If, due to either
(i) the introduction of or any change (other than any change by
way of imposition or increase of reserve requirements included in
the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law)
issued, promulgated or made, as the case may be, after the date
hereof, there shall be any increase in (A) the cost to any Lender
of agreeing to make or making, funding or maintaining Eurodollar
Rate Advances or any other Advances or participating in the
issuance, maintenance or funding of any Letter of Credit, or (B)
the cost to any LC Bank of issuing, maintaining or funding any
Letter of Credit, then the Borrower shall from time to time, upon
demand by such Lender or any LC Bank, as the case may be, (with a
copy of such demand to the Agent), pay to the Agent for the
account of such Lender or any LC Bank, as the case may be,
additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the nature and amount of
such increased cost, submitted to the Borrower and the Agent by
such Lender or any LC Bank, as the case may be, in good faith,
shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender or LC Bank determines that compliance
with any law or regulation or any guideline or request adopted or
made after the date hereof from any central bank or other
governmental authority (whether or not having the force of law)
affects or would affect the amount of capital required or
expected to be maintained by such Lender or LC Bank or any
corporation controlling such Lender or LC Bank and that the
18<PAGE>
amount of such capital is increased by or based upon the
existence of such Lender's or LC Bank's commitment to lend
hereunder and other commitments of the type hereunder or the
Advances or to issue or participate in any Letter of Credit,
then, upon demand by such Lender or LC Bank (with a copy of such
demand to the Agent), the Borrower shall immediately pay to the
Agent for the account of such Lender or LC Bank, from time to
time as specified by such Lender or LC Bank, additional amounts
sufficient to compensate such Lender or LC Bank or such
corporation in the light of such circumstances, to the extent
that such Lender or LC Bank determines such increase in capital
to be allocable to the (A) existence of such Lender's or LC
Bank's commitment to lend or to issue or participate in any
Letter of Credit hereunder; or (B) the participation in or
issuance or maintenance of any Letter of Credit or Advance and
(C) other commitments of the type hereunder, then, upon demand by
such Lender or LC Bank. A certificate as to such amounts
submitted to the Borrower and the Agent by such Lender or LC Bank
in good faith shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.13 Illegality. Notwithstanding any other
provision of this Agreement or any other Loan Document, if any
Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes
it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate
Advances hereunder, (i) the obligation of the Lenders to make, or
to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer
exist and (ii) the Borrower shall forthwith prepay in full all
Eurodollar Rate Advances of all Lenders then outstanding,
together with interest accrued thereon, unless the Borrower,
within five Business Days of notice from the Agent, Converts all
Eurodollar Rate Advances of all Lenders then outstanding into
Advances of another Type in accordance with Section 2.10. Any
Lender that has notified the Agent of any illegality under this
Section 2.13 shall use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change
the jurisdiction of its Applicable Lending Office if the making
of such change would avoid or eliminate such illegality and would
not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.14 Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later
than 12:00 noon (New York City time) on the day when due in U.S.
dollars to the Agent at its address referred to in Section 9.02
in same day funds; any such payment to the Agent shall constitute
payment by the Borrower hereunder, under the Notes and the other
Loan Documents, as the case may be, for all purposes, and upon
such payment the Lenders shall look solely to the Agent for their
19<PAGE>
respective interests in such payment. The Agent will promptly
after any such payment cause to be distributed like funds
relating to the payment of principal or interest or fees ratably
(other than amounts payable pursuant to Section 2.02(c), 2.03,
2.08, 2.12, 2.15 or 9.04(b) or (c)) (in accordance with their
respective Percentages) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to
the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each
case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the
Register pursuant to Section 9.07(d), from and after the
effective date specified in such Assignment and Acceptance, the
Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes the Agent, each Lender
and each LC Bank, if and to the extent payment owed to such
Lender or LC Bank is not made when due hereunder (or under any
Note held by such Lender), to charge from time to time against
any or all of the Borrower's accounts with such Lender or LC
Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate
Base Rate shall be made by the Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of
interest based on the Eurodollar Rate or the Federal Funds Rate
and of fees shall be made by the Agent, and all computations of
interest pursuant to Section 2.08 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are
payable. Each determination by the Agent (or, in the case of
Section 2.08, by a Lender) of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder, under the Notes, under
an LC Bank Agreement or other Loan Document shall be stated to be
due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment
of interest or fees, as the case may be; provided, however, if
such extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day, and such reduction of time shall in such case be
taken into account in the computation of interest or fees, as the
case may be.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
20<PAGE>
Lenders hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent that the Borrower shall not
have so made such payment in full to the Agent, each Lender shall
repay to the Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date
such Lender repays such amount to the Agent, at the Federal Funds
Rate.
(f) Notwithstanding anything to the contrary contained
herein, any amount payable by the Borrower hereunder or under any
Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall (to the fullest extent permitted
by law) bear interest from the date when due until paid in full
at a rate per annum equal at all times to the Default Rate
payable upon demand.
SECTION 2.15 Taxes. (a) Any and all payments by the
Borrower hereunder under the Notes and under the other Loan
Documents shall be made, in accordance with Section 2.14, free
and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, each LC Bank and the
Agent, taxes imposed on its income and any withholdings in
connection therewith, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender, LC Bank or the
Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable to any Lender, any LC Bank or the
Agent hereunder, under any Note or under any other Loan Document,
(i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.15)
such Lender, such LC Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment
made hereunder, under the Notes or under any other Loan Document
21<PAGE>
or arise from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, the Notes or any other
Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender, each LC Bank
and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.15)
paid by such Lender, LC Bank or the Agent (as the case may be)
and any liability (including penalties, interest and expenses,
other than those arising from such Lender's or LC Bank's gross
negligence) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date
such Lender, LC Bank or the Agent (as the case may be) makes
written demand therefor.
(d) Prior to the date of the initial Borrowing in the case
of each Bank, and on the date of the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter if requested by the
Borrower or the Agent, each Lender organized under the laws of a
jurisdiction outside the United States shall provide the Agent
and the Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying that such Lender
is exempt from United States withholding taxes with respect to
all payments to be made to such Lender hereunder and under the
Notes. If for any reason during the term of this Agreement, any
Lender becomes unable to submit the forms referred to above or
the information or representations contained therein are no
longer accurate in any material respect, such Lender shall
promptly notify the Agent and the Borrower in writing to that
effect. Unless the Borrower and the Agent have received forms or
other documents satisfactory to them indicating that payments
hereunder, under any Note or under any other Loan Document are
not subject to United States withholding tax, the Borrower or the
Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Lender
organized under the laws of a jurisdiction outside the United
States.
(e) Any Lender or LC Bank claiming any additional amounts
payable pursuant to this Section 2.15 shall use its best efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable
judgment of such Lender or LC Bank, be otherwise disadvantageous
to such Lender or LC Bank.
(f) If the Borrower makes any additional payment to any
Lender or LC Bank pursuant to this Section 2.15 in respect of any
Taxes or Other Taxes, and such Lender or LC Bank determines that
it has received (i) a refund of such Taxes or Other Taxes or
22<PAGE>
(ii) a credit against or relief or remission for, or a reduction
in the amount of, any tax or other governmental charge solely as
a result of any deduction or credit for any Taxes or Other Taxes
with respect to which it has received payments under this Section
2.15, such Lender or LC Bank shall, to the extent that it can do
so without prejudice to the retention of such refund, credit,
relief, remission or reduction, pay to the Borrower such amount
as such Lender or LC Bank shall have determined to be
attributable to the deduction or withholding of such Taxes or
Other Taxes. If such Lender or LC Bank later determines that it
was not entitled to such refund, credit, relief, remission or
reduction to the full extent of any payment made pursuant to the
first sentence of this Section 2.15(f), the Borrower shall upon
demand of such Lender or LC Bank promptly repay the amount of
such overpayment. Any determination made by such Lender or LC
Bank pursuant to this Section 2.15(f) shall in the absence of bad
faith or manifest error be conclusive, and nothing in this
Section 2.15(f) shall be construed as requiring any Lender or LC
Bank to conduct its business or to arrange or alter in any
respect its tax or financial affairs so that it is entitled to
receive such a refund, credit or reduction or as allowing any
person to inspect any records, including tax returns, of any
Lender or LC Bank.
(g) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.15 shall
survive the payment in full of principal and interest hereunder,
under the Notes and under any other Loan Documents; provided,
that no Lender or LC Bank shall be entitled to demand any payment
under this Section 2.15 more than one year following the last day
of the fiscal year of such Lender during which the liability in
respect of such Taxes or Other Taxes was incurred; provided
further, however, that the foregoing proviso shall in no way
limit the right of any Lender or LC Bank to demand or receive any
payment under this Section 2.15 to the extent that such payment
relates to the retroactive application of any Taxes or Other
Taxes if such demand is made within one year after the
implementation of such Taxes or Other Taxes.
SECTION 2.16 Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of the
Advances made by it (other than pursuant to Section 2.02(c),
2.08, 2.12, 2.15 or 9.04(b)) in excess of its Percentage of
payments on account of the Advances obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such
participations in the Advances made by them as shall be necessary
to cause such purchasing Lender to share the excess payment
ratably (in accordance with their respective Percentages) with
each of them, provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount
23<PAGE>
equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees
that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.16 may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.17 Extension of Amortization Period Commencement
Date. Unless the Termination Date shall have occurred, at least
90 but not more than 120 days prior to the date that is one year
prior to the then-effective Amortization Period Commencement
Date, the Borrower may request the Lenders, by written notice to
the Agent, to consent to a single, one-year extension of the
Amortization Period Commencement Date. Each Lender shall, in its
sole discretion, determine whether to consent to such request and
shall notify the Agent of its determination within 60 days of
such Lender's receipt of notice of such request. If any Lender
shall not have consented to such request during such 60-day
period, the Agent shall promptly so notify the Borrower and the
other Lenders, whereupon each other Lender may, during the 30-day
period following receipt of such notice from the Agent, revoke
any consent to such extension previously given by such Lender
unless within such 30-day period the Borrower shall have replaced
such non-consenting Lender pursuant to Section 9.07(h). If such
request shall have been consented to by all the Lenders (as
determined after giving effect to the replacement of any Lender
pursuant to Section 9.07(h)), the Agent shall notify the Borrower
in writing of such consent, and such extension shall become
effective upon the delivery by the Borrower to the Agent and each
Lender, on or prior to the date that is one year prior to the
then-effective Amortization Period Commencement Date, of (i) a
certificate of a duly authorized officer of the Borrower, dated
such date, as to the accuracy, both before and after giving
effect to such proposed extension, of the representations and
warranties set forth in Section 5.01 and as to the absence, both
before and after giving effect to such proposed extension, of any
Event of Default or Unmatured Default, (ii) certified copies of
all corporate and governmental approvals, if any, required to be
obtained by the Borrower or the Parent in connection with such
extension and (iii) an opinion or opinions of counsel to the
Borrower as to the matters set forth in paragraphs 1 through 8 of
Exhibit F after giving effect to such extension and such other
matters as any Lender, through the Agent, may reasonably request.
24<PAGE>
ARTICLE III
LETTERS OF CREDIT
SECTION 3.01 LC Banks. Subject to the terms and conditions
hereof, the Borrower may from time to time arrange for one or
more Lenders to act as an LC Bank hereunder. The Borrower shall
notify the Agent of any such designation at least five Business
Days prior to the first date upon which the Borrower proposes
that such LC Bank issue its first Letter of Credit, so as to
provide adequate time for such proposed LC Bank to be approved by
the Agent hereunder; provided, that nothing contained herein
shall be deemed to require any Lender to agree to act as an LC
Bank, if it does not so desire. Within two Business Days
following the receipt of any such designation of a proposed LC
Bank, the Agent shall notify the Borrower as to whether such
designee is reasonably acceptable to the Agent.
SECTION 3.02 Letters of Credit. (a) Each Letter of Credit
shall be issued (or the stated maturity thereof extended or terms
thereof modified or amended) on or prior to the Amortization
Period Commencement Date on not less than three Business Days'
prior written notice thereof to the Agent (which shall promptly
distribute copies thereof to the Lenders) and the relevant LC
Bank. Each such notice (a "Request for Issuance") shall specify
(i) the date (which shall be a Business Day) of issuance of such
Letter of Credit (or the date of effectiveness of such extension,
modification or amendment) and the stated expiry date thereof
(which shall be no later than the earlier to occur of the third
anniversary of the date of issuance thereof and the second
anniversary of the Amortization Period Commencement Date) (ii)
the proposed stated amount of such Letter of Credit (which shall
not be less than $250,000) and (iii) such other information as
shall demonstrate compliance by such Letter of Credit with the
requirements specified therefor in this Agreement, (including,
without limitation, Sections 2.05(b) and 2.11(b)) and the
relevant LC Bank Agreement. Each Request for Issuance shall be
irrevocable unless modified or rescinded by the Borrower not less
than one Business Day prior to the proposed date of issuance (or
effectiveness) specified therein. Not later than 12:00 noon (New
York City time) on the proposed date of issuance (or
effectiveness) specified in such Request for Issuance, and upon
fulfillment of the applicable conditions precedent and the other
requirements set forth herein and in the relevant LC Bank
Agreement, such LC Bank shall issue (or extend, amend or modify)
such Letter of Credit and provide notice and a copy thereof to
the Agent, which shall promptly furnish copies thereof to the
Lenders.
(b) Each Lender severally agrees with such LC Bank to
participate in the Extension of Credit resulting from the
issuance (or extension, modification or amendment) of such Letter
of Credit, in the manner and the amount provided in Section
3.04(b), and the issuance of such Letter of Credit shall be
25<PAGE>
deemed to be a confirmation by such LC Bank and each Lender of
such participation in such amount.
SECTION 3.03 LC Bank Fees. The Borrower shall pay directly
to each LC Bank the letter of credit fees, if any, specified to
be paid pursuant to the terms of the LC Bank Agreement to which
such LC Bank is a party at the times and in the manner specified
in such LC Bank Agreement.
SECTION 3.04 Reimbursement to LC Banks. (a) The Borrower
hereby agrees to pay to the Agent for the account of each LC
Bank, on demand made by such LC Bank to the Borrower and the
Agent, on the date on which such LC Bank shall pay any amount
under the Letter of Credit issued by such LC Bank, a sum equal to
the amount so paid plus interest on such amount from the date so
paid by such LC Bank until repayment to such LC Bank in full at a
fluctuating interest rate per annum equal at all times to the
interest rate hereunder for Alternate Base Rate Advances.
(b) If any LC Bank shall not have been reimbursed in full
for any payment made by such LC Bank under the Letter of Credit
issued by such LC Bank on the date of such payment, such LC Bank
shall give the Agent and each Lender notice thereof (an "LC
Payment Notice") no later than 12:00 noon (New York City time) on
the Business Day immediately succeeding the date of such payment
by such LC Bank. Each Lender severally agrees to purchase a
participation in the reimbursement obligation of the Borrower to
such LC Bank under subsection (a) above by paying to the Agent
for the account of such LC Bank an amount equal to such Lender's
Percentage of such unreimbursed amount paid by such LC Bank, plus
interest on such amount at a rate per annum equal to the Federal
Funds Rate from the date of such payment by such LC Bank to the
date of payment to such LC Bank by such Lender. Each such
payment by a Lender shall be made not later than 3:00 P.M. (New
York City time) on the later to occur of (i) the Business Day
immediately following the date of such payment by such LC Bank
and (ii) the Business Day on which such Lender shall have
received an LC Payment Notice from such LC Bank. Each Lender's
obligation to make each such payment to the Agent for the account
of such LC Bank shall be several and shall not be affected by the
occurrence or continuance of an Unmatured Default or Event of
Default or the failure of any other Lender to make any payment
under this Section 3.04. Each Lender further agrees that each
such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(c) The failure of any Lender to make any payment to the
Agent for the account of an LC Bank in accordance with subsection
(b) above shall not relieve any other Lender of its obligation to
make payment, but no Lender shall be responsible for the failure
of any other Lender. If any Lender shall fail to make any
payment to the Agent for the account of an LC Bank in accordance
with subsection (b) above within five Business Days after the LC
Payment Notice relating thereto, then, for so long as such
failure shall continue, such LC Bank shall be deemed, for
26<PAGE>
purposes of Section 2.16 and Article VII hereof to be a Lender
hereunder owed an Advance in an amount equal to the outstanding
principal amount due and payable by such Lender to the Agent for
the account of such LC Bank pursuant to subsection (b) above.
(d) Each participation purchased by a Lender under
subsection (b) above shall constitute an Alternate Base Rate
Advance deemed made by such Lender to the Borrower on the date of
such payment by the relevant LC Bank under the Letter of Credit
issued by such LC Bank (irrespective of the Borrower's
noncompliance, if any, with the conditions precedent for Advances
hereunder); and all such payments by the Lenders in respect of
any one such payment by such LC Bank shall constitute a single
Borrowing hereunder.
(e) Notwithstanding anything to the contrary in this
Agreement, any failure of the Borrower to make any payment upon
demand in accordance with subsection (a) above shall not
constitute an Event of Default or an Unmatured Default hereunder,
provided, however, that any failure of the Borrower to make any
payment of principal of or interest on any Alternate Base Rate
Advance deemed to have been made hereunder pursuant to subsection
(d) above shall constitute an Event of Default or an Unmatured
Default, as the case may be.
SECTION 3.05 Obligations Absolute. The payment obligations
of each Lender under Section 3.04(b) and of the Borrower under
this Agreement in respect of any payment under any Letter of
Credit and any Advance made under Section 3.04(d) shall be
unconditional and irrevocable, and shall to the fullest extent
permitted by law be paid strictly in accordance with the terms of
this Agreement under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating
thereto or to such Letter of Credit;
(ii) any amendment or waiver of, or any consent to
departure from, all or any of the Loan Documents;
(iii) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time
against any beneficiary, or any transferee, of such Letter
of Credit (or any Persons for whom any such beneficiary or
any such transferee may be acting), any LC Bank, or any
other Person, whether in connection with this Agreement, the
transactions contemplated herein or by such Letter of
Credit, or any unrelated transaction;
(iv) any statement or any other document presented
under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
27<PAGE>
(v) payment in good faith by any LC Bank under the
Letter of Credit issued by such LC Bank against presentation
of a draft or certificate which does not comply with the
terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 3.06 Liability of LC Banks and the Lenders. The
Borrower assumes all risks of the acts and omissions of any
beneficiary or transferee of any Letter of Credit. Neither the
LC Bank that has issued such Letter of Credit, the Lenders nor
any of their respective officers, directors, employees, agents or
Affiliates shall be liable or responsible for (i) the use that
may be made of such Letter of Credit or any acts or omissions of
any beneficiary or transferee thereof in connection therewith;
(ii) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or
forged; (iii) payment by such LC Bank against presentation of
documents that do not comply with the terms of such Letter of
Credit, including failure of any documents to bear any reference
or adequate reference to such Letter of Credit; or (iv) any other
circumstances whatsoever in making or failing to make payment
under such Letter of Credit, except that the Borrower shall have
the right to bring suit against such LC Bank, and such LC Bank
shall be liable to the Borrower and any Lender, to the extent of
any direct, as opposed to consequential, damages suffered by the
Borrower or such Lender which the Borrower or such Lender proves
were caused by such LC Bank's wilful misconduct or gross
negligence, including such LC Bank's wilful failure to make
timely payment under such Letter of Credit following the
presentation to it by the beneficiary thereof of a draft and
accompanying certificate(s) that strictly comply with the terms
and conditions of such Letter of Credit. In furtherance and not
in limitation of the foregoing, any LC Bank may accept sight
drafts and accompanying certificates presented under the Letter
of Credit issued by such LC Bank that appear on their face to be
in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
Notwithstanding the foregoing, no Lender shall be obligated to
indemnify the Borrower for damages caused by any LC Bank's wilful
misconduct or gross negligence, and the obligation of the
Borrower to reimburse the Lenders hereunder shall be absolute and
unconditional, notwithstanding the gross negligence or wilful
misconduct of any LC Bank.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01 Conditions Precedent to Initial Extensions of
Credit. The obligation of each Lender to make its initial
Extension of Credit is subject to the satisfaction, prior to or
28<PAGE>
concurrently with the making of such initial Extension of Credit,
of each of the following conditions precedent:
(a) Documents and Other Agreements. The Agent shall have
received the following, each dated the same date, in form and
substance satisfactory to the Agent and each Lender and (except
for the Notes) in sufficient copies for each Lender:
(i) The Notes payable to the order of each of the
Lenders, respectively, duly executed by the Borrower;
(ii) A copy of the Support Letter, certified by the
Secretary or an Assistant Secretary of the Parent as being a
true and correct copy and in full force and effect without
amendment or modification;
(iii) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this Agreement
and the Notes and any other documents to be delivered by the
Borrower hereunder, and of all documents evidencing other
necessary corporate action with respect to this Agreement
and the Notes;
(iv) Certified copies of the resolutions of the
Board of Directors of the Parent approving the Support
Letter and any other documents to be delivered by the Parent
hereunder, and of all documents evidencing other necessary
corporate action with respect to the Support Letter;
(v) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying (A) the names
and true signatures of the officers of the Borrower
authorized to sign this Agreement and the Notes and the
other documents to be delivered hereunder; (B) that attached
thereto are true and correct copies of the Certificate of
Incorporation (or comparable charter document) and the By-
laws of the Borrower, in each case as in effect on such
date; (C) that attached thereto are true and correct copies
of all governmental and regulatory authorizations and
approvals required for the due execution, delivery and
performance by the Borrower of this Agreement and the Notes;
(vi) A certificate of the Secretary or an
Assistant Secretary of the Parent certifying (A) the names
and true signatures of the officers of the Parent authorized
to sign the Support Letter and any other documents to be
delivered by the Parent hereunder; (B) that attached thereto
are true and correct copies of the Certificate of
Incorporation (or comparable charter document) and By-laws
of the Parent, in each case as in effect on such date; and
(C) that attached thereto are true and correct copies of all
governmental and regulatory authorizations and approvals
required for the due execution, delivery and performance by
the Parent of the Support Letter and any other documents to
be delivered by the Parent hereunder;
29<PAGE>
(vii) A certificate of the chief financial officer
or vice president-treasurer of the Borrower, or such other
officer of the Borrower reasonably acceptable to the Agent,
stating that (A) the representations and warranties
contained in Section 5.01 of this Agreement are correct on
and as of the date of such certificate as though made on and
as of such date and (B) no Event of Default and no Unmatured
Default has occurred and is continuing;
(viii) A Federal Reserve Form U-1 provided for in
Regulation U issued by the Board of Governors of the Federal
Reserve System, duly completed and executed by the Borrower,
the statements made in which shall be such as to permit the
transactions contemplated hereby in accordance with said
Regulation U;
(ix) Copies of the Parent's 1993 10-K, the
Parent's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994, June 30, 1994 and September 30, 1994
(in each case, as filed with the SEC) and all of the
Parent's Current Reports on Form 8-K filed with the SEC
since December 31, 1993 (in each case, as filed with the
SEC).
(x) Copies of the consolidated balance sheet of
the Borrower and its Subsidiaries as at December 31, 1993,
and the related consolidated statement of income and
retained earnings of the Borrower and its Subsidiaries for
the fiscal year then ended, certified by Coopers & Lybrand,
and copies of the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as at September 30, 1994
and the related unaudited consolidated statement of income
for the nine-month period then ended, certified by the chief
financial officer of the Borrower.
(xi) A favorable opinion of Berlack, Israels &
Liberman, counsel for the Borrower and the Parent,
substantially in the form of Exhibit F hereto and as to such
other matters as any Lender through the Agent may reasonably
request;
(xii) A favorable opinion of King & Spalding,
special counsel for the Agent, substantially in the form of
Exhibit G hereto; and
(xiii) Such other approvals, opinions and documents
as any Lender, through the Agent, may reasonably request.
(b) Payment of Participation Fees. The Agent shall have
received from the Borrower for the account of each Lender, the
participation fees payable by the Borrower to each Lender, as set
forth in each of the commitment letters from each Lender to the
Agent with respect to each Lender's Commitment hereunder.
30<PAGE>
SECTION 4.02 Conditions Precedent to Each Extension of
Credit. The obligation of each Lender or LC Bank, as the case
may be, to make an Extension of Credit (including the initial
Extension of Credit but not including Conversions) shall be
subject to the further conditions precedent that, on the date of
such Extension of Credit and after giving effect thereto:
(a) The following statements shall be true (and each of the
giving of the applicable notice or request with respect thereto
and the making of such Extension of Credit shall constitute a
representation and warranty by the Borrower that, on the date of
such Extension of Credit, such statements are true):
(i) the representations and warranties contained in
Section 5.01 of this Agreement are true and correct on and
as of the date of such Extension of Credit, before and after
giving effect to such Extension of Credit and to the
application of the proceeds thereof, as though made on and
as of such date; and
(ii) no Event of Default or Unmatured Default has
occurred and is continuing, or would result from such
Extension of Credit or the application of the proceeds
thereof.
(b) The Agent shall have received such other approvals,
opinions and documents as any Lender or LC Bank, through the
Agent, may reasonably request as to the legality, validity,
binding effect or enforceability of the Loan Documents or the
financial condition, operations, business, or the prospects of
the Borrower or of the Parent and its Subsidiaries, taken as a
whole.
SECTION 4.03 Condition Precedent to Certain Conversions.
The obligation of each Lender to Convert any Borrowing that, upon
such Conversion, is to comprise Eurodollar Rate Advances is
subject to the condition precedent that on the date of such
Conversion, no Event of Default or Unmatured Default shall have
occurred and be continuing, and the giving by the Borrower of the
applicable Notice of Conversion described in Section 2.10(a)
shall constitute a representation and warranty by the Borrower
that no Event of Default or Unmatured Default has occurred and is
continuing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Each of the Borrower and the Parent is a corporation
duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and is duly
31<PAGE>
qualified to do business as a foreign corporation in each
jurisdiction in which the nature of the business conducted or the
property owned, operated or leased by it requires such
qualification, except where failure to so qualify would not
materially adversely affect the financial condition, operations,
business or prospects of the Borrower or of the Parent and its
Subsidiaries, taken as a whole.
(b) The execution, delivery and performance by the Borrower
of this Agreement and the Notes are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Borrower's
Certificate of Incorporation (or other comparable charter
document) or By-laws or law, (ii) result in a breach of, or
constitute a default under, any indenture or loan or credit
agreement or any other material agreement, lease or instrument to
which the Borrower is a party or by which it or its properties
may be bound or affected, or (iii) result in or require the
creation of any lien upon or with respect to any of its
properties, except such liens as may be permitted under Section
6.02(e).
(c) The execution, delivery and performance by the Parent
of the Support Letter are within the Parent's corporate powers,
have been duly authorized by all necessary corporate action, and
do not (i) contravene the Parent's Certificate of Incorporation
(or other comparable charter document) or By-laws or law, (ii)
result in a breach of, or constitute a default under, any
indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Parent is a party or
by which it or its properties may be bound or affected, or (iii)
result in or require the creation of any lien upon or with
respect to any of its properties.
(d) 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 Borrower of this Agreement or the Notes or by
the Parent of the Support Letter, except for the issuance by the
SEC of an appropriate order under PUHCA, which has been duly
obtained, is in full force and effect and is not subject to any
pending or, to the knowledge of the Borrower or the Parent,
threatened appeal or other proceeding seeking reconsideration or
review thereof.
(e) This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with
their respective terms, except as the enforceability thereof may
be limited by equitable principles or bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally.
(f) The Support Letter is a legal, valid, binding and
enforceable obligation of the Parent, except as the
32<PAGE>
enforceability thereof may be limited by equitable principles or
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally.
(g) The consolidated balance sheet of the Parent and its
Subsidiaries as at December 31, 1993, and the related
consolidated statement of income and retained earnings of the
Parent and its Subsidiaries for the fiscal year then ended,
certified by Coopers & Lybrand, and the consolidated unaudited
balance sheets of the Parent and its Subsidiaries as at September
30, 1994 and the related unaudited consolidated statement of
income for the nine-month period then ended, copies of each of
which have been furnished to each Lender, fairly present
(subject, in the case of such balance sheet and statement of
income for the period ended September 30, 1994, to year-end
adjustments) the financial condition of the Parent and its
Subsidiaries as at such dates and the results of the operations
of the Parent and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting
principles consistently applied, and since December 31, 1993,
except as set forth in the Parent's Quarterly Reports on Form 10-
Q for the quarters ended March 31, 1994, June 30, 1994 and
September 30, 1994 and the Parent's Current Reports on Form 8-K
dated _________, there has been no material adverse change in the
financial condition, operations, business or prospects of the
Parent and its Subsidiaries, taken as a whole, or in the Parent's
ability to perform under the Support Letter.
(h) The consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 1993, and the related
consolidated statement of income and retained earnings of the
Borrower and its Subsidiaries for the fiscal year then ended,
certified by Coopers & Lybrand, and the unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as at
September 30, 1994 and the related unaudited consolidated
statement of income for the nine-month period then ended, copies
of each of which have been furnished to each Lender, fairly
present (subject, in the case of such balance sheet and statement
of income for the period ended September 30, 1994, to year-end
adjustments) the financial condition of the Borrower and its
Subsidiaries as at such dates and the results of the operations
of the Borrower and its Subsidiaries for the periods ended on
such dates, all in accordance with generally accepted accounting
principles consistently applied, and since December 31, 1993,
except as set forth in the Parent's Quarterly Reports on Form 10-
Q for the quarters ended March 31, 1994, June 30, 1994 and
September 30, 1994 and the Parent's Current Reports on Form 8-K
dated _____________, there has been no material adverse change in
the financial condition, operations, business or prospects of the
Borrower and its Subsidiaries, taken as a whole, or in the
Borrower's ability to perform under the Loan Documents to which
it is, or is to become, a party.
(i) Except as disclosed in [Schedule III hereto,] the
Parent's 1993 10-K, the Parent's Quarterly Reports on Form 10-Q
33<PAGE>
for the quarters ending March 31, 1994, June 30, 1994 and
September 30, 1994 and the Parent's Current Reports on Form 8-K
dated ___________, there is no pending or threatened action or
proceeding affecting the Borrower, the Parent or any of their
respective Subsidiaries before any court, governmental agency or
arbitrator that is likely to have a material adverse effect on
the financial condition, operations, business or prospects of the
Borrower, the Parent or the Parent and its Subsidiaries, taken as
a whole, or that is likely to have a material adverse effect on
the Borrower's or the Parent's ability to perform under the Loan
Documents to which it is, or is to become, a party, and there has
been no change in any such matter so disclosed the effect of
which would cause any such material adverse effect.
(j) No proceeds of any Advance have been or will be used
directly or indirectly for the purpose of purchasing or carrying
shares of any class of equity securities that is registered
pursuant to Section 12 of the Exchange Act or in any transaction
subject to the requirements of the Exchange Act.
(k) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System). Not more than 25% of
the value of the assets of the Borrower subject to the
requirements of Section 6.02(b), (e) or (g) below is, on the date
hereof, represented by margin stock.
(l) The Borrower (i) is not a "public utility holding
company" within the meaning of PUHCA, and (ii) neither the Parent
nor the Borrower is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or an "investment
advisor" within the meaning of the Investment Company Act of
1940, as amended.
(m) No ERISA Plan Termination Event has occurred, or is
reasonably expected to occur, with respect to any Plan or
Multiemployer Plan that reasonably could be expected to
materially and adversely affect the business, operations,
affairs, assets or condition financial or otherwise or prospects
of the Borrower, or of the Parent and its Subsidiaries, taken as
a whole, or affect the ability of the Borrower to perform its
obligations hereunder.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01 Affirmative Covenants. Unless the Majority
Lenders shall otherwise consent in writing, so long as any Note
or any amount payable by the Borrower hereunder shall remain
unpaid, any Letter of Credit shall remain outstanding or any
Lender shall have any Commitment hereunder:
34<PAGE>
(a) Reporting Requirements. The Borrower will furnish to
the Lenders:
(i) as soon as available and in any event within 60
days after the end of each of the first three quarters of
each fiscal year of the Parent, a consolidated balance sheet
of the Parent and its Subsidiaries as of the end of such
quarter and a consolidated statement of income and retained
earnings of the Parent and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending
with the end of such quarter, certified by the chief
financial officer or vice president and treasurer of the
Parent, or such other officer of the Parent or the Borrower
acceptable to the Agent;
(ii) as soon as available and in any event within 100
days after the end of each fiscal year of the Borrower, a
copy of the annual report for such year for the Parent and
its Subsidiaries, containing consolidated financial
statements for such year, certified by Coopers & Lybrand or
another nationally recognized firm of independent public
accountants;
(iii) as soon as available and in any event within
60 days after the end of each of the first three quarters of
each fiscal year of the Borrower, consolidated balance
sheets of the Borrower and its Subsidiaries as of the end of
such quarter, consolidated statements of income and retained
earnings of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending
with the end of such quarter, certified by the chief
financial officer or vice president-finance of the Borrower,
or such other officer of the Parent or the Borrower
acceptable to the Agent;
(iv) as soon as available and in any event within 100
days after the end of each fiscal year of the Borrower,
consolidated and consolidating financial statements of the
Borrower and its Subsidiaries for such year, certified by
Coopers & Lybrand or another nationally recognized firm of
independent public accountants;
(v) as soon as available and in any event within 100
days after the end of each fiscal year of the Borrower,
projections of consolidated working capital and cash flows
of the Borrower and its Subsidiaries for the two-year period
commencing with the current fiscal year and otherwise in
form satisfactory to the Agent, which financial statements
and projections shall be accompanied by a certificate of the
chief financial officer or vice president - finance of the
Borrower stating that such projections were prepared in good
faith and based upon best available information and
reasonable assumptions;
35<PAGE>
(vi) as soon as available and in any event within 45
days after the end of each of the first three quarters of
each fiscal year of the Borrower and within 100 days after
the end of the fiscal year of the Borrower, a certificate of
the chief financial officer or vice president-finance of the
Borrower, or such other officer of the Parent or the
Borrower acceptable to the Agent, (A) demonstrating, in
reasonable detail and with supporting calculations,
compliance with the financial covenants set forth in
Sections 6.02(d) and (f) hereof and (B) stating that no
Event of Default and Unmatured Default has occurred and is
continuing, or if an Event of Default or Unmatured Default
has occurred and is continuing, a statement setting forth
details of such Event of Default or Unmatured Default and
the actions that the Borrower has taken and proposes to take
with respect thereto;
(vii) as soon as available and in any event within
100 days after the end of each fiscal year of the Borrower,
a certificate of Coopers & Lybrand or another nationally
recognized firm of independent public accountants,
demonstrating, in reasonable detail and with supporting
calculations, compliance with the financial covenants set
forth in Section 6.02(d) and (f) hereof;
(viii) as soon as possible and in any event within
five days after the occurrence of each Event of Default or
Unmatured Default, continuing on the date of such statement,
a statement of the chief financial officer or vice
president-finance of the Borrower, or such other officer of
the Borrower acceptable to the Agent, setting forth details
of such Event of Default or Unmatured Default and the
actions that the Borrower has taken and proposes to take
with respect thereto;
(ix) as soon as possible and in any event within five
days after the commencement of litigation against the
Borrower, the Parent or any of its Subsidiaries that could
reasonably be expected to have a material adverse effect on
the financial condition, operations, business or prospects
of the Borrower or of the Parent and its Subsidiaries, taken
as a whole, notice of such litigation describing in
reasonable detail the facts and circumstances concerning
such litigation and the Borrower's, the Parent's or such
Subsidiary's proposed actions in connection therewith;
(x) promptly after the sending or filing thereof,
copies of annual, quarterly or current reports on Forms 10-
K, 10-Q or 8-K (or any successor forms thereto) and
registration statements (other than any registration
statement on Form S-8 and any registration statement in
connection with a dividend reinvestment plan) that the
Parent or the Borrower files with the SEC pursuant to the
Securities Act of 1933, as amended, or the Exchange Act, or
with any national securities exchange;
36<PAGE>
(xi) as soon as possible and in any event (A) within 30
days after the Borrower knows or has reason to know, or the
Borrower has knowledge that any of its ERISA Affiliates
knows or has reason to know, that any ERISA Plan Termination
Event described in clause (i) of the definition of ERISA
Plan Termination Event with respect to any Plan has occurred
and (B) within 10 days after the Borrower knows or has
reason to know, or the Borrower has knowledge that any of
its ERISA Affiliates knows or has reason to know, that any
other ERISA Plan Termination Event with respect to any Plan
has occurred, a statement of the chief financial officer or
vice president-finance of the Borrower describing such ERISA
Plan Termination Event and the action, if any, that the
Borrower or such ERISA Affiliate proposes to take with
respect thereto;
(xii) promptly and in any event within five
Business Days after receipt thereof by the Borrower from the
PBGC, or three Business Days after the Borrower has
knowledge of the receipt thereof by any of its ERISA
Affiliates, copies of each notice received by the Borrower
or such ERISA Affiliate of the PBGC's intention to terminate
any Plan or to have a trustee appointed to administer any
such Plan; and
(xiii) such other information respecting the
condition or operations, financial or otherwise, of the
Parent, any Utility, the Borrower or any of the Parent's
other Subsidiaries as any Lender, through the Agent, may
from time to time reasonably request.
(b) Ownership of Equity Interests. The Borrower shall hold
directly or indirectly through wholly-owned Affiliates of the
Borrower all equity interests of the Borrower in Persons engaged
in energy development, generating, transmission or service
related businesses or projects.
(c) Maintenance of Insurance. The Borrower shall maintain,
and shall cause each EI Subsidiary to maintain, with responsible
and reputable and insurance companies, insurance covering the
Borrower, each EI Subsidiary and their respective properties in
effect at all times in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and
owning similar properties in the same general geographical area
in which the Borrower and each EI Subsidiary operates.
(d) Compliance with Laws, Etc. The Borrower shall comply,
and shall cause each EI Subsidiary to comply, with the
requirements of all applicable laws, rules, regulations and
orders of any governmental authority, including without
limitation any such laws, rules, regulations and orders relating
to zoning, environmental protection, use and disposal of
hazardous substances, land use, construction and building
restrictions, and employee safety and health matters relating to
37<PAGE>
business operations, unless the failure to so comply would not
have a material adverse effect on the financial condition,
operations, business or prospects of the Borrower or on its
ability to perform under the Loan Documents to which it is, or is
to become, a party.
(e) Preservation of Existence, Etc. The Borrower shall
preserve and maintain, and shall cause each EI Subsidiary to
preserve and maintain, its corporate existence, material rights
(statutory and otherwise) and franchises, and take such other
action as may be necessary or advisable to preserve and maintain
its right to conduct its business in the states where it shall be
conducting its business, except where the failure to so comply
could not have a material adverse effect on the financial
condition, operations, business or prospects of the Borrower or
on its ability to perform under the Loan Documents to which it
is, or is to become, a party.
(f) Payment of Taxes, Etc. The Borrower shall pay and
discharge, and shall cause each EI Subsidiary to pay and
discharge, before the same shall become delinquent, all taxes,
assessments and governmental charges, royalties or levies imposed
upon it or upon its property except to the extent the Borrower or
such EI Subsidiary, as the case may be, is contesting the same in
good faith and by appropriate proceedings and has set aside
adequate reserves for the payment thereof in accordance with
generally accepted accounting principles.
(g) Maintenance of Properties, Etc. The Borrower shall
preserve, maintain, develop, and operate, and shall cause each EI
Subsidiary to preserve, maintain, develop and operate, in
substantial conformity with all laws and material contractual
obligations, all of its material properties that are used or
useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Inspection Rights. Subject to the requirements of laws
or regulations applicable to the Borrower or the EI Subsidiaries,
as the case may be, and in effect at the time, at any time and
from time to time upon reasonable notice and during normal
business hours, the Borrower shall permit (i) the Agent, any
Lender and their respective agents and representatives to examine
and make copies of and abstracts from the records and books of
account of, and the properties of, the Borrower or any EI
Subsidiary and (ii) the Agent, each of the Lenders, and their
respective agents and representatives to discuss the affairs,
finances and accounts of the Borrower and the EI Subsidiaries
with the Borrower and the EI Subsidiaries and their respective
officers, directors and accountants.
(i) Keeping of Books. The Borrower shall keep, and shall
cause each of its Subsidiaries to keep, proper records and books
of account, in which full and correct entries shall be made of
all financial transactions of the Borrower and its Subsidiaries
and the assets and business of the Borrower and its Subsidiaries,
38<PAGE>
in accordance with generally accepted accounting principles
consistently applied (to the extent required by such accounting
principles, in the case of foreign Subsidiaries).
(j) Use of Proceeds. The Borrower shall use the proceeds
of each Extension of Credit hereunder exclusively for general
corporate purposes, acquisitions and financing and working
capital requirements in connection with energy-related
businesses.
SECTION 6.02 Negative Covenants. So long as any Note shall
remain unpaid, any Letter of Credit shall remain outstanding or
any Lender shall have any Commitment, the Borrower shall not,
without the prior written consent of the Majority Lenders:
(a) Mergers and Consolidations. Merge or consolidate with
or into any Person, or permit any EI Subsidiary to do so, except
(i) any EI Subsidiary may merge or consolidate with or into any
other EI Subsidiary, (ii) any EI Subsidiary may merge with the
Borrower and (iii) the Borrower may merge with the Parent,
provided in each case that, immediately after giving effect to
such proposed transaction, (A) no Event of Default or Unmatured
Default would exist and (B) in the case of any such transaction
to which the Borrower is a party, the Borrower is the surviving
corporation or the survivor shall have expressly assumed the
obligations of the Borrower hereunder and under the Notes
pursuant to an assumption agreement in form and substance
satisfactory to the Majority Lenders and their counsel.
(b) Disposition of Assets. Sell, lease, transfer, convey
or otherwise dispose of (whether in one transaction or in a
series of transactions) to any Person in excess of 20% of the
Borrower's directly- or indirectly-held assets (as reflected in
the financial statements of the Borrower delivered pursuant to
Section 4.01(a)(x) for the period ended June 30, 1994, or, if
greater, as reflected in the most recent financial statements
delivered pursuant to Section 6.01(a)(iii) and (iv)), or permit
any EI Subsidiary to do so, except that (i) any EI Subsidiary may
transfer assets to any other EI Subsidiary or to the Borrower,
and the Borrower may transfer assets to any EI Subsidiary,
(ii) any EI Subsidiary may transfer its assets to any other
Person in connection with a sale and leaseback financing entered
into by such Subsidiary, (iii) the Borrower and any EI Subsidiary
may create or suffer to exist liens on its assets to the extent
permitted by Section 6.02(e), (iv) the Borrower and any EI
Subsidiary may sell assets exceeding the 20% threshold described
above in a cash or non-cash transaction, (v) the Borrower and any
EI Subsidiary may transfer assets in order to permit any EI
Subsidiary to qualify as a "qualifying facility" within the
meaning of PURPA or to meet any substantially similar state law
requirement (in each case, as certified to the Lenders by a duly
authorized officer of the Borrower in a certificate delivered to
the Agent and the Lenders) and (vi) the Borrower may sell, lease,
transfer or dispose of assets in connection with the Barranquilla
Project; provided, in the case of any transaction described in
39<PAGE>
clause (ii), (iv) or (v), the consideration (as hereinafter
defined) received for such assets is at least equal to the fair
value (as certified to the Lenders by a duly authorized officer
of the Borrower in a certificate delivered to the Agent and the
Lenders) thereof, and
(A) cash in an amount equal to such consideration (to
the extent that the assets so disposed of exceed the 20%
threshold described above) (the consideration received in
respect of such excess amount being hereinafter referred to
as the "Asset Sale Proceeds") is delivered immediately to
the Agent to be applied in accordance with Section 2.11(c)
to the prepayment and cash collateralization of amounts
outstanding hereunder, together with accrued interest to the
date of any such prepayment and any other amounts payable
hereunder, with the remainder, if any, to be returned to the
Borrower, and the Commitments hereunder are reduced by an
amount equal to the amount of such consideration, in
accordance with Section 2.05(b) hereof,
(B) such Asset Sale Proceeds are applied, or held in
cash or cash equivalents pending application, for Permitted
Uses (as hereinafter defined) by the Borrower or any EI
Subsidiary or
(C) such Asset Sale Proceeds are applied immediately to
the payment or prepayment of debt incurred by the Borrower
or such EI Subsidiary in connection with the project
comprising such assets or are deposited into a reserve,
escrow or similar account to secure the same;
provided, further that in the case of any transaction described
above in which such 20% threshold shall be exceeded, the
following shall be true, and the Agent and each Lender shall have
received from the chief financial officer or vice president -
finance of the Borrower or such other officer acceptable to the
Agent, a certificate stating that, immediately after giving
effect to such transaction, (1) no Event of Default or Unmatured
Default has occurred and is continuing as a result of such
transaction and (2) no authorization or approval or other action
by, and no notice to or filing with, any governmental authority
or regulatory body is required in connection with the
consummation of such transaction, except such authorizations,
approvals, actions and filings that have been duly obtained or
performed, as the case may be, as of such date. As used in this
Section 6.02(b), the term "consideration" means cash
consideration or the fair value of non-cash consideration (as
certified to the Lenders by a duly authorized officer of the
Borrower in a certificate delivered to the Agent and the
Lenders), and the term "Permitted Uses" means debt and equity
investments in, and expenses incurred by the Borrower or any EI
Subsidiary in developing, energy related projects of the Borrower
or any EI Subsidiary.
40<PAGE>
(c) Distributions. Declare or pay, or permit any EI
Subsidiary to declare or pay, directly or indirectly, any
dividend, payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any share
of any class of capital stock or other equity interest of the
Borrower or any EI Subsidiary (other than distributions made by
an EI Subsidiary to the Borrower, to any EI Subsidiary or to any
other Person that holds directly an equity interest in such EI
Subsidiary), or purchase, redeem, retire, or otherwise acquire
for value, or permit any EI Subsidiary to purchase, redeem,
retire, or otherwise acquire for value, any shares of any class
of capital stock or other equity interest of the Borrower or any
EI Subsidiary or any warrants, rights, or options to acquire any
such shares or other equity interests, now or hereafter
outstanding (other than purchases, redemptions, retirements or
other acquisitions by the Borrower, by any EI Subsidiary or by
any other Person that holds directly an equity interest in such
EI Subsidiary), or make, or permit any EI Subsidiary to make, any
distribution of assets to any of its shareholders (other than
distributions to the Borrower, to any EI Subsidiary or to any
other Person that holds directly an equity interest in such EI
Subsidiary) (any such dividend, payment, distribution, purchase,
redemption, retirement or acquisition being hereinafter referred
to as a "Restricted Payment"), unless (i) the most current
financial statements delivered pursuant to Section 6.01(a)(iii)
and (iv) reflect that the Borrower had positive Working Capital
as at the end of the latest fiscal quarter reported on in such
financial statements, (ii) the most current projections delivered
pursuant to Section 6.01(a)(v) reflect that the Borrower is
projected to have positive Working Capital as at the end of the
current fiscal year and the next succeeding fiscal year, (iii) no
Event of Default or Unmatured Default has occurred and is
continuing or would occur as a result of such Restricted Payment
and (iv) the Agent and each Lender shall have received, at least
10 Business Days prior to such distribution of a Restricted
Payment, from the chief financial officer or vice president-
finance of the Borrower, or such other officer of the Borrower or
the Parent acceptable to the Agent, a certificate (A)
demonstrating, in reasonable detail and with supporting
calculations, compliance with the financial covenants set forth
in Section 6.02 hereof and (B) stating that no Event of Default
or Unmatured Default has occurred and is continuing or would
occur as a result of such Restricted Payment.
(d) Consolidated Net Worth. Permit the Consolidated Net
Worth of the Borrower to be less than $85,000,000.
(e) Liens, Etc. Create or suffer to exist any lien,
security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of
its properties, whether now owned or hereafter acquired, or
assign any right to receive income, in each case to secure or
provide for the payment of any Debt, other than (i) liens or
security interests existing on any asset of the Borrower on the
date hereof and disclosed on Schedule II hereto, (ii) liens or
41<PAGE>
security interests arising in connection with capital leases,
provided that the aggregate amount of obligations secured thereby
does not exceed $750,000 at any time, (iii) liens imposed by law
that are not securing Debt, such as materialmen's, mechanics',
carriers', workmen's and repairmen's liens and other similar
liens arising in the ordinary course of business, provided that
the aggregate amount of obligations secured thereby does not
exceed $100,000 at any time, (iv) liens or security interests
upon or with respect to any of the Borrower's interests in any EI
Subsidiary or any other entity incurred solely to secure
repayment of project financing for, or equity or debt
contribution obligations with respect to, or other project
obligations of, such EI Subsidiary or other entity, as the case
may be, (v) liens on cash or cash equivalents incurred solely to
secure reimbursement obligations of the Borrower in respect of
letters of credit issued in connection with, Debt obligations not
exceeding $2,000,000 at any time under any interest rate swap,
collar or other hedging agreement relating to, or equity or debt
contribution obligations relating to, energy-related projects of
the Borrower and the EI Subsidiaries, provided that the aggregate
amount of the obligations secured thereby does not exceed
$5,000,000 at any time, and (vi) extensions and renewals of any
lien or security interest described in clause (i) above, provided
that (A) any such extension or renewal shall be limited to the
property theretofore subject to such lien or security interest,
(B) the principal amount of the Debt secured by such lien or
security interest shall not be increased.
(f) Debt. Create or suffer to exist any Debt (other than
(i) Debt hereunder or under the Notes or any other Loan Document,
(ii) other Debt secured to the extent permitted under Section
6.02(e) and (iii) Debt described in clause (x) of the definition
of "Debt" if the liability in respect of such Debt shall not have
been asserted by the PBGC or any Affiliate of the Borrower
against the Borrower) in excess of $30,000,000 at any one time
outstanding.
(g) Ownership of Equity Securities. Sell, transfer,
assign, convey, hypothecate, pledge, encumber or otherwise
dispose of the Equity Securities or the right to receive
dividends on, or the proceeds of, the Equity Securities.
(h) Modification of Support Letter. Amend, modify,
terminate or waive any provision of the Support Letter, or
consent to any of the foregoing.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01 Events of Default. If any of the following
events (each an "Event of Default") shall occur and be
continuing, the Agent and the Lenders shall be entitled to
exercise the remedies set forth in Section 7.02:
42<PAGE>
(a) The Borrower shall fail to pay (i) any principal of any
Advance when the same becomes due and payable, or (ii) interest
thereon or any other amount payable under this Agreement or any
Note within five days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower
herein or by the Borrower (or any of its officers) in writing in
connection with this Agreement or any other Loan Document to
which it is a party or by the Parent (or any of its officers) in
writing in connection with this Agreement or the Support Letter
shall prove to have been incorrect in any material respect when
made or deemed made; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 6.02, (ii) the
Parent shall fail to perform or observe any term, covenant or
agreement contained in the Support Letter or (iii) the Borrower
shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement on its part to be performed
or observed, if in any such case the failure to perform or
observe such term, covenant or agreement shall remain unremedied
for 30 days after written notice thereof shall have been given to
the Borrower by the Agent or any Lender; or
(d) The Borrower shall fail to pay any principal of or
premium or interest on any Debt which is outstanding in a
principal amount in excess of $500,000 in the aggregate (but
excluding Debt evidenced by the Notes) of the Borrower when the
same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt;
or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be
due and payable, or required to be prepaid as a result of a
default or breach, prior to the stated maturity thereof; or
(e) The Borrower, the Parent or any Utility shall generally
not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower, the
Parent or any Utility seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such
43<PAGE>
proceeding shall remain undismissed or unstayed for a period of
60 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its
property) shall occur; or the Borrower, the Parent or any Utility
shall take any corporate action to authorize or to consent to any
of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in
excess of $500,000 shall be rendered against the Borrower and
shall remain unpaid and either (i) enforcement proceedings shall
have been commenced by the creditor upon such judgment or order
and such proceedings shall remain undismissed or unstayed for a
period of five Business Days or (ii) there shall be any period of
20 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(g) Any judgment or order for the payment of money in
excess of $20,000,000 shall be rendered against the Parent or any
Utility and shall remain unpaid and either (i) enforcement
proceedings shall have been commenced by any creditor upon such
judgment or order and such proceedings shall remain undismissed
or unstayed for a period of five Business Days or (ii) there
shall be any period of 20 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(h) Any ERISA Plan Termination Event shall have occurred
with respect to a Plan or a Multiemployer Plan that could
reasonably be expected to result in a material liability to the
Borrower or the Parent, and, 30 days after notice thereof shall
have been given to the Borrower by the Agent or any Lender, such
ERISA Plan Termination Event shall still exist; or
(i) Except as permitted by Section 6.02(a), failure by the
Parent to directly own 100% of all of the issued and outstanding
capital shares of the Borrower; or
(j) Failure by the Parent to maintain authorization from
the SEC to make further capital contributions to the Borrower in
an amount at least equal to the difference between (i) 1.10
multiplied by the amount of the Commitments and (ii) the current
market value of the Equity Securities (as reported on the New
York Stock Exchange -- Composite Transactions for the trading day
immediately preceding any date of determination); provided,
however, that the occurrence of the foregoing shall not
constitute an Event of Default for so long as, for up to 75 days
from the date of such occurrence, the Parent shall be diligently
taking all measures and actions as may be necessary to obtain
such SEC authorization; or
(k) Any provision of the Support Letter shall for any
reason (except pursuant to the terms thereof) cease to be valid
44<PAGE>
and binding on any party thereto or any party thereto shall so
state in writing; or
(l) Any authorization or approval or other action by any
governmental authority or regulatory body required for the
execution, delivery or performance of (i) this Agreement, the
Notes or any other Loan Document by the Borrower or (ii) subject
to subsection (j) above, the Support Letter by the Parent shall
be terminated, revoked or rescinded or shall otherwise no longer
be in full force and effect.
SECTION 7.02 Remedies. If any Event of Default has
occurred and is continuing, then the Agent shall at the request,
or may with the consent, of the Majority Lenders, upon notice to
the Borrower (i) declare the Commitments and the obligation of
each Lender to make Advances (other than Advances under Section
3.04 hereof) and of any LC Bank to issue a Letter of Credit to be
terminated, whereupon the same shall forthwith terminate, (ii)
declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest
and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the
Borrower, and (iii) make demand upon the Borrower to, and
forthwith upon such demand, the Borrower shall, deposit with the
Agent in same day funds in the Cash Escrow Account, an amount
equal to the aggregate LC Outstandings, such cash escrow to be
held for the benefit of the LC Banks and the Lenders for payment
of obligations of the Borrower under this Agreement, the Notes
and the other Loan Documents; provided, however, that in the
event of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code, (A) the
Commitments and the obligation of each Lender to make Advances
and of any LC Bank to issue any Letter of Credit shall
automatically be terminated and (B) the Notes, all such interest
and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the
Borrower. Notwithstanding anything to the contrary contained
herein, no notice given or declaration made by the Agent pursuant
to this Section 7.02 shall affect (i) the obligation of any LC
Bank to make any payment under any Letter of Credit issued by
such LC Bank in accordance with the terms of such Letter of
Credit or (ii) the participatory interest of each Lender in each
such payment thereunder.
ARTICLE VIII
THE AGENT
SECTION 8.01 Authorization and Action. Each Lender and LC
Bank hereby appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under this
45<PAGE>
Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall
not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.
SECTION 8.02 Agent's Reliance, Etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be
liable to any Lender, LC Bank or the Borrower for any action
taken or omitted to be taken by it or them under or in connection
with this Agreement or any other Loan Document, except for its or
their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may
treat the payee of any Note as the holder thereof until the Agent
receives and accepts an Assignment and Acceptance entered into by
the Lender which is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 9.07;
(ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no
warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in
connection with this Agreement; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on
the part of the Borrower or to inspect the property (including
the books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent,
certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 8.03 Citibank and Affiliates. With respect to its
Commitment and the Notes issued to it, Citibank shall have the
same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include Citibank in its individual capacity. Citibank
46<PAGE>
and its affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind
of business with, the Borrower, any of its Subsidiaries and any
Person who may do business with or own securities of the Borrower
or any such Subsidiary, all as if Citibank were not the Agent and
without any duty to account therefor to the Lenders.
SECTION 8.04 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 referred to in Section 5.01(g) and such other
documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.
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.
SECTION 8.05 Indemnification. The Lenders agree to
indemnify the Agent (to the extent not reimbursed by the
Borrower), ratably according to the respective principal amounts
of the Notes then held by each of them (or if no Notes are at the
time outstanding, ratably according to the respective Percentages
of the Lenders), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this
Agreement, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel
fees) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement to the extent that the
Agent is entitled to reimbursement for such expenses pursuant to
Section 9.04 but are not reimbursed for such expenses by the
Borrower.
SECTION 8.06 Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by
the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring
47<PAGE>
Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a commercial bank
described in clause (i) or (ii) of the definition of "Eligible
Assignee". 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 retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article VIII shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this
Agreement. Notwithstanding the foregoing, if no Event of Default
and no Unmatured Default shall have occurred and be continuing,
then no successor Agent shall be appointed under this Section
8.06 without the prior written consent of the Borrower, which
consent shall not be unreasonably withheld or delayed.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc.. No amendment or waiver of
any provision of this Agreement or the Notes, nor consent to any
departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Majority 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 (other than any Lender that is the Borrower or an
Affiliate of the Borrower), do any of the following: (a) waive
any of the conditions specified in Section 4.01, 4.02 or 4.03,
(b) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations, (c) reduce the principal
of, or interest on, the Notes, or reduce any Applicable Margin or
any fees or other amounts payable hereunder, (d) postpone any
date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (e) change
the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Lenders, that
shall be required for the Lenders or any of them to take any
action hereunder, (f) amend any Loan Document in a manner
intended to prefer one or more Lenders over any other Lender,
(g) amend this Section 9.01 or (h) release or change any
provisions in the Support Letter; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed
by the Agent in addition to the Lenders required above to take
such action, affect the rights or duties of the Agent under this
Agreement or any Note.
SECTION 9.02 Notices, Etc.. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
48<PAGE>
and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Borrower, at its address at One Upper Pond
Road, Parsippany, New Jersey 07054, Attention: Vice President-
Finance, if to any Bank, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender,
at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the
Agent, at its address at 399 Park Avenue, New York, New York
10043, Attention: Utilities Department, North American Finance
Group; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other
parties. All such notices and communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, be effective when
deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable
company, respectively, except that notices and communications to
the Agent pursuant to Article II or IX shall not be effective
until received by the Agent.
SECTION 9.03 No Waiver; Remedies. No failure on the part
of the Borrower, any Lender, any LC Bank or the Agent to
exercise, and no delay in exercising, any right hereunder or
under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right 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 9.04 Costs and Expenses; Indemnification. (a) The
Borrower agrees to pay on demand all costs and expenses incurred
by the Agent in connection with the preparation, execution,
delivery, syndication administration, modification and amendment
of this Agreement, the Notes, the Support Agreement and the other
documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under
this Agreement. The Borrower further agrees to pay on demand all
costs and expenses, if any (including, without limitation,
counsel fees and expenses of outside counsel and of internal
counsel), incurred by the Agent and the Lenders in connection
with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the Notes, the
Support Agreement and the other documents to be delivered
hereunder, including, without limitation, counsel fees and
expenses in connection with the enforcement of rights under this
Section 9.04(a).
(b) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made other than on the last day of the
Interest Period for such Advance, as a result of a payment or
Conversion pursuant to Section 2.10 or 2.13 or a prepayment
pursuant to Section 2.11 or acceleration of the maturity of the
Notes pursuant to Section 7.02 or for any other reason, the
Borrower shall, upon demand by any Lender (with a copy of such
49<PAGE>
demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion, including, without
limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by any Lender to fund or maintain such Advance.
(c) The Borrower hereby agrees to indemnify and hold each
Lender, each LC Bank, the Agent, and their respective officers,
directors, employees, professional advisors and Affiliates (each,
an "Indemnified Person") harmless from and against any and all
claims, damages, losses, liabilities, costs or expenses
(including reasonable attorney's fees and expenses, whether or
not such Indemnified Person is named as a party to any proceeding
or is otherwise subjected to judicial or legal process arising
from any such proceeding) that any of them may incur or which may
be claimed against any of them by any Person:
(i) by reason of or in connection with the execution,
delivery or performance of any of the Loan Documents or any
transaction contemplated thereby, or the use by the Borrower
or any of its Subsidiaries of the proceeds of any Extension
of Credit;
(ii) in connection with any documentary taxes,
assessments or charges made by any governmental authority by
reason of the execution and delivery of any of the Loan
Documents; or
(iii) in connection with or resulting from the
utilization, storage, disposal, treatment, generation,
transportation, release or ownership of any hazardous
substance (A) at, upon or under any property of the Borrower
or any of its Affiliates or (B) by or on behalf of the
Borrower or any of its Affiliates at any time and in any
place;
provided, however, that nothing contained in this subsection (c)
shall constitute a relinquishment or waiver of the Borrower's
rights to any independent claim that the Borrower may have
against any Indemnified Person for such Indemnified Person's
gross negligence or wilful misconduct, but no Lender or LC Bank
shall be liable for any such conduct on the part of the Agent or
any other Lender or LC Bank, and the Agent shall not be liable
for any such conduct on the part of any Lender or LC Bank.
(d) The Borrower's obligations under this Section 9.04
shall survive the repayment of all amounts owing to the Lenders,
the LC Banks and the Agent under the Loan Documents and the
termination of the Commitments. If and to the extent that the
obligations of the Borrower under this Section 9.04 are
unenforceable for any reason, the Borrower agrees to make the
maximum contribution to the payment and satisfaction thereof
which is permissible under applicable law.
50<PAGE>
SECTION 9.05 Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the
making of the request or the granting of the consent specified by
Section 7.02 by the Majority Lenders to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of
Section 7.02, each Lender and LC Bank 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 or LC
Bank to or for the credit or the account of the Borrower, against
any and all of the obligations of the Borrower now or hereafter
existing under this Agreement and the Note held by such Lender or
the LC Bank Agreement to which such LC Bank is a party, as the
case may be, irrespective of whether or not such Lender or LC
Bank shall have made any demand under this Agreement or such Note
or such LC Bank Agreement and although such obligations may be
unmatured. Each Lender and LC Bank agrees to notify promptly the
Borrower after any such set-off and application made by such
Lender or LC Bank, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
The rights of each Lender and LC Bank under this Section 9.05 are
in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender and LC
Bank may have.
SECTION 9.06 Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and
the Agent and when the Agent shall have been notified by each
Bank that such Bank has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Agent
and each Lender and their respective successors and permitted
assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
SECTION 9.07 Assignments and Participations. (a) Each
Lender may, with the prior written consent of the Borrower (which
consent shall not be unreasonably withheld or delayed), assign to
one or more banks or other entities all or a portion of its
rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances
owing to it and the Note or Notes held by it); provided, however,
that (i) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this
Agreement, (ii) the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than
$5,000,000 (or if less, the entire amount of such Lender's
Commitment) and shall be an integral multiple of $1,000,000,
(iii) each such assignment shall be to an Eligible Assignee, and
(iv) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or
51<PAGE>
Notes subject to such assignment and a processing and recordation
fee of $1,000. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement
and the other Loan Documents (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement
and the other Loan Documents, such Lender shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to, and agree, with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or any other Loan Document
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under this Agreement, any other Loan Document or any
other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this
Agreement and the other Loan Documents, together with copies of
the financial statements referred to in Sections 5.01(g) and (h)
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, upon such
assigning Lender or upon 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;
(v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of
this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
52<PAGE>
(c) The Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from time
to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for
all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that
it is an Eligible Assignee, together with any Note or Notes
subject to such assignment, the Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment
hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of
Exhibit A hereto.
(e) Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights
and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for
all purposes of this Agreement, (iv) the Borrower, the Agent and
the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents and
(v) the grantee of any such participation, other than an
Affiliate of such Lender, shall not be entitled to direct such
Lender to take or omit to take any action hereunder, except
action that would have the effect of (A) extending the time for
payment of interest on, or the final maturity of the principal
53<PAGE>
amount of, the Notes, (B) reducing the principal amount of or the
rate of interest payable on the Notes, (C) reducing or extending
the time for payment of any fee described in Section 2.04(a) or
(b) or (D) releasing any collateral securing the payment of the
obligations of the Borrower hereunder and under the Notes or
releasing or changing any provisions of the Support Letter.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 9.07, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall
agree to preserve the confidentiality of any confidential
information relating to the Borrower received by it from such
Lender.
(g) Notwithstanding anything to the contrary set forth
herein, any Lender may assign, as collateral or otherwise, any of
its rights hereunder and under the Notes (including, without
limitation, its rights to receive payments of principal and
interest hereunder and under the Notes) to any Federal Reserve
Bank without notice to or consent of the Borrower or the Agent.
(h) If any Lender shall make demand for payment under
Section 2.12 or 2.15 or shall fail to consent to any extension of
the Amortization Period Commencement within 60 days of receipt by
such Lender of notice of any request pursuant to Section 2.17,
then within 60 days after such demand (if, but only if, such
payment demanded under Section 2.12 or 2.15 has been made by the
Borrower or upon the termination of such 60-day period, as the
case may be), the Borrower may demand that such Lender assign in
accordance with this Section 9.07 to one or more Eligible
Assignees designated by the Borrower, all (but not less than all)
of such Lender's Commitment and the Advances owing to it within
the next succeeding 30 days. If any such proposed assignee
designated by the Borrower shall fail to consummate such
assignment on terms reasonably acceptable to such Lender, the
Borrower may propose another assignee to assume all of such
Lender's Commitment or Advances in accordance with this Section
9.07.
SECTION 9.08. Confidentiality. In connection with the
negotiation and administration of this Agreement and the other
Loan Documents, the Borrower and the Parent have furnished and
will from time to time furnish to the Agent and the Lenders
(each, a "Recipient") written information that the Borrower or
the Parent, as the case may be, shall have identified in writing
as being confidential (such written information, other than any
such information which (i) was publicly available, or otherwise
known to the Recipient, at the time of disclosure, other than
through the Borrower or the Parent, (ii) subsequently becomes
publicly available other than through any act or omission by the
Recipient or (iii) otherwise subsequently becomes known to the
54<PAGE>
Recipient other than through a Person whom the Recipient knows to
be acting in violation of his or its obligations to the Borrower
or the Parent, being hereinafter referred to as "Confidential
Information"). The Recipient will maintain the confidentiality
of any Confidential Information and will not use Confidential
Information for any purpose other than in connection with the
ongoing administration and enforceability of the Loan Documents.
It is understood, however, that the foregoing will not restrict
the Recipient's ability to freely exchange such Confidential
Information with current or prospective participants in or
assignees of the Recipient's position herein, but the Recipient's
ability to so exchange Confidential Information shall be
conditioned upon any such prospective participant's or assignee's
entering into a written agreement as to confidentiality similar
to this provision. It is further understood that the foregoing
will not prohibit the disclosure of any or all Confidential
Information if and to the extent that such disclosure may be
required (i) by a regulatory agency or otherwise in connection
with an examination of the Recipient's records by appropriate
authorities, (ii) pursuant to court order, subpoena or other
legal process or in connection with any pending or threatened
litigation, (iii) otherwise as required by law, or (iv) in order
to protect the Recipient's interests or its rights or remedies
hereunder or under the other Loan Documents. It is understood
and agreed that the projections furnished by the Borrower to the
Agent for the benefit of the Lenders pursuant to Section
5.01(h)(v) shall be deemed to be Confidential Information.
SECTION 9.09 Governing Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK. EACH OF THE BORROWER, THE LENDERS, THE
LC BANKS, AND THE AGENT (i) IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING
IN NEW YORK CITY IN ANY ACTION ARISING OUT OF ANY LOAN DOCUMENT,
(ii) AGREES THAT ALL CLAIMS IN SUCH ACTION MAY BE DECIDED IN SUCH
COURT, (iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM AND (iv) CONSENTS TO THE
SERVICE OF PROCESS BY MAIL. A FINAL JUDGMENT IN ANY SUCH ACTION
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL
PROCESS IN ANY MANNER PERMITTED BY LAW OR AFFECT ITS RIGHT TO
BRING ANY ACTION IN ANY OTHER COURT.
SECTION 9.10 Waiver of Jury Trial. THE BORROWER, THE
AGENT, THE LC BANKS AND THE LENDERS HEREBY IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY NOTE, OR ANY
OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
SECTION 9.11 Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
55<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
ENERGY INITIATIVES, INC.,
By: ______________________________
Name:
Title:
CITIBANK, N.A.,
as Agent
By: _______________________________
Name:
Title:
56<PAGE>
THE BANKS
Commitment CITIBANK, N.A.
$_____________
By: _____________________________
Name:
Title:
$______________ CIBC INC.
By: _____________________________
Name:
Title:
57<PAGE>
EXHIBIT A
FORM OF NOTE
U.S.$______________ Dated: _________, 19__
FOR VALUE RECEIVED, the undersigned, Energy
Initiatives, Inc., a Delaware corporation (the "Borrower"),
HEREBY PROMISES TO PAY to the order of
___________________________ (the "Lender) for the account of its
Applicable Lending Office (such term and other capitalized terms
herein being used as defined in the Credit Agreement referred to
below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal
amount of the Advances made by the Lender to the Borrower
pursuant to the Credit Agreement outstanding on the Termination
Date.
The Borrower promises to pay interest on the unpaid
principal amount of each Advance from the date of such Advance
until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit
Agreement.
Both principal and interest are payable in lawful
money of the United States of America to Citibank, N.A., as
Agent, at 399 Park Avenue, New York, New York 10043, in same day
funds. Each Advance made by the Lender to the Borrower pursuant
to the Credit Agreement, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which
is part of this Promissory Note, provided that the failure to so
record any Advance or any payment on account thereof shall not
affect the payment obligations of the Borrower hereunder or under
the Credit Agreement.
This Promissory Note is one of the Notes referred to
in, and is entitled to the benefits of, the Credit Agreement,
dated as of December __, 1994 (the "Credit Agreement"), among the
Borrower, the Lender and certain other banks parties thereto, and
Citibank, N.A., as Agent for the Lender and such other banks.
The Credit Agreement, among other things, (i) provides for the
making of Advances by the Lender to the Borrower from time to
time in an aggregate amount not to exceed at any time outstanding
the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance being evidenced by
this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions
therein specified.
1<PAGE>
The Borrower hereby waives presentment, demand,
protest and notice of any kind. No failure to exercise, and no
delay in exercising, any rights hereunder on the part of the
holder hereof shall operate as a waiver of such rights.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ENERGY INITIATIVES, INC.
By_____________________________
Name:
Title:
2<PAGE>
ADVANCES, INTEREST PERIODS AND PAYMENTS OF PRINCIPAL
Interest Amount of
Period (if Principal Unpaid
Amount of any) of Paid or Principal Notation
Date Advance Advance Prepaid Balance Made By
<PAGE>
EXHIBIT B-1
FORM OF NOTICE OF BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]
Attention: Utilities Department
North American Finance Group
Ladies and Gentlemen:
The undersigned, Energy Initiatives, Inc., refers to the
Credit Agreement, dated as of December __, 1994 (as amended,
modified or supplemented from time to time, the "Credit
Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain Lenders parties
thereto and Citibank, N.A., as Agent for said Lenders, and hereby
gives you notice, irrevocably, pursuant to Section 2.02 of the
Credit Agreement that the undersigned hereby requests a Borrowing
under the Credit Agreement, and in that connection sets forth
below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(iii) The Business Day of the Proposed Borrowing
is __________________, 19__.
(iv) The Type of Advances to be made in connection with
the Proposed Borrowing is [Alternate Base Rate Advances]
[Eurodollar Rate Advances].
(v) The aggregate principal amount of the Proposed
Borrowing is $____________.
[(vi) The Interest Period for each Advance made
as part of the Proposed Borrowing is ____ month[s].](1)
__________________
(1) For Eurodollar Rate Advances only.
1<PAGE>
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Borrowing:
(A) the representations and warranties contained in
Section 5.01 are true and correct, before and after giving
effect to the Proposed Borrowing and to the application of
the proceeds thereof, as though made on and as of such date;
and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application
of the proceeds thereof, that constitutes an Event of
Default or Unmatured Default.
Very truly yours,
ENERGY INITIATIVES, INC.
By_____________________________
Name:
Title:
2<PAGE>
EXHIBIT B-2
FORM OF NOTICE OF CONVERSION
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]
Attention: Utilities Department
North American Finance Group
Ladies and Gentlemen:
The undersigned, Energy Initiatives, Inc., refers to the
Credit Agreement, dated as of December __, 1994 (as amended,
modified or supplemented from time to time, the "Credit
Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined), among the Borrower,
the Lenders named therein and the Agent, and hereby gives you
notice, irrevocably, pursuant to Section 2.10 of the Credit
Agreement that the undersigned hereby requests a Conversion under
the Credit Agreement, and in that connection sets forth below the
information relating to such Conversion (the "Proposed
Conversion") as required by Section 2.10 of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is
, .
(ii) The Type of Advances to be subject to the Proposed
Conversion is [Alternate Base Rate Advances] [Eurodollar
Rate Advances].
(iii) The aggregate principal amount of the
Advances to be subject to the Proposed Conversion is $
.
(iv) The Type of Advances to which such Advances are
proposed to be Converted is [Alternate Base Rate Advances]
[Eurodollar Rate Advances].
1<PAGE>
[(v) The Interest Period for each Advance made as part
of the Proposed Conversion is ____ month(s).](1)
The undersigned hereby certifies that the Borrower's
request for the Proposed Conversion is made in compliance with
Sections 2.01 and 2.10 of the Credit Agreement. [The undersigned
hereby acknowledges that the delivery of this Notice of
Conversion shall constitute a representation and warranty by the
Borrower on the date of the Proposed Conversion that no Event of
Default or Unmatured Default has occurred and is continuing](2).
Very truly yours,
ENERGY INITIATIVES, INC.
By
Title:
__________________________
(1) Delete for Alternate Base Rate Advances
(2) Delete if Conversion is into Alternate Base Rate Advances.
2<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ___________, 19__
Reference is made to the Credit Agreement, dated as of
December __, 1994 (the "Credit Agreement"), among Energy
Initiatives, Inc., a Delaware corporation (the "Borrower"), the
Lenders (as defined in the Credit Agreement) and Citibank, N.A.,
as Agent for the Lenders (the "Agent"). Terms defined in the
Credit Agreement are used herein with the same meaning.
_____________ (the "Assignor") and ____________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns without recourse
to the Assignee, and the Assignee hereby purchases and assumes
from the Assignor, that interest in and to all of the Assignor's
rights and obligations under the Credit Agreement as of the date
hereof, which represents the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the
Credit Agreement, including, without limitation, such interest in
the Assignor's Commitment, the Advances owing to the Assignor,
and the Note[s] held by the Assignor. After giving effect to
such sale and assignment, the Assignee's Commitment and the
amount of the Advances owing to the Assignee will be as set forth
in Section 2 of Schedule 1.
2. The Assignor (i) 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; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any
of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and
(iv) attaches the Note[s] referred to in paragraph 1 above and
requests that the Agent exchange such Note[s] for a new Note
payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto or new Notes
payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto and the
Assignor in an amount equal to the Commitment retained by the
Assignor under the Credit Agreement, respectively, as specified
on Schedule 1 hereto.
1<PAGE>
3. The Assignee (i) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial
statements referred to in Section 5.01 thereof and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this
Assignment and Acceptance; (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
as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the
Credit Agreement; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Lender; [and]
(vi) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth
beneath its name on the signature pages hereof [and (vi) attaches
the forms prescribed by the Internal Revenue Service of the
United States certifying that it is exempt from United States
withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement and the Notes].(1)
4. Following the execution of this Assignment and
Acceptance by the Assignor and the Assignee, it will be delivered
to the Agent for acceptance and recording by the Agent. The
effective date of this Assignment and Acceptance shall be the
date of acceptance thereof by the Agent, unless otherwise
specified on Schedule 1 hereto (the "Effective Assignment Date").
5. Upon such acceptance and recording by the Agent, as of
the Effective Assignment Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from
and after the Effective Assignment Date, the Agent shall make all
payments under the Credit Agreement and the Notes in respect of
the interest assigned hereby (including, without limitation, all
payments of principal, interest and Commitment Fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective
Assignment Date directly between themselves.
_______________________
(1) If the Assignee is organized under the laws of a
jurisdiction outside the United States.
2<PAGE>
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective
officers thereunto duly authorized, as of the date first above
written, such execution being made on Schedule 1 hereto.
[NAME OF ASSIGNOR]
By_____________________________
Name:
Title:
[NAME OF ASSIGNEE]
By_____________________________
Name:
Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ____ day
of ____________, 19__
[NAME OF AGENT]
By__________________
Name:
Title:
3<PAGE>
Schedule 1
to
Assignment and Acceptance
Dated __________, 19__
Section 1.
Percentage Interest: %
Section 2.
Assignee's Commitment: $
Aggregate Outstanding Principal
Amount of Advances owing to the Assignee: $
A Note payable to the order of the Assignee
Dated: _________, 19__
Principal amount: $
A Note payable to the order of the Assignor
Dated: _________, 19__
Principal amount: $
Section 3.
Effective Assignment Date (1): _________, 19__
____________________________
(1) This date should be no earlier than the date of
acceptance by the Agent.
4<PAGE>
EXHIBIT D
FORM OF LC BANK AGREEMENT
LETTER OF CREDIT BANK AGREEMENT (the "Agreement"), dated as
of __________, _____, between ENERGY INITIATIVES, INC., a
Delaware corporation (the "Borrower"), and _____________________
(the "LC Bank").
PRELIMINARY STATEMENTS
(1) The Borrower has entered into a Credit Agreement,
dated as of December __, 1994 (said agreement, as amended,
modified or supplemented from time to time, being the ("Credit
Agreement"), with certain lenders named therein and from time to
time parties thereto (the "Lenders") and Citibank, N.A., as
Agent. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings assigned to such terms in the
Credit Agreement.
(2) [PURPOSE OF THE LETTER OF CREDIT TO BE ISSUED
HEREUNDER.]
(3) The Borrower has requested the LC Bank to issue an
irrevocable letter of credit in favor of ________________________
(the "Beneficiary") in the amount of $__________ (the "LC
Commitment").
NOW, THEREFORE, in consideration of the premises and in
order to induce the LC Bank to issue the Letter of Credit, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Beneficiary" has the meaning assigned to that term in
Preliminary Statement (3).
"Issuance Termination Date" has the meaning assigned
to that term in Section 3.01 hereof.
"LC Commitment" has the meaning assigned to that term
in Preliminary Statement (3).
1<PAGE>
"Letter of Credit" means a letter of credit issued by
the LC Bank pursuant to Section 3.02, as such letter of
credit may from time to time be amended, modified or
extended in accordance with the terms of the Credit
Agreement and this Agreement, in form and substance
reasonably satisfactory to the LC Bank, the Borrower and
the Agent.
"Stated Termination Date" means
___________________________; provided, that the Stated
Termination Date of the Letter of Credit upon its date of
issuance shall be no later than the then-scheduled
Termination Date.
SECTION 1.02. Computation of Time Periods. Computation of
a period of time from a specified date to a later specified date
shall be made in accordance with the Credit Agreement.
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein or in the Credit Agreement shall be
construed in accordance with generally accepted United States
accounting principles as in effect as of the date hereof
consistently applied, except as otherwise stated herein.
ARTICLE II
THE CREDIT AGREEMENT
SECTION 2.01. Credit Agreement. (a) The parties hereto
acknowledge and agree that this Agreement is an "LC Bank
Agreement" under the Credit Agreement, and that the parties
hereto shall be entitled to the rights and remedies, and bound by
the obligations, accorded to the parties in interest to an "LC
Bank Agreement" as so provided in the Credit Agreement. The
parties hereto hereby further acknowledge and agree that the
Agent, the Lenders and the Beneficiary, as the case may be, are
intended third-party beneficiaries hereof and are entitled
(acting through the Agent, in the case of the Lenders) to the
rights and benefits accorded hereunder.
(b) The LC Bank hereby acknowledges and agrees that it is
an "LC Bank" under the Credit Agreement.
(c) In the event of any conflict between the terms of this
Agreement and the Credit Agreement (unless such conflict arises
solely as a result of an amendment to the Credit Agreement made
after the date hereof without the written consent of the LC Bank
thereto), the terms of the Credit Agreement shall control and
such conflicting terms hereunder shall be of no force or effect.
2<PAGE>
ARTICLE III
AMOUNT AND TERMS OF THE LETTERS
OF CREDIT
SECTION 3.01. The Letters of Credit. The LC Bank agrees,
on the terms and conditions hereinafter set forth, and subject,
at all times, to Section 2.05(b) of the Credit Agreement, to
issue the Letter of Credit to the Beneficiary on any Business Day
during the period from the date hereof to and including
________________, ______ (the "Issuance Termination Date") in the
amount not to exceed the LC Commitment and expiring on or before
the Stated Termination Date.
SECTION 3.02. Issuing the Letters of Credit. The Letter
of Credit shall be issued (or the stated maturity thereof
extended or terms thereof modified or amended) on not less than
three Business Days' prior written notice thereof to the Agent
and the LC Bank pursuant to, and in accordance with, Section 3.02
of the Credit Agreement.
SECTION 3.03. Fees. [INSERT AS APPROPRIATE]
(a) The Borrower hereby agrees to pay to the LC Bank, upon
the issuance of the Letter of Credit hereunder, an issuance fee
in an amount equal to ____ % of the initial stated amount
thereof.
(b) The Borrower hereby agrees to pay to the LC Bank, upon
each drawing made by the Beneficiary under the Letter of Credit,
a drawing fee in an amount equal to $_______.
(c) The Borrower hereby agrees to pay to the LC Bank, upon
each amendment to the Letter of Credit, an amendment fee in an
amount equal to $________.
[(d) The Borrower hereby agrees to pay to the LC Bank a
fronting fee equal to ___% of the average daily amount of the
stated amount of the Letter of Credit from the date of issuance
of the Letter of Credit until the date of expiry of the Letter of
Credit, payable on the last day of each __________, __________,
__________ and __________ during such period and on such date of
expiry.]
SECTION 3.04. Payments and Computations. The Borrower
shall make each payment hereunder not later than 12:00 noon (New
York City time) on any day when due in U.S. Dollars. Any such
payment shall be made to the Agent for the account of the LC Bank
at the Agent's office set forth in Section 9.02 of the Credit
Agreement. The Borrower hereby authorizes the LC Bank, if and to
the extent payment is not made when due hereunder, to charge from
time to time against any or all of the Borrower's accounts with
the LC Bank any amount so due. Computations of the fees
hereunder shall be made by the LC Bank on the basis of a year of
3<PAGE>
360 days for the actual number of days (including the first day
but excluding the last day) elapsed.
SECTION 3.05. Extension of the Stated Termination Date.
At least 30 but not more than 90 days before the Stated
Termination Date of the Letter of Credit, and in any event no
later than the then-scheduled Amortization Period Commencement
Date, the Borrower may request the LC Bank in writing (with a
copy of each such request to the Agent) to extend the Stated
Termination Date of the Letter of Credit for purposes of this
Agreement and the Letter of Credit to any date not later than the
then-scheduled Termination Date. If the Borrower shall make such
a request, the LC Bank shall, on or before the 15th Business Day
after its receipt of such request, notify the Borrower in writing
whether or not the LC Bank consents to such request and, if the
LC Bank does so consent, the conditions of such consent
(including conditions relating to legal documentation and the
consent of the Beneficiary thereof). If the LC Bank shall not so
notify the Borrower, the LC Bank shall be deemed not to have
consented to such request. Any such extension shall be effective
only if and when made in accordance with Articles III and IV of
the Credit Agreement.
ARTICLE IV
CONDITIONS OF ISSUANCE
SECTION 4.01. Conditions Precedent to Issuance of the
Letter of Credit. The obligation of the LC Bank to issue the
Letter of Credit is subject to the satisfaction of the applicable
conditions precedent set forth in Article IV of the Credit
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the
Borrower. The Borrower hereby represents and warrants for the
benefit of the LC Bank that the representations and warranties of
the Borrower set forth in Article V of the Credit Agreement are
true and correct on the date hereof, on each date of issuance of
the Letter of Credit and on each date on which the term thereof
is extended in accordance with Section 3.05 hereof, as if made on
and as of such date.
4<PAGE>
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless
the same shall be in writing, signed by the LC Bank and the
Borrower and consented to by the Agent on behalf of the Majority
Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given.
SECTION 6.02. Notices, Etc. All notices and other
communications provided for hereunder shall be made in accordance
with Section 9.02 of the Credit Agreement and sent, if to the LC
Bank, at its address set forth on the signature page hereof.
SECTION 6.03. No Waiver; Remedies. No failure on the part
of the Borrower or LC Bank to exercise, and no delay in
exercising, any right hereunder or under the Credit Agreement
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder or thereunder preclude
any other or further exercise thereof or the exercise of any
other right. The remedies herein and therein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 6.04. Costs, Expenses and Taxes. The Borrower
agrees to pay to the LC Bank on demand all costs and expenses
incurred by the LC Bank in connection with the preparation,
execution, delivery and administration of this Agreement and any
other documents that may be delivered in connection with this
Agreement and any proposed modification, amendment or consent
relating to this Agreement, including, without limitation,
reasonable counsel fees and out-of-pocket expenses of counsel for
the LC Bank with respect hereto, and with respect to advising the
LC Bank as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all
costs and expenses, if any, (including, without limitation,
counsel fees and expenses of outside counsel and of internal
counsel) incurred by the LC Bank in connection with (i) the
enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement and such other documents that may be
delivered in connection with this Agreement and (ii) any action
or proceeding relating to a court order, injunction, or other
process or decree restraining or seeking to restrain the LC Bank
from paying any amount under the Letter of Credit. In addition,
the Borrower shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the
execution and delivery of this Agreement or the Letter of Credit
or any such other documents, and agrees to save the LC Bank
harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such
taxes and fees.
5<PAGE>
SECTION 6.05. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and
the LC Bank and consented to in writing by the Agent (for itself
as the Agent and on behalf of the Lenders); and thereafter shall
be binding upon and inure to the benefit of the Borrower, the LC
Bank, the Agent, the Lenders and their respective successors and
assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the
prior written consent of the Lenders and the LC Bank shall not
have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
SECTION 6.06. Severability. Any provision of this
Agreement which is prohibited, unenforceable or not authorized in
any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, unenforceability or
non-authorization without invalidating the remaining provisions
hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
SECTION 6.07. WAIVER OF JURY TRIAL. EACH OF THE LC BANK
AND THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE LETTER OF CREDIT, OR ANY OTHER
INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
SECTION 6.08. Governing Law; Submission to Jurisdiction.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York. Each of the Borrower
and the LC Bank (i) irrevocably submits to the jurisdiction of
any New York State court or Federal court sitting in New York
City in any action arising out of this Agreement or the Letter of
Credit, (ii) agrees that all claims in such action may be decided
in such court, (iii) waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum and
(iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be
enforced in other jurisdictions. Nothing herein shall affect the
right of any party to serve legal process in any manner permitted
by law or affect its right to bring any action in any other
court.
SECTION 6.09. Headings. Section headings in this
Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other
purpose.
SECTION 6.10. Execution in Counterparts. This Agreement
may be executed and consented to in any number of counterparts
and by different parties hereto in separate counterparts, each of
which when so executed or consented to shall be deemed to be an
original and all of which taken together shall constitute one and
the same instrument.
6<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above
written.
ENERGY INITIATIVES, INC.
By
Name:
Title:
[INSERT LC BANK], as LC Bank
By
Name:
Title:
Consented to as of the date
first above written:
CITIBANK, N.A., as the Agent
on behalf of the Lenders
By____________________________________
Name:
Title:
1<PAGE>
DRAFT
(General Public Utilities Corporation Letterhead)
EXHIBIT E
LETTER OF SUPPORT
To the lenders party to the Facilities
described below
We are aware that you are considering extending facilities (the
"Facilities") to our subsidiary, Energy Initiatives, Inc. These
Facilities would consist of an extendable three-year $30,000,000
revolving credit and two-year term loan facility which would be
agented and syndicated on a best efforts basis.
In order to induce you to extend such Facilities, we hereby
confirm that we own 100% of the issued and outstanding capital
shares of Energy Initiatives, Inc. and that during the term of
the Facilities we will not alter our position as sole shareholder
of Energy Initiatives, Inc. without your prior consent. We
further confirm that, through the Board of Directors, we shall
provide appropriate oversight of the management of Energy
Initiatives, Inc. to help it to meet its financial obligations,
and we hereby undertake to utilize our best efforts to arrange
for repayment of the facilities as and when the outstanding
borrowings become due and payable.
We approve of the Facilities being granted to Energy Initiatives,
Inc. and are most grateful for your assistance to that company.
Sincerely,
General Public Utilities Corporation<PAGE>
EXHIBIT F
FORM OF OPINION OF COUNSEL
FOR THE BORROWER AND THE PARENT
[Date]
To each of the Banks party to the
Credit Agreement, dated as of
December __, 1994, among Energy
Initiatives, Inc., said Banks and
Citibank, N.A., as Agent for said
Banks
Energy Initiatives, Inc.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to
Section 4.01 of the Credit Agreement, dated as of December __,
1994 (the "Credit Agreement"), among Energy Initiatives, Inc., a
Delaware corporation (the "Borrower"), the Banks named therein
and Citibank, N.A., as Agent for said Banks. Terms defined in
the Credit Agreement are used herein as therein defined.
We have acted as counsel to the Borrower and to
General Public Utilities Corporation, a Pennsylvania corporation
(the "Parent"; together with the Borrower, the "Loan Parties"),
in connection with the execution and delivery of the Credit
Agreement and the other Loan Documents to be delivered
thereunder.
In that capacity, we have examined:
(1) the Credit Agreement;
(2) the Notes executed and delivered on the
date hereof;
(3) the Support Letter;
(4) the form of the LC Bank Agreement attached
as Exhibit D to the Credit Agreement;
(5) the Certificate of Incorporation of the
Borrower and all amendments thereto (the "Borrower
Charter");
(6) the by-laws of the Borrower as in effect on
the date hereof and on the date of the adoption of
1<PAGE>
the resolutions authorizing the execution, delivery
and performance by the Borrower of all Loan Documents
to which it is, or is to become, a party (the
"Borrower By-laws");
(7) a certificate of the Secretary of Delaware,
dated December __, 1994, attesting to the continued
corporate existence and good standing of the Borrower
in that State;
(8) the Certificate of Incorporation of the
Parent and all amendments thereto (the "Parent
Charter");
(9) the by-laws of the Parent as in effect on
the date hereof and on the date of the adoption of
the resolutions authorizing the execution, delivery
and performance by the Parent of the Support Letter
(the "Parent By-laws");
(10) a certificate of the Secretary of the
Commonwealth of Pennsylvania, dated December __,
1994, attesting to the subsistence of the Parent in
that State; and
(11) the order dated December __, 1994 of the
SEC under PUHCA (the "SEC Order").
We have also examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Loan
Parties, certificates of public officials and of officers of the
Loan Parties, and agreements, instruments and other documents, as
we have deemed necessary as a basis for the opinions expressed
below. We have assumed (i) the due execution and delivery,
pursuant to due authorization, of the Credit Agreement by the
Banks and the Agent, (ii) the authenticity of all documents
submitted to us as originals, (iii) the genuineness of all
signatures (other than those of the Loan Parties) and (iv) the
conformity to originals of all documents submitted to us as
copies.
We are members of the Bar of the State of New York
and do not purport to be expert on the laws of any jurisdiction
other than the laws of the State of New York and the Federal laws
of the United States. We have, however, reviewed the Delaware
General Corporation Law ("GCL") to the extent required to express
the opinions set forth herein. The opinions expressed herein are
limited to matters governed by the laws of the State of New York,
the Federal laws of the United States and the GCL. As to all
matters governed by the laws of the Commonwealth of Pennsylvania,
we have relied on the annexed opinion of Ballard Spahr Andrews &
Ingersoll, upon which opinion we believe you and we are justified
in relying.
2<PAGE>
Based upon the foregoing and upon such investigation
as we have deemed necessary, we are of the following opinion:
1. The Borrower and the Parent are
corporations duly incorporated, validly existing and,
in the case of the Borrower, in good standing under
the laws of the State of Delaware and the
Commonwealth of Pennsylvania, respectively.
2. The execution, delivery and performance by
the Borrower of the Credit Agreement, the Notes and
the LC Bank Agreement are within the Borrower's
corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not
(i) contravene the Borrower Charter or the Borrower
By-laws or any law, rule or regulation applicable to
the Borrower, (ii) to our knowledge, result in a
breach of, or constitute a default under, any
indenture or loan or credit agreement or any other
material agreement, lease or instrument to which the
Borrower is a party or by which it or its properties
are bound (each, a "Borrower Document") or (iii)
result in or require the creation of any lien upon or
with respect to any of its properties under any
Borrower Document of which we are aware.
3. The execution, delivery and performance by
the Parent of the Support Letter are within the
Parent's corporate powers, have been duly authorized
by all necessary corporate action, and do not and
will not (i) contravene the Parent Charter or the
Parent By-laws or any law, rule or regulation
applicable to the Parent, (ii) to our knowledge,
result in a breach of, or constitute a default under,
any indenture or loan or credit agreement or any
other material agreement, lease or instrument to
which the Parent is a party or by which it or its
properties are bound (each, a "Parent Document") or
(iii) result in or require the creation of any lien
upon or with respect to any of its properties under
any Parent Document of which we are aware.
4. 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
any Loan Party of any Loan Document to which it is,
or is to become, a party, except for the SEC Order,
which has been duly obtained, is in full force and
effect and is not subject to any pending or, to our
knowledge, threatened appeal or other proceeding
seeking reconsideration or review thereof.
5. The Credit Agreement and the Notes have
been duly executed and delivered by the Borrower.
3<PAGE>
The Credit Agreement and Notes constitute, and each
LC Bank Agreement, when duly completed, executed and
delivered by the Borrower, will constitute, legal,
valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with
their respective terms.
6. The Support Letter has been duly executed
and delivered by the Parent. The Support Letter
constitutes the legal, valid and binding obligation
of the Parent enforceable against the Parent in
accordance with its terms.
7. The Borrower is not a "public utility
holding company" within the meaning of PUHCA.
8. Neither the Borrower nor the Parent is an
"investment company" or a company "controlled" by an
"investment company" within the meaning of the
Investment Company Act of 1940, as amended, or an
"investment advisor" within the meaning of the
Investment Company Act of 1940, as amended.
_______________
Except as disclosed in Schedule III to the Credit
Agreement or the Parent's 1993 10-K, the Parent's Quarterly
Reports on Form 10-Q for the quarters ending March 31, 1994, June
30, 1994 and September 30, 1994 and the Parent's Current Report
on Form 8-K dated __________, 1994, there is no pending or, to
our knowledge, threatened action or proceeding to which the
Borrower or the Parent is a party before any court, governmental
agency or arbitrator that could reasonably be expected to have a
material adverse effect on the financial condition or results or
operations of the Borrower, the Parent or the Parent and its
subsidiaries, taken as a whole, or that calls into question the
validity, legally binding character or enforceability of the
Credit Agreement, the Notes, the Support Letter or any LC Bank
Agreement.
The opinions set forth above are subject to the
following qualifications:
(a) Our opinions in the last sentence of
paragraphs 5 and 6 above are subject to the effect of
any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar law
affecting creditors' rights generally.
(b) Our opinions in the last sentence of
paragraphs 5 and 6 above are subject to the effect of
general principles of equity, including (without
limitation) concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law).
4<PAGE>
In addition, insofar as the foregoing opinions are based on laws,
contracts, charter documents or by-laws, such opinions are based
on the same as in effect or existing on the date hereof.
The foregoing opinion is furnished solely for the
benefit of the addressees hereof and, except as set forth in the
immediately succeeding sentence, may not be relied upon by any
other Person (other than any Person that may become a Lender
under the Credit Agreement after the date hereof) or for any
other purpose without our prior written consent. We are aware
that King & Spalding will rely upon the opinions set forth herein
in rendering their opinion furnished pursuant to Section 4.01 of
the Credit Agreement.
Very truly yours,
5<PAGE>
EXHIBIT G
FORM OF OPINION OF SPECIAL
NEW YORK COUNSEL TO THE AGENT
[Date]
To the Banks listed on
Exhibit A hereto and to
Citibank, N.A., as Agent
Energy Initiatives, Inc.
Ladies and Gentlemen:
We have acted as special New York counsel to
Citibank, N.A., individually and as agent, in connection with the
preparation, execution and delivery of the Credit Agreement,
dated as of December __, 1994 (the "Credit Agreement"), among
Energy Initiatives, Inc. (the "Borrower"), the banks parties
thereto (the "Banks") and Citibank, N.A., as agent for the Banks.
Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.
In that connection, we have examined (i) counterparts
of the Credit Agreement, executed by the Borrower, the Banks and
the Agent, (ii) the Notes, executed by the Borrower and (iii) the
other documents delivered to the Agent pursuant to Section
4.01(a) of the Credit Agreement, including, without limitation,
the opinion of Berlack, Israels & Liberman, counsel for the
Borrower and the Parent (the "Opinion").
In our examination of the documents referred to
above, we have assumed the authenticity of all such documents
submitted to us as originals, the genuineness of all signatures,
the due authority of the parties executing such documents and the
conformity to the originals of all such documents submitted to us
as copies. We have further assumed that you have evaluated, and
are satisfied with, the creditworthiness of the Borrower and the
Parent and the business and financial terms evidenced by the
Credit Agreement, the Support Letter and the other documents
delivered under the Credit Agreement. We have relied as to
factual matters on the documents we have examined.
Based upon the foregoing, and subject to the
qualifications set forth below, we are of the opinion that:
(i) The Credit Agreement, each of the Notes
being delivered on the date hereof and the form of
1<PAGE>
the LC Bank Agreement to be delivered by the Borrower
in connection with the issuance of any Letter of
Credit are in substantially acceptable legal form.
(ii) While we have not independently considered
the matters covered by the Opinion to the extent
necessary to enable us to express the conclusions
stated therein, the Opinion and the other documents
delivered pursuant to Section 4.01(a) of the Credit
Agreement are substantially responsive to the
corresponding requirements set forth in Section
4.01(a) of the Credit Agreement pursuant to which the
same have been delivered.
Our opinions expressed above are limited to the law
of the State of New York and the Federal law of the United
States, and we do not express any opinion herein concerning any
other law.
The foregoing opinion is solely for your benefit and
may not be relied upon by any other Person other than any Person
that may become a Lender under the Credit Agreement after the
date hereof.
Very truly yours,
2<PAGE>
(LETTERHEAD OF BERLACK, ISRAELS & LIBERMAN)
Exhibit F-1
November 23, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: General Public Utilities Corporation
Energy Initiatives, Inc.
Application on Form U-1
SEC File No. 70-8369
Dear Sirs:
We have examined Post-Effective Amendment No. 1, dated
September 28, 1994, to the Application on Form U-1, dated March
4, 1994, as amended, under the Public Utility Holding Company Act
of 1935 (the "Act"), of General Public Utilities Corporation
("GPU") and Energy Initiatives, Inc. ("EI"), which has been
docketed in SEC File No. 70-8369, as amended by Post-Effective
Amendment No. 2 thereto, dated October 4, 1994, and as to be
amended by Post-Effective Amendment No. 3 thereto, dated this
date, of which this opinion is to be a part. (The Application,
as so amended and as thus to be amended, is hereinafter referred
to as the "Application".)
The Application now contemplates borrowings by EI from
a syndicate of banks ("Banks") of up to a maximum aggregate
amount of $30 million pursuant to the terms of a Revolving Credit
Agreement ("Credit Agreement"). The Credit Agreement would have
an initial term of three years (subject to extension for one
year), and any borrowings outstanding at the end of such term
would be repayable over a two-year term loan period. The
borrowings would be evidenced by unsecured promissory notes of EI
("Notes").
The Credit Agreement would also include a letter of
credit facility, which would permit EI to obtain letters of
credit from one or more Banks up to an aggregate outstanding
amount of $15 million. Pursuant to the terms of the Credit
Agreement and related reimbursement agreements (each, a
"Reimbursement Agreement"), if EI elected not to reimburse the
issuing Bank for any draw on the letter of credit, the amount of
that draw would be treated as a borrowing under the Credit
Agreement.<PAGE>
Securities and Exchange Commission
November 23, 1994
Page 2
In addition, GPU proposes to deliver to the Banks a
Support Letter ("Support Letter") pursuant to which GPU would
undertake to maintain 100% ownership of EI and to use its best
efforts to arrange for repayment of the Notes when they become
due and payable.
We have been counsel to GPU, a Pennsylvania
corporation, and its subsidiaries, including EI, for many years.
In such capacity, we have participated in various proceedings
relating to the issuance of securities by GPU and its
subsidiaries, and we are familiar with the terms of the
outstanding securities of the General Public Utilities holding
company system.
In addition to the matters set forth in our previous
opinion dated April 29, 1994 and filed as Exhibit F to the
Application, we have examined a copy of the Commission's Order,
dated May 17, 1994, granting the Application, as then amended.
We have also examined such corporate records, documents and
certificates as we have deemed necessary as a basis for this
opinion.
As to all matters of Pennsylvania law, we have relied
upon the opinion of Ballard Spahr Andrews & Ingersoll, which is
being filed as Exhibit F-2 to the Application.
Based upon the foregoing, and assuming that the
transactions therein proposed are carried out in accordance with
the Application, we are of the opinion that when the Commission
shall have entered an order forthwith granting the Application,
(a) all State laws applicable to the proposed
transactions will have been complied with;
(b) GPU and EI are each validly organized and
duly existing;
(c) the Notes, the Reimbursement Agreements and
the Support Letter will each be valid and binding
obligations of EI and GPU, as applicable, in accordance
with their respective terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws
affecting creditors' rights generally and general
principles of equity; and
(d) the issuance of the Notes, the
Reimbursement Agreements and the Support Letter will
not violate the legal rights of the holders of any
securities issued by GPU or EI or any company which is
an "associate company" thereof, as defined in the Act.<PAGE>
<PAGE>
Securities and Exchange Commission
November 23, 1994
Page 3
We hereby consent to the filing of this opinion as an
exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN<PAGE>
(LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL)
Exhibit F-2
November 23, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: General Public Utilities Corporation
Energy Initiatives, Inc.
Application on Form U-1
SEC File No. 70-8369
Dear Sirs:
We have examined Post-Effective Amendment No. 1, dated
September 28, 1994, to the Application on Form U-1, dated
March 4, 1994, as amended, under the Public Utility Holding
Company Act of 1935 (the "Act"), of General Public Utilities
Corporation ("GPU") and Energy Initiatives, Inc. ("EI"), which
has been docketed in SEC File No. 70-8369, as amended by Post-
Effective Amendment No. 2 thereto, dated October 4, 1994, and
Post-Effective Amendment No. 3 thereto, dated this date, of which
this opinion is to be a part. (The Application, as so amended,
is hereinafter referred to as the "Application".)
The Application now contemplates borrowings by EI from
a syndicate of banks ("Banks") of up to a maximum aggregate
amount of $30 million pursuant to the terms of a Revolving Credit
Agreement ("Credit Agreement"). The Credit Agreement would have
an initial term of three years (subject to extension for one
year), and any borrowings outstanding at the end of such term
would be repayable over a two-year term loan period. The
borrowings would be evidenced by unsecured promissory notes of EI
("Notes").
The Credit Agreement would also include a letter of
credit facility, which would permit EI to obtain letters of
credit from one or more Banks up to an aggregate outstanding
amount of $15 million. Pursuant to the terms of the Credit
Agreement and related reimbursement agreements (each, a
"Reimbursement Agreement"), if EI elected not to reimburse the
issuing Bank for any draw on the letter of credit, the amount of
that draw would be treated as a borrowing under the Credit
Agreement.<PAGE>
Securities and Exchange Commission
November 23, 1994
Page 2
In addition, GPU proposes to deliver to the Banks a
Support Letter ("Support Letter") pursuant to which GPU would
undertake to maintain 100% ownership of EI and use its best
efforts to arrange for repayment of the Notes when they become
due and payable.
We have acted as Pennsylvania counsel to GPU, a
Pennsylvania corporation, for many years. In connection with the
delivery of this opinion, we have examined such corporate
records, documents and certificates as we have deemed necessary
as a basis for this opinion.
Based upon the foregoing, and assuming that the
transactions therein proposed are carried out in accordance with
the Application, we are of the opinion, insofar as Pennsylvania
law is concerned, that:
(a) all Pennsylvania laws applicable to the
proposed transactions will have been complied with; and
(b) GPU is validly organized and duly existing.
We hereby consent to the filing of this opinion as an
exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
BALLARD SPAHR ANDREWS & INGERSOLL<PAGE>
