Post-Effective Amendment No. 4 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
LLP
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, Esq., Secretary
Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
(Names and addresses of agents for service)<PAGE>
GPU and EI hereby post-effectively amend their
Application on Form U-1, docketed in SEC File No. 70-8369, as
follows:
A. By Order dated December 1, 1994 (HCAR No. 35-
26179), the Commission authorized EI to enter into a loan
agreement with a group of lenders ("Lenders") for whom Citibank,
N.A. acts as agent ("Loan Agreement"). The Loan Agreement
permits revolving credit borrowings by EI from time to time
through December 1, 1997 in an aggregate amount not to exceed $30
million, of which up to $15 million may be utilized to obtain
letters of credit. The Loan Agreement may be extended for one
year in the sole discretion of the Lenders, and permits EI to
repay any borrowings outstanding at termination in eight
quarterly installments.
B. The Order also authorized GPU to deliver to the
Lenders, as an inducement to enter into the Loan Agreement, a
Support Agreement ("Support Agreement") which provided, among
other things, that during the term of the Loan Agreement, GPU
would maintain 100% ownership of EI and would use its best
efforts to arrange for repayment of the loans when they become
due and payable.
C. Among other covenants in the Loan Agreement, EI
has agreed not to sell or pledge certain shares of Ace Ltd. and
Excel, Ltd. ("Securities") owned by it without the consent of the
Lenders. At September 1, 1995, the Securities had an aggregate
market value of approximately $20 million. EI now desires to be
in a position to sell the Securities from time to time as
circumstances warrant. As a condition to consenting to such
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sale, however, the Lenders have requested that GPU provide a new
Support Agreement ("New Support Agreement").
D. In addition to the provisions contained in the
original Support Agreement, the New Support Agreement would
obligate GPU (x) to maintain a consolidated net worth at EI of at
least $85 million, (y) to use its best efforts to arrange for
adequate liquidity at EI, and (z) not to pledge or otherwise
encumber the EI shares owned by it. At June 30, 1995, EI had a
consolidated net worth of approximately $118 million.
E. Accordingly, GPU proposes to execute and deliver
the New Support Letter to the Lenders and requests that the
Commission issue a supplemental order authorizing the same at the
earliest practicable date. In all other respects the
transactions as heretofore authorized by the Commission in this
docket would remain unchanged.
F. The following exhibits are filed herewith in Item
6:
B-14(a) Form of New Support Agreement.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS 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:
Bruce L. Levy
President
Dated: September 8, 1995<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
B-14(a) Form of New Support Agreement.<PAGE>
Exhibit B-14(a)
LETTER OF SUPPORT
[Date of Amendment]
To the Lenders parties to the
Facility described below
We are aware that you have extended credit to our
subsidiary, Energy Initiatives, Inc.("EI"), pursuant to a Credit
Agreement, dated as of December 12, 1994 (as amended or
supplemented from time to time, the "Facility"), among EI, the
lenders named therein and Citibank, N.A., as your agent. EI has
requested that the Facility be amended to effect certain
modifications substantially as set forth in Exhibit A hereto (the
"Amendment"). Unless otherwise defined herein, the terms used
herein shall have the meanings assigned to them in the Facility.
In order to induce you to enter into the Amendment and in
consideration of the premises, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned hereby agrees as follows:
SECTION 1. Affirmative Covenants of the Parent. So long as
any amount in respect of any Note shall remain unpaid, any Letter
of Credit shall remain outstanding or any Lender shall have any
Commitment, the Parent will, unless the Majority Lenders shall
otherwise consent in writing:
(a) Stock Ownership. At all times maintain direct
ownership of 100% of the shares of capital stock (or
comparable interests) of EI now or hereinafter issued and
outstanding.
(b) Net Worth. Cause EI to have at all times a
Consolidated Net Worth of at least $85,000,000.
(c) Management of EI. Provide appropriate oversight
of the management of EI through the Board of Directors of EI
to help it meet its financial obligations, and utilize its
best efforts to arrange for adequate liquidity and repayment
of all amounts payable under the Facility as and when such
amounts become due and payable.
SECTION 2. Negative Covenant of the Parent. So long as any
amount in respect of any Note shall remain unpaid, any Letter of
Credit shall remain outstanding or any Lender shall have any
Commitment, the Parent will not, without the written consent of
the Majority Lenders, create or suffer to exist any Lien upon or
with respect to any capital stock of EI from time to time owned
by the Parent.<PAGE>
SECTION 3. Governing Law. This Letter of Support shall be
governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 4. Remedies. The Parent acknowledges and agrees
that breach of any of the covenants of the Parent set forth
herein may not be compensable by payment of money damages and,
therefore, that the covenants of the Parent set forth herein may
be enforced in equity by a decree requiring specific performance.
Such remedies shall be cumulative and non-exclusive and shall be
in addition to any other rights and remedies the Lenders may have
under the Facility and this Letter of Support.
SECTION 5. Certain Confirmations. We hereby agree that for
all purposes, this Letter of Support shall mean and be the
"Letter of Support" under the Facility.
This letter is intended solely for the benefit of the
Lenders and may not be relied on by any other person.
We approve of the Facility and the Amendment and are most
grateful for your assistance to EI.
Sincerely,
GENERAL PUBLIC UTILITIES
CORPORATION
By ___________________________
Title:
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