EXECUTION COPY
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Exhibit 10(C)
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$200,000,000
REVOLVING CREDIT AGREEMENT
Among
PPL CAPITAL FUNDING, INC.,
as Borrower
PPL CORPORATION,
as Guarantor of the obligations of
PPL Capital Funding, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Administrative Agent
and
THE BANKS NAMED HEREIN
Dated as of December 21, 2000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC., as Lead Arranger and Book Manager
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TABLE OF CONTENTS
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Page
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SECTION 1. AMOUNTS AND TERMS OF LOANS...................................................................... 1
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1.1 Commitments.................................................................................. 1
1.2 Notices of Borrowing......................................................................... 1
1.3 Disbursement of Funds........................................................................ 2
1.4 Repayment of Loans; Evidence of Debt......................................................... 2
1.5 Special Payment Provisions................................................................... 2
1.6 Compensation................................................................................. 3
1.7 Commitment Fee............................................................................... 3
1.8 Reductions in Total Commitments.............................................................. 3
SECTION 2. INTEREST........................................................................................ 4
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2.1 Rates of Interest............................................................................ 4
2.2 Determination of Rate of Borrowing........................................................... 4
2.3 Interest Payment Dates....................................................................... 4
2.4 Conversions; Interest Periods................................................................ 5
2.5 Increased Costs, Illegality, Etc............................................................. 6
SECTION 3. PAYMENTS........................................................................................ 8
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3.1 Payments on Non-Business Days................................................................ 8
3.2 Prepayments.................................................................................. 8
3.3 Method and Place of Payment, Etc............................................................. 9
3.4 Net Payments................................................................................. 9
SECTION 4. CONDITIONS PRECEDENT............................................................................ 10
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4.1 Conditions to Effectiveness.................................................................. 10
4.2 Conditions to Each Loan to Finance Co........................................................ 11
SECTION 5. COVENANTS OF FINANCE CO. AND PARENT............................................................. 11
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5.1 Financial Statements......................................................................... 11
5.2 Mergers...................................................................................... 12
5.3 Ratings...................................................................................... 12
5.4 Liens........................................................................................ 12
5.5 Consolidated Indebtedness to Consolidated Capitalization..................................... 13
SECTION 6. EVENTS OF DEFAULT WITH RESPECT TO FINANCE CO.................................................... 13
SECTION 7. REPRESENTATIONS AND WARRANTIES OF FINANCE CO. AND PARENT........................................ 14
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SECTION 8. AGENT........................................................................................... 16
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8.1 Appointment.................................................................................. 16
8.2 Nature of Duties............................................................................. 16
8.3 Rights, Exculpation, Etc..................................................................... 17
8.4 Reliance..................................................................................... 17
8.5 Indemnification.............................................................................. 17
8.6 The Agent, Individually...................................................................... 18
8.7 Resignation by the Agent..................................................................... 18
SECTION 9. PARENT GUARANTEE................................................................................ 18
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SECTION 10. MISCELLANEOUS................................................................................... 20
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10.1 Definitions.................................................................................. 20
10.2 Accounting Principles........................................................................ 27
10.3 Exercise of Rights........................................................................... 28
10.4 Amendment and Waiver......................................................................... 28
10.5 Expenses; Indemnification.................................................................... 28
10.6 Successors and Assigns....................................................................... 29
10.7 Notices, Requests, Demands................................................................... 30
10.8 Survival of Representations and Warranties................................................... 31
10.9 Governing Law................................................................................ 31
10.10 Counterparts................................................................................. 31
10.11 Terms Generally.............................................................................. 31
10.12 Effectiveness................................................................................ 31
10.13 Transfer of Office........................................................................... 31
10.14 Proration of Payments........................................................................ 31
10.15 Jurisdiction; Consent to Service of Process.................................................. 32
10.16 WAIVER OF JURY TRIAL......................................................................... 32
10.17 Headings Descriptive......................................................................... 33
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Bank Address Schedule
SCHEDULE I - Commitments
EXHIBIT A - Form of Opinion of Senior Counsel of Finance Co. and Parent
EXHIBIT B - Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
EXHIBIT C - Form of Parent Compliance Certificate
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REVOLVING CREDIT AGREEMENT, dated as of December 21, 2000, among PPL
CAPITAL FUNDING, INC., a Delaware corporation ("Finance Co."), as Borrower (the
"Borrower"); PPL CORPORATION, a Pennsylvania corporation (the "Parent"), as
guarantor of the obligations of Finance Co. hereunder; the banks listed on
Schedule I hereto (each a "Bank" and collectively the "Banks"); and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ SENIOR FUNDING, INC., as administrative agent for the Banks to the
extent and in the manner provided in (S) 8 below (in such capacity, the "Agent")
(all capitalized terms used herein shall have the meanings specified therefor in
(S) 10.1 unless otherwise defined herein).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Banks make available to
the Borrower a revolving credit facility for working capital and other general
corporate purposes of the Borrower, including investments in, or loans to,
affiliates of the Borrower;
WHEREAS, the Banks are willing to make available to the Borrower a
revolving credit facility subject to and upon the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Borrower, the Guarantor, the
Banks and the Agent hereby agree as follows:
SECTION 1. Amounts and Terms of Loans.
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1.1 Commitments. Subject to and upon the terms and conditions herein set
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forth, each Bank severally and not jointly agrees, at any time and from time to
time prior to the Expiry Date, to make a loan or loans (each a "Loan" and
collectively for all Banks, the "Loans") to the Borrower, as requested by the
Borrower, which Loans (i) shall at the option of the Borrower be initially
maintained as Base Rate Loans or Eurodollar Loans, provided that all the Loans
made by all the Banks at any one Borrowing must be either all Base Rate Loans or
all Eurodollar Loans, (ii) may be repaid and borrowed in accordance with the
provisions hereof and (iii) shall not exceed in aggregate principal amount at
any time outstanding each Bank's Commitment hereunder.
1.2 Notices of Borrowing. Whenever the Borrower desires to make a
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Borrowing hereunder, it shall give to the Agent at the Payment Office (i) no
later than 12:00 Noon (New York time) at least three Business Days' prior
written notice or telephonic notice (confirmed in writing) of each Eurodollar
Loan to be made hereunder and (ii) no later than 11:30 A.M. (New York time) on
the date of such Borrowing written notice or telephonic notice (confirmed in
writing) of each Base Rate Loan to be made hereunder. Each such notice (each a
"Notice of Borrowing") shall state that the Borrowing is being made hereunder
and shall specify the aggregate principal amount the Borrower desires to borrow
hereunder, the date of Borrowing (which shall be a Business Day), the Type of
Loans to be made pursuant to such Borrowing and the Interest Period to be
applicable thereto. The Agent shall promptly give each Bank telephonic notice
(confirmed in writing) of the proposed Borrowing, of such Bank's proportionate
share thereof and of the other matters covered by a Notice of Borrowing. Each
Borrowing shall be in an integral multiple of $1,000,000 and not less than
$10,000,000 and shall be made from each
Bank in the proportion which its respective Commitment bears to the Total
Commitment except as otherwise specifically provided in (S) 2.5. The failure of
any Bank to make any Loan required hereby shall not release any other Bank from
its obligation to make Loans as provided herein.
1.3 Disbursement of Funds. No later than 12:00 Noon (New York time) (or,
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in the case of Base Rate Loans, 2:00 P.M. (New York time)) on the date specified
in a Notice of Borrowing each Bank will make available the amount of its pro
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rata portion of the Loans requested to be made on such date in U.S. dollars and
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in immediately available funds, to the Agent at the Payment Office. The Agent
will make available to the Borrower not later than 1:00 P.M. (New York time)
(or, in the case of Base Rate Loans, 3:00 P.M. (New York time)) on such date at
the Payment Office the aggregate of the amounts in immediately available funds
made available by the Banks against delivery to the Agent at the Payment Office,
or at such other office as the Agent may specify, of the documents and papers
provided for herein. The Agent shall deliver the documents and papers received
by it for the account of each Bank to such Bank or upon its order.
1.4 Repayment of Loans; Evidence of Debt. (a) The outstanding principal
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balance of each Loan shall be due and payable by the Borrower on the Expiry
Date. Each Loan shall bear interest from the date thereof on the outstanding
principal balance thereof as set forth in (S) 2.1. Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness to such Bank resulting from each Loan made by such Bank from time
to time to the Borrower, including the amounts of principal and interest payable
and paid to such Bank from time to time under this Agreement. The Agent shall
maintain the Register pursuant to (S) 1.4(b), and a subaccount for each Bank and
the Borrower, in which Register and subaccounts (taken together) shall be
recorded (i) the amount of each Loan made hereunder, the Type of each Loan made
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Bank hereunder and (iii) the amount of any sum received by the Agent hereunder
from the Borrower and each Bank's share thereof. The entries made in the
Register and accounts maintained pursuant to this (S) 1.4 shall be prima facie
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evidence of the existence and amounts of the obligations therein recorded;
provided, however, that the failure of any Bank or the Agent to maintain such
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account, such Register or such subaccount, as applicable, or any error therein
shall not in any manner affect the obligations of the Borrower to repay the
Loans in accordance with their terms.
(b) The Agent shall maintain at the Payment Office a register for the
recordation of the names and addresses of the Banks, the Commitments of the
Banks from time to time, and the principal amount of the Loans owing to each
Bank from the Borrower from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error. The Register shall be available for inspection by the Borrower, the Agent
or any Bank at any reasonable time and from time to time upon reasonable prior
notice.
1.5 Special Payment Provisions. Unless the Agent shall have been notified
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by any Bank prior to any date of a Borrowing that such Bank does not intend to
make available to the Agent such Bank's portion of the Loans to be made on such
date, the Agent may assume that such Bank has made such amount available to the
Agent on such date of a Borrowing and the
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Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such amount on demand from
such Bank. If such Bank does not pay such amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the Borrower and the Borrower
shall pay such amount to the Agent. The Agent shall also be entitled to recover
from such Bank or the Borrower, as the case may be, interest on such amount in
respect of each day from the date such amount was made available by the Agent to
the Borrower to the date such amount is recovered by the Agent, at a rate per
annum equal to (i) in the case of such Bank, the Federal Funds Rate and (ii) in
the case of the Borrower, the applicable rate provided in (S) 2.1 for the
applicable Type of Loan. Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its Commitment hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of the failure of such
Bank to perform its obligations hereunder.
1.6 Compensation. The Borrower shall compensate each Bank, upon such
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Bank's written request given promptly after learning of the same, for all
losses, expenses and liabilities (including, without limitation, any interest
paid by such Bank to lenders of funds borrowed by it to make or carry its
Eurodollar Loans and any loss sustained by such Bank in connection with the re-
employment of such funds), which the Bank sustains: (i) if for any reason (other
than a failure of such Bank to perform its obligations) a Borrowing of any
Eurodollar Loan does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn or canceled pursuant
to (S) 2.5 or otherwise), (ii) if any repayment or conversion (pursuant to (S)
2.5 or otherwise) of any of its Eurodollar Loans occurs on a date which is not
the last day of the Interest Period applicable thereto, or (iii) without
duplication of any amounts paid pursuant to (S) 2 hereof, as a consequence of
any other default by the Borrower to repay its Eurodollar Loans when required by
the terms of this Agreement. A certificate as to any amounts payable to any Bank
under this (S) 1.6 submitted to the Borrower by such Bank shall show the amount
payable and the calculations used to determine such amount and shall, absent
manifest error, be final, conclusive and binding upon all parties hereto.
1.7 Commitment Fee. The Borrower agrees to pay to the Agent for pro rata
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distribution to each Bank a Commitment Fee (the "Commitment Fee"), for the
period from the Closing Date until the Expiry Date or such earlier date as the
Total Commitment shall be terminated by the Borrower, on the average daily
unused amount of the Commitments, computed at the Applicable Commitment Fee
Percentage per annum computed on the basis of the number of days actually
elapsed over a year of 365 or 366 days and payable quarterly in arrears on the
last day of each calendar quarter and on the Expiry Date or such earlier date as
the Total Commitment shall be terminated by the Borrower.
1.8 Reductions in Total Commitments. (c) The Borrower shall have the
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right, upon at least 3 Business Days' prior written notice to the Agent at the
Payment Office (which notice the Agent shall promptly transmit to each of the
Banks), to reduce permanently the Total Commitment, in an aggregate amount equal
to an integral multiple of $1,000,000 and not less than $10,000,000, or to
terminate the unutilized portion of the Total Commitment, provided that (i) any
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such reduction or termination shall apply proportionately to the Commitments of
the Banks and (ii) no such termination or reduction shall be made that would
reduce the Total Commitments to an amount less than the aggregate outstanding
principal amount of Loans.
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(d) The Total Commitment shall be automatically and permanently
reduced on each date on which prepayment thereof is required to be made pursuant
to (S)(S) 3.2(b)(i) or (ii) in an amount equal to such required prepayments,
provided that any such reduction shall apply proportionately to the Commitments
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of the Banks.
SECTION 2. Interest.
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2.1 Rates of Interest. (e) The Borrower agrees to pay interest in respect
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of the unpaid principal amount of each Base Rate Loan made to it from the date
the proceeds thereof are made available to it until prepayment pursuant to (S) 3
or maturity (whether by acceleration or otherwise) at a rate per annum which
shall be the Base Rate in effect from time to time.
(f) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date the proceeds
thereof are made available to it until prepayment pursuant to (S) 3 or maturity
(whether by acceleration or otherwise) at a rate per annum which shall be the
relevant Quoted Rate plus the Applicable Eurodollar Margin plus the Applicable
Utilization Fee, if any.
(g) The Borrower agrees to pay interest in respect of overdue
principal of, and (to the extent permitted by law) overdue interest in respect
of, each Loan made to it, on demand, at a rate per annum which shall be 2% in
excess of the Base Rate in effect from time to time.
(h) Interest shall be computed on the actual number of days elapsed
on the basis of a 360-day year; provided, however, that for any rate of interest
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determined by reference to the Prime Rate, interest shall be computed on the
actual number of days elapsed on the basis of a year of 365 or 366 days.
(i) In computing interest on the Loans, the date of the making of a
Loan shall be included and the date of payment shall be excluded, provided,
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however, that if a Loan is repaid on the same day on which it is made, such day
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shall nevertheless be included in computing interest thereon.
2.2 Determination of Rate of Borrowing. As soon as practicable after
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10:00 A.M. (New York time) on the second Business Day prior to the commencement
of any Interest Period with respect to a Eurodollar Loan, the Agent shall
determine (which determination, absent manifest error, shall be final,
conclusive and binding upon all parties) the rate of interest which shall be
applicable to such Eurodollar Loan for the Interest Period applicable thereto
and shall promptly give notice thereof (in writing or by telephone, confirmed in
writing) to the Borrower and the Banks. In the event that there is no applicable
rate for such Eurodollar Loan: (i) the Agent shall promptly give notice thereof
(in writing or by telephone, confirmed in writing) to the Borrower and the
Banks, (ii) such Loan shall be deemed to have been requested to be made as a
Base Rate Loan and (iii) the rate applicable to such Loan shall be the Base Rate
in effect from time to time.
2.3 Interest Payment Dates. Accrued interest shall be payable (i) in
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respect of each Eurodollar Loan, at the end of the Interest Period relating
thereto and in respect of each Loan with an Interest Period of longer than 3
months, on each 3-month anniversary of the first day of such Interest Period,
(ii) in respect of each Base Rate Loan, at the end of each Interest Period
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relating thereto and (iii) in respect of each Loan, on any prepayment (on the
amount prepaid), at maturity (whether by acceleration or otherwise) and, after
maturity, on demand.
2.4 Conversions; Interest Periods. (j) The Borrower shall have the option
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to convert on any Business Day all or a portion at least equal to $10,000,000 of
the outstanding principal amount of the Loans made to it pursuant to one or more
Borrowings of one Type of Loans into a Borrowing or Borrowings of another Type
of Loan, provided that (i) except as provided in (S) 2.5(b), Eurodollar Loans
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may be converted into Base Rate Loans only on the last day of an Interest Period
applicable thereto and no partial conversion of a Borrowing of Eurodollar Loans
shall reduce the outstanding principal amount of the Loans pursuant to such
Borrowing to less than $10,000,000 and (ii) Loans may only be converted into
Eurodollar Loans if no Default or Event of Default with respect to the Borrower
is in existence on the date of the conversion. Each such conversion shall be
effected by the Borrower by giving the Agent at its Payment Office, prior to
12:00 Noon (New York time), at least three Business Days (or by 12:00 Noon on
the same Business Day in the case of a conversion into Base Rate Loans) prior
written notice (or telephonic notice promptly confirmed in writing) (each a
"Notice of Conversion") specifying the Loans to be so converted, the Borrowing
or Borrowings pursuant to which such Loans were made, the Type of Loans to be
converted into and, if to be converted into a Borrowing of Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Agent shall give each
Bank prompt notice of any such proposed conversion.
(k) At the time the Borrower gives a Notice of Borrowing or Notice of
Conversion in respect of the making of, or conversion into, a Borrowing of
Eurodollar Loans (in the case of the initial Interest Period applicable thereto)
or prior to 12:00 Noon (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans
(in the case of any subsequent Interest Period), the Borrower shall have the
right to elect, by giving the Agent written notice (or telephonic notice
promptly confirmed in writing), the Interest Period applicable to such
Borrowing, which Interest Period shall, at the option of the Borrower, be a one,
two, three or six month period or, subject to availability on the part of each
Bank, such shorter period as ends on the Expiry Date. Notwithstanding anything
to the contrary contained above:
(i) the initial Interest Period for a Borrowing of Eurodollar Loans
shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires;
(ii) if any Interest Period applicable to a Borrowing of Eurodollar
Loans begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iii) no Interest Period in respect of a Borrowing of Loans shall
extend beyond the Expiry Date; and
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(iv) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period.
If upon the expiration of any Interest Period, the Borrower has failed to elect
a new Interest Period to be applicable to a Borrowing of Eurodollar Loans as
provided above or is unable to elect a new Interest Period as a result of (S)
2.4(a)(ii) above, the Borrower shall be deemed to have elected to convert such
Borrowing into a Borrowing of Base Rate Loans effective as of the expiration
date of such current Interest Period.
2.5 Increased Costs, Illegality, Etc. (l) In the event that any Bank
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(including the Agent) shall have reasonably determined (which determination
shall be final and conclusive and binding upon all parties but, with respect to
the following clauses (i), (ii) and (iii), shall be made only after consultation
with the Borrower and the Agent on the date of such determination) that:
(i) on any date for determining the Quoted Rate for any Interest
Period, by reason of any change after the date hereof affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate by reference to the Quoted Rate;
or
(ii) at any time, by reason of (y) any change after the date hereof
in any applicable law or governmental rule, regulation or order (or any
interpretation thereof by a governmental authority or otherwise (provided
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that, in the case of an interpretation not by a governmental authority,
such interpretation shall be made in good faith and shall have a reasonable
basis) and including the introduction of any new law or governmental rule,
regulation or order), to the extent not provided for in clause (iii) below,
or (z) in the case of Eurodollar Loans, other circumstances affecting such
Bank or the interbank Eurodollar market or the position of such Bank in
such market, the Quoted Rate shall not represent the effective pricing to
such Bank for funding or maintaining the affected Eurodollar Loan; or
(iii) at any time, by reason of the requirements of Regulation D or
other official reserve requirements, the Quoted Rate shall not represent
the effective pricing to such Bank for funding or maintaining the affected
Eurodollar Loan; or
(iv) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Bank in good faith with any
law, governmental rule, regulation, guideline or order, or would cause
severe hardship to such Bank as a result of a contingency occurring after
the date hereof which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, the Bank so affected shall on such date of
determination give notice (by telephone confirmed in writing) to the Borrower
and to the Agent (who shall give similar notice to each Bank) of such
determination. Thereafter, (x) in the case of clause (i), (ii) or (iii) above,
the Borrower shall pay to such Bank, upon written demand therefor, such
additional amounts deemed in good faith by such Bank to be material (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its discretion shall determine) as shall be required
to cause such Bank to receive interest with respect to its affected
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Eurodollar Loan at a rate per annum equal to the then Applicable Eurodollar
Margin in excess of the effective pricing to such Bank to make or maintain such
Eurodollar Loan and (y) in the case of clause (iv), the Borrower shall take one
of the actions specified in (S) 2.5(b) as promptly as possible and, in any
event, within the time period required by law. A certificate as to additional
amounts owed any such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower and the Agent by such Bank shall,
absent manifest error, be final, conclusive and binding upon all of the parties
hereto.
(m) At any time that any of its Loans are affected by the
circumstances described in (S) 2.5(a) the Borrower may (i) if the affected
Eurodollar Loan is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Agent notice thereof by telephone (confirmed in writing)
on the same date that the Borrower was notified by the affected Bank pursuant to
(S) 2.5(a) or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least 3 Business Days' written notice to the Bank, require the Bank to convert
such Eurodollar Loan into a Base Rate Loan; provided that if more than one Bank
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is affected at any time, then all affected Banks must be treated in the same
manner pursuant to this (S) 2.5(b).
(n) In the event that the Borrower shall be paying additional amounts
to a Bank pursuant to (S) 2.5(a)(i), (ii) or (iii) or (S) 2.5(d) (and, in the
case of (S) 2.5(d), such Bank has not eliminated the increased costs by
designating a new Applicable Lending Office) or is unable to incur a Eurodollar
Loan from such Bank because of the existence of a condition described in (S)
2.5(a)(iv) (any such Bank, an "Affected Bank") covering a period of 90
consecutive days, the Borrower, the Agent and the Affected Bank shall consult
with a view towards (but being under no obligation to) amending this Agreement,
with the consent of the Banks other than the Affected Bank (the "Unaffected
Banks") which, at such time, have outstanding two-thirds of the aggregate
principal amount of the Loans outstanding hereunder (exclusive of the aggregate
principal amount of the Loans outstanding of the Affected Bank), to provide for
(i) the termination of the Affected Bank's Commitment, provided that such
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termination is accompanied by payment in full of the outstanding amount of all
Loans of the Affected Bank, interest accrued on such amount to the date of
payment and all other liabilities and obligations of the Borrower hereunder
(including, without limitation, amounts payable pursuant to (S) 1.6, (S) 2.5(a)
or (S) 2.5(d)) with respect to the Affected Bank, and (ii) the substitution of
another bank for the Affected Bank and/or the increase, pro rata or otherwise,
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of the Commitments of the Unaffected Banks or otherwise, so that the Total
Commitment remains the amount which would be applicable in the absence of the
occurrence of clause (i) of this (S) 2.5(c); provided that no Commitment of any
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Unaffected Bank may be changed without the consent of such Bank.
(o) If any Bank reasonably determines at any time that any applicable
law or governmental rule, regulation, order or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Bank based on the existence of
such Bank's Commitment hereunder or its obligations hereunder, then promptly
upon receipt of a written demand from such Bank meeting the requirements of this
(S) 2.5(d), the Borrower agrees to pay such Bank such additional amounts as
shall be required to compensate such Bank for the increased cost to such Bank of
making Loans to the Borrower, as a result of such increase in capital for the
first Compensation Period (as defined below). After the initial written demand
for
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payment in respect of this (S) 2.5(d) is delivered to the Borrower by such Bank,
written demand for payment may be submitted for each Compensation Period
thereafter that this Agreement remains in effect as to such Bank. Each such
written demand shall (i) specify (a) the event pursuant to which such Bank is
entitled to claim the additional amount, (b) the date on which the event
occurred and became applicable to the Bank and (c) the Compensation Period for
which the amount is due and (ii) set out in reasonable detail the basis and
computation of such additional amount. Each period for which the additional
amounts may be claimed by such Bank (a "Compensation Period") shall be the
lesser of (x) the number of days actually elapsed since the date the event
occurred and became applicable to such Bank or (y) 90 days. Payments made by the
Borrower to any Bank in respect of this (S) 2.5(d) shall be made on the last day
of the Compensation Period specified in each written demand with a final payment
to be made on the date of termination of this Agreement as to such Bank.
Provided that each Bank acts reasonably and in good faith and uses averaging and
attribution methods which are reasonable in determining any additional amounts
due under this (S) 2.5(d), such Bank's determination of compensation owing under
this (S) 2.5(d) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. No Bank shall be entitled to compensation
under this (S) 2.5(d) for any costs incurred with respect to any date unless it
shall have notified the Borrower that it will demand compensation for such costs
not more than 60 days after the later of (i) such date and (ii) the date on
which it shall have become aware of such costs.
(p) Each Bank agrees that, upon the occurrence of any event giving
rise to the operation of (S) 2.5(d) with respect to such Bank, such Bank shall,
if requested by the Borrower, designate another Applicable Lending Office for
any Loans affected by such event with the objective of eliminating, avoiding or
mitigating the consequence of the event giving rise to the operation of such
section; provided that such Bank and its Applicable Lending Office shall not, in
--------
the sole judgment of such Bank, suffer any economic, legal or regulatory
disadvantage. Nothing in this (S) 2.5(e) shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in (S) 2.5(d).
SECTION 3. Payments.
--------------------
3.1 Payments on Non-Business Days. Whenever any payment to be made
----------------------------------
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, if a
payment of principal has been so extended, interest shall be payable on such
principal at the applicable rate during such extension.
3.2 Prepayments. (q) Voluntary Prepayments. The Borrower shall have the
---------------- ---------------------
right to prepay the Loans in whole or in part, without premium or penalty, from
time to time pursuant to this (S) 3.2(a) on the following terms and conditions:
(i) the Borrower shall give the Agent at the Payment Office at least 3 Business
Days' prior written notice or telephonic notice (confirmed in writing) of its
intent to prepay such Loans, which notice shall specify the amount of such
prepayment and the specific Borrowing to be prepaid, which notice the Agent
shall promptly transmit to each of the Banks; (ii) each prepayment shall be in
an integral multiple of $1,000,000 and not less than $10,000,000 (or, if less,
the amount then remaining outstanding in respect of the Borrowing being
prepaid); (iii) each prepayment in respect of Loans made pursuant to one
Borrowing shall be applied pro rata among the Banks on the basis of such Loans,
--- ----
except as otherwise provided in (S) 2.5; and (iv) at the time of any prepayment,
the Borrower shall pay all
8
interest accrued on the principal amount of said prepayment and, if the Borrower
prepays any Eurodollar Loan on any day other than the last day of an Interest
Period applicable thereto, the Borrower shall compensate the Banks for losses
sustained as a result of such prepayment to the extent and as provided in (S)
1.6.
(r) Mandatory Prepayments. (i) The Borrower shall, within 10
--------------------------
business days of receipt of Net Cash Proceeds (A) by the Parent or the Borrower
from the issuance by the Parent or the Borrower of Specified Equity or (B) by
the Parent, the Borrower or PPL Energy Supply from the issuance by the Parent,
the Borrower or PPL Energy Supply of Specified Debt, prepay an aggregate
outstanding principal amount of the Loans in an amount equal to the amount of
such Net Cash Proceeds. The provisions set forth in (S)(S) 3.2(a)(iii) and (iv)
shall be applicable to the prepayments made under this (S) 3.2(b).
(ii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Loans comprising part of the same Borrowings, in an
amount equal to the amount by which the aggregate principal amount of the
outstanding Loans exceeds the Total Commitment on such Business Day.
3.3 Method and Place of Payment, Etc. Except as expressly provided
-------------------------------------
herein, all payments under this Agreement shall be made to the Agent for the
ratable account of the Banks not later than Noon (New York time) on the date
when due and shall be made in freely transferable U.S. dollars and in
immediately available funds at the Payment Office (or, if such payment is made
in respect of principal of or interest on any Eurodollar Loan, for the account
of such non-U.S. office of the Agent as the Agent may from time to time direct).
Unless the Agent shall have been notified by the Borrower prior to the date on
which any payment to be made by the Borrower hereunder is due that the Borrower
does not intend to remit such payment, the Agent may, at its discretion, assume
that the Borrower has remitted such payment when so due and the Agent may, at
its discretion and in reliance upon such assumption, make available to each Bank
(for the account of its applicable lending office) on such payment date an
amount equal to such Bank's share of such assumed payment. If the Borrower has
not in fact remitted such payment to the Agent, each Bank shall forthwith on
demand repay to the Agent the amount of such assumed payment made available to
such Bank together with interest thereon in respect of each day from and
including the date such amount was made available by the Agent to such Bank to
the date such amount is repaid to the Agent at a rate per annum equal to the
Federal Funds Rate. On the commencement date of each Interest Period and on each
date occurring two Business Days prior to an Interest Payment Date, the Agent
shall notify the Borrower of the amount of interest and/or fees due at the end
of such Interest Period or on such Interest Payment Date (assuming, in the case
of Base Rate Loans, that there is no change in the rate of interest applicable
to the applicable Base Rate Loan); provided, however, that failure to so notify
-------- -------
the Borrower shall not affect the Borrower's obligation to make any such
payments.
3.4 Net Payments. All payments under this Agreement shall be made without
-----------------
set-off or counterclaim and in such amounts as may be necessary in order that
all such payments of principal and interest in connection with Loans (after
deduction or withholding for or on account of (i) any present or future taxes,
levies, imposts, duties or other charges of whatsoever nature imposed by any
government or any political subdivision or taxing authority thereof, excluding
any tax on or measured by the net income of a Bank pursuant to the income tax
laws of the
9
jurisdiction where such Bank's principal or lending office is located or in
which such Bank maintains a place of business (all such non-excluded taxes,
levies, imposts, duties or other charges, the "Taxes") and (ii) any taxes on or
measured by the net income payable by any such Bank with respect to the amount
by which the payments required to be made by this (S) 3.4 exceed the amount
otherwise specified to be paid under this Agreement) shall not be less than the
amounts otherwise specified to be paid under this Agreement; and the Borrower
further agrees to pay and to save the Agent and the Banks (and any participant,
to the extent provided in Section 10.6(b)(B)) harmless, on an after-tax basis,
from all liability for Taxes on or in connection with Loans or any payments
thereunder, and any interest, penalties or additions with respect thereto,
provided, however, that such interest, penalties and additions are not a result
-------- -------
of any action, omission or failure to act on the part of the Agent or the Banks.
A certificate as to any additional amounts payable to any Bank under this (S)
3.4 submitted to the Borrower by such Bank shall show in reasonable detail the
amount payable and the calculations used to determine such amount and shall,
absent manifest error, be final, conclusive and binding upon all parties hereto.
With respect to each deduction or withholding for or on account of any Taxes,
the Borrower shall promptly furnish to each Bank such certificates, receipts and
other documents as may be required (in the judgment of such Bank) to establish
any tax credit to which such Bank may be entitled.
SECTION 4. Conditions Precedent.
--------------------------------
4.1 Conditions to Effectiveness. On the Closing Date:
--------------------------------
(b) The Agent shall have received from the general counsel or senior
counsel of PPL a favorable opinion dated the Closing Date substantially in
the form of Exhibit A hereto.
(c) The Agent shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest
LLP, counsel for Finance Co. and Parent, addressed to the Agent and the
Banks, dated the Closing Date, with respect to the enforceability of this
Agreement against Finance Co., and with respect to the enforceability of
the guarantee hereunder by Parent of the obligations of Finance Co. against
Parent, substantially in the form of Exhibit B hereto.
(d) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement (including
resolutions of the Board of Directors of Finance Co. and Parent and
certificates as to the incumbency of the officers signing this Agreement or
any certificate delivered in connection herewith) shall be satisfactory in
form and substance to the Agent, and the Agent shall have received all
information and copies of all documents that it has requested, such
documents where appropriate to be certified by proper corporate or
governmental authorities.
(e) The Agent shall have received from each of the Banks, Finance Co.
and Parent a duly executed and delivered counterpart hereof.
(f) The conditions set forth in (S) 4.2 (other than (S) 4.2(c)) shall
have been satisfied.
10
(g) The Agent shall have received from the Parent a duly executed and
delivered counterpart of the fee letter dated as of December 21, 2000 and
shall have received any fees payable thereunder through the Closing Date.
4.2 Conditions to Each Loan to Finance Co. The obligation of each Bank to
------------------------------------------
make each Loan to Finance Co. (excluding any conversions of one Type of Loan to
another Type pursuant to (S) 2.5(b)) hereunder is subject, at the time of the
making of each such Loan (except as hereinafter indicated), to the satisfaction
of the following conditions, with the making of each such Loan constituting a
representation and warranty by Finance Co. that the conditions specified in
(S)(S) 4.2(a), (b) and (d) below are then satisfied:
(h) No Default. At the time of the making of each such Loan to
----------
Finance Co. and after giving effect thereto, there shall exist no Default
or Event of Default.
(i) Representations and Warranties. At the time of the making of
------------------------------
each such Loan to Finance Co. and after giving effect thereto, all
representations and warranties contained in (S) 7 hereof shall be true and
correct with the same force and effect as though such representations and
warranties had been made as of such time.
(j) Notice of Borrowing. The Agent shall have received a Notice of
-------------------
Borrowing from Finance Co. as required by (S) 1.2.
(k) No Adverse Change. Since December 31, 1999, there shall have
-----------------
been no change in the business, assets, financial condition or operations
of Parent and its Subsidiaries taken as a whole which materially and
adversely affects the ability of Parent to perform any of its obligations
hereunder.
SECTION 5. Covenants of Finance Co. and Parent. While this Agreement
-----------------------------------------------
is in effect and until the Total Commitment has been terminated and all
obligations of Finance Co. and Parent hereunder shall have been paid in full,
each of Finance Co. and Parent agrees that:
5.1 Financial Statements. Parent will furnish to each Bank:
-------------------------
(l) within 120 days after the end of each fiscal year (i) an
auditors' report, including a balance sheet as at the close of such fiscal
year and statements of income, shareowners' common equity and cash flows
for such year for Parent and its consolidated Subsidiaries prepared in
conformity with GAAP, with an opinion expressed by PricewaterhouseCoopers
LLP or other independent auditors of recognized standing selected by it and
(ii) Parent's unconsolidated balance sheet as at the close of such fiscal
year and statements of income, shareholders common equity and cash flows
for such year;
(m) within 60 days after the end of each of the first three quarters
in each fiscal year, a balance sheet as at the close of such quarterly
period and statements of income, shareowners' common equity and cash flows
for such quarterly period for (i) Parent and its consolidated Subsidiaries
prepared in conformity with GAAP, and (ii) Parent's unconsolidated balance
sheet as at the close of such quarterly period and statements of income,
shareowners' common equity and cash flow for such quarterly period;
11
(n) within 120 days after the end of each fiscal year, a copy of
Parent's Form 10-K Report to the Securities and Exchange Commission ("SEC")
and within 60 days after the end of each of the first three quarters in
each fiscal year, a copy of Parent's Form 10-Q Report to the SEC;
(o) from time to time, with reasonable promptness, such further
information regarding Parent's business, affairs and financial condition as
any Bank may reasonably request; and
(p) upon acquiring knowledge of the existence of a Default or Event
of Default with respect to Finance Co. a certificate of a financial officer
of Parent and an officer of Finance Co. specifying: (i) the nature of such
Default or Event of Default, (ii) the period of the existence thereof, and
(iii) the actions that Parent and Finance Co. propose to take with respect
thereto.
The financial statements required to be furnished pursuant to clauses
(a) and (b) above shall be accompanied by a certificate of a principal financial
officer of Parent to the effect that no Default or Event of Default with respect
to Finance Co. has occurred and is continuing. The financial statements required
to be furnished pursuant to clause (a) above shall also be accompanied by a
Compliance Certificate in the form of Exhibit C hereto ("Parent Compliance
Certificate") demonstrating compliance with (S) 5.5.
5.2 Mergers. (i) (1) Parent will not merge or consolidate with any Person
------------
if Parent is not the survivor unless (a) the survivor assumes Parent's
obligations hereunder, (b) substantially all of the consolidated assets and
consolidated revenues of the survivor are anticipated to come from a utility or
energy business or utility or energy businesses and (c) the senior unsecured
debt ratings of the survivor by ▇▇▇▇▇'▇ or S&P, as available (or if the ratings
of ▇▇▇▇▇'▇ and S&P are not available, of such other rating agency as shall be
acceptable to the Required Banks), are at least equal to the ratings of Parent's
senior unsecured debt immediately prior to such merger or consolidation; and (2)
Parent will not dispose of any common stock of the Borrower or any securities
convertible into common stock of the Borrower, except in connection with any
merger or consolidation permitted under this (S) 5.2, and except that Parent
shall be allowed to sell, transfer or otherwise dispose of PPL's common stock to
PPL or any Subsidiary of Parent.
(ii) Finance Co. will not merge into or consolidate with any other
Person except (a) Parent or a successor of Parent permitted by this Section or
(b) any other Person which is a wholly owned subsidiary of Parent or a successor
of Parent permitted by this Section.
5.3 Ratings. Finance Co. and Parent will each use their best efforts to
------------
promptly notify the Banks upon obtaining knowledge of any change in, or
cessation of, ratings of Parent's senior unsecured debt by ▇▇▇▇▇'▇ or S&P.
5.4 Liens. Parent will not create, incur, or suffer to exist any Lien in
----------
or on the common stock of PPL or Finance Co. or on securities convertible into
the common stock of PPL or Finance Co. (in either case, now or hereafter
acquired) other than Permitted Liens.
12
5.5 Consolidated Indebtedness to Consolidated Capitalization. The ratio
-------------------------------------------------------------
of Consolidated Indebtedness of Parent to Consolidated Capitalization of Parent
shall not exceed 70% at any time.
SECTION 6. Events of Default with Respect to Finance Co.
--------------------------------------------
Each of the following events shall constitute an "Event of Default":
6.1 Representations, Etc. Any certificate furnished by Finance Co.
--------------------
or Parent to the Banks pursuant hereto shall prove to have been incorrect
in any material respect or any of the representations and warranties made
by Finance Co. or Parent herein or in connection herewith shall prove to
have been incorrect in any material respect when made; or
6.2 Principal and Interest. Either Finance Co. or Parent shall fail
----------------------
to make any payment of principal on any Loan to Finance Co. or any other
payment payable by Finance Co. or Parent hereunder when due or, in the case
of interest or fees, within 10 days of the due date thereof; or
6.3 Defaults by Finance Co. or Parent Under Other Agreements.
--------------------------------------------------------
Finance Co. or Parent shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness in a principal
amount in excess of $40,000,000, in the case of Indebtedness of Parent or
Indebtedness of Finance Co. guaranteed by Parent or, in the case of
Indebtedness of Finance Co. not guaranteed by Parent, $10,000,000, if such
failure shall continue beyond any period of grace provided with respect
thereto, or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument (including
any term, covenant, condition or agreement herein) evidencing or governing
any such Indebtedness in a principal amount in excess of, in the case of
Indebtedness of Parent or Indebtedness of Finance Co. guaranteed by Parent,
$40,000,000 or, in the case of Indebtedness of Finance Co. not guaranteed
by Parent, $10,000,000, if such failure shall continue beyond any period of
grace provided with respect thereto if the effect of any failure referred
to in this clause (ii) is to cause, or to permit the holder or holders of
such Indebtedness or a trustee on its or their behalf to cause, such
Indebtedness to become due prior to its stated maturity; or
6.4 Judgments. Finance Co. or Parent shall fail within 60 days to
---------
pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $25,000,000 that is not stayed on appeal or otherwise
being appropriately contested in good faith; or
6.5 Bankruptcy, Etc. Finance Co. or Parent shall commence a
---------------
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy" as now or hereafter in effect or any successor
thereto (the "Bankruptcy Code"); or an involuntary case shall be commenced
against Finance Co. or Parent or such case shall be controverted but shall
not be dismissed within 60 days after the commencement of the case; or
Finance Co. or Parent shall not generally be paying its debts as they
become due; or a custodian (as defined in the Bankruptcy Code) shall be
appointed for, or shall take charge of, all or
13
substantially all of the property of Finance Co. or Parent or Finance Co.
or Parent shall commence any other proceeding under any reorganization,
arrangement, readjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Finance Co. or Parent or there shall be
commenced against Finance Co. or Parent any such proceeding which remains
undismissed for a period of 60 days or Finance Co. or Parent shall be
adjudicated in solvent or bankrupt; or Finance Co. or Parent shall fail to
controvert in a timely manner any such case under the Bankruptcy Code or
any such proceeding, or any order of relief or other order approving any
such case or proceeding shall be entered; or Finance Co. or Parent by any
act or failure to act shall indicate its consent to, approval of or
acquiescence in any such case or proceeding or in the appointment of any
custodian or the like for it or any substantial part of its property or
shall suffer any such appointment to continue undischarged or unstayed for
a period of 60 days; Finance Co. or Parent shall make a general assignment
for the benefit of creditors; or any corporate action shall be taken by
Finance Co. or Parent for the purpose of effecting any of the foregoing; or
6.6 Other Covenants. Finance Co. or Parent shall fail to perform or
---------------
observe any other term, covenant or agreement contained in this Agreement
on its part to be performed or observed and any such failure shall remain
unremedied for a period of 30 days after written notice thereof shall have
been received by Finance Co. or Parent, as the case may be, from the Agent
or the Required Banks.
If any Event of Default as specified in this (S) 6 shall then be continuing,
then either or both of the following actions may be taken: (i) the Agent, at
the direction of the Required Banks, shall by written notice to Parent and
Finance Co., declare the principal of and accrued interest in respect of all of
the outstanding Loans to be, whereupon the same and all other amounts due
hereunder shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
Parent and Finance Co., anything contained herein to the contrary
notwithstanding, and (ii) the Agent, at the direction of the Required Banks,
shall, by written notice to Parent and Finance Co., declare the Total Commitment
terminated, whereupon the Commitment of each Bank and the obligation of each
Bank to make its Loans hereunder shall terminate immediately and any accrued
Commitment Fee owed shall forthwith become due and payable without any other
notice of any kind; provided that if an Event of Default described in (S) 6.5
--------
shall occur with respect to Finance Co., the results which would otherwise occur
only upon the giving of written notice by the Agent to Finance Co. as specified
in clauses (i) and (ii) above shall occur automatically without the giving of
any such notice and without any instruction by the Required Banks to give such
notice.
SECTION 7. Representations and Warranties of Finance Co. and Parent.
--------------------------------------------------------------------
In order to induce the Banks to enter into this Agreement and to make
the Loans to Finance Co. as provided for herein, each of Finance Co. and Parent
makes the following representations and warranties to the Banks:
7.1 Corporate Status. Parent is duly incorporated, validly existing
----------------
and in good standing under the laws of the Commonwealth of Pennsylvania,
and has the corporate power to make and perform this Agreement, and Finance
Co. is duly incorporated,
14
validly existing and in good standing under the laws of the State of
Delaware, and has the corporate power to make and perform this Agreement
and to borrow hereunder.
7.2 Authority; No Conflict. The making and performance by Parent
----------------------
and Finance Co. of this Agreement have been duly authorized by all
necessary corporate action and do not and will not violate any provision of
law or regulation, or any decree, order, writ or judgment, or any provision
of its charter or by-laws, or result in the breach of or constitute a
default under any indenture or other agreement or instrument to which
Parent or Finance Co., as the case may be, is a party.
7.3 Legality, Etc. This Agreement constitutes the legal, valid and
-------------
binding obligation of each of Parent and Finance Co., enforceable against
Parent or Finance Co., as the case may be, in accordance with its terms
except to the extent limited by bankruptcy, insolvency or reorganization
laws or by other laws relating to or affecting the enforceability of
creditors' rights generally and by general equitable principles which may
limit the right to obtain equitable remedies.
7.4 Financial Statements. The consolidated financial statements of
--------------------
Parent for the year ended as at December 31, 1999, furnished to the Banks,
fairly present Parent's consolidated financial position at December 31,
1999 and the results of its consolidated operations for the year then ended
and were prepared in accordance with GAAP. Since that date there has been
no adverse change in the business, assets, financial condition or
operations of Parent that would materially and adversely affect its ability
to perform any of its obligations hereunder.
7.5 Litigation. Except as disclosed in or contemplated by Parent's
----------
Form 10-K Report to the SEC for the year ended December 31, 1999, or in any
subsequent Form 10-Q Report or otherwise furnished in writing to the Banks,
no litigation, arbitration or administrative proceeding against Parent or
Finance Co. is pending or, to Parent's knowledge, threatened, which, if
determined adversely, would materially and adversely affect the ability of
Parent to perform any of its obligations under this Agreement. There is no
litigation, arbitration or administrative proceeding pending or, to the
knowledge of Parent, threatened which questions the validity of this
Agreement.
7.6 No Violation. No part of the proceeds of the borrowings by
------------
Finance Co. under this Agreement will be used, directly or indirectly by
Finance Co. or any Subsidiary of Parent for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, or for any other purpose which
violates, or which conflicts with, the provisions of Regulation U or X of
said Board of Governors. Neither Parent nor Finance Co. is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any such "margin
stock."
7.7 ERISA. There have not been any "reportable events," as that
-----
term is defined in Section 4043 of the Employee Retirement Income Security
Act of 1974, as amended, which would result in a material liability to
Parent.
15
7.8 Consents. No authorization, consent or approval from
--------
governmental bodies or regulatory authorities is required for the making
and performance by Parent or Finance Co. of this Agreement, except such
authorizations, consents and approvals as have been obtained prior to the
making of any Loans and are in full force and effect at the time of the
making of each Loan.
7.9 Investment Company Act. Neither Parent nor Finance Co. is an
----------------------
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended, in order not to be subject to the
prohibitions of Section 7 of such Act.
7.10 Public Utility Holding Company Act. Parent is a "holding
----------------------------------
company" within the meaning of the Public Utility Holding Company Act of
1935, as amended, but is exempt from such Act (except for the provisions of
Section 9(a)(2) thereof) by virtue of an order of the SEC pursuant to
Section 3(a)(1) thereof. Finance Co. is not a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
7.11 Tax Returns. Parent and Finance Co. have filed or caused to be
-----------
filed all Federal, state, local and foreign tax returns or materials
required to have been filed by it and has paid or caused to be paid all
taxes due and payable by it and all assessments received by it, except
taxes that are being contested in good faith by appropriate proceedings and
for which Parent shall have set aside on its books appropriate reserves
with respect thereto in accordance with GAAP.
7.12 Compliance with Laws. Each of Parent and Finance Co. is in
--------------------
compliance with all laws, regulations and orders of any governmental
authority except to the extent (A) such compliance is being contested in
good faith by appropriate proceedings or (B) non-compliance would not
reasonably be expected to materially and adversely affect its ability to
perform any of its obligations hereunder.
SECTION 8. Agent
-----------------
8.1 Appointment. The Banks hereby appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
----------------
Inc. as Agent (such term to include Agent acting as Agent) to act as herein
specified. Each Bank hereby irrevocably authorizes, and each assignee of any
Bank shall be deemed irrevocably to authorize, the Agent to take such action on
their behalf under the provisions of this Agreement and any instruments,
documents and agreements referred to herein (such instruments, documents and
agreements being herein referred to as the "Loan Documents") and to exercise
such powers hereunder and thereunder as are specifically delegated to the Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent may perform any of its duties hereunder, or under
the Loan Documents, by or through its agents or employees.
8.2 Nature of Duties. The duties of the Agent shall be mechanical and
---------------------
administrative in nature. The Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Bank. Nothing in this Agreement or any
of the Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations
16
respect of this Agreement or any of the Loan Documents except as expressly set
forth herein. Each Bank shall make its own independent investigation of the
financial condition and affairs of Finance Co. and Parent and each of their
Subsidiaries in connection with the making and the continuance of the Loans
hereunder and shall make its own appraisal of the creditworthiness of Parent and
Finance Co.; and the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. The Agent may execute
any of its duties under this Agreement or any other Loan Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible to any Bank for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by (S) 8.3.
8.3 Rights, Exculpation, Etc. Neither the Agent nor any of its officers,
------------------------------
directors, employees, agents, attorneys-in-fact or affiliates shall be liable to
any Bank for any action taken or omitted by it hereunder or under any of the
Loan Documents, or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The Agent shall not be responsible
to any Bank for any recitals, statements, representations or warranties herein
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the Loan Documents or
the financial condition of Finance Co. or Parent. The Agent shall not be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any of the Loan
Documents or the financial condition of Finance Co. or Parent, or the existence
or possible existence of any Default or Event of Default. The Agent may at any
time request instructions from the Banks with respect to any actions or
approvals which by the terms of this Agreement or any of the Loan Documents the
Agent is permitted or required to take or to grant, and if such instructions are
requested, the Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under this Agreement or any of the Loan Documents until it shall have
received such instructions from the Required Banks or all Banks, as required.
Without limiting the foregoing, no Bank shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder or under any of the Loan Documents in accordance with the
instructions of the Required Banks or all Banks, as required.
8.4 Reliance. The Agent shall be entitled to rely upon any written
-------------
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person, and, with respect to all legal matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or thereunder,
upon advice of counsel selected by it.
8.5 Indemnification. To the extent that the Agent is not reimbursed and
--------------------
indemnified by Parent or Finance Co., the Banks will reimburse and indemnify the
Agent for 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, acting pursuant hereto, in any way relating to or arising out
of this Agreement or any of the Loan Documents or any action taken or omitted by
the Agent under
17
this Agreement or any of the Loan Documents, in proportion to their respective
Commitments hereunder; provided, however, that no Bank 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. The obligations of the Banks under this
(S) 8.5 shall survive the payment in full of outstanding Loans and the
termination of this Agreement.
8.6 The Agent, Individually. With respect to its Commitment hereunder
----------------------------
and the Loans made by it, the Agent shall have and may exercise the same rights
and powers hereunder and is subject to the same obligations and liabilities as
and to the extent set forth herein for any other Bank. The terms "Banks,"
"Required Banks" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Bank or
one of the Required Banks. The Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with
Finance Co. or Parent as if it were not acting pursuant hereto.
8.7 Resignation by the Agent. The Agent may resign from the performance
-----------------------------
of all its functions and duties hereunder at any time by giving 30 Business
Days' prior written notice to the Borrower, Parent and the Banks. Such
resignation shall take effect upon the expiration of such 30 Business Day period
or upon the earlier appointment of a successor. Upon any such resignation, the
Required Banks shall appoint a successor Agent who shall be satisfactory to the
Borrower and Parent and shall be an incorporated bank or trust company. In the
event no such successor shall have been so appointed, then any notification,
demand or other communication required or permitted to be given by the Agent on
behalf of the Banks to the Borrower shall be sufficiently given if given by the
Required Banks, and any notification, demand, other communication, document,
statement, other paper or payment required to be made, given or furnished by
Finance Co. or Parent to the Agent for distribution to the Banks shall be
sufficiently made, given or furnished if made, given or furnished by Finance Co.
or Parent, as applicable, directly to each Bank entitled thereto and, in the
case of payments, in the amount to which each such Bank is entitled from the
Borrower. All powers specifically delegated to the Agent by the terms hereof may
be exercised by the Required Banks.
SECTION 9. Parent Guarantee.
----------------------------
In order to induce the Banks to extend credit hereunder to Finance
Co., Parent hereby irrevocably and unconditionally guarantees, as primary
obligor and not merely as a surety, the Finance Co. Obligations. Parent further
agrees that the due and punctual payment of the Finance Co. Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its Guarantee hereunder
notwithstanding any such extension or renewal of any Finance Co. Obligation.
Parent waives presentment to, demand of payment from and protest to
Finance Co. of any of the Finance Co. Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of Parent hereunder shall not be affected by (a) the failure of any
Bank or the Agent to assert any claim or demand or to enforce any right or
remedy against Finance Co. under the provisions of this Agreement or otherwise,
(b) change or increase in the amount of any of the Finance Co. Obligations,
whether or not consented to by
18
Parent, or (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Agreement or any other agreement.
Parent further agrees that its agreement hereunder constitutes a
promise of payment when due (whether or not any bankruptcy or similar proceeding
shall have stayed the accrual or collection of any of the Finance Co.
Obligations or operated as a discharge thereof) and not merely of collection,
and waives any right to require that any resort be had by any Bank to any
balance of any deposit account or credit on the books of any Bank in favor of
any other person.
The obligations of Parent hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of the
Finance Co. Obligations, any impossibility in the performance of the Finance Co.
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of Parent hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Agent or any Bank to assert any claim or demand
or to enforce any remedy under this Agreement or any other agreement, by any
waiver or modification in respect of any thereof, by any default, failure or
delay, willful or otherwise, in the performance of the Finance Co. Obligations,
or by any other act or omission which may or might in any manner or to any
extent vary the risk of Parent or otherwise operate as a discharge of Parent or
Finance Co. as a matter of law or equity.
Parent further agrees that its obligations hereunder shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Finance Co. Obligation is rescinded or must otherwise
be restored by the Agent or any Bank upon the bankruptcy or reorganization of
Finance Co. or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which the Agent or any Bank may have at law or in equity against Parent by
virtue hereof, upon the failure of Finance Co. to pay any Finance Co. Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, Parent hereby promises to and will,
upon receipt of written demand by the Agent, forthwith pay, or cause to be paid,
in cash the amount of such unpaid Finance Co. Obligation.
Upon payment by Parent of any Finance Co. Obligation, each Bank shall,
in a reasonable manner, assign the amount of such Finance Co. Obligation owed to
it and so paid to Parent, such assignment to be pro tanto to the extent to which
--- -----
the Finance Co. Obligation in question was discharged by Parent, or make such
disposition thereof as Parent shall direct (all without recourse to any Bank and
without any representation or warranty by any Bank).
Upon payment by Parent of any sums as provided above, all rights of
Parent against Finance Co. arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be subordinate and junior in
right of payment to the prior indefeasible payment in full of all the Finance
Co. Obligations owed by Finance Co. to the Banks.
19
SECTION 10. Miscellaneous
-------------
10.1 Definitions. As used herein the following terms shall have the
-----------------
meanings herein specified and shall include in the singular number the plural
and in the plural number the singular:
"Affected Bank" shall have the meaning assigned that term in (S)
-------------
2.5(c).
"Agent" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., and shall
-----
include (i) any successor corporation thereto by merger, consolidation or
otherwise and (ii) any successor to the Agent appointed pursuant to (S) 8.7.
"Agreement" shall mean this Revolving Credit Agreement, as it may
---------
from time to time be amended, supplemented or otherwise modified.
"Applicable Commitment Fee Percentage" shall mean the percentage
------------------------------------
specified as such in the table in the definition of "Applicable Rate" opposite
the highest rating category in which Parent's senior unsecured debt is assigned
a rating by either of ▇▇▇▇▇'▇ or S&P.
"Applicable Eurodollar Margin" shall mean the margin specified as
----------------------------
such in the table in the definition of "Applicable Rate" opposite the highest
rating category in which Parent's senior unsecured debt is assigned ratings by
either of ▇▇▇▇▇'▇ or S&P.
"Applicable Lending Office" shall mean, with respect to each Bank,
-------------------------
(i) such Bank's Base Rate Lending Office in the case of a Base Rate Loan and
(ii) such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate
Loan.
"Applicable Rate" shall mean and include the Applicable Commitment
---------------
Fee Percentage for undrawn Commitments or Applicable Eurodollar Margin for any
Loans and at any time will be determined based on the highest applicable
Category set forth below (the highest category being Category A).
================================================================================
Applicable Commitment Applicable
Criteria Ratings (S&P/▇▇▇▇▇'▇) Fee Percentage Eurodollar Margin
--------------------------------------------------------------------------------
Category A: A- or better/ .080% .400%
A3 or better
--------------------------------------------------------------------------------
Category B: BBB+/Baa1 .100% .450%
--------------------------------------------------------------------------------
Category C: BBB/Baa2 .125% .500%
--------------------------------------------------------------------------------
Category D: BBB-/Baa3 .150% .600%
--------------------------------------------------------------------------------
Category E: BB+ or below/ .200% .750%
Ba1 or below
================================================================================
"Applicable Utilization Fee" shall mean on any day the applicable
--------------------------
percentage specified as such in the table set forth below corresponding to (a)
the percentage of the Total
20
Commitments represented by the aggregate outstanding Loans on such day and (b)
the highest rating category in which Parent's senior unsecured debt is assigned
ratings by either of ▇▇▇▇▇'▇ or S&P:
================================================================================
Usage > 25% and
Ratings 75% of Total Usage > 75% of Total
Criteria (S&P/▇▇▇▇▇'▇) Commitments Commitments
--------------------------------------------------------------------------------
Category A: A- or better/ .100% .200%
A3 or better
--------------------------------------------------------------------------------
Category B: BBB+ / Baa1 .125% .250%
--------------------------------------------------------------------------------
Category C: BBB / Baa2 .150% .300%
--------------------------------------------------------------------------------
Category D: BBB- / Baa3 .250% .500%
================================================================================
"Bank" shall mean each Person listed on Schedule I hereto and any
----
other Person that shall have become a party hereto as a result of an assignment
pursuant to Section 10.6(b)(A) hereto, other than any such Person that ceases to
be a party hereto as a result of an assignment pursuant to Section 10.6(b)(A)
hereto.
"Bankruptcy Code" shall have the meaning assigned that term in (S)
---------------
6.5.
"Base Rate" shall mean, for any day, a rate per annum equal to the
---------
higher of (i) the Prime Rate and (ii) 1/2 of 1% plus the Federal Funds Rate,
each as in effect from time to time.
"Base Rate Lending Office" means, with respect to each Bank, the
------------------------
office of such Bank specified as its "Base Rate Lending Office" on the signature
pages to the Agreement or such other office of such Bank as such Bank may from
time to time specify as such to the Borrower and the Agent.
"Base Rate Loan" shall mean any Loan during any period during which
--------------
such Loan is bearing interest at the rates provided for in (S) 2.1(a).
"Borrower" shall have the meaning assigned that term in the first
--------
paragraph of this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan to the
---------
Borrower from all the Banks on a given date, all of which Eurodollar Loans shall
have the same Interest Period, pursuant to (S) 1.2; provided, however, that
-------- -------
Loans to the Borrower of a different Type extended by one or more Banks pursuant
to (S) 2.5(b) shall be considered a part of the related Borrowing.
21
"Business Day" shall mean (i) for all purposes other than as covered
------------
by clause (ii) below, any day excluding Saturday, Sunday and any day on which
banks in New York City are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar deposits in the London interbank Eurodollar
market.
"Capital Lease Obligations" of any person shall mean obligations of
-------------------------
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Closing Date" shall mean the date of this Agreement.
------------
"Commitment", for each Bank, shall mean the amount specified opposite
----------
its name on Schedule I hereto or in the assignment pursuant to which such Bank
shall have assumed its Commitment, as applicable, such Commitment to be reduced
by the amount of any reduction thereto effected pursuant to (S) 1.8, (S) 6
and/or (S) 10.6(b)(A).
"Commitment Fee" shall have the meaning assigned that term in (S) 1.7.
--------------
"Consolidated Capitalization of Parent" shall mean the sum of (A) the
-------------------------------------
Consolidated Indebtedness of Parent and (B) (i) the consolidated shareowners'
equity (determined in accordance with GAAP) of the common, preference and
preferred stockholders of Parent and (ii) the aggregate amount of Hybrid
Preferred Securities of Parent, except that for purposes of calculating
Consolidated Capitalization of Parent, Consolidated Indebtedness of Parent shall
exclude Non-Recourse Indebtedness of Parent and Consolidated Capitalization of
Parent shall exclude that portion of shareholder equity attributable to assets
securing Non-Recourse Indebtedness of Parent.
"Consolidated Indebtedness of Parent" shall mean the consolidated
-----------------------------------
Indebtedness of Parent (determined in accordance with GAAP), except that for
purposes of this definition (1) Consolidated Indebtedness of Parent shall
exclude Non-Recourse Indebtedness of Parent and (2) Consolidated Indebtedness of
Parent shall exclude any Hybrid Preferred Securities of Parent.
"Default" with respect to the Borrower, shall mean any event, act or
-------
condition which with notice or lapse of time or both would constitute an Event
of Default with respect to the Borrower.
"Eligible Transferee" shall mean and include a commercial bank,
-------------------
financial institution or other "accredited investor" (as defined in SEC
Regulation D).
"Eurodollar Lending Office" shall mean, with respect to each Bank, the
-------------------------
office of such Bank specified as its "Eurodollar Lending Office" on the
signature pages to the Agreement or such other office of such Bank as such Bank
may from time to time specify as such to the Borrower and the Agent.
22
"Eurodollar Loan" shall mean any loan during any period during which
---------------
such Loan is bearing interest at the rates provided for in (S) 2.1(b).
"Event of Default" shall mean each of the Events of Default specified
----------------
in (S) 6.
"Expiry Date" shall mean the earlier of June 21, 2001 and the
-----------
termination in whole of the Total Commitments pursuant to (S) 1.8 or (S) 6.
"Federal Funds Rate" shall mean for any day, a fluctuating interest
------------------
rate 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 the Agent.
"Finance Co." shall have the meaning assigned that term in the first
-----------
paragraph of this Agreement.
"Finance Co. Obligations" shall mean all obligations of Finance Co.
-----------------------
under this Agreement to pay (i) the principal of and interest on the Loans when
and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, and (ii) all other payment obligations of Finance Co.
hereunder.
"GAAP" shall mean United States generally accepted accounting
----
principles applied on a consistent basis.
"Guarantee" of or by any person shall mean any obligation, contingent
---------
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
-------- -------
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hybrid Preferred Securities of Parent" means (1) the preferred
-------------------------------------
securities and subordinated debt described in the Prospectus dated as of April
3, 1997 of PP&L Capital Trust and PPL and the preferred securities and
subordinated debt described in the Prospectus dated as of June 9, 1997 of PP&L
Capital Trust II and PPL (collectively, the "Existing TOPrS") and (2) any
additional preferred securities and subordinated debt (with a maturity of at
least twenty years) similar to the Existing TOPrS and in an aggregate amount not
to exceed $100,000,000, issued by business trusts, limited liability companies,
limited partnerships (or similar entities) (i) all of the common equity, general
partner or similar interests of which are owned (either
23
directly or indirectly through one or more wholly-owned Subsidiaries) at all
times by Parent or PPL, (ii) that have been formed for the purpose of issuing
hybrid preferred securities and (iii) substantially all the assets of which
consist of (A) subordinated debt of Parent or a Subsidiary of Parent, as the
case may be, and (B) payments made from time to time on the subordinated debt.
"Indebtedness" of any person shall mean, without duplication, (a) all
------------
obligations of such person for borrowed money, (b) all obligations of such
person with respect to deposits or advances of any kind, (c) all obligations of
such person evidenced by bonds, debentures, notes or similar instruments, (d)
all obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding any trade accounts payable and accrued
obligations incurred in the ordinary course of business), (f) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such person, whether or not the obligations secured thereby
have been assumed but shall not include any obligations that are without
recourse to such person, (g) all Guarantees by such person of Indebtedness of
others, (h) all Capital Lease Obligations of such person, (i) all obligations of
such person in respect of Interest Rate Protection Agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements (the
amount of any such obligation to be the net amount that would be payable upon
the acceleration, termination or liquidation thereof) and (j) all obligations of
such person as an account party in respect of letters of credit and bankers'
acceptances.
"Interest Period" shall mean (a) as to any Eurodollar Loan, the
---------------
period commencing on the date of such Loan or on the last day of the most recent
Interest Period applicable thereto and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect
in a Notice of Borrowing or Notice of Conversion and (b) as to any Base Rate
Loan, the period commencing on the date of such Loan and ending on the date 90
days thereafter or, if earlier, on the Expiry Date or the date of prepayment of
such Loan. If any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day, provided that if any Interest Period applicable to a Borrowing of
--------
Eurodollar Loans would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day.
"Interest Rate Protection Agreement" shall mean any agreement
----------------------------------
providing for an interest rate swap, cap or collar, or for any other financial
arrangement designed to protect against fluctuations in interest rates.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
----
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vender or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
24
"Loan" shall have the meaning assigned that term in (S) 1.1.
----
"Loan Documents" shall have the meaning assigned that term in (S) 8.1.
--------------
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
-------
thereto.
"Net Cash Proceeds" means, (i) with respect to the incurrence or
-----------------
issuance of any Specified Debt by the Parent, the Borrower or PPL Energy Supply
or (ii) with respect to the issuance of any Specified Equity by the Parent or
the Borrower, the aggregate amount of cash received by or on behalf of such
respective entities in connection with such transaction, after deducting
therefrom only (without duplication) (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees, finder's fees and
other similar fees and commissions and (b) the amount of taxes payable in
connection with or as a result of such transaction, in each case to the extent,
but only to the extent, that the amounts so deducted are, at the time of receipt
of such cash, actually paid to a Person that is not an affiliate of such Person
and are properly attributable to such transaction provided that the term "Net
--------
Cash Proceeds" shall not include (i) the first $50,000,000 in the aggregate of
cash received with respect to incurrences or issuances of Specified Debt and
(ii) the first $50,000,000 in the aggregate of cash received with respect to
issuances of Specified Equity.
"Non-Recourse Indebtedness of Parent" shall mean (a) indebtedness that
-----------------------------------
is nonrecourse to Parent, the Borrower or any of PPL's Subsidiaries and (b) any
transition bonds issued by PP&L Transition Bond Company LLC, a subsidiary of
PPL, or any similar special purpose company organized for the purpose of issuing
bonds payable from revenues associated with intangible transition property
created under the Pennsylvania Electricity Generation Customer Choice and
Competition Act or other assets of PP&L Transition Bond Company LLC or any such
other special purpose company, provided that (i) such bonds are nonrecourse to
--------
PPL or any of its subsidiaries (other than PP&L Transition Bond Company LLC or
any such other special purpose company) and (ii) the aggregate amount of such
transition bonds shall not exceed $2,850,000,000.
"Notice of Borrowing" shall have the meaning assigned that term in (S)
-------------------
1.2.
"Notice of Conversion" shall have the meaning assigned that term in
--------------------
(S) 2.4(a).
"Parent" shall have the meaning assigned that term in the first
------
paragraph of this Agreement.
"Payment Office" shall mean the office of the Agent located at 1633
--------------
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the Agent may
hereafter designate in writing as such to the other parties hereto.
"Permitted Liens" shall mean (a) Liens for taxes, assessments or
---------------
governmental charges or levies to the extent not past due, or which are being
contested in good faith in appropriate proceedings for which Parent has provided
appropriate reserves for the payment thereof in accordance with GAAP; (b)
pledges or deposits in the ordinary course of business to secure obligations
under worker's compensation laws or similar legislation; (c) other pledges or
deposits in the ordinary course of business (other than for borrowed monies)
that, in the
25
aggregate, are not material to Parent; (d) Liens imposed by law such as
materialmen's, mechanics', carriers', workers' and repairmen's Liens and other
similar Liens arising in the ordinary course of business for sums not yet due or
currently being contested in good faith by appropriate proceedings; (e)
attachment, judgment or other similar Liens arising in connection with court
proceedings, provided that such Liens, in the aggregate, shall not exceed
$50,000,000 at any one time outstanding, and (f) other Liens not otherwise
referred to in the foregoing clauses (a) through (e) above, provided that such
--------
other Liens do not secure at any time obligations in an aggregate amount in
excess of $100,000,000 at any time outstanding.
"Persons" shall mean and include any individual, firm, corporation,
-------
association, trust or other enterprise or any governmental or political
subdivision or agency, department or instrument thereof.
"PPL" shall mean PPL Electric Utilities Corporation, a Pennsylvania
---
corporation.
"PPL Energy Supply" shall mean PPL Energy Supply LLC, a Delaware
-----------------
limited liability company, or a substitute entity established for the purposes
of holding all the unregulated businesses of the Parent and providing financing
therefor.
"Prime Rate" shall mean the rate which Citibank, N.A. announces from
----------
time to time as its prime lending rate, such Prime Rate to change when and as
such prime lending rate changes. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. Citibank, N.A. may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Quoted Rate" shall mean, with respect to any Eurodollar Loan for any
-----------
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 A.M.
(London time) 2 Business Days prior to the commencement of such Interest Period,
as the rate for dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then the "Quoted Rate" with respect to such Eurodollar Loan for such
-----------
Interest Period shall be the rate at which dollar deposits of $5,000,000 and for
a maturity comparable to such Interest Period are offered by the principal
London office of the Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"Register" shall have the meaning provided in 1.4(b).
--------
"Regulation D" shall mean Regulation D of the Board of Governors of
------------
the Federal Reserve System as from time to time in effect or any successor to
all or a portion thereof establishing reserve requirements.
"Required Banks" shall mean Banks having Loans the outstanding
--------------
principal amount of which aggregate (or, if no Loans are outstanding, Banks with
Commitments
26
aggregating) at least the majority of the aggregate outstanding principal amount
of all Loans (or of the Total Commitment).
"SEC" shall have the meaning assigned that term in (S) 5.1(c).
---
"SEC Regulation D" shall mean Regulation D as promulgated under the
----------------
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"Specified Debt" shall mean, with respect to the Parent, the Borrower
--------------
or PPL Energy Supply, any Indebtedness of the Parent, the Borrower or PPL Energy
Supply, of the character described in clauses (a) or (c) of the definition
thereof, but in each case excluding (i) commercial paper issuances and (ii) any
such Indebtedness issued to or held by any affiliate of the Parent, the Borrower
or PPL Energy Supply.
"Specified Equity" shall mean, with respect to the Parent or the
----------------
Borrower, shares of capital stock of the Parent or the Borrower, or securities
convertible into or exchangeable for the shares of capital stock of the Parent
or the Borrower (but in each case excluding shares of common stock issued
pursuant to the Parent's direct stock purchase and dividend reinvestment plan,
structured equity shelf program and the Parent's stock plans for directors,
officers and employees, and any capital stock issued to or held by a Person
which immediately prior to such transaction was an affiliate of the Parent or
the Borrower).
"S&P" shall mean Standard & Poor's Ratings Group or any successor
---
thereto.
"Subsidiary" shall mean any company, partnership, association or other
----------
business entity in which any Person and its Subsidiaries now have or may
hereafter acquire an aggregate of at least 50% of the voting stock or ownership
interests.
"Taxes" shall have the meaning assigned that term in (S) 3.4.
-----
"Total Commitment" shall mean the aggregate of all the Commitments of
----------------
all the Banks.
"Type" shall mean any type of Loan, i.e., whether a Loan is a Base
---- ----
Rate Loan or a Eurodollar Loan.
"Unaffected Bank" shall have the meaning assigned that term in (S)
---------------
2.5(c).
"written" or "in writing" shall mean any form of written communication
------- ----------
or a communication by means of telex, telecopier device, telegraph or cable.
10.2 Accounting Principles. All statements to be prepared and
---------------------------
determinations to be made under this Agreement, including (without limitation)
those pursuant to (S) 5, shall be prepared and made in accordance with generally
accepted accounting principles applied on a basis consistent with the accounting
principles reflected in the audited financial statements of Parent for the
fiscal year ended December 31, 1999, referred to in (S) 7.4, except for changes
in accounting principles consistent with GAAP.
27
10.3 Exercise of Rights. Neither the failure nor delay on the part of
------------------------
any of the Banks to exercise any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further
exercise thereof, or the exercise of any other right, power or privilege. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Banks would otherwise have. No notice to or
demand on Finance Co. or Parent in any case shall entitle Finance Co. or Parent,
as applicable, to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Banks to any other or
further action in any circumstances without notice or demand.
10.4 Amendment and Waiver. Neither this Agreement nor any other Loan
--------------------------
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by Finance Co. and Parent, and the Required Banks, provided that no such
--------
change, waiver, discharge or termination shall, without the consent of each Bank
directly affected thereby, (i) extend the final scheduled maturity of any Loan,
or reduce the rate or extend the time of payment of interest or Commitment Fees
thereon (except in connection with a waiver of the applicability of any post-
default increase in interest rates), or reduce the principal amount thereof
(except to the extent repaid in cash), (ii) amend, modify or waive any provision
of this (S) 10.4, (iii) reduce the percentage specified in the definition of
Required Banks or (iv) consent to the assignment or transfer by Finance Co. or
Parent of any of its rights and obligations under this Agreement or the release
of Parent from its guarantee hereunder; provided further, that no such change,
-------- -------
waiver, discharge or termination shall (x) increase the Commitments of any Bank
over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default shall not constitute an increase of the
Commitment of any Bank) or (y) without the consent of the Agent, amend, modify
or waive any provision of (S) 8 as such Section applies to such Agent or any
other provision as such Section relates to the rights or obligations of such
Agent.
10.5 Expenses; Indemnification. (s) The Borrower agrees to pay all
-------------------------------
reasonable out-of-pocket expenses (i) of the Agent incurred in connection with
the preparation, execution, delivery, enforcement and administration (exclusive
of any internal overhead expenses) of this Agreement and any and all agreements
supplementary hereto and the making and repayment of the Loans and the payment
of interest, including, without limitation, the reasonable fees and expenses of
Shearman & Sterling, counsel for the Agent and (ii) of the Agent and each Bank
incurred in connection with the enforcement of this Agreement, including,
without limitation, the reasonable fees and expenses of any counsel for any of
the Banks with respect to such enforcement; provided that neither the Borrower
--------
nor Parent shall be liable for any fees, charges or disbursements of any counsel
for the Banks or the Agent other than Shearman & Sterling associated with the
preparation, execution and delivery of this Agreement and the closing
documentation contemplated hereby.
(t) The Borrower further agrees to pay, and to save the Agent and
the Banks harmless from all liability for, any stamp or other documentary taxes
which may be payable in connection with the Borrower's execution or delivery of
this Agreement, its borrowings hereunder, or the issuance of any notes or of any
other instruments or documents provided for herein or delivered or to be
delivered by it hereunder or in connection herewith.
28
(u) The Borrower agrees to indemnify the Agent and each Bank and each
of their respective affiliates, directors, officers and employees (each such
person being called an "Indemnitee") against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent or
any Bank is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby, the direct or indirect application or proposed application
of the proceeds of any Loan; provided that such indemnification shall not extend
--------
to disputes solely among the Agent and the Banks; and provided further that such
-------- -------
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(v) All obligations provided for in this (S) 10.5 shall survive any
termination of this Agreement or the resignation, withdrawal or removal of any
Bank.
10.6 Successors and Assigns. (w) This Agreement shall be binding upon and
---------------------------
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that neither Finance Co. nor Parent may
--------
assign or transfer any of its interests hereunder, except to the extent any such
assignment results from the consummation of a transaction permitted under (S)
5.2, without the prior written consent of the Banks and provided further that
-------- -------
the right of each Bank to transfer, assign or grant participations in its rights
and/or obligations hereunder shall be limited as set forth below in this (S)
10.6, provided that nothing in this (S) 10.6 shall prevent or prohibit any Bank
--------
from pledging its rights under this Agreement and/or its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank. In order to facilitate such an assignment to a Federal
Reserve Bank, the Borrower shall, at the request of the assigning Bank, duly
execute and deliver to the assigning Bank a promissory note evidencing its
Commitment or Loans made by the assigning Bank hereunder.
(x) Each Bank shall have the right to transfer, assign or grant
participations in all or any part of its remaining rights and obligations
hereunder on the basis set forth below in this clause (b).
(A) Assignments. Each Bank may assign all or a portion of its rights
-----------
and obligations hereunder pursuant to this clause (b)(A) to (x) one or more
Banks or any affiliates of any Bank or (y) one or more other Eligible
Transferees, provided that (i) any such assignment pursuant to clause (y)
--------
above shall be in the aggregate amount of at least $5,000,000, (ii) after
giving effect to any such assignment pursuant to clause (x) or (y) above,
no Bank shall have a Commitment of less than $5,000,000 unless such Bank's
Commitment is reduced to zero pursuant to such assignment, and (iii) any
assignment pursuant to clause (y) shall require the consent of the
Borrower, which consent shall not be unreasonably withheld. Assignments
will only be effective if the Agent shall have received a written notice
from the assigning Bank and the assignee and payment of a nonrefundable
assignment fee of $2,500 to the Agent by either the assigning Bank or the
assignee. No later than five Business Days after its receipt of any
written notice of assignment, the Agent will record such assignment, and
the resultant effects thereof on
29
the Commitment of the assigning Bank and, in the case of an assignment, the
assignee, in the Register, at which time such assignment shall become
effective, provided that the Agent shall not be required to, and shall not,
--------
so record any assignment in the Register on or after the date on which any
proposed amendment, modification or supplement in respect of this Agreement
has been circulated to the Banks for approval until the earlier of (x) the
effectiveness of such amendment, modification or supplement in accordance
with (S) 10.4 or (y) 30 days following the date on which such proposed
amendment, modification or supplement was circulated to the Banks. Upon the
effectiveness of any assignment pursuant to this clause (b)(A), the
assignee will become a "Bank" for all purposes of this Agreement and the
other Loan Documents with a Commitment as so recorded by the Agent in the
Register, and to the extent of such assignment, the assigning Bank shall be
relieved of its obligations hereunder with respect to the portion of its
Commitment being assigned.
(B) Participations. Each Bank may transfer, grant or assign
--------------
participations in all or any part of such Bank's interests and obligations
hereunder pursuant to this clause (b)(B) to any Eligible Transferee,
provided that (i) such Bank shall remain a "Bank" for all purposes of this
--------
Agreement and the transferee of such participation shall not constitute a
Bank hereunder and (ii) no participant under any such participation shall
have any rights under the Agreement or other Loan Document or any rights to
approve any amendment to or waiver of this Agreement or any other Loan
Document except to the extent such amendment or waiver would (x) extend the
final scheduled maturity of any of the Loans or the Commitment in which
such participant is participating, (y) reduce the interest rate (other than
as a result of waiving the applicability of any post- default increases in
interest rates) or Commitment Fee or other fees applicable to any of the
Loans or Commitments in which such participant is participating or postpone
the payment of any thereof or reduce the principal amount of any Loan
(except to the extent repaid in cash) or (z) release Parent from its
obligations as a guarantor hereunder. In the case of any such
participation, the participant shall not have any rights under this
Agreement or any of the other Loan Documents (the participant's rights
against the granting Bank in respect of such participation to be those set
forth in the agreement with such Bank creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation, provided that such participant shall
--------
be entitled to receive additional amounts under (S)(S) 1.6, 2.5 and 3.4 on
the same basis as if it were a Bank but in no case shall be entitled to any
amount greater than would have been payable had the Bank not sold such
participations.
(y) Each Bank hereby represents, and each Person that becomes a Bank
pursuant to an assignment permitted by the preceding clause (b)(A) will upon its
becoming party to this Agreement represent, that it is an Eligible Transferee
which makes loans in the ordinary course of its business and that it will make
or acquire Loans for its own account in the ordinary course of such business,
provided that, subject to the preceding clauses (a) and (b), the disposition of
--------
any promissory notes or other evidences of or interests in Loans held by such
Bank shall at all times be within its exclusive control.
10.7 Notices, Requests, Demands. All notices, requests, demands or other
-------------------------------
communications to or upon the respective parties hereto shall be deemed to have
been given or
30
made (i) in the case of notice by mail, when actually received, and (ii) in the
case of telecopier notice sent over a telecopier machine owned or operated by a
party hereto, when sent, in each case addressed to the party or parties to which
such notice is given at their respective addresses shown below their signatures
hereto or at such other address as such party may hereafter specify in writing
to the others. No other method of giving notice is hereby precluded.
10.8 Survival of Representations and Warranties. All representations and
------------------------------------------------
warranties contained herein or otherwise made in writing by Finance Co. or
Parent in connection herewith shall survive the execution and delivery of this
Agreement.
10.9 Governing Law. This Agreement and the rights and obligations of the
-------------------
parties under this Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of New York.
10.10 Counterparts. This Agreement may be executed in any number of
------------------
copies, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
Complete counterparts of this Agreement shall be lodged with the Borrower,
Parent and the Agent.
10.11 Terms Generally. All references herein to the "date hereof", the
---------------------
"date of this Agreement", or words of similar import, shall be construed as
referring to December 21, 2000.
10.12 Effectiveness. This Agreement shall become effective on the Closing
-------------------
Date.
10.13 Transfer of Office. (z) Each Bank may transfer and carry its Loans
------------------------
at, to or for the account of any branch office, subsidiary or affiliate of such
Bank; provided that such Bank shall continue to bear all of its obligations
--------
under this Agreement; and provided further that the Borrower shall not be
-------- --------
responsible for costs arising under (S) 1.6, 2.5 or 3.4 resulting from any such
transfer to the extent not otherwise applicable to such Bank prior to such
transfer.
(aa) Upon a Bank becoming aware of any event which will entitle it
to any additional amount pursuant to (S) 2.5(a) or (S) 3.4, such Bank shall take
all reasonable steps (including but not limited to making, maintaining or
funding the affected Loan through another office of such Bank) to avoid or
reduce the additional amount payable by the Borrower; provided that, such steps
--------
will not result in any additional costs, liabilities or expenses (not
reimbursable by the Borrower) to such Bank and are not otherwise inconsistent
with the interests of such Bank determined in good faith.
10.14 Proration of Payments. The Bank agrees among themselves that, with
---------------------------
respect to all amounts received by them which are applicable to the payment of
principal of or interest on the Loans, equitable adjustment will be made so
that, in effect, all such amounts will be shared ratably among the Banks on the
basis of the amounts then owed each of them in respect of such obligation,
whether received by voluntary payment, by realization upon security, by the
exercise of any right of set-off or bankers' lien, by counterclaim or cross
action, under or pursuant to this Agreement or otherwise. Each of the Banks
agrees that if it should receive any payment on its Loans of a sum or sums in
excess of its pro rata portion, then the Bank receiving such excess payment
--- ----
shall purchase for cash from the other Banks an interest in the Loans of such
Banks in such amount as shall result in a ratable participation by each of the
Banks in the aggregate
31
unpaid amount of all outstanding Loans then held by all of the Banks. If all or
any portion of such excess payment is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this (S) 10.14 may
exercise all its rights with respect to such participation as fully as if such
Bank were the direct creditor of the Borrower in the amount of such
participation.
10.15 Jurisdiction; Consent to Service of Process. (bb) Each of Finance
---------------------------------------------------
Co. and Parent hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Agent or any Bank may otherwise have to bring any action or
proceeding relating to this Agreement against any of Finance Co., Parent or
their properties in the courts of any jurisdiction.
(cc) Each of Finance Co. and Parent hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (a) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(dd) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 10.7. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
10.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
--------------------------
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
32
10.17 Headings Descriptive. The headings of the various provisions of
---------------------------
this Agreement are inserted for convenience of reference only and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.
33
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
PPL CAPITAL FUNDING, INC.
By_____________________________
Name:
Title:
PPL CORPORATION, as Guarantor
By_____________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
Individually and as Agent
By_____________________________
Name:
Title:
34
Bank Address
------------
-------------------------------------------------------------------------
Name of Bank and Address Phone Number(s) Fax Number(s)
-------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. (▇▇▇) ▇▇▇-▇▇▇▇ (212) 537-1867
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------------------
SCHEDULE I
BANK COMMITMENT
---- ----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC............ $200,000,000
TOTAL COMMITMENT.......... $200,000,000
36
EXHIBIT C
PARENT COMPLIANCE CERTIFICATE
PPL CORPORATION
_____________
(date)
The undersigned certifies, as of [ ], that the
following information concerning PPL Corporation, a Pennsylvania corporation
("Parent") is true and correct:
A. Consolidated Indebtedness of Parent: __________
B. Consolidated Capitalization of Parent: __________
C. Consolidated Indebtedness of Parent
to Consolidated Capitalization of Parent
(A divided by B): _________/1/
PPL CORPORATION
By____________________________
Name:
Title:
_______________________
/1/ If such number is greater than .70, then a Default exists.
LETTER AMENDMENT NO. 1
Dated as of January 4, 200l
To the Banks and the Agent
referred to below
Ladies and Gentlemen:
We refer to the REVOLVING CREDIT AGREEMENT, dated as of December 21,
2000 (the "Revolving Credit Agreement") entered into by and among PPL CAPITAL
FUNDING, INC., a Delaware corporation ("Finance Co."), as borrower, PPL
CORPORATION, a Pennsylvania corporation (the "Parent"), as guarantor of the
obligations of Finance Co. under the Revolving Credit Agreement, the banks party
thereto from time to time (each a "Bank" and collectively the "Banks") and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC., as administrative agent for the Banks (in
such capacity, the "Agent"). All capitalized terms used herein shall have the
meanings specified therefor in (S)10.1 of the Revolving Credit Agreement unless
otherwise defined herein.
The Borrower has requested that the Banks amend and modify the
Revolving Credit Agreement as hereinafter set forth.
It is hereby agreed by you and us that (S)1.8 of the Revolving Credit
Agreement shall be amended in full to read as follows:
"1.8 Reductions in Total Commitment. (a) The Borrower shall have the
------------------------------
right, upon at least 3 Business Days' prior written notice to the Agent at
the Payment Office (which notice the Agent shall promptly transmit to each
of the Banks), to reduce permanently the Total Commitment hereunder, in an
aggregate amount equal to an integral multiple of $1,000,000 and not less
than $l0,000,000, or to terminate the unutilized portion of the Total
Commitment, provided that (i) any such reduction or termination shall apply
--------
proportionately to the Commitments of the Banks and (ii) no such
termination or reduction shall be made that would reduce the Total
Commitment to an amount less than the aggregate outstanding principal
amount of Loans.
(b) The Total Commitment shall be automatically and permanently
reduced on each date on which prepayment thereof is required to be made to
the extent set forth in (S)(S)3.2(b)(i), (ii) or (iii) in an amount equal
to such required prepayments, provided that any such required reduction to
--------
be applied to any Commitments hereunder shall be applied proportionately to
the Commitments of the Banks.
(c) The Total Commitment shall be automatically and permanently
reduced on each date on which the Borrower shall have voluntarily reduced
or voluntarily terminated commitments under the CSFB Facility, in an
aggregate amount comparable to the amount of such reduction or termination
under the CSFB Facility, provided that any such required reduction or
--------
termination to be applied to any
Commitments hereunder shall be applied proportionately to the Commitments
of the Banks."
It is hereby further agreed by you and us that (S)3.2 of the Revolving
Credit Agreement shall be amended in full to read as follows:
"3.2 Prepayments. (a) Voluntary Prepayments. The Borrower shall have
----------- ---------------------
the right to prepay the Loans in whole or in part, without premium or
penalty, from time to time pursuant to this (S)3.2(a) on the following
terms and conditions: (i) the Borrower shall give the Agent at the Payment
Office at least 3 Business Days' prior written notice or telephonic notice
(confirmed in writing) of its intent to prepay such Loans, which notice
shall specify the amount of such prepayment and the specific Borrowing to
be prepaid, which notice the Agent shall promptly transmit to each of the
Banks; (ii) each prepayment, to the extent applied to any Loans outstanding
hereunder, shall be in an integral multiple of $1,000,000 and not less than
$10,000,000 (or, if less, the amount then remaining outstanding in respect
of the Borrowing being prepaid); (iii) each prepayment in respect of Loans
made pursuant to one Borrowing shall be applied pro rata among the Banks on
--- ----
the basis of such Loans, except as otherwise provided in (S)2.5; and (iv)
at the time of any prepayment, the Borrower shall pay all interest accrued
on the principal amount of said prepayment and, if the Borrower prepays any
Eurodollar Loan on any day other than the last day of an Interest Period
applicable thereto, the Borrower shall compensate the Banks for losses
sustained as a result of such prepayment to the extent and as provided in
(S)1.6.
(b) Mandatory Prepayments. (i) The Borrower shall, within 10 business
---------------------
days of receipt of Net Cash Proceeds (A) by the Parent or the Borrower from
the issuance by the Parent or the Borrower of Specified Equity or (B) by
the Parent, the Borrower or PPL Energy Supply from the issuance by the
Parent, the Borrower or PPL Energy Supply of Specified Debt, prepay an
aggregate outstanding principal amount of the Loans in an amount equal to
the amount of such Net Cash Proceeds (or, if the CSFB Facility is
outstanding, prepay Loans hereunder and loans thereunder, on a ratable
basis, based on the total outstanding principal amounts thereof). The
provisions set forth in (S)(S)3.2(a)(iii) and (iv) shall be applicable to
the prepayments made under this (S)(S)3.2(b).
(ii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Loans comprising part of the same
Borrowings, in an amount equal to the amount by which the aggregate
principal amount of the outstanding Loans exceeds the Total Commitment on
such Business Day.
(iii) The Borrower shall, on each date on which the Borrower
shall have voluntarily prepaid loans outstanding under the CSFB Facility,
prepay an aggregate principal amount of the Loans hereunder comprising part
of the same Borrowings, in an aggregate amount comparable to the amount of
such prepayments under the CSFB Facility."
It is hereby further agreed by you and us that (S)5.3 of the Revolving
Credit Agreement shall be amended in full to read as follows:
2
"5.3 Ratings. Finance Co. and Parent will each notify the Banks as
-------
soon as practicable upon obtaining knowledge of any change in, or cessation
of, ratings of Parent's senior unsecured debt by ▇▇▇▇▇'▇ or S&P."
It is hereby further agreed by you and us that the Revolving Credit
Agreement shall be amended by adding a new (S)5.6 to read as follows:
"5.6 CSFB Facility. Borrower shall not cause any term of the CSFB
-------------
Facility to be amended, waived or otherwise modified at its request or with
its consent unless (i) it gives the Agent prior notice thereof, and (ii)
Borrower and Parent offer to make or approve substantially identical
amendments, waivers or modifications to this Agreement within three
Business Days of any request by the Agent to do so (it being acknowledged
that any collateral delivery may be made on an equal and ratable basis
between the CSFB Facility and this Agreement)."
It is hereby further agreed by you and us that (S)6.6 of the Revolving
Credit Agreement shall be amended in full to read as follows:
"6.6 Other Covenants. Finance Co. or Parent shall fail to perform or
---------------
observe any other term, covenant or agreement contained in this Agreement
on its part to be performed or observed and any such failure shall remain
unremedied for a period of 30 days (or, in the case of such a failure with
respect to (S)5.6, 10 days) after written notice thereof shall have been
received by Finance Co. or Parent, as the case may be, from the Agent or
the Required Banks."
It is hereby further agreed by you and us that (S)10.1 of the
Revolving Credit Agreement shall be amended by adding the following definition
in the appropriate alphabetical order:
"CFSB Facility" shall mean, with respect to Borrower, any
-------------
Indebtedness, up to $200,000,000.00, incurred by the Borrower pursuant to
that certain credit agreement to be entered into by and among the Borrower,
the Parent, as guarantor and Credit Suisse First Boston, as administrative
agent for the banks party thereto."
It is hereby further agreed by you and us that the definitions of
"Expiry Date," "Specified Debt" and "Specified Equity" in (S)10.1 of the
Revolving Credit Agreement shall be amended in full respectively to read as
follows:
"Expiry Date" shall mean the earlier of April 4, 2001 and the
-----------
termination in whole of the Total Commitment pursuant to (S)1.8 or (S)6.
"Specified Debt" shall mean, with respect to the Parent, the Borrower
--------------
or PPL Energy Supply, any Indebtedness of the Parent, the Borrower or PPL
Energy Supply, of the character described in clauses (a) or (c) of the
definition thereof, but in each case excluding (i) commercial paper
issuances, (ii) any such Indebtedness issued to or held by any affiliate of
the Parent, the Borrower or PPL Energy Supply, and (iii) any such
Indebtedness incurred by the Borrower pursuant to the CSFB Facility.
"Specified Equity" shall mean, (a) with respect to the Parent or the
----------------
Borrower, shares of capital stock of the Parent or the Borrower, or
securities convertible into or exchangeable for the shares of capital stock
of the Parent or the Borrower (but in each
3
case excluding shares of common stock issued pursuant to the Parent's
direct stock purchase and dividend reinvestment plan, structured equity
shelf program and the Parent's stock plans for directors, officers and
employees, and any capital stock issued to or held by a Person which
immediately prior to such transaction was an affiliate of the Parent or the
Borrower), and (b) with respect to the Parent, issuance of equity with
proceeds exceeding $50,000,000 by a subsidiary, which is recorded on the
books of the Parent and its consolidated subsidiaries as a minority
interest."
This Letter Amendment No. 1 shall become effective as of the date
first above written when, and only when, (i) the Agent shall have received
counterparts of this Letter Amendment No. 1 executed by the Borrower, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Senior Funding, Inc., individually and as Agent, and the consent
attached hereto executed by the Guarantor; (ii) the Agent shall have received
from the Borrower a true and correct copy of the CSFB Facility in effect as of
the closing date thereof, and the Agent shall be satisfied with the final terms
and conditions of the CSFB Facility; and (iii) the Borrower shall have paid all
accrued fees and expenses of the Agent (including fees and expenses of counsel
to the Agent). ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. hereby represents, as of the
date hereof, that it holds 100% of the Loans and Commitments outstanding under
the Revolving Credit Agreement.
On and after the effectiveness of this Letter Amendment No. 1, each
reference in the Revolving Credit Agreement and each other Loan Document to
"this Agreement", "hereunder", "thereunder", "hereof', "thereof or words of like
import referring to the Revolving Credit Agreement shall mean and be a reference
to the Revolving Credit Agreement, as amended by this Letter Amendment No. 1.
The Revolving Credit Agreement and each other Loan Document is and
shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed. The execution, delivery and effectiveness of this Letter
Amendment No. 1 shall not, except as expressly provided herein, operate as a
waiver of any right, power ,or remedy of any Bank or the Agent under the
Revolving Credit Agreement or any other Loan Document, nor constitute a waiver
of any provision of the Revolving Credit Agreement or any other Loan Document,
and all of such rights, powers, remedies, or provisions are hereby expressly
reserved.
This Letter Amendment No. 1 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. Delivery of an executed
counterpart of a signature page to this Letter Amendment No. 1 by telecopier
shall be effective as delivery of a manually executed counterpart of this Letter
Amendment No. 1.
This Letter Amendment No. 1 shall be governed by, and construed in
accordance with, the laws of the State of New York.
4
Very truly yours,
PPL CAPITAL FUNDING, INC.
By ______________________________
Name:
Title:
Agreed as of the date first above written:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
Individually and as Agent
By ______________________
Name:
Title:
CONSENT
Dated as of January 4, 200l
The undersigned in its capacity as Guarantor under (S)9 of the
Revolving Credit Agreement dated as of December 21, 2000 (the "Parent
Guarantee") in favor of the Banks (as defined in the Revolving Credit Agreement
referred to in the foregoing Letter Amendment No. l), hereby consents to such
Letter Amendment No. 1 and hereby confirms and agrees that notwithstanding the
effectiveness of such Letter Amendment No. 1, the Parent Guarantee is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects.
PPL CORPORATION, as Guarantor
By __________________________
Name:
Title: