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CREDIT AGREEMENT
DATED AS OF NOVEMBER 28, 2000
AMONG
MYR GROUP, INC.,
THE LENDERS,
BANK ONE, NA,
AS ADMINISTRATIVE AGENT AND LC ISSUER
AND
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
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Table of Contents
Page
ARTICLE I DEFINITIONS 2
ARTICLE II THE CREDITS 14
2.1 Commitment 14
2.2 Required Payments; Termination 14
2.3 Ratable Loans 14
2.4 Types of Loans 14
2.5 Commitment Fee; Reductions in Aggregate Commitment 14
2.6 Minimum Amount of Each Advance 15
2.7 Optional Principal Payments 15
2.8 Method of Selecting Types and Interest Periods
for New Advances 15
2.9 Conversion and Continuation of Outstanding Advances 15
2.10 Changes in Interest Rate, etc. 16
2.11 Rates Applicable After Default 16
2.12 Method of Payment 17
2.13 Noteless Agreement; Evidence of Indebtedness 17
2.14 Telephonic Notices 18
2.15 Interest Payment Dates; Interest and Fee Basis 18
2.16 Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions 19
2.17 Lending Installations 19
2.18 Non-Receipt of Funds by the Agent 19
2.19 Facility LCs 20
2.19.1 Issuance 20
2.19.2 Participations 20
2.19.3 Notice 20
2.19.4 Fees 21
2.19.5 Administration; Reimbursement by Lenders 21
2.19.6 Reimbursement by Borrower 21
2.19.7 Obligations Absolute 22
2.19.8 Actions of LC Issuer 23
2.19.9 Indemnification 23
2.19.10 Lenders' Indemnification 24
2.19.11 Facility LC Collateral Account 24
2.19.12 Rights as a Lender 25
ARTICLE III YIELD PROTECTION; TAXES 25
3.1 Yield Protection 25
3.2 Changes in Capital Adequacy Regulations 26
3.3 Availability of Types of Advances 26
3.4 Funding Indemnification 27
3.5 Taxes 27
3.6 Lender Statements; Survival of Indemnity 29
ARTICLE IV CONDITIONS PRECEDENT 29
4.1 Initial Credit Extension 29
4.2 Each Advance 31
i
ARTICLE V REPRESENTATIONS AND WARRANTIES 31
5.1 Existence and Standing 31
5.2 Authorization and Validity 31
5.3 No Conflict; Government Consent 31
5.4 Financial Statements 32
5.5 Material Adverse Change 32
5.6 Taxes 32
5.7 Litigation and Contingent Obligations 33
5.8 Subsidiaries 33
5.9 ERISA 33
5.10 Accuracy of Information 33
5.11 Regulation U 33
5.12 Material Agreements 33
5.13 Compliance With Laws 34
5.14 Ownership of Properties 34
5.15 Plan Assets; Prohibited Transactions 34
5.16 Environmental Matters 34
5.17 Investment Company Act 34
5.18 Insurance 34
ARTICLE VI COVENANTS 35
6.1 Financial Reporting 35
6.2 Use of Proceeds 36
6.3 Notice of Default 36
6.4 Conduct of Business 36
6.5 Taxes 37
6.6 Insurance 37
6.7 Compliance with Laws 37
6.8 Maintenance of Properties 37
6.9 Inspection 37
6.10 Indebtedness 37
6.11 Merger 38
6.12 Sale of Assets 38
6.13 Investments and Acquisitions 38
6.14 Liens 39
6.15 Affiliates 40
6.16 Financial Covenants 40
6.16.1 Consolidated Tangible Net Worth to Consolidated
Indebtedness Ratio 40
6.16.2 Minimum Net Worth 40
6.17 Subsidiary Dividends 40
ARTICLE VII DEFAULTS 40
7.1 Any representation or warranty 40
7.2 Nonpayment of principal 40
7.3 The breach by the Borrower 41
7.4 The breach by the Borrower or GPU 41
7.5 Failure of the Borrower 41
7.6 The Borrower, any of its Subsidiaries 41
7.7 Without the application 42
7.8 The Borrower, any of its Subsidiaries 42
7.9 The Unfunded Liabilities 42
7.10 The Borrower or any other member 42
7.11 The Borrower or any other member 42
7.12 Any Change in Control shall occur 42
7.13 Nonpayment by the Borrower 42
7.14 After its delivery 42
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ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 43
8.1 Acceleration; Facility LC Collateral Account 43
8.2 Amendments 44
8.3 Preservation of Rights 45
ARTICLE IX GENERAL PROVISIONS 45
9.1 Survival of Representations 45
9.2 Governmental Regulation 45
9.3 Headings 45
9.4 Entire Agreement 45
9.5 Several Obligations; Benefits of this Agreement 45
9.6 Expenses; Indemnification 46
9.7 Numbers of Documents 46
9.8 Accounting 46
9.9 Severability of Provisions 47
9.10 Nonliability of Lenders 47
9.11 Confidentiality 47
9.12 Nonreliance 47
9.13 Disclosure 48
ARTICLE X THE AGENT 48
10.1 Appointment; Nature of Relationship 48
10.2 Powers 48
10.3 General Immunity 48
10.4 No Responsibility for Loans, Recitals, etc. 48
10.5 Action on Instructions of Lenders 49
10.6 Employment of Agents and Counsel 49
10.7 Reliance on Documents; Counsel 49
10.8 Agent's Reimbursement and Indemnification 50
10.9 Notice of Default 50
10.10 Rights as a Lender 50
10.11 Lender Credit Decision 51
10.12 Successor Agent 51
10.13 Agent and Arranger Fees 51
10.14 Delegation to Affiliates 52
10.15 Execution of Collateral Documents 52
ARTICLE XI SETOFF; RATABLE PAYMENTS 52
11.1 Setoff 52
11.2 Ratable Payments 52
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 53
12.1 Successors and Assigns 53
12.1.1 Permitted Participants; Effect 53
12.1.2 Voting Rights 54
12.1.3 Benefit of Setoff 54
12.2 Assignments 54
12.2.1 Permitted Assignments 54
12.2.2 Effect; Effective Date 55
12.3 Dissemination of Information 55
12.4 Tax Treatment 55
iii
ARTICLE XIII NOTICES 55
13.1 Notices 55
13.2 Change of Address 56
ARTICLE XIV COUNTERPARTS 56
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL 56
15.1 CHOICE OF LAW 56
15.2 CONSENT TO JURISDICTION 56
15.3 WAIVER OF JURY TRIAL 57
iv
PRICING SCHEDULE
EXHIBIT A. FORM OF BORROWER'S COUNSEL OPINION
EXHIBIT B. COMPLIANCE CERTIFICATE
EXHIBIT C. ASSIGNMENT AGREEMENT
EXHIBIT D. LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
EXHIBIT E. NOTE
EXHIBIT F. FORM OF OPINION OF GPU COUNSEL
EXHIBIT G. FORM OF SUPPORT AGREEMENT
EXHIBIT H. FORM OF GPU GUARANTY
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS
SCHEDULE 2. INDEBTEDNESS AND LIENS
v
CREDIT AGREEMENT
This Agreement, dated as of November 28, 2000, is among MYR Group,
Inc., a Delaware corporation, the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Administrative
Agent and LC Issuer. The parties hereto agree as follows:
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement; and
WHEREAS, GPU, Inc. has agreed to deliver a support agreement in
respect of this facility and may, at its option, substitute a guaranty for
such support agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Administrative Agent" means the Agent.
"Advance" means a borrowing hereunder, (i) made by the Lenders on
the same Borrowing Date, or (ii) converted or continued by the Lenders on the
same date of conversion or continuation, consisting, in either case, of the
aggregate amount of the several Loans of the same Type and, in the case of
Eurodollar Loans, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the
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controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative
of the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in a manner
consistent with that used in preparing the financial statements referred to in
Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per
annum at which Commitment Fees are accruing on the unused portion of the
Aggregate Commitment at such time as set forth in the Pricing Schedule plus,
after the Non Guaranty Date, 0.025% per annum.
"Applicable Margin" means, with respect to Advances of any Type at
any time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule plus,
after the Non Guaranty Date, 0.10% per annum.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole
Book Runner.
"Article" means an article of this Agreement unless another document
is specifically referenced.
"Authorized Officer" means any of the President, Senior Vice
President or Controller of the Borrower, acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
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"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means MYR Group, Inc., a Delaware corporation, and its
successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday)
on which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of,
or fully guaranteed by, the United States of America, (ii) commercial paper
rated A-1 or better by S&P or P-1 or better by ▇▇▇▇▇'▇, (iii) demand deposit
accounts maintained in the ordinary course of business, and (iv) certificates of
deposit issued by and time deposits with commercial banks (whether domestic or
foreign) having capital and surplus in excess of $100,000,000; provided in each
case that the same provides for payment of both principal and interest (and not
principal alone or interest alone) and is not subject to any contingency
regarding the payment of principal or interest.
"Change in Control" means (i) the acquisition, directly or
indirectly, by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of
the outstanding shares of voting stock of GPU; provided, that the neither
ownership of voting stock of GPU by First Energy Corp. nor the merger of GPU
with and into First Energy Corp. shall constitute or give rise to a Change of
Control; or (ii) GPU or
4
First Energy Corp. shall cease to own, free and clear of all Liens or other
encumbrances, all the outstanding shares of voting stock of the Borrower on a
fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender
to make Loans, and participate in Facility LCs issued upon the application of,
the Borrower in an aggregate amount not exceeding the amount set forth opposite
its signature below, as it may be modified as a result of any assignment that
has become effective pursuant to Section 12.3.2 or as otherwise modified from
time to time pursuant to the terms hereof.
"Consolidated Indebtedness" means at any time the Indebtedness of
the Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.
"Consolidated Tangible Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its Subsidiaries minus intangible
assets, calculated on a consolidated basis as of such time.
"Contingent Obligation" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Credit Extension" means the making of a Loan or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or
the issuance date for a Facility LC.
"Default" means an event described in Article VII.
"Environmental Laws" means any and all federal,
5
state, local and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans, injunctions, permits,
concessions, grants, franchises, licenses, agreements and other governmental
restrictions relating to (i) the protection of the environment, (ii) the effect
of the environment on human health, (iii) emissions, discharges or releases of
pollutants, contaminants, hazardous substances or wastes into surface water,
ground water or land, or (iv) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance
for the relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, and having a maturity equal to such Interest
Period, provided that, (i) if Reuters Screen FRBD is not available to the Agent
for any reason, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any other generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Agent, the applicable
Eurodollar Base Rate for the relevant Interest Period shall instead be the rate
determined by the Agent to be the rate at which Bank One or one of its Affiliate
banks offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, in the approximate amount
of Bank One's relevant Eurodollar Loan and having a maturity equal to such
Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest Period,
plus (ii) the Applicable Margin.
6
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Facility LC" is defined in Section 2.19.1.
"Facility LC Application" is defined in Section 2.19.3.
"Facility LC Collateral Account" is defined in Section 2.19.11.
"Facility Termination Date" means November 1, 2003 or any earlier
date on which the Aggregate Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fixed Rate" means, at any time when there is only one Lender party
to this Agreement, a rate per annum mutually agreed to between such Lender and
the Borrower for an applicable Interest Period.
"Fixed Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Fixed Rate.
"Floating Rate" means, for any day, a rate per annum equal to (i)
the Alternate Base Rate for such day minus (ii) 2.00% per annum plus (iii) 0.10%
per annum after the Non Guaranty Date, in each case changing when and as the
Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
7
"GPU" means GPU, Inc., a Pennsylvania corporation.
"GPU Guaranty" means a guaranty executed by GPU in substantially the
form attached as Exhibit H .
"GPU Subsidiary" means a Subsidiary of GPU, other than the Borrower
or a Subsidiary of the Borrower.
"Guaranty Date" means the date, prior to April 1, 2001, on which the
GPU Guaranty is delivered, together with such certified charter documentation,
certified resolutions, incumbency certificates and opinions of counsel as the
Agent may require.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) obligations in respect of letters of credit or similar
instruments which are issued upon the application of such Person or upon which
such Person is an account party or for which such Person is any way liable,
(viii) the present value of obligations with respect to Synthetic Leases and
accounts receivable sales and (ix) Contingent Obligations with respect to
Indebtedness of other Persons.
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day selected by
the Borrower pursuant to this Agreement. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If such an Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day. "Interest Period" means, with respect to
a Fixed Rate Loan, such period up to 30 days as may be mutually agreed upon by
the Borrower and the then Lender. If such an Interest Period would otherwise end
on a day which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
8
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LC Fee" is defined in Section 2.19.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank
One designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication,
of (i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.19.5.
"Lenders" means the lending institutions listed on the signature
pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.17.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Facility LC Applications,
the Support Agreement, the GPU Guaranty (if delivered) and any Notes issued
pursuant to Section 2.13.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects, at any time, of GPU and its Subsidiaries taken as a whole or,
prior to the Guaranty Date, of the Borrower and its Subsidiaries taken as a
whole, (ii) the ability of the GPU or, prior to the Guaranty
9
Date, the Borrower to perform its obligations under the Loan Documents to which
it is a party, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent, the LC Issuer or the Lenders
thereunder.
"Material Subsidiary" means, prior to the Guaranty Date, any
Subsidiary of the Borrower and, after the Guaranty Date, any Subsidiary of the
Borrower with assets equal to at least 10% of the total assets of the Borrower
and its Subsidiaries on a consolidated basis or revenues equal to at least 10%
of the total revenues of the Borrower and its Subsidiaries on a consolidated
basis.
"Material GPU Subsidiary" means Metropolitan Edison Company, Jersey
Central Power & Light Company and Pennsylvania Electric Company.
"Material Indebtedness" is defined in Section 7.5.
"Modify" and "Modification" are defined in Section 2.19.1.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the Borrower
or any member of the Controlled Group is a party to which more than one employer
is obligated to make contributions.
"Non Guaranty Date" means April 1, 2001, unless prior to such date
the GPU Guaranty is delivered, together with such certified charter
documentation, certified resolutions, incumbency certificates and opinions of
counsel as the Agent may require. If the foregoing conditions shall occur prior
to April 1, 2001, the Non Guaranty Date shall not occur.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.13.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent or any indemnified party
arising under the Loan Documents.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time,
the sum of (i) the aggregate principal amount of its Loans outstanding at such
time, plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at
such time.
"Participants" is defined in Section 12.2.1.
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"Payment Date" means the last day of each March, June, September and
December commencing the first such date after the date hereof.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code as to which the Borrower or any member of the Controlled Group may
have any liability.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Bank One or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.
"Pro Rata Share" means, with respect to a Lender, a portion equal to
a fraction the numerator of which is such Lender's Commitment and the
denominator of which is the Aggregate Commitment.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by the
Borrower or any Subsidiary which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
11
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC has by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event, provided, however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least
66_% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66_% of the aggregate
unpaid principal amount of the Aggregate Outstanding Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered Section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or
any member of the Controlled Group for employees of the Borrower or any member
of the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, limited liability company,
12
association, joint venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above. "Substantial Portion" mean, with respect to the Property of GPU and the
GPU Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of GPU and the GPU Subsidiaries as would be shown in the
consolidated financial statements of the GPU and the GPU Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of GPU and the GPU
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Support Agreement" means an agreement of GPU in substantially the
form of Exhibit G.
"Synthetic Lease" means a lease which is an operating lease for the
purpose of generally accepted account principles and not a true lease for tax
purposes.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Loan, its nature as a Floating
Rate Loan, a Eurodollar or a Fixed Rate Loan.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under all Single
Employer Plans exceeds the fair market value of all such Plan assets allocable
to such benefits, all determined as of the then most recent valuation date for
such Plans using PBGC actuarial assumptions for single employer plan
terminations.
"Unmatured Default" means an event which but for the lapse of time
or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary
all of the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
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The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and prior to
the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (i) make Loans to the Borrower and
(ii) participate in Facility LCs issued upon the request of the Borrower,
provided that, after giving effect to the making of each such Loan and the
issuance of each such Facility LC, such Lender's Outstanding Credit Exposure
shall not exceed its Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to extend credit hereunder shall expire on the
Facility Termination Date. The LC Issuer will issue Facility LCs hereunder on
the terms and conditions set forth in Section 2.19.
2.2 Required Payments; Termination . The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by the Borrower
on the Facility Termination Date.
2.3 Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably according to their Pro Rata Shares.
2.4 Types of Loans. The Loans may be Floating Rate Loans, Eurodollar Loans
or Fixed Rate Loans, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9; provided, however, that Fixed Rate Loans
shall not be made and no Advance shall be continued as, or converted into, a
Fixed Rate Loan, at any time that more than one Lender shall be party to this
Agreement.
2.5 Commitment Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender according to its Pro
Rata Share a commitment fee at a per annum rate equal to the Applicable Fee Rate
on the average daily Available Aggregate Commitment from the date hereof to and
including the Facility Termination Date, payable on each Payment Date hereafter
and on the Facility Termination Date. The Borrower may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Lenders in integral
multiples of $5,000,000, upon at least three Business Days' written notice to
the Agent, which notice shall specify the amount of any such
14
reduction, provided, however, that the amount of the Aggregate Commitment may
not be reduced below the Aggregate Outstanding Credit Exposure. All accrued
commitment fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Credit Extensions hereunder.
2.6 Minimum Amount of Each Advance. Each Advance (or Fixed Rate Loan)
shall be in the minimum amount of $1,000,000 (and in multiples of $100,000 if in
excess thereof), provided, however, that any Floating Rate Advance may be in the
amount of the Available Aggregate Commitment.
2.7 Optional Principal Payments. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances, or, in a
minimum aggregate amount of $500,000 or any portion of the outstanding Floating
Rate Advances upon two Business Days' prior notice to the Agent. The Borrower
may from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances and Fixed Rate Loans, or, in a minimum aggregate amount of
$1,000,000 or any integral multiple of $100,000 in excess thereof, any portion
of the outstanding Eurodollar Advances and Fixed Rate Loans upon three Business
Days' prior notice to the Agent.
2.8 Method of Selecting Types and Interest Periods for New Advances. The
Borrower shall select the Type of Loan and, in the case of each Eurodollar
Advance or Fixed Rate Loan, the Interest Period applicable thereto from time to
time. The Borrower shall give the Agent irrevocable notice (a "Borrowing
Notice") not later than 10:00 a.m. (Chicago time) (a) on the proposed Borrowing
Date of each Floating Rate Advance or Fixed Rate Loan and (b) at least three
Business Days before the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.9 Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances or Fixed Rate Loans
pursuant to this Section 2.9 or are repaid in accordance with Section 2.7. Each
Eurodollar Advance or Fixed Rate Loan shall continue as a
15
Eurodollar Advance or Fixed Rate Loan until the end of the then applicable
Interest Period therefor, at which time such Eurodollar Advance or Fixed Rate
Loan shall be automatically converted into a Floating Rate Advance unless (x)
such Eurodollar Advance or Fixed Rate Loan is or was repaid in accordance with
Section 2.7 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance or Fixed Rate Loan continue as or
convert into, a Eurodollar Advance or Fixed Rate Loan for the same or another
Interest Period. Subject to the terms of Section 2.6, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance into a
Eurodollar Advance or Fixed Rate Loan. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Advance or Fixed Rate Loan into a Eurodollar Advance or
continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago time) at
least three Business Days prior to the date of the requested conversion or
continuation, specifying:
(i) the requested date, which shall be a Business Day, of
such conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance or a Fixed Rate Loan and
the duration of the Interest Period applicable thereto.
2.10 Changes in Interest Rate, etc. Each Floating Rate Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance or Fixed Rate Advance into a Floating Rate Advance pursuant
to Section 2.9, to but excluding the date it is paid or is converted into a
Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum equal to
the Floating Rate for such day. Changes in the rate of interest on that portion
of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each Fixed Rate Loan
shall bear interest on the outstanding principal amount thereof, for each day
from and including the first day of the Interest Period applicable thereto to
(but not including) the last day of such Interest Period at the interest rate
determined by the then Lender based upon the Borrower's selections under
Sections 2.8 and 2.9 and otherwise in accordance with the terms hereof. Each
Eurodollar Advance shall bear interest on the outstanding principal amount
thereof from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
Eurodollar Rate determined by the Agent as applicable to such Eurodollar Advance
based upon the Borrower's selections under Sections 2.8 and 2.9 and otherwise in
accordance with the terms hereof. No Interest Period may end after the Facility
Termination Date.
2.11 Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during
16
the continuance of a Default or Unmatured Default the Required Lenders may, at
their option, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that no Advance may be made as, converted into or continued as a
Eurodollar Advance or Fixed Rate Loan. During the continuance of a Default the
Required Lenders may, at their option, by notice to the Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) each Eurodollar Advance or Fixed Rate Loan
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to the
Alternate Base Rate in effect from time to time plus 2% per annum and (iii) the
LC Fee shall be increased by 2% per annum, provided that, during the continuance
of a Default under Section 7.6 or 7.7, the interest rates set forth in clauses
(i) and (ii) above and the increase in the LC Fee set forth in clause (iii)
above shall be applicable to all Credit Extensions without any election or
action on the part of the Agent or any Lender.
2.12 Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Agent at the Agent's address specified pursuant to Article XIII, or at
any other Lending Installation of the Agent specified in writing by the Agent to
the Borrower, by noon (local time) on the date when due and shall (except in the
case of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by the Lenders, or as otherwise specifically required hereunder) be
applied ratably by the Agent among the Lenders. Each payment delivered to the
Agent for the account of any Lender shall be delivered promptly by the Agent to
such Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized to
charge the account of the Borrower maintained with Bank One for each payment of
principal, interest, Reimbursement Obligations and fees as it becomes due
hereunder. Each reference to the Agent in this Section 2.12 shall also be deemed
to refer, and shall apply equally, to the LC Issuer, in the case of payments
required to be made by the Borrower to the LC Issuer pursuant to Section 2.19.6.
2.13 Noteless Agreement; Evidence of Indebtedness. (i) Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the
17
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder, (c) the original stated amount of
each Facility LC and the amount of LC Obligations outstanding at any time, and
(d) the amount of any sum received by the Agent hereunder from the Borrower and
each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note (a "Note"). In such event, the Borrower shall prepare, execute and deliver
to such Lender a Note payable to the order of such Lender in a form supplied by
the Agent. Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the order of the payee named therein
or any assignee pursuant to Section 12.3, except to the extent that any such
Lender or assignee subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described in paragraphs (i)
and (ii) above.
2.14 Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.15 Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance or Fixed Rate Loan shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance or Fixed Rate Loan is prepaid, whether by acceleration or otherwise, and
at maturity. Interest accrued on each Eurodollar Advance having an Interest
18
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest, commitment fees and
LC Fees shall be calculated for actual days elapsed on the basis of a 360-day
year, other than interest on Floating Rate Advances which shall be calculated
for actual days elapsed on the basis of a 365 or 366-day year, as applicable.
Interest shall be payable for the day a Loan is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on a Loan shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
2.16 Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
Promptly after notice from the LC Issuer, the Agent will notify each Lender of
the contents of each request for issuance of a Facility LC hereunder. The Agent
will notify each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give each
Lender prompt notice of each change in the Alternate Base Rate.
2.17 Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period
19
commencing on the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to (x) in the case
of payment by a Lender, the Federal Funds Effective Rate for such day for the
first three days and, thereafter, the interest rate applicable to the relevant
Loan or (y) in the case of payment by the Borrower, the interest rate applicable
to the relevant Loan.
2.19 Facility LCs.
2.19.1 Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby letters of credit
(each, a "Facility LC") and to renew, extend, increase, decrease or
otherwise modify each Facility LC ("Modify," and each such action a
"Modification"), from time to time from and including the date of this
Agreement and prior to the Facility Termination Date upon the request of
the Borrower; provided that immediately after each such Facility LC is
issued or Modified, (i) the aggregate amount of the outstanding LC
Obligations shall not exceed $10,000,000 and (ii) the Aggregate
Outstanding Credit Exposure shall not exceed the Aggregate Commitment. No
Facility LC shall have an expiry date later than the earlier of (x) the
fifth Business Day prior to the Facility Termination Date and (y) one year
after its issuance.
2.19.2 Participations. Upon the issuance or Modification by the LC
Issuer of a Facility LC in accordance with this Section 2.19, the LC
Issuer shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably sold to each Lender, and each Lender
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the LC Issuer, a
participation in such Facility LC (and each Modification thereof) and the
related LC Obligations in proportion to its Pro Rata Share.
2.19.3 Notice. Subject to Section 2.19.1, the Borrower shall give
the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least three
Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of
issuance (or Modification) and the expiry date of such Facility LC, and
describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such
notice, the LC Issuer shall promptly notify the Agent, and the Agent shall
promptly notify each Lender, of the contents thereof and of the amount of
such Lender's participation in such proposed Facility LC. The issuance or
Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article IV (the satisfaction of which
the LC Issuer shall have no duty to ascertain), be subject to the
conditions precedent that such Facility LC shall be satisfactory to the LC
Issuer and that the Borrower shall have executed and delivered such
application agreement and/or such other instruments and agreements
relating to
20
such Facility LC as the LC Issuer shall have reasonably requested (each, a
"Facility LC Application"). In the event of any conflict between the terms
of this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control.
2.19.4 Fees. The Borrower shall pay to the Agent, for the account of
the Lenders ratably in accordance with their respective Pro Rata Shares,
with respect to each Facility LC, a letter of credit fee at a per annum
rate equal to the Applicable Margin for Eurodollar Loans in effect from
time to time on the average daily undrawn stated amount under such
Facility LC, such fee to be payable in arrears on each Payment Date (such
fee described in this sentence the "LC Fee"). The Borrower shall also pay
to the LC Issuer for its own account documentary and processing charges in
connection with the issuance or Modification of and draws under Facility
LCs in accordance with the LC Issuer's standard schedule for such charges
as in effect from time to time.
2.19.5 Administration; Reimbursement by Lenders. Upon receipt from
the beneficiary of any Facility LC of any demand for payment under such
Facility LC, the LC Issuer shall notify the Agent and the Agent shall
promptly notify the Borrower and each other Lender as to the amount to be
paid by the LC Issuer as a result of such demand and the proposed payment
date (the "LC Payment Date"). The responsibility of the LC Issuer to the
Borrower and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material
respects with such Facility LC. The LC Issuer shall endeavor to exercise
the same care in the issuance and administration of the Facility LCs as it
does with respect to letters of credit in which no participations are
granted, it being understood that in the absence of any gross negligence
or willful misconduct by the LC Issuer, each Lender shall be
unconditionally and irrevocably liable without regard to the occurrence of
any Default or any condition precedent whatsoever, to reimburse the LC
Issuer on demand for (i) such Lender's Pro Rata Share of the amount of
each payment made by the LC Issuer under each Facility LC to the extent
such amount is not reimbursed by the Borrower pursuant to Section 2.19.6
below, plus (ii) interest on the foregoing amount to be reimbursed by such
Lender, for each day from the date of the LC Issuer's demand for such
reimbursement (or, if such demand is made after 11:00 a.m. (Chicago time)
on such date, from the next succeeding Business Day) to the date on which
such Lender pays the amount to be reimbursed by it, at a rate of interest
per annum equal to the Federal Funds Effective Rate for the first three
days and, thereafter, at a rate of interest equal to the rate applicable
to Floating Rate Advances.
2.19.6 Reimbursement by Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date
21
for any amounts to be paid by the LC Issuer upon any drawing under any
Facility LC, without presentment, demand, protest or other formalities of
any kind; provided that neither the Borrower nor any Lender shall hereby
be precluded from asserting any claim for direct (but not consequential)
damages suffered by the Borrower or such Lender to the extent, but only to
the extent, caused by (i) the willful misconduct or gross negligence of
the LC Issuer in determining whether a request presented under any
Facility LC issued by it complied with the terms of such Facility LC or
(ii) the LC Issuer's failure to pay under any Facility LC issued by it
after the presentation to it of a request strictly complying with the
terms and conditions of such Facility LC. All such amounts paid by the LC
Issuer and remaining unpaid by the Borrower shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day falls
on or before the applicable LC Payment Date and (y) the sum of 2% plus the
rate applicable to Floating Rate Advances for such day if such day falls
after such LC Payment Date. The LC Issuer will pay to each Lender ratably
in accordance with its Pro Rata Share all amounts received by it from the
Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Facility LC issued by the LC
Issuer, but only to the extent such Lender has made payment to the LC
Issuer in respect of such Facility LC pursuant to Section 2.19.5. Subject
to the terms and conditions of this Agreement (including without
limitation the submission of a Borrowing Notice in compliance with Section
2.8 and the satisfaction of the applicable conditions precedent set forth
in Article IV), the Borrower may request an Advance hereunder for the
purpose of satisfying any Reimbursement Obligation.
2.19.7 Obligations Absolute. The Borrower's obligations under this
Section 2.19 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the LC Issuer, any
Lender or any beneficiary of a Facility LC. The Borrower further agrees
with the LC Issuer and the Lenders that the LC Issuer and the Lenders
shall not be responsible for, and the Borrower's Reimbursement Obligation
in respect of any Facility LC shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, any of its Affiliates, the beneficiary of any Facility LC or
any financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any
of its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Facility LC. The
22
Borrower agrees that any action taken or omitted by the LC Issuer or any
Lender under or in connection with each Facility LC and the related drafts
and documents, if done without gross negligence or willful misconduct,
shall be binding upon the Borrower and shall not put the LC Issuer or any
Lender under any liability to the Borrower. Nothing in this Section 2.19.7
is intended to limit the right of the Borrower to make a claim against the
LC Issuer for damages as contemplated by the proviso to the first sentence
of Section 2.19.6.
2.19.8 Actions of LC Issuer. The LC Issuer shall be entitled to
rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or
it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.19, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and any future holders of a
participation in any Facility LC.
2.19.9 Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and against any
and all claims and damages, losses, liabilities, costs or expenses which
such Lender, the LC Issuer or the Agent may incur (or which may be claimed
against such Lender, the LC Issuer or the Agent by any Person whatsoever)
by reason of or in connection with the issuance, execution and delivery or
transfer of or payment or failure to pay under any Facility LC or any
actual or proposed use of any Facility LC, including, without limitation,
any claims, damages, losses, liabilities, costs or expenses which the LC
Issuer may incur by reason of or in connection with (i) the failure of any
other Lender to fulfill or comply with its obligations to the LC Issuer
hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any defaulting Lender) or (ii) by reason of or
on account of the LC Issuer issuing any Facility LC which specifies that
the term "Beneficiary" included therein includes any successor by
operation of law of the named Beneficiary, but which Facility LC does not
require that any drawing by any such
23
successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer, evidencing the appointment of such
successor Beneficiary; provided that the Borrower shall not be required to
indemnify any Lender, the LC Issuer or the Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
complied with the terms of such Facility LC or (y) the LC Issuer's failure
to pay under any Facility LC after the presentation to it of a request
strictly complying with the terms and conditions of such Facility LC.
Nothing in this Section 2.19.9 is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
2.19.10 Lenders' Indemnification. Each Lender shall, ratably in
accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and employees
(to the extent not reimbursed by the Borrower) against any cost, expense
(including reasonable counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from such indemnitees'
gross negligence or willful misconduct or the LC Issuer's failure to pay
under any Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of the Facility LC) that such
indemnitees may suffer or incur in connection with this Section 2.19 or
any action taken or omitted by such indemnitees hereunder.
2.19.11 Facility LC Collateral Account. The Borrower agrees that it
will, upon the request of the Agent or the Required Lenders and until the
final expiration date of any Facility LC and thereafter as long as any
amount is payable to the LC Issuer or the Lenders in respect of any
Facility LC, maintain a special collateral account pursuant to
arrangements satisfactory to the Agent (the "Facility LC Collateral
Account") at the Agent's office at the address specified pursuant to
Article XIII, in the name of such Borrower but under the sole dominion and
control of the Agent, for the benefit of the Lenders and in which such
Borrower shall have no interest other than as set forth in Section 8.1.
The Borrower hereby pledges, assigns and grants to the Agent, on behalf of
and for the ratable benefit of the Lenders and the LC Issuer, a security
interest in all of the Borrower's right, title and interest in and to all
funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and
performance of the Obligations. The Agent will invest any funds on deposit
from time to time in the Facility LC Collateral Account in certificates of
deposit of Bank One having a maturity not exceeding 30 days. Nothing in
this Section 2.19.11 shall either obligate the Agent to require the
Borrower to deposit any funds in the Facility LC Collateral Account or
limit the right of the Agent to release any funds held in the Facility LC
Collateral Account in each case other than as required by Section 8.1.
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2.19.12 Rights as a Lender. In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1 Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation or
the LC Issuer to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to
any Lender or the LC Issuer in respect of its Eurodollar
Loans, Facility LCs or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than
reserves and assessments taken into account in determining
the interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation or the LC Issuer of making, funding or
maintaining its Eurodollar Loans, or of issuing or
participating in Facility LCs or reduces any amount
receivable by any Lender or any applicable Lending
Installation or the LC Issuer in connection with its
Eurodollar Loans, Facility LCs or participations therein, or
requires any Lender or any applicable Lending Installation or
the LC Issuer to make any payment calculated by reference to
the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received
by it, by an amount deemed material by such Lender or the LC
Issuer, as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar
25
Loans, or Commitment or of issuing or participating in Facility LCs or to reduce
the return received by such Lender or applicable Lending Installation or the LC
Issuer, as the case may be, in connection with such Eurodollar Loans, Facility
LCs, participations therein or Commitment, then, within 15 days of demand by
such Lender or the LC Issuer, as the case may be, the Borrower shall pay such
Lender such additional amount or amounts as will compensate such Lender or the
LC Issuer, as the case may be, for such increased cost or reduction in amount
received.
3.2 Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or the LC Issuer or any
corporation controlling such Lender or the LC Issuer is increased as a result of
a Change generally applicable to national banks in the United States, then,
within 15 days of demand by such Lender or the LC Issuer, the Borrower shall pay
such Lender or the LC Issuer the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender or the LC Issuer determines is attributable to this Agreement, its
Outstanding Credit Exposure or its Commitment to make Loans and issue or
participate in Facility LCs, as the case may be, hereunder (after taking into
account such Lender's or the LC Issuer's policies as to capital adequacy).
"Change" means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or the LC Issuer or any Lending Installation or
any corporation controlling any Lender or the LC Issuer. "Risk-Based Capital
Guidelines" means (i) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
26
3.4 Funding Indemnification. If any payment of a Eurodollar Advance or
Fixed Rate Loan occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance or Fixed Rate Loan is not made on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.
3.5 Taxes. (i) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Note or the Facility
LC Application shall be made free and clear of and without deduction for any and
all Taxes. If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
any Facility Application or from the execution or delivery of, or otherwise with
respect to, this Agreement, any Note or any Facility Application ("Other
Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, the LC Issuer and
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, the LC Issuer or such Lender makes demand therefor pursuant
to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in
either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of the Borrower and the Agent a United States
Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is
entitled
27
to an exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Agent (x) renewals
or additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by the
Borrower or the Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the Borrower and
the Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to
28
the Agent under this subsection, together with all costs and expenses related
thereto (including attorneys fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent). The obligations of the Lenders
under this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6 Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1 Initial Credit Extension. The Lenders shall not be required to
make the initial Credit Extension hereunder unless the Borrower has furnished
to the Agent with sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of the
Borrower, together with all amendments, and a certificate of
good standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(ii) Copies certified by the Secretary or Assistant Secretary of
the Borrower, of its by-laws and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the
Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by
name and title and bear
29
the signatures of the Authorized Officers and any other
officers of the Borrower authorized to sign the Loan
Documents to which the Borrower is a party, upon which
certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(iv) Copies of the articles or certificate of incorporation of
GPU, together with all amendments, and a certificate of good
standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(v) Copies, certified by the Secretary or Assistant Secretary of
GPU, of its by-laws authorizing the execution of the Loan
Documents to which GPU is a party.
(vi) An incumbency certificate, certificate, executed by the
Secretary or Assistant Secretary of GPU, which shall
identify by name and title and bear the signatures of the
Authorized Officers and any other officers of GPU
authorized to sign the Loan Documents to which GPU is a
party, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in
writing by GPU.
(vii) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension no
Default or Unmatured Default has occurred and is continuing.
(viii) A written opinion of the Borrower's counsel, addressed to
the Lenders in substantially the form of Exhibit A.
(ix) Agreement.
(x) A written opinion of GPU's counsel, addressed to the Lenders
in substantially the form of Exhibit F.
(xi) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(xii) Written money transfer instructions, in substantially the
form of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(xiii) Such other documents as any Lender or its counsel
may have reasonably requested.
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4.2 Each Advance. The Lenders shall not be required to make any
Advance unless on the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Credit Extension Date except to
the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct
on and as of such earlier date.
(iii) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their
counsel.
Each Borrowing Notice or request for issuance of a Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.2(i) and
(ii) have been satisfied. Any Lender may require a duly completed compliance
certificate in substantially the form of Exhibit B as a condition to making a
Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that:
5.1 Existence and Standing. Each of the Borrower and its Material
Subsidiaries is a corporation, partnership (in the case of Subsidiaries only) or
limited liability company duly and properly incorporated or organized, as the
case may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
5.2 Authorization and Validity. The Borrower has the power and authority
and legal right to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which the Borrower is a party constitute
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3 No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents to which it is a party, nor
the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will
31
violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on the Borrower or any of its Subsidiaries or (ii) the
Borrower's or any Subsidiary's articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, as the case
may be, or (iii) the provisions of any indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
of or on the Property of the Borrower or a Subsidiary pursuant to the terms of
any such indenture, instrument or agreement. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof (including,
without limitation, under the Public Utility Holding Company Act of 1935, as
amended), which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
5.4 Financial Statements. The December 31, 1999 and the June 30, 2000
consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with generally
accepted accounting principles in effect on the date such statements were
prepared and fairly present the consolidated financial condition and operations
of the Borrower and its Subsidiaries at such dates and the consolidated results
of their operations for the periods then ended.
5.5 Material Adverse Change. Since December 31, 1999 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6 Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement Accounting Principles and as to which no
Lien exists. The United States income tax returns of the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended December 31, 1996. No tax liens have been filed and no claims
are being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
32
5.7 Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8 Subsidiaries. Schedule 1 contains an accurate list of all Subsidiaries
of the Borrower as of the date of this Agreement, setting forth their respective
jurisdictions of organization and the percentage of their respective capital
stock or other ownership interests owned by the Borrower or other Subsidiaries.
All of the issued and outstanding shares of capital stock or other ownership
interests of such Subsidiaries have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and are fully paid and non-assessable.
5.9 ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
the aggregate exceed $5,000,000. Neither the Borrower nor any other member of
the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $5,000,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.
5.10 Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading.
5.11 Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.12 Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.
33
5.13 Compliance With Laws. The Borrower and its Subsidiaries have complied
with all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, except to the extent that the failure to so comply
would not result in a Material Adverse Effect, and except laws, rules,
regulations, judgments, injunctions or awards being contested in good faith.
5.14 Ownership of Properties. Except as set forth on Schedule 2, on the
date of this Agreement, the Borrower and its Subsidiaries will have good title,
free of all Liens other than those permitted by Section 6.15, to all of the
Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Subsidiaries.
5.15 Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Credit
Extensions hereunder gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code.
5.16 Environmental Matters. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17 Investment Company Act. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
5.18 Insurance. The certificate signed by the President or Chief Financial
Officer of the Borrower, that attests to the existence and adequacy of, and
summarizes, the property and casualty insurance program carried by the Borrower
with respect to itself and its Subsidiaries and that has been furnished by the
Borrower to the Agent and the Lenders, is complete and accurate. This summary
includes the insurer's or insurers' name(s), policy number(s), expiration
date(s), amount(s) of coverage, type(s) of
34
coverage, exclusion(s), and deductibles. This summary also includes similar
information, and describes any reserves, relating to any self-insurance program
that is in effect.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1 Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
(i) Within 90 days after the close of each of its fiscal
years, an audit report (unqualified as to scope or as to
"going concern" status) certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (consolidating
statements need not be certified by such accountants) for
itself and its Subsidiaries, including balance sheets as
of the end of such period, related profit and loss and
reconciliation of surplus statements, and a statement of
cash flows, accompanied by (a) any management letter
prepared by said accountants, and (b) a certificate of
said accountants that, in the course of their examination
necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating the
nature and status thereof.
(ii) Within 60 days after the close of the first three
quarterly periods of each of its fiscal years, for itself
and its Subsidiaries, consolidated and consolidating
unaudited balance sheets as at the close of each such
period and consolidated and consolidating profit and loss
and reconciliation of surplus statements and a statement
of cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified by
its chief financial officer.
(iii) Together with the financial statements required under
Sections 6.1(i) and (ii), a compliance certificate in
substantially the form of Exhibit B signed by its chief
financial officer showing the calculations necessary to
determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status
thereof.
35
(iv) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
(v) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief
financial officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with
respect thereto.
(vi) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim
to the effect that the Borrower or any of its Subsidiaries
is or may be liable to any Person as a result of the
release by the Borrower, any of its Subsidiaries, or any
other Person of any toxic or hazardous waste or substance
into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental,
health or safety law or regulation by the Borrower or any
of its Subsidiaries, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(vii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(viii)Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
(ix) Such other information (including non-financial information
and regulatory information) as the Agent or any Lender may
from time to time reasonably request.
6.2 Use of Proceeds. The Borrower will, and will cause each Subsidiary to,
use the proceeds of the Credit Extensions for general corporate purposes,
including Investments permitted hereunder. The Borrower will not, nor will it
permit any Subsidiary to, use any of the proceeds of the Loans to purchase or
carry any "margin stock" (as defined in Regulation U).
6.3 Notice of Default. The Borrower will give prompt notice in writing to
the Lenders of the occurrence of any Default or Unmatured Default and of any
other development, financial or otherwise, which could reasonably be expected to
have a Material Adverse Effect.
6.4 Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in
36
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted and do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic corporation, partnership
or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
6.5 Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles.
6.6 Insurance. The Borrower will, and will cause each Material Subsidiary
to, maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts and covering such risks as is consistent
with sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, noncompliance with which would have
a Material Adverse Effect, except laws, rules, regulations, judgments,
injunctions, or awards being contest in good faith.
6.8 Maintenance of Properties. The Borrower will, and will cause each
Material Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
6.9 Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may designate.
6.10 Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
37
(i) The Loans and the Reimbursement Obligations.
(ii) Indebtedness existing on the date hereof and described in
Schedule 2.
(iii) Indebtedness secured by Liens permitted under Section
6.14(vi) in an aggregate amount not to exceed $5,000,000
(prior to the delivery of the GPU Guaranty) or $10,000,000
(after the delivery of the GPU Guaranty) at any time
outstanding.
(iv) Synthetic Leases.
6.11 Merger. Prior to the Guaranty Date, the Borrower will not, nor will
it permit any Subsidiary to, merge or consolidate with or into any other Person,
except that a Subsidiary may merge into the Borrower or a Wholly-Owned
Subsidiary and mergers in connection with Investments permitted pursuant to
Section 6.13(iii) so long as the Borrower, if a party to such merger, shall be
the surviving corporation and if the Borrower is not a party to such merger, the
surviving corporation shall be a Subsidiary.
6.12 Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) to the Borrower or any Subsidiary of the Borrower.
(iii) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as
permitted by this Section during the twelve-month period
ending with the month in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion
of the Property of the Borrower and its Subsidiaries.
6.13 Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule 1.
38
(iii) Investments (including Acquisitions) in businesses engaged in
activities similar to the Borrower's core competencies so
long as such investments in the aggregate do not exceed
$5,000,000.
6.14 Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books.
(iii) Liens (a) arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation or (b) to secure the performance of bids or
contracts (other than contracts for the payment of money)
made in the ordinary course of business.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.
(v) Liens existing on the date hereof and described in
Schedule 2.
(vi) purchase money security interest on any property acquired or
held by the Borrower or its Subsidiaries in the ordinary
course of business, securing Indebtedness (including
Capitalized Leases) incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such
property; provided that (i) any such Lien attaches to such
property concurrently
39
with or within 20 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in such
transaction, (iii) the principal amount of the debt secured
thereby does not exceed 100% of the cost of such property,
and (iv) the principal amount of the Indebtedness secured by
any and all such purchase money security interests shall not
at any time exceed $5,000,000 (prior to the delivery of the
GPU Guaranty) or $10,000,000 (after the delivery of the GPU
Guaranty).
6.15 Affiliates. Except as provided under the Public Utility Holding
Company Act of 1935, the Borrower will not, and will not permit any Subsidiary
to, enter into any transaction (including, without limitation, the purchase or
sale of any Property or service) with, or make any payment or transfer to, any
Affiliate (other than the Borrower or any of its Subsidiaries) except in the
ordinary course of business and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than the Borrower or such
Subsidiary would obtain in a comparable arms-length transaction.
6.16 Financial Covenants.
6.16.1 Consolidated Tangible Net Worth to Consolidated Indebtedness
Ratio. The Borrower will not permit the ratio, at any time after the Non
Guaranty Date, of its Consolidated Tangible Net Worth to its Consolidated
Indebtedness to be less than 1.00 to 1.35.
6.16.2 Minimum Net Worth. The Borrower will, at all times
after the Non Guaranty Date, maintain Consolidated Tangible Net Worth of at
least $40,000,000.
6.17 Subsidiary Dividends. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any agreement or contract which would limit
the right of any such Subsidiary to pay dividends or make distributions to the
Borrower.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1 Any representation or warranty made or deemed made by or on behalf of
GPU or the Borrower or any of its Subsidiaries to the Lenders or the Agent under
or in connection with this Agreement, any Credit Extension, or any certificate
or information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2 Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business
40
Day after the same becomes due, or nonpayment of interest upon any Loan or of
any commitment fee, LC Fee or other obligations under any of the Loan Documents
within five days after the same becomes due.
7.3 The breach by the Borrower of any of the terms or provisions of
Article VI Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16 or 6.17.
7.4 The breach by the Borrower or GPU (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement or any other Loan Document which is not
remedied within five days after written notice from the Agent or any Lender.
7.5 Failure of the Borrower or any of its Subsidiaries or GPU or any
Material GPU Subsidiary to pay when due any Indebtedness aggregating in excess
of $5,000,000 in the case of the Borrower or any of its Subsidiaries,
$20,000,000 in the case of GPU or $20,000,000 in the case of any Material GPU
Subsidiary ("Material Indebtedness"); or the default by the Borrower, any of its
Subsidiaries, GPU or any Material GPU Subsidiary in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of the
Borrower, any of its Subsidiaries, GPU or any Material GPU Subsidiary shall be
declared to be due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment) prior to the stated maturity thereof; or
the Borrower, any of its Subsidiaries, GPU or any Material GPU Subsidiary shall
not pay, or admit in writing its inability to pay, its debts generally as they
become due.
7.6 The Borrower, any of its Subsidiaries, GPU or any Material GPU
Subsidiary shall (i) have an order for relief entered with respect to it under
the Federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion of its
Property, (iv) institute any proceeding seeking an order for relief under the
Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate
it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (v) take any corporate or
partnership action to authorize or effect any of the foregoing actions set forth
in this Section 7.6 or (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.7.
41
7.7 Without the application, approval or consent of the Borrower, any of
its Subsidiaries, GPU or any Material GPU Subsidiary, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the Borrower,
any of its Subsidiaries, GPU or any Material GPU Subsidiary or any Substantial
Portion of its Property, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower, any of its Subsidiaries, GPU or any Material
GPU Subsidiary and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 30 consecutive days.
7.8 The Borrower, any of its Subsidiaries, GPU or any Material GPU
Subsidiary shall fail within 30 days to pay, bond or otherwise discharge one or
more judgments or orders for the payment of money in excess of $5,000,000 in the
case of the Borrower and its Subsidiaries or $20,000,000 in the case of GPU and
the Material GPU Subsidiaries (or the equivalent thereof in currencies other
than U.S. Dollars) in the aggregate.
7.9 The Unfunded Liabilities of all Single Employer Plans shall exceed in
the aggregate $5,000,000 or any Reportable Event shall occur in connection with
any Plan.
7.10 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $5,000,000 or requires
payments exceeding $5,000,000 per annum.
7.11 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the respective plan years of
each such Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $5,000,000.
7.12 Any Change in Control shall occur.
7.13 Nonpayment by the Borrower or any Subsidiary of any obligation with
respect to a Rate Management Transaction in excess of $5,000,000 when due.
7.14 After its delivery, the GPU Guaranty shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of the GPU Guaranty, or GPU shall fail to comply
with any of the terms or provisions of the GPU Guaranty, or any GPU shall deny
42
that it has any further liability under the GPU Guaranty, or shall give notice
to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1 Acceleration; Facility LC Collateral Account. (i) If any Default
described in Section 7.6 or 7.7 occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and the Borrower
will be and become thereby unconditionally obligated, without any further
notice, act or demand, to pay to the Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral Account, equal to
the difference of (x) the amount of LC Obligations at such time, less (y) the
amount on deposit in the Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and has not been
applied against the Obligations (such difference, the "Collateral Shortfall
Amount"). If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives, and (b) upon notice to the Borrower
and in addition to the continuing right to demand payment of all amounts payable
under this Agreement, make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(ii) If at any time while any Default is continuing, the Agent determines
that the Collateral Shortfall Amount at such time is greater than zero, the
Agent may make demand on the Borrower to pay, and the Borrower will, forthwith
upon such demand and without any further notice or act, pay to the Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
(iv) At any time while any Default is continuing, neither the Borrower nor
any Person claiming on behalf of or through the Borrower shall have any right to
withdraw any of the funds held in the Facility LC Collateral Account. After all
of the Obligations have been indefeasibly paid in full and the Aggregate
43
Commitment has been terminated, any funds remaining in the Facility LC
Collateral Account shall be returned by the Agent to the Borrower or paid to
whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in Section 7.6 or 7.7
with respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2 Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the expiry
date of any Facility LC to a date after the Facility
Termination Date or forgive all or any portion of the
principal amount thereof or any Reimbursement Obligation
related thereto, or reduce the rate or extend the time of
payment of interest or fees thereon or Reimbursement
Obligations related thereto.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Facility Termination Date, or reduce the amount or
extend the payment date, for the mandatory payments required
under Section 2.2, or increase the amount of the Aggregate
Commitment, the Commitment of any Lender hereunder or the
commitment to issue Facility LCs, or permit the Borrower to
assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release GPU from any of its obligations under the Support
Agreement or, if delivered, the GPU Guaranty.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. The Agent may waive payment of the fee required under
44
Section 12.3.2 without obtaining the consent of any other party to this
Agreement.
8.3 Preservation of Rights. No delay or omission of the Lenders, the LC
Issuer or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the LC
Issuer and the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1 Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent, the LC Issuer and the Lenders and
supersede all prior agreements and understandings among the Borrower, the Agent,
the LC Issuer and the Lenders relating to the subject matter thereof other than
the fee letter described in Section 10.13.
9.5 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits
45
of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.
9.6 Expenses; Indemnification. (i) The Borrower shall reimburse the Agent
and the Arranger for any costs, internal charges and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent or the
Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, distribution (including, without limitation, via the internet),
review, amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent, the Arranger, the LC Issuer and the
Lenders for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, the Arranger, the
LC Issuer and the Lenders, which attorneys may be employees of the Agent, the
Arranger, the LC Issuer or the Lenders) paid or incurred by the Agent, the
Arranger, the LC Issuer or any Lender in connection with the collection and
enforcement of the Loan Documents. Expenses being reimbursed by the Borrower
under this Section include, without limitation, costs and expenses incurred in
connection with the Reports described in the following sentence. The Borrower
acknowledges that from time to time Bank One may prepare and may distribute to
the Lenders (but shall have no obligation or duty to prepare or to distribute to
the Lenders) certain audit reports (the "Reports") pertaining to the Borrower's
assets for internal use by Bank One from information furnished to it by or on
behalf of the Borrower, after Bank One has exercised its rights of inspection
pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer, each Lender, their respective affiliates, and each of
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer, any Lender or any affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
9.7 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
9.8 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
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9.9 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10 Nonliability of Lenders. The relationship between the Borrower on the
one hand and the Lenders, the LC Issuer and the Agent on the other hand shall be
solely that of borrower and lender. Neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have any fiduciary responsibilities to the Borrower.
Neither the Agent, the Arranger, the LC Issuer nor any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's business or operations. The Borrower
agrees that neither the Agent, the Arranger, the LC Issuer nor any Lender shall
have liability to the Borrower (whether sounding in tort, contract or otherwise)
for losses suffered by the Borrower in connection with, arising out of, or in
any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to ▇▇▇ for, any special, indirect, consequential or punitive damages
suffered by the Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby.
9.11 Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4.
9.12 Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
47
9.13 Disclosure. The Borrower and each Lender hereby acknowledge and agree
that Bank One and/or its Affiliates from time to time may hold investments in,
make other loans to or have other relationships with the Borrower and its
Affiliates.
ARTICLE X
THE AGENT
---------
10.1 Appointment; Nature of Relationship. Bank One, NA is hereby appointed
by each of the Lenders as its contractual representative (herein referred to as
the "Agent") hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2 Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation
48
made in connection with any Loan Document or any borrowing hereunder; (b) the
performance or observance of any of the covenants or agreements of any obligor
under any Loan Document, including, without limitation, any agreement by an
obligor to furnish information directly to each Lender; (c) the satisfaction of
any condition specified in Article IV, except receipt of items required to be
delivered solely to the Agent; (d) the existence or possible existence of any
Default or Unmatured Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower or any guarantor of any of the Obligations
or of any of the Borrower's or any such guarantor's respective Subsidiaries. The
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
10.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
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10.8 Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10 Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
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10.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12 Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
51
10.13 Agent and Arranger Fees. The Borrower agrees to pay to the Agent and
the Arranger, for their respective accounts, the fees agreed to by the Borrower,
the Agent and the Arranger pursuant to that certain term sheet dated October 2,
2000, or as otherwise agreed from time to time.
10.14 Delegation to Affiliates. The Borrower and the Lenders agree that
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15 Execution of Collateral Documents. The Lenders hereby empower and
authorize the Agent to execute and deliver to the Borrower on their behalf the
Security Agreement(s) and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Security Agreement(s).
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
52
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of
this Section 12.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, (x) any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a
Lender which is a fund, any pledge or assignment of all or any portion of its
rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Agent may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Loan.
12.2 Participations.
12.1.1 Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Outstanding Credit Exposure of such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such Lender
under the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the owner of its Outstanding Credit Exposure and the
holder of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement shall
be determined as if such Lender had not sold such participating interests, and
the Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents.
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12.1.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Credit Extension or Commitment in
which such Participant has an interest which would require consent of all of the
Lenders pursuant to the terms of Section 8.2 or of any other Loan Document.
12.1.3 Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 11.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
12.2 Assignments.
12.2.1 Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign to one
or more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit C or in such other form as may be agreed to by the parties
thereto. The consent of the Borrower and the Agent and the LC Issuer shall be
required prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; provided, however, that if a
Default has occurred and is continuing, the consent of the Borrower shall not be
required. Such consent shall not be unreasonably withheld or delayed. Each such
assignment with respect to a Purchaser which is not a Lender or an Affiliate
thereof shall (unless each of the Borrower and the Agent otherwise consents) be
in an amount not less than the lesser of (i) $10,000,000 or (ii) the remaining
amount of the assigning Lender's Commitment (calculated as at the date of such
assignment) or outstanding Loans (if the applicable Commitment has been
terminated). Bank One expects, at least initially, to serve as the sole Lender
under the Credit Agreement; provided, however, that the Agent reserves the right
to arrange with one or more banks or other entities assignments of Commitments
under the Credit Agreement. Since the flexibility to assign part of the
Commitment with other Lenders is for the benefit of the Lenders, all costs and
fees (including legal costs) associated with arranging such assignment shall be
for the account of the Lenders. The Borrower agrees to cooperate with the Agent
and the Lenders in this matter.
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12.2.2 Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by Section 12.3.1, and (ii)
payment of a $4,000 fee to the Agent for processing such assignment (unless such
fee is waived by the Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Outstanding Credit Exposure
under the applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and under the
Loan Documents will not be "plan assets" under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Lender party
to this Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Commitment and Outstanding Credit Exposure assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Agent and the Borrower shall, if the
transferor Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate, replacement
Notes are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments, as adjusted pursuant to such
assignment.
12.3 Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.4 Tax Treatment. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
-------
13.1 Notices. Except as otherwise permitted by Section 2.14 with respect
to borrowing notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
55
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth in its administrative questionnaire or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
13.2 Change of Address. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent, the LC Issuer
and the Lenders and each party has notified the Agent by facsimile transmission
or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
------------------------------------------------------------
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER
56
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT, THE LC
ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, THE LC ISSUER OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
57
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
MYR GROUP, INC.
By:
---------------------------------
Title:
---------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ( ▇▇▇) ▇▇▇-▇▇▇▇
FAX: ( ▇▇▇) ▇▇▇-▇▇▇▇
Commitments
50,000,000 BANK ONE, NA,
Individually and as Agent
By:
---------------------------------
Title:
---------------------------------
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Driver
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
58
PRICING SCHEDULE
--------------------------------------------------------------------------
Applicable Level I Level II Level III Level IV Level V
Margin Status Status Status Status Status
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Applicable Margin .500% .625% .750% 1.000% 2.000%
Rate
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Applicable Fee .100% .125% .150% .200% .400%
Rate
--------------------------------------------------------------------------
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, GPU's ▇▇▇▇▇'▇
Rating is A3 or better and GPU's S&P Rating is A- or better.
"Level II Status" exists at any date if, on such date, (i) GPU has
not qualified for Level I Status and (ii) GPU's ▇▇▇▇▇'▇ Rating is Baa1 or better
and GPU's S&P Rating is BBB+ or better.
"Level III Status" exists at any date if, on such date, (i) GPU has
not qualified for Level I Status or Level II Status and (ii) GPU's ▇▇▇▇▇'▇
Rating is Baa2 or better and GPU's S&P Rating is BBB or better.
"Level IV Status" exists at any date if, on such date, (i) GPU has
not qualified for Level I Status, Level II Status or Level III Status and (ii)
GPU's ▇▇▇▇▇'▇ Rating is Baa3 or better and GPU's S&P Rating is BBB- or below.
"Level V Status" exists at any date if, on such date, GPU has not
qualified for Level I Status, Level II Status, Level III Status or Level IV
Status.
"▇▇▇▇▇'▇ Rating" means, at any time, the rating issued by ▇▇▇▇▇'▇
and then in effect with respect to GPU's senior unsecured long-term debt
securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P and then
in effect with respect to GPU's senior unsecured long-term debt securities
without third-party credit enhancement.
"Status" means either Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on GPU's Status as determined from its
then-current ▇▇▇▇▇'▇ and S&P Ratings. The credit rating in effect on any date
for the purposes of this Schedule is that in effect at the close of business on
such date. If at any time GPU has no ▇▇▇▇▇'▇ Rating or no S&P Rating, Level V
Status shall exist.
59
EXHIBIT A
FORM OF OPINION OF BORROWER'S COUNSEL
---------------------- , 2000
The Agent and the Lenders who are parties to the Credit Agreement described
below.
Gentlemen/Ladies:
We are counsel for MYR Group, Inc. (the "Borrower"), and have
represented the Borrower in connection with its execution and delivery of a
Credit Agreement dated as of , 2000 (the "Agreement") among the Borrower, the
Lenders named therein, and Bank One, NA, as Administrative Agent and LC Issuer,
and providing for Advances in an aggregate principal amount not exceeding
$50,000,000 at any one time outstanding. All capitalized terms used in this
opinion and not otherwise defined herein shall have the meanings attributed to
them in the Agreement.
We have examined the Borrower's **[describe constitutive documents
of Borrower and appropriate evidence of authority to enter into the
transaction]**, the Loan Documents and such other matters of fact and law which
we deem necessary in order to render this opinion. Based upon the foregoing, it
is our opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation, partnership
or limited liability company duly and properly incorporated or organized, as the
case may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
2. The execution and delivery by the Borrower of the Loan Documents to
which it is a party and the performance by the Borrower of its obligations
thereunder have been duly authorized by proper corporate proceedings on the part
of the Borrower and will not:
(a) require any consent of the Borrower's shareholders or members
(other than any such consent as has already been given and remains in full
force and effect);
(b) violate (i) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture,
60
instrument or agreement to which the Borrower or any of its Subsidiaries
is a party or is subject, or by which it, or its Property, is bound, or
conflict with or constitute a default thereunder; or
(c) result in, or require, the creation or imposition of any Lien
in, of or on the Property of the Borrower or a Subsidiary pursuant to the
terms of any indenture, instrument or agreement binding upon the Borrower
or any of its Subsidiaries.
3. The Loan Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower and constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their terms except to the extent the enforcement thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject also to the availability of equitable remedies if
equitable remedies are sought.
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of our knowledge after due
inquiry, threatened against the Borrower or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
5. No order, consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof (including, without limitation, under the Public Utility
Holding Company Act of 1935, as amended), which has not been obtained by the
Borrower or any of its Subsidiaries, is required to be obtained by the Borrower
or any of its Subsidiaries in connection with the execution and delivery of the
Loan Documents, the borrowings under the Agreement, the payment and performance
by the Borrower of the Obligations, or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
This opinion may be relied upon by the Agent, the Lenders and their
participants, assignees and other transferees.
Very truly yours,
61
EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of ------- , 2000 (as amended, modified, renewed or
extended from time to time, the "Agreement") among the MYR Group, Inc. (the
"Borrower"), the lenders party thereto and Bank One, NA, as Administrative Agent
for the Lenders and LC Issuer. Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the meanings ascribed thereto in
the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ----------------------- of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
The foregoing certifications, together with the computations set
forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ------------------
day of ---- ,------.
62
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of ---------,----- with
Provisions of ------ and -------- of
the Agreement
63
EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
(the "Assignor") and (the "Assignee") is dated as
of , 200 . The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other Loan
Documents relating to the facilities listed in Item 3 of Schedule 1. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after
this Assignment Agreement, together with any consents required under the Credit
Agreement, are delivered to the Agent. In no event will the Effective Date occur
if the payments required to be made by the Assignee to the Assignor on the
Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of
Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date, the
amount agreed to by the Assignor and the Assignee. On and after the Effective
Date, the Assignee shall be entitled to receive from the Agent all payments of
principal, interest and fees with respect to the interest assigned hereby. The
Assignee will promptly remit to the Assignor any interest on Loans and fees
received from the Agent which relate to the portion of the Commitment or Loans
assigned to the Assignee hereunder for periods prior to the Effective Date and
not previously paid by the Assignee to the Assignor. In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
64
5. RECORDATION FEE. The Assignor and Assignee each agree to pay
one-half of the recordation fee required to be paid to the Agent in
connection with this Assignment Agreement unless otherwise specified in Item
6 of Schedule 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) confirms
that the execution and delivery of this Assignment Agreement by the Assignee is
duly authorized, (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Lender, (vi) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vii)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as defined
under ERISA and that its rights, benefits and interests in and under the Loan
Documents will not be "plan assets" under ERISA, (viii) agrees to
65
indemnify and hold the Assignor harmless against all losses, costs and expenses
(including, without limitation, reasonable attorneys' fees) and liabilities
incurred by the Assignor in connection with or arising in any manner from the
Assignee's non-performance of the obligations assumed under this Assignment
Agreement, and (ix) if applicable, attaches the forms prescribed by the Internal
Revenue Service of the United States certifying that the Assignee is entitled to
receive payments under the Loan Documents without deduction or withholding of
any United States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by
the internal law, and not the law of conflicts, of the State of Illinois.
9. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may be
executed in counterparts. Transmission by facsimile of an executed counterpart
of this Assignment Agreement shall be deemed to constitute due and sufficient
delivery of such counterpart and such facsimile shall be deemed to be an
original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties
hereto have executed this Assignment Agreement by executing Schedule 1 hereto as
of the date first above written.
66
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Credit Agreement dated as of
, 2000 among MYR Group, Inc., certain lenders and Bank
One, NA, as Administrative Agent and LC Issuer
2. Date of Assignment Agreement: ------------ , 200
3. Amounts (As of Date of Item 2 above):
Facility Facility Facility Facility
-------- -------- -------- --------
1* 2* 3* 4*
-------- -------- -------- --------
a. Assignee's
percentage
of each Facility
purchased
under the
Assignment
Agreement** % % % %
-------- -------- -------- --------
b. Amount of
each Facility
purchased
under the
Assignment
Agreement*** $ $ $ $
-------- -------- -------- --------
4. Assignee's Commitment (or Loans
with respect to terminated
Commitments) purchased
hereunder:*** $
5. Proposed Effective Date: -------
67
6. Non-standard Recordation Fee
Arrangement N/A***
[Assignor/Assignee
to pay 100% of fee]
[Fee waived by Agent]
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: ------------------- By: ------------------------
Title: ------------------- Title:------------------------
ACCEPTED AND CONSENTED TO**** BY ACCEPTED AND CONSENTED TO****BY
MYR GROUP, INC. BANK ONE, NA
By: ------------------ By: ------------------------
Title: ------------------ Title: ------------------------
* Insert specific facility names per Credit Agreement
** Percentage taken to 10 decimal places
*** If fee is split 50-50, pick N/A as option
**** Delete if not required by Credit Agreement
68
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
--------------------------------
Attach Assignor's Administrative Information Sheet, which must include
notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
--------------------
Contact:
Name: Telephone No.:
Fax No.: Telex No.:
Answerback:
Payment Information:
--------------------
Name & ABA # of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
Address for Notices for Assignor:
---------------------------------
ASSIGNEE INFORMATION
--------------------
Credit Contact:
---------------
Name: Telephone No.:
Fax No.: Telex No.:
Answerback:
Key Operations Contacts:
------------------------
Booking Installation: Booking Installation:
Name: Name:
Telephone No.: Telephone No.:
Fax No.: Fax No.:
Telex No.: Telex No.:
Answerback: Answerback:
Payment Information:
--------------------
Name & ABA # of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
Address for Notices for Assignee:
---------------------------------
BANK ONE INFORMATION
69
Assignee will be called promptly upon receipt of the signed agreement.
Initial Funding Contact: Subsequent Operations Contact:
Name: ---------------------- Name:----------------------
Telephone No.: (312) Telephone No.: (312)
----------- --------------
Fax No.: (312) Fax No.: (312)
------------------ ------------------
Bank One Telex No.: 190201 (Answerback: FNBC UT)
-----------------------------
Initial Funding Standards:
-------------------------
Libor - Fund 2 days after rates are set.
Bank One Wire Instructions: Bank One, NA, ABA # ▇▇▇▇▇▇▇▇▇
------------------------- LS2 Incoming Account # 481152860000
Ref: ---------------
Address for Notices for Bank One: ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------- Attn: Agency Compliance
Division, Suite IL1-0353
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇)▇▇▇-▇▇▇▇
70
EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, NA,
as Administrative Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated ----------------, 2000 (as the same may be
amended or modified, the "Credit Agreement"), among MYR Group, Inc.
(the "Borrower"), the Lenders named therein and Bank One, NA, as
Administrative Agent and IC Issuer. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned
thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.
Facility Identification Number(s) ----------------------------
Customer/Account Name ----------------------------
Transfer Funds To ----------------------------
For Account No. ----------------------------
Reference/Attention To ---------------------------
Authorized Officer (Customer Representative) Date -----------
---------------------------- ----------------------------
(Please Print) Signature
Bank Officer Name Date ----------------------
---------------------------- ----------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
71
EXHIBIT E
NOTE
----------- , 2000
MYR Group, Inc., a Delaware corporation (the "Borrower"), promises
to pay to the order of ------------------------------------ (the "Lender") the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article II of the Agreement (as hereinafter defined), in
immediately available funds at the main office of Bank One, NA in Chicago,
Illinois, as Agent, together with interest on the unpaid principal amount hereof
at the rates and on the dates set forth in the Agreement. The Borrower shall pay
the principal of and accrued and unpaid interest on the Loans in full on the
Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of-------------- , 2000 (which,
as it may be amended or modified and in effect from time to time, is herein
called the "Agreement"), among the Borrower, the lenders party thereto,
including the Lender, and Bank One, NA, as Agent and LC Issuer, to which
Agreement reference is hereby made for a statement of the terms and conditions
governing this Note, including the terms and conditions under which this Note
may be prepaid or its maturity date accelerated. Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to them
in the Agreement.
MYR GROUP, INC.
By:
Print Name:
Title:
72
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF MYR GROUP, INC.,
DATED ---------------------,
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
---- ---- ------ ---- -------
73
SCHEDULE 1
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.13)
Investment Jurisdiction of Owned Amount of Percent
In Organization By Investment Ownership
-- ------------ -- ---------- ---------
74
SCHEDULE 2
INDEBTEDNESS AND LIENS
(See Sections 5.14, 6.10 and 6.14)
Maturity
Indebtedness Indebtedness Property and Amount
Incurred By Owed To Encumbered (If Any) of Indebtedness
----------- ------- ------------------- ---------------
1) MYR Group ▇▇▇▇▇▇ Bank unsecured 5,000,000
2) MYR Group ▇▇▇▇▇▇ Bank unsecured ?
3) MYR Group ▇▇▇▇▇▇ Bank unsecured 1,939,139
LC obligation
Obligations 1 and 2 above will be repaid from the proceeds of borrowings under
the Bank One Credit Agreement
75
EXHIBIT F
FORM OF OPINION OF BORROWER'S COUNSEL
------------------- , 2000
The Agent and the Lenders who are parties to the Credit Agreement described
below.
Gentlemen/Ladies:
We are counsel for GPU, Inc. ("GPU") and have represented GPU in
connection with its execution and delivery of a Support Agreement (the "Support
Agreement") dated --------, 2000 with respect to an Agreement dated as of
--------, 2000 (the "Agreement") among MYR Group, Inc., the Lenders named
therein, and Bank One, NA, as Administrative Agent and LC Issuer, and providing
for Advances in an aggregate principal amount not exceeding $50,000,000 at any
one time outstanding. All capitalized terms used in this opinion and not
otherwise defined herein shall have the meanings attributed to them in the
Agreement.
We have examined GPU's **[describe constitutive documents of GPU and
appropriate evidence of authority to enter into the transaction]**, the Support
Agreement and such other matters of fact and law which we deem necessary in
order to render this opinion. Based upon the foregoing, it is our opinion that:
l. GPU is a corporation, duly and properly incorporated, validly existing
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted.
2. The execution and delivery by GPU of the Support Agreement and the
performance by GPU of its obligations thereunder have been duly authorized by
proper corporate proceedings on the part of GPU and will not:
(a) require any consent of GPU's shareholders or members (other than
any such consent as has already been given and remains in full force and
effect);
(b) violate (i) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on GPU or any of its Subsidiaries or
(ii) GPU's or any such Subsidiary's articles or certificate of
incorporation, partnership agreement, certificate of partnership, articles
or certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (iii) the provisions of any indenture,
instrument or agreement to which GPU or any of its Subsidiaries is a party
or is subject, or by which it, or its Property, is bound, or conflict with
or constitute a default thereunder; or
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(c) result in, or require, the creation or imposition of any Lien
in, of or on the Property of GPU or a Subsidiary pursuant to the terms of
any indenture, instrument or agreement binding upon the Borrower or any of
its Subsidiaries.
3. The Support Agreement has been duly executed and delivered by GPU and
constitutes the legal, valid and binding obligation of GPU enforceable against
GPU in accordance with its terms except to the extent the enforcement thereof
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and subject also to the availability
of equitable remedies if equitable remedies are sought.
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of our knowledge after due
inquiry, threatened against GPU or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
5. No order, consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof (including, without limitation, under the Public Utility
Holding Company Act of 1935, as amended), which has not been obtained by GPU or
any of its Subsidiaries, is required to be obtained by GPU or any of its
Subsidiaries in connection with the execution and delivery of the Support
Agreement, or the legality, validity, binding effect or enforceability of the
Support Agreement.
This opinion may be relied upon by the Agent, the Lenders and their
participants, assignees and other transferees.
Very truly yours,
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EXHIBIT G
November 28, 2000
Bank One, NA, as Administrative Agent and
the Lenders under the Credit Agreement
hereafter referred to
Ladies and Gentlemen:
As you are aware, MYR Group, Inc. ("MYR") is a wholly-owned subsidiary of GPU,
Inc. ("GPU"). We are aware that certain lenders (the "Lenders") and Bank One, NA
as administrative agent (the "Agent") and LC Issuer propose to enter into a
Credit Agreement, dated as of November 28, 2000. In order to induce the Lenders,
the Agent and the LC Issuer to enter into such a Credit Agreement, GPU hereby
confirms as follows:
1. GPU will not reduce its ownership in MYR without your prior
written consent.
2. GPU will not cause or permit MYR to make any dividend or other
payment or distribution on its capital stock, or otherwise lend any
amounts to GPU or redeem any shares of its capital stock during the
term of the Credit Agreement without the written consent of the
Lenders.
3. Through the Board of Directors of MYR, GPU will provide appropriate
management oversight to help it meet its financial obligations.
4. GPU undertakes to utilize its best efforts to arrange for repayment
of MYR's obligations under the Credit Agreement when they become due
and payable, and further undertakes to utilize its best efforts to
arrange for the financing of MYR's ongoing business operations as
may be necessary or appropriate.
This letter shall terminate on and as of the Guaranty Date (as defined in the
Credit Agreement.)
Very truly yours,
GPU, Inc.
By: -------------------------
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[EXHIBIT H
GUARANTY
GUARANTY, dated as of ----------, 2000 (this "Guaranty"), of GPU,
INC., a Pennsylvania corporation (the "Parent"), in favor of the Administrative
Agent, the LC Issuer and the Lenders under the Credit Agreement referred to
herein.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Parent is the direct owner of 100% of the
outstanding common stock of MYR Group, Inc., a Delaware corporation (the
"Borrower");
WHEREAS, the Borrower has made and intends to make borrowings from
the Lenders pursuant to that certain $50,000,000 Credit Agreement, dated as of
----------, 2000 (said Agreement, as it may hereafter be amended or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
among the Borrower, the Lenders named therein and Bank One, NA, as
Administrative Agent and LC Issuer thereunder;
WHEREAS, the Parent desires to enter into this Guaranty in order to
enable the Borrower to incur and maintain debt under the Credit Agreement; and
WHEREAS, the Parent understands and agrees that the Agent, the LC
Issuer and the Lenders will rely hereon in making and maintaining extensions of
credit to the Borrower;
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows for the benefit of the
Administrative Agent, the LC Bank and each Lender:
SECTION 1. Guaranty. (a) The Parent hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations (whether payable at
scheduled maturity, upon acceleration, as a mandatory prepayment or otherwise)
of the Borrower now or hereafter existing under the Credit Agreement, whether
for principal, interest, fees, expenses or otherwise (such obligations being the
"Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Agent, the LC Issuer and any Lender
in enforcing any rights under this Guaranty. Without limiting the generality of
the foregoing, the Parent's liability shall extend to all amounts that
constitute part of the Obligations and would be owed by the Borrower to the
Agent, the LC Issuer and the Lenders under the Credit Agreement and the other
documents entered into in connection therewith (collectively, the "Loan
Documents") but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower.
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SECTION 2. Guaranty Absolute. The Parent guarantees that the
Obligations will be paid strictly in accordance with the terms of the Credit
Agreement, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent, the
LC Issuer or any Lender, as the case may be, with respect thereto. The
obligations of the Parent under this Guaranty are independent of the
Obligations, and a separate action or actions may be brought and prosecuted
against the Parent to enforce this Guaranty, irrespective of whether any action
is brought against the Borrower or whether the Borrower is joined in any such
action or actions. The liability of the Parent under this Guaranty shall, to the
fullest extent permitted by law, be absolute, irrevocable and unconditional
irrespective of, and the Parent waives any defense based upon:
(i) any lack of validity or enforceability of the Credit
Agreement or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from the Credit Agreement,
including, without limitation, any increase in the Obligations resulting
from the extension of additional credit to the Borrower;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of the Borrower;
(v) any change, restructuring or termination of the corporate
structure or existence of the Borrower; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Agent, the LC Issuer or any Lender upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though such payment had not been made.
SECTION 3. Waiver. The Parent hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
and this Guaranty and any requirement that the Agent, the LC Issuer or any
Lender protect, secure, perfect or insure any security interest or lien or any
property subject thereto or exhaust any right or take any action against the
Borrower or any other Affiliate or any collateral.
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SECTION 4. Subrogation. The Parent will not exercise any rights
which it may acquire by way of subrogation under this Guaranty, by any payment
made hereunder or otherwise, until all the Obligations and all other amounts
payable under this Guaranty shall have been paid in full and the Commitments
shall have expired or terminated. If any amount shall be paid to the Parent on
account of such subrogation rights at any time prior to the later of (x) the
payment in full of the Obligations and all other amounts payable under this
Guaranty and (y) the expiration or termination of the Commitments, such amount
shall be held in trust for the benefit of the Agent, the LC Issuer and the
Lenders and shall forthwith be paid to the Agent to be credited and applied upon
the Obligations, whether matured or unmatured, in accordance with the terms of
the Credit Agreement and the other Loan Documents or to be held by the Agent as
collateral security for any Obligations thereafter existing. If (i) the Parent
shall make payment to the Agent, the LC Issuer and the Lenders of all or any
part of the Obligations, (ii) all the Obligations and all other amounts payable
under this Guaranty shall be paid in full and (iii) the Commitments shall have
expired or terminated, the Agent, the LC Issuer and the Lenders (as appropriate)
will, at the Parent's request, execute and deliver to the Parent appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to the Parent of an interest in the
Obligations resulting from such payment by the Parent.
SECTION 5. Representations and Warranties of the Parent. The
Parent represents and warrants as follows:
(a) The Parent is a corporation duly incorporated, validly
subsisting and in good standing under the laws of Pennsylvania.
(b) The execution, delivery and performance by the Parent of this
Guaranty are within the Parent's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (i) the Parent's charter
or by-laws or (ii) any applicable law or any material contractual restriction
binding on or affecting the Parent, and do not result in or require the creation
of any Lien upon or with respect to any of its purposes.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Parent of this Guaranty,
except for an appropriate order of the SEC under the Public Utility Holding
Company Act of 1935, as amended (the "Utility Act"), which order has been duly
obtained, is in full force and effect, is sufficient for its purpose and is not
subject to any pending or, to the knowledge of the Parent, threatened appeal or
other proceeding seeking reconsideration or review thereof.
(d) This Guaranty is a legal, valid and binding obligation of the
Parent enforceable against the Parent in accordance with its terms.
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(e) The audited consolidated balance sheet of the Parent and its
Subsidiaries as at December 31, 1999, and the related audited consolidated
statements of income and retained earnings of the Parent and its Subsidiaries
for the fiscal year then ended, together with the notes thereto, and the
unaudited consolidated balance sheet of the Parent and its Subsidiaries as at
September 30, 2000, and the related unaudited consolidated statements of income
and retained earnings of the Parent and its Subsidiaries for the nine-month
period then ended, together with the notes thereto, copies of which have been
furnished to the LC Issuer and each Lender, fairly present (subject, in the case
of such unaudited financial statements, to year-end adjustments) the financial
condition of the Parent and its Subsidiaries as at such dates and the results of
the operations of the Parent and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accountings principles
consistently applied. Except as disclosed in the Annual Report of the Parent or
any Utility Subsidiary (each, a "GPU Party") on Form 10-K for the fiscal year
ended December 31, 1999 or in any GPU Party's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 2000, copies of which have been delivered
to the Administrative Agent, since December 31, 1999, there has been no material
adverse change in such financial condition or results of operations.
(f) There has not been any failure by the Parent to file at or prior
to the time required any reports or other filings with any regulatory authority
having jurisdiction over it that would adversely affect the enforceability
against the Parent of this Guaranty.
(g) The Parent is not in default, and no condition exists which with
notice or lapse of time or both would constitute a default, under any agreement
to which the Parent is a party evidencing Indebtedness with a principal amount
equal to or in excess of $20,000,000.
[(h) The Parent owns beneficially and of record, free and clear of
all Liens, directly or indirectly 100% of the common stock of each Metropolitan
Edison Company, Mersey Central Power & Light Company and Pennsylvania Electric
Company (each a "Utility Subsidiary") and of the Borrower.]
(i) Except as disclosed any GPU Party's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999 or in any such GPU Party's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 2000, copies of
which have been delivered to the Agent, there is no pending or, to any such GPU
Party's knowledge, threatened action or proceeding affecting any such GPU Party
or any of its Subsidiaries before any court, governmental agency or arbitrator
that could reasonably be expected to materially adversely affect the financial
condition or operations of the Parent or of the Parent and its Subsidiaries,
taken as a whole, or could reasonably be expected to materially adversely affect
the financial condition or operations of any Utility Subsidiary or any Utility
Subsidiary and its Subsidiaries, taken as a whole.
(j) Schedule B (Actuarial Information) to the 1999 annual report
(Form 5500 Series) with respect to each Plan of the Parent, copies of which have
been filed with the Internal Revenue
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Service and furnished to the Agent, is complete and accurate and fairly presents
the funding status of such Plan, and since the date of such Schedule B there has
been no material adverse change in such funding status.
(k) Neither any GPU Party nor any member of the Parent's Controlled
Group (an "ERISA Affiliate") has incurred or reasonably expects to incur any
material withdrawal liability under ERISA to any Multiemployer Plan of the
Parent or any ERISA Affiliate of the Parent.
(l) Neither the Parent nor the Borrower is an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 6. Affirmative Covenants of the Parent. So long as any
amount in respect of any Advance shall remain unpaid, any Lender shall have any
Commitment or any Obligation (whether contingent or otherwise) shall remain
unpaid, the Parent will or will cause each GPU Party to, unless the Required
Lenders shall otherwise consent in writing:
(a) Credit Agreement. To the extent required to prevent the
occurrence of an Event of Default, cause the Borrower to perform and observe for
the benefit of the Agent and the Lenders each and every covenant and agreement
of the Borrower set forth in Article VI of the Credit Agreement, including but
not limited to delivering to the Agent and the Lenders all financial statements
and financial and other information required to be delivered pursuant to Section
6.1 of the Credit Agreement.
(b) Payment of Taxes, Etc. Pay and discharge, and with respect to
the Utility Subsidiaries, cause the payment and discharge of, all taxes,
assessments and governmental charges or levies imposed upon any GPU Party or
upon its income or profits, or upon any properties belonging to it, prior to the
date on which penalties attach thereto, and all lawful claims which, if unpaid,
might become a Lien upon any properties of such GPU Party, provided it shall not
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings.
(c) Performance and Compliance with Other Agreements. Perform and
comply with, and with respect to the Utility Subsidiaries, cause the performance
by and compliance with, each of the material provisions of each material
indenture, credit agreement, contract or other agreement by which such GPU Party
is bound, non-performance or non-compliance with which would have a material
adverse effect upon such GPU Party's business or credit or materially and
adversely affect its ability to perform its obligations hereunder except
material contracts or other agreements being contested in good faith.
(d) Preservation of Corporate Existence, Conduct of Business, Etc.
Except to the extent otherwise permitted under Section 7(d), preserve and
maintain, and with respect to the Utility Subsidiaries, cause the preservation
and maintenance of,
83
such GPU Party's corporate existence in the jurisdiction of its incorporation,
and cause the qualification and continued qualification with respect to the
Utility Subsidiaries, and qualify and continue to qualify such GPU Party, as a
foreign corporation in good standing in each jurisdiction in which such
qualification is necessary or desirable in view of its business and operations
or the ownership of such GPU Party's properties, except where the failure to be
so qualified would not materially adversely affect its financial condition,
operations, properties or business, and preserve its material rights, franchises
and privileges to conduct its business substantially as conducted on the date
hereof.
(e) Compliance with Laws, Etc. Comply with, and, with respect to the
Utility Subsidiaries, cause compliance with, the requirements of all applicable
laws, rules, regulations and orders of any governmental authority,
non-compliance with which would have a material adverse effect upon such GPU
Party's business or credit or in any way materially and adversely affect its
ability to perform its obligations hereunder except laws, rules, regulations and
orders being contested in good faith.
(f) Maintenance of Insurance. Maintain, and with respect to the
Utility Subsidiaries, cause the maintenance of, insurance in effect at all times
in such amounts as are available to such GPU Party and covering such risks as is
usually carried by companies of a similar size, engaged in similar businesses
and owning similar properties (including, without limitation, the operation and
ownership of nuclear generating facilities) in the same general geographical
area in which such GPU Party operates, either with responsible and reputable
insurance companies or associations, or, in whole or in part, by establishing
reserves of one or more insurance funds, either alone or with other corporations
or associations.
(g) Books and Records; Inspection Rights. Keep and, with respect to
the Utility Subsidiaries, cause each of them to keep, proper books of record and
account in which entries shall be made of all financial transactions and assets
and business of such GPU Party in accordance with GAAP; and at any reasonable
time and from time to time, permit and, with respect to the Utility
Subsidiaries, cause each of them to permit, the Agent, the LC Issuer or any
Lender or any agents or representatives thereof to examine and make copies of
and abstracts from the records and books of account of, and visit the properties
of, such GPU Party and to discuss the affairs, finances and accounts of such GPU
Party with any of its officers or directors.
[(h) Ownership of Utility Subsidiaries and Borrower. Maintain at all
times direct or indirect beneficial ownership, free and clear of all Liens other
than those permitted by Section 7(a)(iii), of 100% of all outstanding shares of
common stock of each Utility Subsidiary and the Borrower.]
(i) Debt to Total Capitalization. Maintain at all times a
ratio of Adjusted Debt (as defined below) to Total Capitalization (as defined
below) of not more than 0.68 to 1.0. As used herein: (i)"Adjusted Debt"
means all consolidated Debt of the Parent and its Subsidiaries, less: (A)
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Subordinated Debt not exceeding the aggregate principal amount of $400,000,000
and (B) Securitization Securities not exceeding the aggregate principal amount
of $900,000,000; (ii) "Securitization Securities" means transition bonds issued
pursuant to the New Jersey Electric Discount and Energy Competition Act or the
Pennsylvania Electricity Generation Customer Choice and Competition Act if (and
only if) no recourse may be had to the Parent or any of the GPU Parties (or to
their respective assets) for the payment of such obligations, other than for
failure to collect and pay over the rates, taxes and/or charges provided for in
such legislation to service such obligations; (iii) "Subordinated Debt" means
subordinated Debt incurred by any Utility Subsidiary as a result of the
borrowings of the proceeds of any trust-originated or limited
partnership-originated preferred securities by such Utility Subsidiary; "Total
Capitalization" means the sum of (i) consolidated Debt of the Parent and its
Subsidiaries (other than Securitization Securities excluded from the computation
of Adjusted Debt), plus (ii) the sum of the capital stock (excluding treasury
stock and capital stock subscribed for and unissued) and surplus (including
earned surplus, capital surplus, translation adjustment and the balance of the
current profit and loss account not transferred to surplus) accounts of the
Parent and its Subsidiaries appearing on a consolidated balance sheet of the
Parent and its Subsidiaries, in each case prepared as of the date of
determination in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in Section 5(e), after eliminating all intercompany transactions and
all amounts properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries; and (v) "Debt" of any Person shall mean (a)
indebtedness for borrowed money, (b) obligations evidenced by bonds, debentures,
notes or other similar instruments, (c) obligations to pay the deferred purchase
price of property or services, (d) obligations as lessee under leases which
shall have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (e) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(a) through (d) above, (f) liabilities in respect of unfunded vested benefits
under Plans, and (g) withdrawal liability incurred under ERISA by such Person or
any of its Affiliates to any Multiemployer Plan.
(j) Furnish to the LC Bank and each Lender, and cause each Utility
Subsidiary to furnish to the LC Issuer and each Lender:
(i) as soon as possible and in any event within three Business
Days after the occurrence of each Default applicable to such GPU
Party and each Unmatured Default applicable to such GPU Party
continuing on the date of such statement, the statement of the chief
financial officer or vice president and treasurer of such GPU Party
setting forth details of such Default or Unmatured Default and the
action which such GPU Party proposes to take with respect thereto;
85
(ii) as soon as available and in any event within sixty days
after the end of each of the first three quarters of each fiscal
year of such GPU Party, a balance sheet of such GPU Party as of the
end of such quarter and statements of income and retained earnings
and cash flows of such GPU Party (in the case of the Parent, on a
consolidated and consolidating basis) for the 3-month and 12-month
periods ending with the end of such quarter, setting forth in each
case in comparative form the corresponding figures as of the end of
and for the 3-month and the 12-month periods ending on the
corresponding date of the preceding fiscal year, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by
the chief financial officer or vice president and treasurer of such
GPU Party as having been prepared in accordance with generally
accepted accounting principles consistently applied, together with a
certificate of said officer stating that said officer has no
knowledge that a Default or an Unmatured Default, in each case,
applicable to such GPU Party, has occurred and is continuing or, if
a Default or an Unmatured Default applicable to such Affiliate has
occurred and is continuing, a statement as to the nature thereof and
the action which such GPU Party proposes to take with respect
thereto;
(iii) as soon as available and in any event within ninety days
after the end of each fiscal year of each GPU Party, a copy of the
audited balance sheet for such year for such GPU Party including
therein an audited balance sheet as of the end of such fiscal year
and audited statements of income and retained earnings and cash
flows of such GPU Party (in the case of the Parent, on a
consolidated and consolidating basis) for such fiscal year, in each
case certified (except for the consolidating financial statements)
by PriceWaterhouseCoopers LLP or other independent public
accountants of recognized standing reasonable acceptable to the
Agent as having been prepared in accordance with generally accepted
accounting principles consistently applied;
(iv) within thirty days after the filing thereof, copies of
all Annual Reports on Form 10-K (or successor form), Quarterly
Reports on Form 10-Q (or successor form), and reports on Form 8-K
(or successor form) of each GPU Party filed with the SEC;
(v) as soon as possible and in any event within three Business
Days of the occurrence of a material adverse change in the financial
condition or results of operations or prospects of such GPU Party,
the statement of the chief financial officer or vice president and
treasurer of such GPU Party setting forth the details of such
change, the anticipated effects thereof and the action which such
GPU Party proposes to take with respect thereto;
86
(vi) as soon as possible and in any event within three days
after any GPU Party acquires knowledge of the filing of any appeal
of, or petition seeking modification or setting aside of, any order
of the SEC under the Utility Act obtained in connection with this
Guaranty, notice of such appeal or petition together with a copy
thereof, if available;
(vii) as soon as practicable and in any event within three
Business Days after any GPU Party acquires knowledge thereof, notice
of any change in the Debt Rating or in any credit rating used to
determine the Debt Rating;
(viii) as soon as practicable and in any event within three
Business Days after any GPU Party acquires knowledge thereof, notice
of any change in the short-term debt borrowing limit prescribed by
the SEC for any GPU Party under the Public Utility Holding Company
Act of 1935 (such GPU Party's "Short-Term Debt Limit");
(ix) together with the financial statements delivered pursuant
to paragraphs (ii) and (iii) above, a certificate of the chief
financial officer or vice president and treasurer of the Parent
setting forth in reasonable detail the calculations used in
determining compliance by each relevant GPU Party with Section 6(i)
and 7(b)(viii) as of the last day of the period or periods covered
by such financial statements; and
(x) such other information respecting the business, properties
or the condition or operations, financial or otherwise, of such GPU
Party as any Lender may through to Agent from time to time
reasonably request.
SECTION 7. Negative Covenants of the Parent. So long as any amount
in respect of any Advance shall remain unpaid, any Lender shall have any
Commitment or any Obligation (whether contingent or otherwise) shall remain
unpaid, the Parent will not and will not cause any other GPU Party to, unless
the Required Lenders shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any Utility Subsidiary to create, incur, assume or suffer to exist, any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement, upon or with respect
to any of such GPU Party's properties or rights, whether now owned or hereafter
acquired (any of the foregoing being referred to herein as a "Lien"), or assign
any right to receive income, services or property, except that the foregoing
restrictions shall not apply to any such assignments in connection with the
issuance of Securitization Securities not exceeding $900,000,000 at any time
outstanding or to Liens:
87
(i) existing on the date hereof;
(ii) created to secure any Indebtedness of a GPU Party under
any agreement or other document listed on Schedule I hereto and any
extensions, renewals or refinancing of any such Indebtedness,
provided that, in connection with any such extension, renewal or
refinancing, the principal amount of such Indebtedness shall not be
increased; provided, further, however, that no Lien created to
secure any such Indebtedness shall extend to or cover property of
any type which is excluded therefrom on the date hereof;
(iii) for taxes, assessments or governmental charges or levies
on property of such GPU Party if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings;
(iv) imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary
course of business;
(v) arising out of pledges or deposits (A) under worker's
compensation laws, unemployment insurance, or other social security,
or similar legislation, or (B) to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money),
leases, surety or similar bonds or other similar obligations, in
each case under this clause (B) made in the ordinary course of
business in an amount not to exceed $15,000,000 in the aggregate for
all GPU Parties at any one time outstanding;
(vi) arising out of purchase money mortgages or other Liens on
property acquired by such GPU Party in the ordinary course of
business to secure the purchase price of such property or to secure
Indebtedness incurred solely for the purpose of financing the
acquisition of any such property to be subject to such Liens, or
Liens existing on any such property at the time of acquisition, or
extensions, renewals or replacements of any of the foregoing for the
same or a lesser amount, provided that no such Lien shall extend to
or cover any property other than the property being acquired, and no
such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced;
(vii) affecting the fuel used in the power generating
operations of any GPU Party;
(viii) constituting attachment, judgment and other similar
Liens arising in connection with court proceedings, provided that
the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested
in
88
good faith by proper proceedings or the payment of which is covered
in full (subject to customary deductible amounts) by insurance
maintained with responsible and reputable insurance companies or
associations and such applicable insurance company or association
has acknowledged its liability therefor in writing;
(ix) constituting easements, restrictions and other similar
encumbrances arising in the ordinary course of business, which in
the aggregate do not materially adversely affect such GPU Party's
use of its properties; or
(x) in addition to the foregoing, securing amounts not to
exceed in the aggregate $75,000,000 for each GPU Party at any one
time outstanding.
(b) Indebtedness. Create, incur, assume or suffer to exist, or
permit any Utility Subsidiary to create, incur, assume or suffer to exist, any
Indebtedness, except:
(i) Indebtedness of any Utility Subsidiary directly
secured by Liens permitted by Section 7(a)(ii)-(vii);
(ii) Indebtedness of a GPU Party under any arrangement with
any commercial bank pursuant to which such commercial bank has
agreed (whether or not such agreement shall constitute a committed
facility or shall otherwise be legally enforceable) to make
unsecured loans or extend credit on an unsecured basis to one or
more such GPU Parties up to a specified amount either on a demand
basis or for periods of not in excess of 270 days or any similar
financing arrangement commonly known as a "line of credit" (any such
arrangement an "External Line"), commercial paper and other forms of
unsecured short-term indebtedness, such commercial paper and such
other unsecured short-term indebtedness having a stated maturity not
in excess of 270 days from the date of issuance; provided, however,
that the aggregate principal amount of all Indebtedness under
External Lines of such GPU Party, such unsecured commercial paper of
such GPU Party and such other unsecured short-term indebtedness of
such GPU Party in each case at any one time outstanding, shall not
exceed at any time (A) in the case of a GPU Party other than the
Parent, such GPU Party's Short-Term Debt Limit, and (B) in the case
of the Parent, the lesser of the Parent's Short-Term Debt Limit and
$250,000,000;
(iii) Indebtedness of the Parent which is expressly and
effectively subordinated to the Indebtedness hereunder and, without
limiting the generality of the foregoing, which provides that,
unless and until the Indebtedness hereunder shall have been paid in
full, no payments of any kind, whether for
89
principal, interest, premium, fees, expenses or otherwise, shall be
made in the event of a Default described in Section 7.6, 7.7 or 7.8
of the Credit Agreement;
(iv) Indebtedness of any Utility Subsidiary arising from the
purchase in the ordinary course of its business as conducted on the
date hereof of fuel, supplies, equipment, services, electric energy
and capacity with respect to which no assertion that such
Indebtedness is delinquent in payment has been made and outstanding
for more than 60 days, unless such GPU Party is contesting such
assertion in good faith and by appropriate proceedings;
(v) Indebtedness with respect to unfunded vested benefits
under Plans or withdrawal liability incurred under ERISA by any GPU
Party or any of its ERISA Affiliates to any Multiemployer Plan of
such Affiliate;
(vi) Indebtedness of any Utility Subsidiary with respect
to capital lease obligations;
(vii) Indebtedness of any Utility Subsidiary with respect to
obligations arising under arrangements for the lease of nuclear fuel
and materials;
(viii) any unsecured Indebtedness not to exceed until the date
of the merger of the Parent with and into First Energy Corp., an
Ohio corporation, (A) in the case of the Parent (on an
unconsolidated basis), the aggregate amount of $2,000,000,000 and
(B) in the case of each Utility Subsidiary, the aggregate amount of
$200,000,000 at any one time outstanding;
(ix) Debt of a GPU Party (A) in respect of Securitization
Securities in amounts not in excess of $900,000,000 at any time
outstanding or Subordinated Debt in amounts not in excess of
$400,000,000 at any time outstanding and (B) under any of those
agreements and other documents listed on Schedule I hereto (or under
any indenture in which the Debt is secured by first mortgage bonds
referenced on Schedule I), as such agreements and other documents
may be amended or supplemented from time to time, and any
extensions, renewal or refinancings of any such Debt, provided, that
in connection with any such extension, renewal or refinancing, the
principal amount of such Debt shall not be increased; and
(x) other unsecured Debt not in excess of the amount otherwise
permitted under Section 6(i).
(c) Assumptions, Guaranties, Etc. of Indebtedness of Other
Persons. Assume, guarantee, endorse or otherwise become directly or contingently
liable, or permit the Utility Subsidiaries to assume, guarantee, endorse or
otherwise become directly or indirectly liable (including, without limitation,
in any case, liable by way of agreement, contingent or otherwise, to purchase,
to provide funds for payment, to supply funds to or otherwise invest in the
debtor or otherwise to assure the creditor against loss) in connection with any
obligation or Indebtedness of any other Person, except:
90
(i) guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary
course of business;
(ii) obligations to pay insurance premiums;
(iii) guaranties existing on the date hereof to the extent
permitted pursuant to Section 7(b)(viii);
(iv) guaranties by any Utility Subsidiary of obligations of
any Subsidiary of such Utility Subsidiary to the extent permitted
pursuant to Section 7(b)(viii);
(v) indemnifications of any GPU Party or GPU Services,
Inc. or GPU Nuclear, Inc. for the benefit of suppliers and
contractors of property or services to any GPU Party (other than
the Parent) with respect to nuclear material and facilities;
(vi) guaranties or indemnifications by any GPU Party issued in
the ordinary course of business of such GPU Party (and not covering
the payment or performance of any GPU Party's indebtedness for
borrowed money) such as self-insurance guaranties and those issued
in favor of surety companies issuing indemnity bonds, third party
vendors or customers to promote conservation of energy or
cogeneration, stock transfer agents, lessors or vendors of
equipment, supplies or services; and
(vii) guaranties by the Parent of obligations of any GPU Party
(only for so long as such GPU Party is a Subsidiary of Parent) to
the extent permitted pursuant to Section 7(b)(viii).
(d) Mergers, Etc. Merge or consolidate with any Person (other
than the merger of the Parent with and into First Energy Corp., an Ohio
corporation), unless:
(i) the surviving or resulting entity is a GPU Party that
agrees to be bound hereby pursuant to a writing in form and
substance reasonably acceptable to the Agent;
(ii) immediately after giving effect thereto no Default or
Unmatured Default applicable to the surviving or resulting Person
shall have occurred and be continuing; and
(iii) the senior unsecured debt of the surviving or resulting
Person shall be rated at least BBB- by S&P and at least Baa3 by
▇▇▇▇▇'▇.
91
(e) Sale of Assets, Etc. From the date hereof until the Facility
Termination Date, the Parent will not, and will not permit or cause any GPU
Party to, sell, transfer, lease, assign or otherwise convey or dispose of 25% or
more of its assets (whether now owned or hereafter acquired), in any single or
series of transactions, whether or not related, except for (i) dispositions of
current assets in the ordinary course of business as conducted on the date
hereof, (ii) dispositions of assets not exceeding 5% of such GPU Party's assets
in connection with sale-leaseback transactions relating to such assets, (iii)
conveyances of assets from one GPU Party to another and (iv) dispositions of any
generating and related assets of any GPU Party listed on Schedule II hereto,
provided that before and after giving effect to any such disposition, no Default
under Section 7.2 of the Credit Agreement shall have occurred and be continuing.
(f) Constituent Documents, Etc. The Parent will not, and will not
permit or cause any GPU Party to, change in any material respect, the nature of
its business, charter, certificate of incorporation or other similar document,
accounting policies or accounting practices (except as required or permitted by
the Financial Accounting Standards Board or generally accepted accounting
principles and except as contemplated in connection with the merger of the
Parent with and into First Energy Corp.) (it being agreed that such portion of
any change to a charter, certificate of incorporation or other similar document
that provides for the issuance of equity shall not be deemed material) or cease
to engage principally in the business of the transmission and distribution of
electric power.
SECTION 8 Waivers. (a) The Parent hereby waives any failure or delay
on the part of the Agent, the LC Issuer or any Lender in asserting or enforcing
any of its rights or in making any claims or demands hereunder. The Borrower,
the Agent, the LC Issuer or any Lender may at any time, without the Parent's
consent, without notice to the Parent and without affecting or impairing the
Borrower's, the Agent's, the LC Issuer's or such Lender's rights or the Parent's
obligations hereunder, do any of the following with respect to any Loan Document
to which it is a party: (i) make changes, modifications, amendments or
alterations thereto, by operation of law or otherwise, including, without
limitation (in the case of the Credit Agreement and the Notes), any increase in
the Commitments or the rate of interest payable with respect to Advances or any
change in the method of calculating the rate of interest payable with respect
thereto, (ii) grant renewals and extensions of time, for payment or otherwise,
(iii) accept new or additional documents, instruments or agreements relating to
or in substitution thereof, or (iv) otherwise handle the enforcement of their
respective rights and remedies in accordance with their business judgment.
(b) If the Parent shall at any time or from time to time fail to
perform or comply with any of its obligations contained herein and if for any
reason any Agent, the LC Issuer or any Lender shall have failed to receive when
due and payable (whether at stated maturity, by acceleration, or otherwise) the
92
payment of all or any part of principal of, or interest on, or any other amount
payable by the Borrower in respect of any Obligations owing to such Agent, the
LC Issuer or such Lender (as the case may be), then in each case, to the fullest
extent permitted by law, (i) it shall be assumed conclusively without necessity
of proof that such failure by the Parent was the sole and direct cause of such
Agent's, the LC Issuer's or such Lender's (as the case may be) failure to
receive such payment when due irrespective of any other contributing or
intervening cause whatsoever, and (ii) the Parent further irrevocably waives any
right or defense that the Parent may have to cause such Agent, the LC Issuer or
any Lender (as the case may be) to prove the cause or amount of any damages or
to mitigate the same.
(c) The Parent irrevocably waives, to the fullest extent permitted
by law and for the benefit of, and as a separate undertaking with, the Agent,
the LC Issuer and each Lender, any defense to the performance of this Guaranty
that may be available to the Parent as a consequence of this Guaranty's being
rejected or otherwise not assumed by the Borrower or any trustee or similar
official for the Borrower or for any substantial part of the property of the
Borrower, or as a consequence of this Guaranty's being otherwise terminated or
modified, in any bankruptcy or insolvency proceeding, whether such rejection,
non-assumption, termination or modification shall have been by reason of this
Guaranty's being held to be an executory contract or by reason of any other
circumstance. If, notwithstanding the foregoing, this Guaranty shall be rejected
or otherwise not assumed, or terminated or modified, the Parent agrees, to the
fullest extent permitted by law, for the benefit of, and as a separate
undertaking with, the Agent, the LC Issuer and each Lender, that the Parent will
be unconditionally liable to pay to the Agent, the LC Issuer and each Lender (as
the case may be) an amount equal to each payment that would otherwise be payable
by the Parent under or in connection with this Guaranty if this Guaranty were
not so rejected or otherwise not assumed or terminated or modified.
SECTION 9. Amendments, Etc. Subject to the provisions of Section
12.1 of the Credit Agreement, no amendment or waiver of any provision of this
Guaranty, nor consent to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by both parties and
consented to by the Required Lenders.
SECTION 10. Notices. All notices and other communications provided
for hereunder shall be in writing (including telecopy transmission) and (except
when particular means are specified) mailed, faxed or delivered, if to the
Parent or the Borrower, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Vice President and Treasurer, telecopy: ▇▇▇-▇▇▇-▇▇▇▇; if
to any Lender, to the address specified for notice pursuant to the Credit
Agreement; and if to the Agent, at its address specified for notice pursuant to
the Credit Agreement; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed or telecopied, be effective when
deposited in the mails or transmitted, respectively.
93
SECTION 11. Costs, Expenses and Taxes. (a) The Parent agrees to pay
on demand all reasonable costs and expenses in connection with the preparation,
execution, delivery, modification and amendment of this Guaranty, and all costs
and expenses, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Guaranty. The Parent also agrees to
indemnify the Agent, the LC Issuer and each Lender from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against any Agent, the LC Bank or any
Lender (as the case may be) in any way relating to or arising out of this
Guaranty or any action taken or omitted by the Agent, the LC Issuer or any
Lender hereunder, except for such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or willful misconduct of the Person seeking such
indemnity.
(b) Any and all payments made by the Parent shall be made free and
clear of and without deduction for any and all current or future United States
Federal, state and local taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect to such payments, but only to the
extent reasonably attributable to such payments, excluding (i) income taxes
imposed on the net income of the Agent, the LC Issuer or any Lender and (ii)
franchise taxes imposed on the net income of the Agent, the LC Issuer or any
Lender, in each case by the jurisdiction under the laws of which the Agent, the
LC Issuer or such Lender is organized or doing business through offices or
branches located therein, or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, "Taxes"). If the Parent shall be
required to deduct any Taxes from or in respect of any sum payable hereunder to
the Agent, the LC Issuer or any Lender, (i) the sum payable shall be increased
by the amount (an "additional amount") necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 11), the Agent, the LC Issuer or such Lender (as the case may
be) shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) the Parent shall make such deductions and (iii) the
Parent shall pay the full amount deducted to the relevant governmental authority
in accordance with applicable law.
(c) In addition, the Parent shall pay to the relevant governmental
authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Guaranty ("Other
Taxes").
(d) The Parent shall indemnify the Agent, the LC Issuer and each
Lender (as the case may be) for the full amount of Taxes and Other Taxes with
respect to payments paid by such
94
person, and any liability (including penalties, interest and expenses (including
reasonable attorney's fees and expenses)) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant United States governmental authority. A certificate
setting forth and containing an explanation in reasonable detail of the manner
in which such amount shall have been determined and the amount of such payment
or liability prepared by a Lender, the LC Issuer or the Agent on their behalf,
absent manifest error, shall be final, conclusive and binding for all purposes.
Such indemnification shall be made within 30 days after the date the Agent, the
LC Issuer or the Lender, as the case may be, makes written demand therefor.
(e) If the Agent, the LC Issuer or a Lender shall become aware that
it is entitled to claim a refund from a United States governmental authority in
respect of Taxes or Other Taxes as to which it has been indemnified by the
Parent, or with respect to which the Parent has paid additional amounts,
pursuant to this Section 11, it shall promptly notify the Parent of the
availability of such refund claim and shall, within 30 days after receipt of a
request by the Parent, make a claim to such United States governmental authority
for such refund at the Parent's expense. If the Agent, the LC Issuer or a Lender
receives a refund (including pursuant to a claim for refund made pursuant to the
preceding sentence) in respect of any Taxes or Other Taxes as to which it has
been indemnified by the Parent or with respect to which the Parent had paid
additional amounts pursuant to this Section 11, it shall within 30 days from the
date of such receipt pay over such refund to the Parent (but only to the extent
of indemnity payments made, or additional amounts paid, by the Parent under this
Section 11 with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses and without interest (other than interest paid
by the relevant United States governmental authority with respect to such
refund); provided, however, that the Parent, upon the request of the Agent, the
LC Issuer or such Lender, agrees to repay the amount paid over to the Parent
(plus penalties, interest or other charges) to the Agent, the LC Issuer or such
Lender (as the case may be) in the event the Agent, the LC Issuer or such Lender
(as the case may be) is required to repay such refund to such United States
governmental authority.
(f) As soon as practicable, but in any event within 30 days, after
the date of any payment of Taxes or Other Taxes by the Parent to the relevant
United States governmental authority, the Parent will deliver to the
Administrative Agent, at its address referred to in Section 10, the original or
a certified copy of a receipt issued by such United States governmental
authority evidencing payment thereof.
(g) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 11
shall survive the payment in full of the Obligations.
95
(h) Each of the Administrative Agent, the LC Issuer and each Lender
that is organized under the laws of a jurisdiction other than the United States,
any State thereof or the District of Columbia (a "Non-U.S. Payee") shall deliver
to the Parent and the Agent two copies of either United States Internal Revenue
Service Form W-BEN, Forms W-ECI or Form W-8IMY, properly completed and duly
executed by such Non-U.S. Payee claiming complete exemption from, or reduced
rate of, United States Federal withholding tax on payments by the Parent under
this Guaranty. Such forms shall be delivered by each Non-U.S. Payee on or before
the date it becomes a party to the Credit Agreement (or, in the case of any
Lender that becomes a party to the Credit Agreement pursuant to an Assignment
and Acceptance (a "Transferee"), on or prior to the effective date of such
Assignment and Acceptance) and on or before the date, if any, such Non-U.S.
Payee changes its Applicable Lending Office by designating a different lending
office (a "New Lending Office"). In addition, each Non-U.S. Payee shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Payee. Notwithstanding any other provision of this
Section 11, a Non-U.S. Payee shall not be required to deliver any form pursuant
to this Section 11 that such Non-U.S. Payee is not legally able to deliver.
(i) The Parent shall not be required to indemnify any Non-U.S.
Payee, or to pay any additional amounts to any Non-U.S. Payee, in respect of
United States Federal, state or local withholding tax pursuant to paragraph (a)
or (c) above to the extent that (i) the obligation to withhold amounts with
respect to United States Federal, state or local withholding tax existed on the
date such Non-U.S. Payee became a party to the Credit Agreement (or, in the case
of a Transferee, on the effective date of the Assignment and Acceptance pursuant
to which such Transferee becomes a Lender) or, with respect to payments to a New
Lending Office, the date such Non-U.S. Payee designated such New Lending Office
with respect to an Extension of Credit; provided, however, that this clause (i)
shall not apply to any Lender that becomes a Lender or New Lending Office that
becomes a New Lending Office as a result of an assignment or designation made at
the request of the Parent; and provided further, however, that this clause (i)
shall not apply to the extent the indemnity payment or additional amounts any
Lender, the Agent, the LC Issuer or any Lender through a New Lending Office
would be entitled to receive (without regard to this clause (i)) do not exceed
the indemnity payment or additional amounts that the person making the
assignment or transfer to such Lender, the Agent, the LC Issuer or such Lender
making the designation of such New Lending Office would have been entitled to
receive in the absence of such assignment, transfer or designation or (ii) the
obligation to pay such additional amounts or such indemnity payments would not
have arisen but for a failure by such Non-U.S. Payee to comply with the
provisions of paragraph (h) above and (j) below.
(j) Any of the Agent, the LC Issuer or any Lender claiming any
indemnity payment or additional amounts payable pursuant to this Section 11
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested in writing by the
Parent or to change the jurisdiction of its Applicable Lending
96
Office if the making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional amounts that may
thereafter accrue and would not, in the good faith determination of the Agent,
the LC Issuer or such Lender (as the case may be), be otherwise disadvantageous
to such person.
(k) Nothing contained in this Section 11 shall require the Agent,
the LC Issuer or any Lender to make available to the Parent any of its tax
returns (or any other information) that it deems to be confidential or
proprietary.
SECTION 12. Continuing Guaranty; Assignment under Credit Agreement.
This Guaranty is a continuing guaranty and shall (i) remain in full force and
effect, until the later of (x) the payment in full of the Obligations and all
other amounts payable under this Guaranty and (y) the expiration or termination
of the Commitments, (ii) be binding upon the Parent, its successors and assigns,
and (iii) inure to the benefit of, and be enforceable by, the Agent, the LC
Issuer and the Lenders and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii), any Lender may
assign or otherwise transfer all or any portion of its rights and obligations
under the Credit Agreement in accordance with Section 12.1 of the Credit
Agreement and the transferee shall thereupon become vested with all the benefits
in respect thereof granted to such Bank herein or otherwise, subject, however,
to the provisions of Article X (concerning the Agent) of the Credit Agreement.
The Parent may not assign its rights and obligations hereunder other than to a
GPU Party as a result of a merger or consolidation of the Parent permitted under
Section 7(d) hereof.
SECTION 13. Governing Law. This Guaranty shall be governed by,
and construed in accordance with, the laws of the State of New York, without
giving effect to conflict of law principles.
SECTION 14. Remedies. The remedies herein provided shall be
cumulative and non-exclusive and shall be in addition to any other rights and
remedies the Borrower may have under this Guaranty.
SECTION 15. Jurisdiction; Venue; Waiver of Jury Trial; Right of
Setoff. (a) The Parent hereby irrevocably and unconditionally submits to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to the Loan
Documents, or for recognition or enforcement of any judgment, and 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. The Parent 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. Subject to the foregoing and to paragraph (b)
97
below, nothing in any Loan Document shall affect any right that any party
thereto may otherwise have to bring any action or proceeding relating to any
Loan Document against any other party thereto in the courts of any jurisdiction.
(b) The Parent hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or thereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to any Loan Document in any New York State or Federal
court. The Parent 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.
(c) THE PARENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ALL LITIGATION
BASED ON THE LOAN DOCUMENTS, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THE LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE PARENT. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENT, THE LENDERS AND THE LC ISSUER ENTERING INTO
THE LOAN DOCUMENTS.
(d) If (i) an Event of Default shall have occurred and be continuing
and (ii) the request shall have been made or the consent granted as specified by
[Section 6.02(a)] of the Credit Agreement to authorize the Agent to declare the
Advances of the Borrower due and payable pursuant to the provisions of such
Section [6.02(a)], each Lender and the LC Issuer is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or the LC Issuer to or for the credit or the account of the Guarantor
against any of and all the obligations of the Guarantor now or hereafter
existing under this Guaranty held by such Lender or the LC Issuer, irrespective
of whether or not such Lender or the LC Issuer shall have made any demand under
this Guaranty and although such obligations may be unmatured. The rights of each
Lender and the LC Issuer under this subsection are in addition to other rights
and remedies (including other rights of setoff) which such Lender or the LC
Issuer may have.
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IN WITNESS WHEREOF, the Parent has caused this Guaranty to be duly
executed as of the day and year first above written.
GPU, INC.
By ---------------------------------- ]
Name:
Title:
99
SCHEDULE I
[1. Jersey Central Power & Light Company
First Mortgage Bonds
--------------------
Indenture, dated as of March 1, 1946, to United States Trust Company of
New York, as Successor Trustee, as supplemented
Debentures
----------
Subordinated Debenture Indenture, dated as of May 1, 1999, to United
States Trust Company of New York, as Trustee
Senior Notes
------------
Senior Note Indenture, dated as of July 1, 1999, to United States Trust
Company of New York, as Trustee
2. Metropolitan Edison Company
First Mortgage Bonds
--------------------
Indenture, dated November 1, 1994, to United States Trust Company of
New York, as Successor Trustee, as supplemented
Debentures
----------
Subordinated Debenture Indenture, dated as of May 1, 1999, to United
States Trust Company of New York, as Trustee
Senior Notes
------------
Senior Note Indenture, dated as of April 1, 1999, to United States
Trust Company of New York, as Trustee
3. Pennsylvania Electric Company
First Mortgage Bonds
--------------------
Mortgage and Deed of Trust, dated as of June 1, 1942, to United States
Trust Company of New York, as Successor Trustee, as supplemented
Debentures
----------
Subordinated Debenture Indenture, dated as of July 1, 1994, to United
States Trust Company of New York, as Trustee]
Senior Notes
------------
Senior Note Indenture dated as of April 1, 1999, to United States Trust
Company of New York, as Trustee
100
SCHEDULE II
GENERATING FACILITY
Pumped Storage
--------------
Yards Creek Station, a 400 MW pumped storage facility located in
northwestern New Jersey on a 1,373-acre site. JCP&L owns a 50% undivided
ownership interest in the station.
101
CREDIT AGREEMENT
DATED AS OF ---------------- , 2000
AMONG
MYR GROUP, INC.,
THE LENDERS,
BANK ONE, NA,
AS ADMINISTRATIVE AGENT AND LC ISSUER
AND
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
102
