EXECUTION COPY
PP&L RESOURCES, INC.
$300,000,000
REVOLVING CREDIT AGREEMENT
_________________
DATED AS OF May 30, 1996
TABLE OF CONTENTS
Page
SECTION 1. Amounts and Terms of Loans 1
1.1 Commitments 1
1.2 Notices of Borrowing 1
1.3 Disbursement of Funds 2
1.4 Repayment of Loans; Evidence of Debt 3
1.5 Special Payment Provisions 4
1.6 Fees 5
1.7 Reductions in Total Commitments 6
1.8 Compensation 6
SECTION 1A. Letters of Credit. 6
SECTION 2. Interest 11
2.1 Rates of Interest 11
2.2 Determination of Rate of Borrowing 12
2.3 Interest Payment Dates 13
2.4 Conversions; Interest Periods 13
2.5 Increased Costs, Illegality, Etc. 14
SECTION 3. Payments 18
3.1 Payments on Non-Business Days 18
3.2 Voluntary Prepayments 19
3.3 Method and Place of Payment, Etc. 19
3.4 Net Payments 20
SECTION 4. Conditions Precedent 21
4.1 Conditions to Effectiveness 21
4.2 Conditions to Each Loan and Each Issuance of
Letter of Credit 21
SECTION 5. Covenants 22
5.1 Financial Statements 23
5.2 Mergers 24
5.3 Ratings 24
5.4 Indebtedness 24
5.5 Liens 24
SECTION 6. Events of Default 24
6.1 Representations, Etc. 24
6.2 Principal and Interest 25
6.3 Defaults by Resources or PPLC Under
Other Agreements 25
6.4 Judgments 25
6.5 Bankruptcy, Etc. 25
6.6 Other Covenants 26
SECTION 7. Representations and Warranties 27
7.1 Corporate Status 27
7.2 Authority; No Conflict 27
7.3 Legality, Etc. 27
7.4 Financial Statements 27
7.5 Litigation 28
7.6 No Violation 28
7.7 ERISA 28
7.8 Consents 28
7.9 Subsidiaries 29
7.10 Investment Company Act 29
7.11 Public Utility Holding Company Act 29
7.12 Tax Returns 29
SECTION 8. Agent 29
8.1 Appointment 29
8.2 Nature of Duties 30
8.3 Rights, Exculpation, Etc. 30
8.4 Reliance 31
8.5 Indemnification 31
8.6 The Agent, Individually 32
8.7 Resignation by the Agent 32
SECTION 9. Miscellaneous 32
9.1 Definitions 32
9.2 Accounting Principles 42
9.3 Exercise of Rights 42
9.4 Amendment and Waiver 43
9.5 Expenses; Indemnification 43
9.6 Successors and Assigns 45
9.7 Notices, Requests, Demands 48
9.8 Survival of Representations and
Warranties 48
9.9 Governing Law 48
9.10 Counterparts 49
9.11 Effectiveness 49
9.12 Transfer of Office 49
9.13 Proration of Payments 49
9.14 Headings Descriptive 50
EXHIBIT A - Opinion of Counsel
REVOLVING CREDIT AGREEMENT, dated as of May 30,
1996, among PP&L RESOURCES, INC., a Pennsylvania corporation
("Resources"), the banks listed on Schedule I hereto (each a
"Bank" and collectively the "Banks") and CHEMICAL BANK, as
fronting bank (in such capacity, the "Fronting Bank"), as
collateral agent (in such capacity, the "Collateral Agent")
and as Agent for the Banks to the extent and in the manner
provided in Sec. 8 below (in such capacity, the "Agent")
(all capitalized terms used herein shall have the meaning
specified therefor in Sec. 9.1 unless otherwise defined
herein).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions
set forth herein, the Banks are willing to make available to
Resources the credit facility herein provided;
NOW, THEREFORE, it is agreed:
SECTION 1. Amounts and Terms of Loans.
1.1 Commitments. Subject to and upon the terms and
conditions herein set forth, each Bank severally agrees, at
any time and from time to time prior to the Expiry Date, to
make a loan or loans (each a "Loan" and collectively for all
Banks, the "Loans") to Resources, which Loans (i) shall at
the option of Resources, be initially maintained as Base
Rate Loans or Eurodollar Loans, provided that all the Loans
made by all the Banks at any one Borrowing hereunder must be
either all Base Rate Loans or all Eurodollar Loans, (ii) may
be repaid and borrowed in accordance with the provisions
hereof and (iii) shall not exceed in aggregate principal
amount at any time outstanding the difference between such
Bank's Commitment and the L/C Exposure of such Bank at such
time.
1.2 Notices of Borrowing. Whenever Resources desires
to make a Borrowing hereunder, it shall give the Agent at
the Payment Office (i) no later than 12:00 Noon (New York
time) at least three Business Days' prior written notice or
telephonic notice (confirmed in writing) of each Eurodollar
Loan to be made hereunder and (ii) no later than 10 A.M.
(New York time) on the date of such Borrowing written notice
or telephonic notice (confirmed in writing) of each Base
Rate Loan to be made hereunder. Each such notice (each a
"Notice of Borrowing") shall specify the aggregate principal
amount Resources desires to borrow hereunder, the date of
Borrowing (which shall be a Business Day), the Type of Loans
to be made pursuant to such Borrowing and the Interest
Period to be applicable thereto. The Agent shall promptly
give each Bank telephonic notice (confirmed in writing) of
the proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters covered by the Notice of
Borrowing. Each Borrowing shall be in an integral multiple
of $500,000 and not less than $10,000,000 and shall be made
from each Bank in the proportion which its respective
Commitment bears to the Total Commitment except as otherwise
specifically provided in Sec. 2.5. The failure of any Bank
to make any Loan required hereby shall not release any other
Bank from its obligation to make Loans as provided herein.
1.3 Disbursement of Funds. (a) No later than 12:00
Noon (New York time) (or, in the case of Base Rate Loans,
2:00 P.M. (New York time)) on the date specified in each
Notice of Borrowing each Bank will make available the amount
of its pro rata portion of the Loans requested to be made on
such date in U.S. dollars and in immediately available
funds, to the Agent at the Payment Office. The Agent will
make available to Resources not later than 1:00 P.M. (New
York time) (or, in the case of Base Rate Loans, 3:00 P.M.
(New York time)) on such date at the Payment Office the
aggregate of the amounts in immediately available funds made
available by the Banks against delivery to the Agent at the
Payment Office, or at such other office as the Agent may
specify, of the documents and papers provided for herein.
The Agent shall deliver the documents and papers received by
it for the account of each Bank to such Bank or upon its
order.
(b) If the Fronting Bank shall not have received
from Resources the payment required to be made by Resources
pursuant to Sec. 1A(e) within the time specified in such
Section, the Fronting Bank will promptly notify the Agent of
the L/C Disbursement and the Agent will promptly notify each
Bank of such L/C Disbursement and its Applicable Percentage
thereof. Not later than 2:00 P.M. (New York time) on such
date (or, if such Bank shall have received such notice later
than 12:00 Noon (New York time) on any day, no later than
10:00 A.M. (New York time) on the immediately following
Business Day), each Bank will make available the amount of
its Applicable Percentage of such L/C Disbursement (it being
understood that such amount shall be deemed to constitute a
Base Rate Loan of such Bank and such payment shall be deemed
to have reduced the L/C Exposure) in immediately available
funds, to the Agent at the Payment Office, and the Agent
will promptly pay to the Fronting Bank amounts so received
by it from the Banks. The Agent will promptly pay to the
Fronting Bank any amounts received by it from Resources
pursuant to Sec. 1A(e) prior to the time that any Bank makes
any payment pursuant to this paragraph (b), and any such
amounts received by the Agent thereafter will be promptly
remitted by the Agent to the Banks that shall have made such
payments and to the Fronting Bank, as their interests may
appear. If any Bank shall not have made its Applicable
Percentage of such L/C Disbursement available to the Agent
as provided above, such Bank agrees to pay interest on such
amount, for each day from and including the date such amount
is required to be paid in accordance with this paragraph to
but excluding the date such amount is paid, to the Agent for
the account of the Fronting Bank at, for the first such day,
the Federal Funds Rate, and for each day thereafter, the
Base Rate.
1.4 Repayment of Loans; Evidence of Debt. (a) The
outstanding principal balance of each Loan shall be payable
on the Expiry Date. Each Loan shall bear interest from the
date thereof on the outstanding principal balance thereof as
set forth in Sec. 2.1. Each Bank shall maintain in
accordance with its usual practice an account or accounts
evidencing the indebtedness to such Bank resulting from each
Loan made by such Bank from time to time, including the
amounts of principal and interest payable and paid to such
Bank from time to time under this Agreement. The Agent
shall maintain the Register pursuant to Sec. 1.4(b), and a
subaccount for each Bank, in which Register and subaccounts
(taken together) shall be recorded (i) the amount of each
Loan made hereunder, the Type of each Loan made and the
Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and
payable from Resources to each Bank hereunder and (iii) the
amount of any sum received by the Agent hereunder from
Resources and each Bank's share thereof. The entries made
in the Register and accounts maintained pursuant to this
Sec. 1.4 shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided,
however, that the failure of any Bank or the Agent to
maintain such account, such Register or such subaccount, as
applicable, or any error therein shall not in any manner
affect the obligations of Resources to repay the Loans in
accordance with their terms.
(b) The Agent shall maintain at the Payment
Office a register for the recordation of the names and
addresses of the Banks, the Commitments of the Banks from
time to time, and the principal amount of the Loans owing to
each Bank from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all
purposes, absent manifest error. The Register shall be
available for inspection by Resources, the Agent or any Bank
at any reasonable time and from time to time upon reasonable
prior notice.
1.5 Special Payment Provisions. Unless the Agent
shall have been notified by any Bank prior to any Borrowing
Date that such Bank does not intend to make available to the
Agent such Bank's portion of the Loans to be made on such
date, the Agent may assume that such Bank has made such
amount available to the Agent on such Borrowing Date and the
Agent may, in reliance upon such assumption, make available
to Resources a corresponding amount. If such amount is not
in fact made available to the Agent by such Bank, the Agent
shall be entitled to recover such amount on demand from such
Bank. If such Bank does not pay such amount forthwith upon
the Agent's demand therefor, the Agent shall promptly notify
Resources and Resources shall pay such amount to the Agent.
The Agent shall also be entitled to recover from such Bank
or Resources, as the case may be, interest on such amount in
respect of each day from the date such amount was made
available by the Agent to Resources to the date such amount
is recovered by the Agent, at a rate per annum equal to (i)
in the case of such Bank, the Federal Funds Rate and (ii) in
the case of Resources, the applicable rate provided in
Sec. 2.1 for the applicable Type of Loan. Nothing herein
shall be deemed to relieve any Bank from its obligation to
fulfill its Commitment hereunder or to prejudice any rights
which Resources may have against any Bank as a result of the
failure of such Bank to perform its obligations hereunder.
1.6 Fees. (a) Resources agrees to pay to the Agent
for pro rata distribution to each Bank a Facility Fee (the
"Facility Fee"), for the period from the Closing Date until
the Expiry Date (or such earlier date as the Total
Commitment shall be terminated), on the average daily Total
Commitment, computed at the Applicable Facility Fee
Percentage per annum computed on the basis of the number of
days actually elapsed over a year of 365 or 366 days and
payable quarterly in arrears on the last day of each
calendar quarter and on the Expiry Date (or such earlier
date as the Total Commitment shall be terminated).
(b) Resources agrees to pay (i) to the Agent for
pro rata distribution to each Bank a fee (an "L/C
Participation Fee"), for the period from the Closing Date
until the Expiry Date (or such earlier date as all Letters
of Credit shall be canceled or expire and the Total
Commitment shall be terminated), on the average daily L/C
Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements), at the rate per annum equal
to the Applicable Eurodollar Margin from time to time in
effect and payable quarterly in arrears on the last day of
each calendar quarter and on the date on which the Total
Commitment shall be terminated as provided herein and
(ii) to the Fronting Bank a fee for the period from the
Closing Date until the Expiry Date (or such earlier date as
all Letters of Credit shall be canceled or expire and the
Total Commitment shall be terminated), on the average daily
L/C Exposure, at the rate of 0.10% per annum and payable
quarterly in arrears on the last day of each calendar
quarter and on the Expiry Date (or such earlier date as the
Total Commitment shall be terminated as provided herein),
plus, in connection with the issuance, amendment or transfer
of any Letters of Credit or L/C Disbursement, the Fronting
Bank's customary documentory and processing charges
(collectively, the "Fronting Bank Fees"). All L/C
Participation Fees and Fronting Bank Fees shall be computed
on the basis of the number of days actually elapsed over a
year of 365 or 366 days.
1.7 Reductions in Total Commitments. Resources shall
have the right, upon at least 3 Business Days' prior written
notice to the Agent at the Payment Office (which notice the
Agent shall promptly transmit to each of the Banks), to re-
duce permanently the Total Commitment, in an aggregate
amount equal to an integral multiple of $500,000 and not
less than $10,000,000, or to terminate the unutilized
portion of the Total Commitment, provided that (i) any such
reduction or termination shall apply proportionately to the
Commitments of the Banks and (ii) no such termination or
reduction shall be made that would reduce the Total
Commitments to an amount less than the sum of the aggregate
outstanding principal amount of Loans and the aggregate L/C
Exposure.
1.8 Compensation. Resources shall compensate each
Bank, upon such Bank's written request given promptly after
learning of the same, for all losses, expenses and liabil-
ities (including, without limitation, any interest paid by
such Bank to lenders of funds borrowed by it to make or
carry its Eurodollar Loans and any loss sustained by such
Bank in connection with the re-employment of such funds),
which the Bank sustains: (i) if for any reason (other than
a failure of such Bank to perform its obligations) a
Borrowing of any Eurodollar Loan does not occur on a date
specified therefor in a Notice of Borrowing or notice of
conversion (whether or not withdrawn or cancelled pursuant
to Sec. 2.5 or otherwise), (ii) if any repayment or
conversion (pursuant to Sec. 2.5 or otherwise) of any of its
Eurodollar Loans occurs on a date which is not the last day
of the Interest Period applicable thereto, or (iii) without
duplication of any amounts paid pursuant to Sec. 2 hereof,
as a consequence of any other default by Resources to repay
its Eurodollar Loans when required by the terms of this
Agreement. A certificate as to any amounts payable to any
Bank under this Sec. 1.8 submitted to Resources by such Bank
shall show the amount payable and the calculations used to
determine such amount and shall, absent manifest error, be
final, conclusive and binding upon all parties hereto.
SECTION 1A. Letters of Credit. (a) General.
Resources may from time to time request the issuance of
Letters of Credit for its own account (for obligations of
Resources or any of its subsidiaries), denominated in
dollars, in form reasonably acceptable to the Agent and the
Fronting Bank, at any time and from time to time while the
Commitments remain in effect. This Section shall not be
construed to impose an obligation upon the Fronting Bank to
issue any Letter of Credit that is inconsistent with the
terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal,
Extension; Certain Conditions. In order to request the
issuance of a Letter of Credit (or to amend, renew or extend
an existing Letter of Credit), Resources shall hand deliver
or telecopy to the Fronting Bank and the Agent (reasonably
in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance,
amendment, renewal or extension, the date on which such
Letter of Credit is to expire (which shall comply with
paragraph (c) below), the amount of such Letter of Credit,
the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such
Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit
Resources shall be deemed to represent and warrant that,
after giving effect to such issuance, amendment, renewal or
extension (A) the L/C Exposure shall not exceed $5,000,000
and (B) the Aggregate Credit Exposure shall not exceed the
Total Commitment.
(c) Expiration Date. Each Letter of Credit shall
expire at the close of business on the date that is five
Business Days prior to the Expiry Date, unless such Letter
of Credit expires by its terms on an earlier date.
(d) Participations. By the issuance of a Letter
of Credit and without any further action on the part of the
Fronting Bank or the Banks, the Fronting Bank hereby grants
to each Bank, and each such Bank hereby acquires from the
Fronting Bank, a participation in such Letter of Credit
equal to such Bank's Applicable Percentage from time to time
of the aggregate amount available to be drawn under such
Letter of Credit, effective upon the issuance of such Letter
of Credit. In consideration and in furtherance of the
foregoing, each Bank hereby absolutely and unconditionally
agrees to pay to the Agent, for the account of the Fronting
Bank, such Bank's proportionate share of each L/C
Disbursement made by the Fronting Bank and not reimbursed by
Resources forthwith on the date due as provided in
Sec. 1.3(b). Each Bank acknowledges and agrees that its
obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a
Default or an Event of Default or the termination of the
Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Fronting Bank shall
make any L/C Disbursement in respect of a Letter of Credit,
Resources shall pay to the Agent an amount equal to such L/C
Disbursement not later than two hours after Resources shall
have received notice from the Fronting Bank that payment of
such draft will be made, or, if Resources shall have
received such notice later than 10:00 A.M. (New York time)
on any Business Day, not later than 10:00 A.M. (New York
time) on the immediately following Business Day.
(f) Obligations Absolute. Resources' obligations
to reimburse L/C Disbursements as provided in paragraph (e)
above shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of
this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or any Loan Document, or any term or
provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of
Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense
or other right that Resources, any other party guaranteeing,
or otherwise obligated with, Resources or any subsidiary or
other affiliate thereof or any other person may at any time
have against the beneficiary under any Letter of Credit, the
Fronting Bank, the Agent or any Bank or any other person,
whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(v) payment by the Fronting Bank under a Letter of
Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of
Credit; and
(vi) any other act or omission to act or delay of
any kind of the Fronting Bank, the Banks, the Agent or any
other person or any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might,
but for the provisions of this Section, constitute a legal
or equitable discharge of Resources' obligations hereunder.
Without limiting the generality of the foregoing,
it is expressly understood and agreed that the absolute and
unconditional obligation of Resources hereunder to reimburse
L/C Disbursements will not be excused by the gross
negligence or wilful misconduct of the Fronting Bank.
However, the foregoing shall not be construed to excuse the
Fronting Bank from liability to Resources to the extent of
any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by Resources to
the extent permitted by applicable law) suffered by
Resources that are caused by the Fronting Bank's gross
negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that
the Fronting Bank may accept documents that appear on their
face to be in order, without responsibility for further
investigation, regardless of any notice or information to
the contrary and, in making any payment under any Letter of
Credit (i) the Fronting Bank's exclusive reliance on the
documents presented to it under such Letter of Credit as to
any and all matters set forth therein, including reliance on
the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or
not any document presented pursuant to such Letter of Credit
proves to be insufficient in any respect, if such document
on its face appears to be in order, and whether or not any
other statement or any other document presented pursuant to
such Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any
immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case,
be deemed not to constitute wilful misconduct or gross
negligence of the Fronting Bank.
(g) Disbursement Procedures. The Fronting Bank
shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under
a Letter of Credit. The Fronting Bank shall as promptly as
possible give telephonic notification, confirmed by
telecopy, to the Agent and Resources of such demand for
payment and whether the Fronting Bank has made or will make
an L/C Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve
Resources of its obligation to reimburse the Fronting Bank
and the Banks with respect to any such L/C Disbursement.
The Agent shall promptly give each Bank notice thereof.
(h) Interim Interest. If the Fronting Bank shall
make any L/C Disbursement in respect of a Letter of Credit,
then, unless Resources shall reimburse such L/C Disbursement
in full on the date thereof, the unpaid amount thereof shall
bear interest for the account of the Fronting Bank, for each
day from and including the date of such L/C Disbursement, to
but excluding the earlier of the date of payment by
Resources or the date on which interest shall commence to
accrue on the Base Rate Loans resulting from such L/C
Disbursement as provided in Sec. 1.3(b), at the rate per
annum that would apply to such amount if such amount were a
Base Rate Loan.
(i) Cash Collateralization. If any Event of
Default shall occur and be continuing, Resources shall, on
the Business Day it receives notice from the Agent or the
Required Banks thereof and of the amount to be deposited,
deposit in an account with the Collateral Agent, for the
benefit of the Banks, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the
Collateral Agent as collateral for the payment and
performance of the obligations under this Agreement. The
Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such
account. Such deposits shall not bear interest. Moneys in
such account shall automatically be applied by the Agent to
reimburse the Fronting Bank for L/C Disbursements for which
it has not been reimbursed, and any remaining amounts will
either (i) be held for the satisfaction of the reimbursement
obligations of Resources for the L/C Exposure at such time
or (ii) if the maturity of the Loans has been accelerated,
be applied to satisfy the obligations under this Agreement.
If Resources is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an
Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to Resources within three
Business Days after all Events of Default have been cured or
waived.
SECTION 2. Interest.
2.1 Rates of Interest. (a) Resources agrees to pay
interest in respect of the unpaid principal amount of each
Base Rate Loan from the date the proceeds thereof are made
available to Resources until prepayment pursuant to Sec. 3
or maturity (whether by acceleration or otherwise) at a rate
per annum which shall be the Base Rate in effect from time
to time.
(b) Resources agrees to pay interest in respect
of the unpaid principal amount of each Eurodollar Loan from
the date the proceeds thereof are made available to
Resources until prepayment pursuant to Sec. 3 or maturity
(whether by acceleration or otherwise) at a rate per annum
which shall be the relevant Quoted Rate plus the Applicable
Eurodollar Margin.
(c) Resources agrees to pay interest in respect
of overdue principal of, and (to the extent permitted by
law) overdue interest in respect of, each Loan, on demand,
at a rate per annum which shall be 2% in excess of the Base
Rate in effect from time to time.
(d) Interest shall be computed on the actual
number of days elapsed on the basis of a 360-day year;
provided, however, that for any rate of interest determined
by reference to the Prime Rate, interest shall be computed
on the actual number of days elapsed on the basis of a year
of 365 or 366 days.
(e) In computing interest on the Loans, the date
of the making of a Loan shall be included and the date of
payment shall be excluded, provided, however, that if a Loan
is repaid on the same day on which it is made, such day
shall nevertheless be included in computing interest
thereon.
2.2 Determination of Rate of Borrowing. As soon as
practicable after 10:00 A.M. (New York time) on the second
Business Day prior to the commencement of the Interest
Period with respect to Eurodollar Loans, the Agent shall
determine (which determination, absent manifest error, shall
be final, conclusive and binding upon all parties) the rate
of interest which shall be applicable to the Eurodollar
Loans for the Interest Period applicable thereto and shall
promptly give notice thereof (in writing or by telephone,
confirmed in writing) to Resources and the Banks. In the
event that there is no applicable rate for the Eurodollar
Loans: (i) the Agent shall promptly give notice thereof (in
writing or by telephone, confirmed in writing) to Resources
and the Banks and (ii) such Loans shall be deemed to have
been requested to be made as Base Rate Loans and (iii) the
rate applicable to such Loans shall be the Base Rate in
effect from time to time.
2.3 Interest Payment Dates. Accrued interest shall be
payable (i) in respect of each Eurodollar Loan, at the end
of the Interest Period relating thereto and in respect of
each Loan with an Interest Period of longer than 3 months,
on each 3-month anniversary of the first day of such
Interest Period, (ii) in respect of each Base Rate Loan, at
the end of each Interest Period relating thereto and (iii)
in respect of each Loan, on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise)
and, after maturity, on demand.
2.4 Conversions; Interest Periods. (a) Resources
shall have the option to convert on any Business Day, all or
a portion at least equal to $10,000,000 of the outstanding
principal amount of the Loans made pursuant to one or more
Borrowings of one Type of Loans into a Borrowing or
Borrowings of another Type of Loan, provided that (i) except
as provided in Sec.2.5(b), Eurodollar Loans may be converted
into Base Rate Loans only on the last day of an Interest
Period applicable thereto and no partial conversion of a
Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of the Loans pursuant to such Borrowing to
less than $10,000,000 and (ii) Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is
in existence on the date of the conversion. Each such
conversion shall be effected by Resources by giving the
Agent at its Payment Office, prior to 12:00 Noon (New York
time), at least three Business Days (or by 12:00 Noon on the
same Business Day in the case of a conversion into Base Rate
Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a "Notice of Conversion") spec-
ifying the Loans to be so converted, the Borrowing or
Borrowings pursuant to which such Loans were made, the Type
of Loans to be converted into and, if to be converted into a
Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each
Bank prompt notice of any such proposed conversion affecting
any of its Loans.
(b) At the time Resources gives a Notice of
Borrowing or Notice of Conversion in respect of the making
of, or conversion into, a Borrowing of Eurodollar Loans (in
the case of the initial Interest Period applicable thereto)
or prior to 12:00 Noon (New York time) on the third Business
Day prior to the expiration of an Interest Period applicable
to a Borrowing of Eurodollar Loans (in the case of any
subsequent Interest Period), Resources shall have the right
to elect, by giving the Agent written notice (or telephonic
notice promptly confirmed in writing), the Interest Period
applicable to such Borrowing, which Interest Period shall,
at the option of Resources, be a one, two, three or six
month period or, subject to availability on the part of each
Bank, such shorter period as ends on the Expiry Date.
Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing
of Eurodollar Loans shall commence on the date of such
Borrowing (including the date of any conversion from a
Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest
Period expires;
(ii) if any Interest Period applicable to a
Borrowing of Eurodollar Loans begins on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar
month;
(iii) no Interest Period in respect of any
Borrowing of Loans shall extend beyond the Expiry Date; and
(iv) all Eurodollar Loans comprising a Borrowing
shall at all times have the same Interest Period.
If upon the expiration of any Interest Period, Resources has
failed to elect a new Interest Period to be applicable to
the respective Borrowing of Eurodollar Loans as provided
above or is unable to elect a new Interest Period as a
result of Sec. 2.4(a)(ii) above, Resources shall be deemed
to have elected to convert such Borrowing into a Borrowing
of Base Rate Loans effective as of the expiration date of
such current Interest Period.
2.5 Increased Costs, Illegality, Etc. (a) In the
event that any Bank (including the Agent and the Fronting
Bank) shall have reasonably determined (which determination
shall be final and conclusive and binding upon all parties
but, with respect to the following clauses (i), (ii) and
(iii), shall be made only after consultation with Resources
and the Agent on the date of such determination) that:
(i) on any date for determining the Quoted Rate
for any Interest Period, by reason of any change after the
date hereof affecting the interbank Eurodollar market or
affecting the position of the Agent in such market, adequate
and fair means do not exist for ascertaining the applicable
interest rate by reference to the Quoted Rate; or
(ii) at any time, by reason of (y) any change
after the date hereof in any applicable law or governmental
rule, regulation or order (or any interpretation thereof by
a governmental authority or otherwise (provided that, in the
case of an interpretation not by a governmental authority,
such interpretation shall be made in good faith and shall
have a reasonable basis) and including the introduction of
any new law or governmental rule, regulation or order), to
the extent not provided for in clause (iii) below, or (z) in
the case of Eurodollar Loans, other circumstances affecting
such Bank or the interbank Eurodollar market or the position
of such Bank in such market, the Quoted Rate shall not
represent the effective pricing to such Bank for funding or
maintaining the affected Eurodollar Loan; or
(iii) at any time, by reason of the requirements
of Regulation D or other official reserve requirements, the
Quoted Rate shall not represent the effective pricing to
such Bank for funding or maintaining the affected
Eurodollar Loan; or
(iv) at any time, that the making or continuance
of any Eurodollar Loan or the issuance of any Letter of
Credit has become unlawful by compliance by such Bank or by
the Fronting Bank in good faith with any law, governmental
rule, regulation, guideline or order, or would cause severe
hardship to such Bank or to the Fronting Bank as a result of
a contingency occurring after the date hereof which
materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, the Bank so affected shall on
such date of determination give notice (by telephone con-
firmed in writing) to Resources and (except with respect to
clause (iii) of this Sec. 2.5(a)) to the Agent (who shall
give similar notice to each Bank) of such determination.
Thereafter, (x) in the case of clause (i), (ii) or (iii)
above, Resources shall pay to such Bank, upon written demand
therefor, such additional amounts deemed in good faith by
such Bank to be material (in the form of an increased rate
of, or a different method of calculating, interest or
otherwise as such Bank in its discretion shall determine) as
shall be required to cause such Bank to receive interest
with respect to its affected Eurodollar Loan at a rate per
annum equal to the then Applicable Eurodollar Margin in
excess of the effective pricing to such Bank to make or
maintain such Eurodollar Loan and (y) in the case of clause
(iv), Resources shall take one of the actions specified in
Sec. 2.5(b) as promptly as possible and, in any event,
within the time period required by law. A certificate as to
additional amounts owed any such Bank, showing in reasonable
detail the basis for the calculation thereof, submitted to
Resources and (except with respect to clause (iii) of this
Sec. 2.5(a)) the Agent by such Bank shall, absent manifest
error, be final, conclusive and binding upon all of the
parties hereto.
(b) At any time that any of its Loans are
affected by the circumstances described in Sec. 2.5(a)
(other than clause (iii) thereof) Resources may (i) if the
affected Eurodollar Loan is then being made pursuant to a
Borrowing, cancel said Borrowing by giving the Agent notice
thereof by telephone (confirmed in writing) on the same date
that Resources was notified by the affected Bank pursuant to
Sec. 2.5(a) or (ii) if the affected Eurodollar Loan is then
outstanding, upon at least 3 Business Days' written notice
to the Bank, require the Bank to convert such Eurodollar
Loan into a Base Rate Loan; provided that if more than one
Bank is affected at any time, then all affected Banks must
be treated in the same manner pursuant to this Sec. 2.5(b).
(c) In the event that Resources shall be paying
additional amounts to a Bank pursuant to Sec. 2.5(a)(i) or
(ii) or Sec. 2.5(d) (and, in the case of Sec. 2.5(d), such
Bank has not eliminated the increased costs by designating a
new Applicable Lending Office) or is unable to incur a
Eurodollar Loan from such Bank because of the existence of a
condition described in Sec. 2.5(a)(iv) (any such Bank, an
"Affected Bank") covering a period of 90 consecutive days,
Resources, the Agent and the Affected Bank shall consult
with a view towards (but being under no obligation to)
amending this Agreement, with the consent of the Banks other
than the Affected Bank (the "Unaffected Banks") which, at
such time, have outstanding two-thirds of the aggregate
principal amount of the Loans outstanding hereunder (exclu-
sive of the aggregate principal amount of the Loans out-
standing of the Affected Bank), to provide for (i) the term-
ination of the Affected Bank's Commitment, provided that
such termination is accompanied by payment in full of the
outstanding amount of all Loans of the Affected Bank,
interest accrued on such amount to the date of payment and
all other liabilities and obligations of Resources hereunder
(including, without limitation, amounts payable pursuant to
Sec. 1.8, Sec. 2.5(a) or Sec. 2.5(d)), and (ii) the
substitution of another bank for the Affected Bank and/or
the increase, pro rata or otherwise, of the Commitments of
the Unaffected Banks or otherwise, so that the Total
Commitment remains the amount which would be applicable in
the absence of the occurrence of clause (i) of this
Sec. 2.5(c); provided that no Commitment of any Unaffected
Bank may be changed without the consent of such Bank.
(d) If any Bank reasonably determines at any time
that any applicable law or governmental rule, regulation,
order or request (whether or not having the force of law)
concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority,
central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be
maintained by such Bank based on the existence of such
Bank's Commitment hereunder or its obligations hereunder or
under any Letter of Credit, then promptly upon receipt of a
written demand from such Bank meeting the requirements of
this Sec. 2.5(d), Resources shall pay such Bank such addi-
tional amounts as shall be required to compensate such Bank
for the increased cost to such Bank as a result of such
increase in capital for the first Compensation Period (as
defined below). After the initial written demand for
payment in respect of this Sec. 2.5(d) is delivered to
Resources by such Bank, written demand for payment may be
submitted for each Compensation Period thereafter that this
Agreement remains in effect as to such Bank. Each such
written demand shall (i) specify (a) the event pursuant to
which such Bank is entitled to claim the additional amount,
(b) the date on which the event occurred and became
applicable to the Bank and (c) the Compensation Period for
which the amount is due and (ii) set out in reasonable
detail the basis and computation of such additional amount.
The period for which the additional amounts may be claimed
by such Bank (the "Compensation Period") shall be the lesser
of (x) the number of days actually elapsed since the date
the event occurred and became applicable to such Bank or (y)
90 days. Payments made by Resources to any Bank in respect
of this Sec. 2.5(d) shall be made on the last day of the
Compensation Period specified in each written demand with a
final payment to be made on the date of termination of this
Agreement as to such Bank. Provided that each Bank acts
reasonably and in good faith and uses averaging and
attribution methods which are reasonable in determining any
additional amounts due under this Sec. 2.5(d), such Bank's
determination of compensation owing under this Sec. 2.5(d)
shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. No Bank shall be
entitled to compensation under this Sec. 2.5(d) for any
costs incurred with respect to any date unless it shall have
notified Resources that it will demand compensation for such
costs not more than 60 days after the later of (i) such date
and (ii) the date on which it shall have become aware of
such costs.
(e) Each Bank agrees that, upon the occurrence of
any event giving rise to the operation of Sec. 2.5(d) with
respect to such Bank, such Bank shall, if requested by
Resources, designate another Applicable Lending Office for
any Loans affected by such event with the objective of
eliminating, avoiding or mitigating the consequence of the
event giving rise to the operation of such section; provided
that such Bank and its Applicable Lending Office shall not,
in the sole judgment of such Bank, suffer any economic,
legal or regulatory disadvantage. Nothing in this Sec.
2.5(e) shall affect or postpone any of the obligations of
Resources or the right of any Bank provided in Sec. 2.5(d).
SECTION 3. Payments.
3.1 Payments on Non-Business Days. Whenever any
payment to be made hereunder shall be stated to be due on a
day which is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day and, if a
payment of principal has been so extended, interest shall be
payable on such principal at the applicable rate during such
extension.
3.2 Voluntary Prepayments. Resources shall have the
right to prepay the Loans in whole or in part, without
premium or penalty, from time to time pursuant to this
Sec. 3.2 on the following terms and conditions: (i)
Resources shall give the Agent at the Payment Office at
least 3 Business Days' prior written notice or telephonic
notice (confirmed in writing) of its intent to prepay such
Loans, which notice shall specify the amount of such
prepayment and the specific Borrowing to be prepaid, which
notice the Agent shall promptly transmit to each of the
Banks; (ii) each prepayment shall be in an integral multiple
of $500,000 and not less than $10,000,000 (or, if less, the
amount then remaining outstanding in respect of the
Borrowing being prepaid); (iii) each prepayment in respect
of Loans made pursuant to one Borrowing shall be applied pro
rata among the Banks on the basis of such Loans, except as
otherwise provided in Sec. 2.5; (iv) at the time of any
prepayment, Resources shall pay all interest accrued on the
principal amount of said prepayment and, if Resources
prepays any Eurodollar Loan on any day other than the last
day of an Interest Period applicable thereto, Resources
shall compensate the Banks for losses sustained as a result
of such prepayment to the extent and as provided in
Sec. 1.8.
3.3 Method and Place of Payment, Etc. Except as
expressly provided herein, all payments under this Agreement
shall be made to the Agent for the ratable account of the
Banks not later than Noon (New York time) on the date when
due and shall be made in freely transferable U.S. dollars
and in immediately available funds at the Payment Office (if
such payment is made in respect of principal of or interest
on any Eurodollar Loan, for the account of such non-U.S.
office of the Agent as the Agent may from time to time
direct). Unless the Agent shall have been notified by
Resources prior to the date on which any payment to be made
by Resources hereunder is due that Resources does not intend
to remit such payment, the Agent may, at its discretion,
assume that Resources has remitted such payment when so due
and the Agent may, at its discretion and in reliance upon
such assumption, make available to each Bank (for the
account of its applicable lending office) on such payment
date an amount equal to such Bank's share of such assumed
payment. If Resources has not in fact remitted such payment
to the Agent, each Bank shall forthwith on demand repay to
the Agent the amount of such assumed payment made available
to such Bank together with interest thereon in respect of
each day from and including the date such amount was made
available by the Agent to such Bank to the date such amount
is repaid to the Agent at a rate per annum equal to the
Federal Funds Rate. On the commencement date of each
Interest Period and on each date occurring two Business Days
prior to an Interest Payment Date, the Agent shall notify
Resources of the amount of interest and/or fees due at the
end of such Interest Period or on such Interest Payment Date
(assuming, in the case of Base Rate Loans, that there is no
change in the rate of the applicable Base Rate Loan);
provided, however, that failure to so notify Resources shall
not affect Resources's obligation to make any such payments.
3.4 Net Payments. All payments under this Agreement
shall be made without set-off or counterclaim and in such
amounts as may be necessary in order that all such payments
of principal and interest in connection with Loans (after
deduction or withholding for or on account of (i) any
present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or
any political subdivision or taxing authority thereof, other
than any tax (except such taxes referred to in clause (ii)
below) on or measured by the net income of a Bank pursuant
to the income tax laws of the jurisdiction where such Bank's
principal or lending office is located or in which such Bank
maintains a place of business (collectively the "Taxes") and
(ii) deduction of an amount equal to any taxes on or
measured by the net income payable by any such Bank with
respect to the amount by which the payments required to be
made by this Sec. 3.4 exceed the amount otherwise specified
to be paid under this Agreement) shall not be less than the
amounts otherwise specified to be paid under this Agreement.
A certificate as to any additional amounts payable to any
Bank under this Sec. 3.4 submitted to Resources by such Bank
shall show in reasonable detail the amount payable and the
calculations used to determine such amount and shall,
absent manifest error, be final, conclusive and binding upon
all parties hereto. With respect to each deduction or
withholding for or on account of any Taxes, Resources shall
promptly furnish to each Bank such certificates, receipts
and other documents as may be required (in the judgment of
such Bank) to establish any tax credit to which such Bank
may be entitled.
SECTION 4. Conditions Precedent.
4.1 Conditions to Effectiveness. On the Closing Date:
(a) Opinion of Counsel for Resources. The Agent
shall have received from the General Counsel of Resources or
Senior Counsel for PPLC a favorable opinion, in sufficient
copies for each of the Banks and the Fronting Bank and dated
the Closing Date (which the Agent will forward to the Banks
and the Fronting Bank), substantially in the form of Exhibit
A hereto.
(b) Opinion of Counsel for the Agent. The Agent
shall have received in sufficient counterparts for each of
the Banks and the Fronting Bank and dated the Closing Date
(which the Agent will forward to the Banks and the Fronting
Bank), an opinion of Cravath, Swaine & ▇▇▇▇▇, special
counsel for the Agent, addressed to the Agent, the Fronting
Bank and the Banks, with respect to the enforceability of
this Agreement against Resources.
(c) Documentation and Proceedings. All corporate
and legal proceedings and all instruments in connection with
the transactions contemplated by this Agreement (including
resolutions of the Board of Directors of Resources and
certificates as to the incumbency of the officers signing
this Agreement or any certificate delivered in connection
herewith) shall be satisfactory in form and substance to the
Agent, and the Agent shall have received all information and
copies of all documents that it has requested, such
documents where appropriate to be certified by proper
corporate or governmental authorities.
(d) Agreement. The Agent shall have received
from each of the Banks, the Fronting Bank and Resources a
duly executed and delivered counterpart hereof.
(e) The conditions set forth in Sec. 4.2 (other
than Sec. 4.2(c)) shall have been satisfied.
4.2 Conditions to Each Loan and Each Issuance of a
Letter of Credit. The obligation of each Bank to make each
Loan (excluding any conversions of one Type of Loan to
another Type pursuant to Sec. 2.5(b)) and of the Fronting
Bank to issue each Letter of Credit to Resources hereunder
is subject, at the time of the making of each such Loan and
the issuance of each such Letter of Credit (except as
hereinafter indicated), to the satisfaction of the following
conditions, with the making of each such Loan and the
issuance of each such Letter of Credit constituting a
representation and warranty by Resources that the conditions
specified in Sections 4.2(a) and (b) below are then
satisfied:
(a) No Default. At the time of the making of
each such Loan and the issuance of each such Letter of
Credit and after giving effect thereto, there shall exist no
Default or Event of Default.
(b) Representations and Warranties. At the time
of the making of each such Loan and the issuance of each
such Letter of Credit and after giving effect thereto, all
representations and warranties contained in Sec. 7 hereof
shall be true and correct with the same force and effect as
though such representations and warranties had been made as
of such time.
(c) Notice of Borrowing. The Agent shall have
received Notice of Borrowing as required by Sec. 1.2 or, in
the case of the issuance of a Letter of Credit, the Fronting
Bank and the Agent shall have received a notice requesting
the issuance of such Letter of Credit as required by
Sec. 1A(b).
(d) No Adverse Change. Since December 31, 1995,
there shall have been no change in the business, assets,
financial condition or operations of Resources and its
Subsidiaries taken as a whole which materially and adversely
affects the ability of Resources to perform any of its
obligations hereunder.
SECTION 5. Covenants.
While this Agreement is in effect and until the
Total Commitment has been terminated, all obligations
hereunder and under the Notes shall have been paid in full
and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in
full, Resources agrees that:
5.1 Financial Statements. It will furnish to each
Bank:
(a) within 120 days after the end of each of its
fiscal years (i) an auditors' report, including a balance
sheet as at the close of such fiscal year and statements of
income, shareowners' common equity and cash flows for such
year for Resources and its consolidated Subsidiaries
prepared in conformity with GAAP, with an opinion expressed
by Price Waterhouse LLP or other independent auditors of
recognized standing selected by Resources and (ii) a balance
sheet as at the close of such fiscal year and statements of
income, shareholders common equity and cash flows for such
year for Resources;
(b) within 60 days after the end of each of the
first three quarters in each of Resources's fiscal years, a
balance sheet as at the close of such quarterly period and
statements of income, shareowners' common equity and cash
flows for such quarterly period for (i) Resources and
(ii) Resources and its consolidated Subsidiaries, in the
case of the statements for Resources and its consolidated
Subsidiaries, prepared in conformity with GAAP;
(c) within 120 days after the end of each of its
fiscal years, a copy of each of Resources's and PPLC's Form
10-K Report to the Securities and Exchange Commission
("SEC") and within 60 days after the end of each of the
first three quarters in each of Resources's fiscal years, a
copy of each of Resources's and PPLC's Form 10-Q Report to
the SEC;
(d) from time to time, with reasonable
promptness, such further information regarding Resources's
business, affairs and financial condition as such Bank and
the Fronting Bank may reasonably request; and
(e) upon acquiring knowledge of the existence of
a Default or Event of Default, Resources will promptly
deliver to each Bank and the Fronting Bank a certificate of
a financial officer of Resources specifying: (i) the nature
of such Default or Event of Default, (ii) the period of the
existence thereof, and (iii) the actions that Resources
proposes to take with respect thereto.
The financial statements required to be furnished
pursuant to clauses (a) and (b) above, shall be accompanied
by a certificate of a principal financial officer of
Resources to the effect that no Default or Event of Default
has occurred and is continuing.
5.2 Mergers. It will not merge or consolidate (other
than a merger or consolidation under which Resources is the
surviving corporation) with any Person. It will not sell,
transfer or otherwise dispose of any common stock of PPLC or
stock convertible into common stock of PPLC or of all or
substantially all of its other assets, except in the case of
such other assets, in the ordinary course of its business.
5.3 Ratings. It will use its best efforts to promptly
notify the Banks upon obtaining knowledge of any change in,
or cessation of, ratings of PPLC's First Mortgage Bonds by
▇▇▇▇▇'▇ or S&P.
5.4 Indebtedness. It will not incur, create or suffer
to exist any Indebtedness if, after giving effect thereto,
the aggregate amount of Indebtedness of Resources (including
any Indebtedness outstanding hereunder) would exceed
$1,000,000,000 at any time outstanding.
5.5 Liens. It will not create, incur, or suffer to
exist any Lien in or on the common stock of PPLC or on stock
convertible into the common stock of PPLC (in either case,
now or hereafter acquired) other than Permitted Liens.
SECTION 6. Events of Default.
Upon the occurrence of any of the following events
(each an "Event of Default"):
6.1 Representations, Etc. Any certificate furnished
by Resources to the Banks and the Fronting Bank pursuant
hereto shall prove to have been incorrect in any material
respect or any of the representations and warranties made by
Resources herein or in connection herewith shall prove to
have been incorrect in any material respect when made; or
6.2 Principal and Interest. Resources shall fail to
make any payment of principal or interest on any Loan or any
other payment payable by Resources hereunder (including the
reimbursement of any L/C Disbursement) within 10 days of the
due date thereof; or
6.3 Defaults by Resources or PPLC Under Other
Agreements. Resources or PPLC shall (i) fail to pay any
principal or interest, regardless of amount, due in respect
of any Indebtedness in a principal amount in excess of
$50,000,000 beyond any period of grace provided with respect
thereto, or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement
or instrument evidencing or governing any such Indebtedness
in a principal amount in excess $50,000,000 beyond any
period of grace provided with respect thereto if the effect
of any failure referred to in this clause (ii) is to cause,
or to permit the holder or holders of such Indebtedness or a
trustee on its or their behalf to cause, such Indebtedness
to become due prior to its stated maturity; or
6.4 Judgments. Resources or PPLC shall fail within
60 days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $25,000,000 that
is not stayed on appeal or otherwise being appropriately
contested in good faith; or
6.5 Bankruptcy, Etc. Resources shall commence a vol-
untary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy" as now or hereafter in
effect or any successor thereto (the "Bankruptcy Code"); or
an involuntary case is commenced against Resources or such
case is controverted but is not dismissed within 60 days
after the commencement of the case; or Resources is not
generally paying its debts as they become due; or a
custodian (as defined in the Bankruptcy Code) is appointed
for, or takes charge of, all or substantially all of the
property of Resources or Resources commences any other
proceeding under any reorganization, arrangement,
readjustment of debt, relief of debtors, dissolution, insol-
vency or liquidation or similar law of any jurisdiction whe-
ther now or hereafter in effect relating to Resources or
there is commenced against Resources any such proceeding
which remains undismissed for a period of 60 days or
Resources is adjudicated insolvent or bankrupt; or Resources
fails to controvert in a timely manner any such case under
the Bankruptcy Code or any such proceeding, or any order of
relief or other order approving any such case or proceeding
is entered; or Resources by any act or failure to act
indicates its consent to, approval of or acquiescence in any
such case or proceeding or in the appointment of any
custodian or the like for it or any substantial part of its
property or suffers any such appointment to continue
undischarged or unstayed for a period of 60 days; or
Resources makes a general assignment for the benefit of
creditors; or any corporate action is taken by Resources for
the purpose of effecting any of the foregoing; or
6.6 Other Covenants. Resources shall fail to perform
or observe any other term, covenant or agreement contained
in this Agreement on its part to be performed or observed
and any such failure shall remain unremedied for a period of
30 days after written notice thereof shall have been
received by Resources from the Agent or the Required Banks;
then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, either or
both of the following actions may be taken: (i) the Agent,
at the direction of the Required Banks, shall by written
notice to Resources, declare the principal of and accrued
interest in respect of all of the outstanding Loans to be,
whereupon the same and all other amounts due hereunder shall
become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which
are hereby expressly waived by Resources, anything contained
herein to the contrary notwithstanding, and (ii) the Agent,
at the direction of the Required Banks, shall by written
notice to Resources, declare the Total Commitment
terminated, whereupon the Commitment of each Bank and the
obligation of each Bank to make its Loans hereunder shall
terminate immediately and any accrued Facility Fee shall
forthwith become due and payable without any other notice of
any kind; provided that if an Event of Default described in
Sec. 6.5 shall occur, the result which would otherwise
occur only upon the giving of written notice by the Agent to
Resources as specified in clauses (i) and (ii) above shall
occur automatically without the giving of any such notice
and without any instruction by the Required Banks to give
such notice.
SECTION 7. Representations and Warranties.
In order to induce the Banks and the Fronting Bank
to enter into this Agreement and to make the Loans and issue
the Letters of Credit provided for herein, Resources makes
the following representations and warranties to the Banks
and the Fronting Bank:
7.1 Corporate Status. Resources is duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and has the corporate power to
make and perform this Agreement and to borrow hereunder.
7.2 Authority; No Conflict. The making and
performance by Resources of this Agreement have been duly
authorized by all necessary corporate action and do not and
will not violate any provision of law or regulation, or any
decree, order, writ or judgment, or any provision of its
charter or by-laws, or result in the breach of or constitute
a default under any indenture or other agreement or
instrument to which it is a party.
7.3 Legality, Etc. This Agreement constitutes the
legal, valid and binding obligation of Resources enforceable
in accordance with its terms except to the extent limited by
bankruptcy, insolvency or reorganization laws or by other
laws relating to or affecting the enforceability of credi-
tors' rights generally and by general equitable principles
which may limit the right to obtain equitable remedies.
7.4 Financial Statements. The financial statements of
(i) Resources and (ii) Resources and its consolidated
Subsidiaries for the year ended as at December 31, 1995,
furnished to the Banks, fairly present the financial
position of Resources and Resources and its consolidated
Subsidiaries, as the case may be, at December 31, 1995 and
the results of their operations for the year then ended and,
in the case of the statements for Resources and its
consolidated Subsidiaries, were prepared in accordance with
GAAP. Since that date there has been no adverse change in
the business, assets, financial condition or operations of
Resources which would materially and adversely affect the
ability of Resources to perform any of its obligations
hereunder.
7.5 Litigation. Except as disclosed in or contem-
plated by Resources's Form 10-K Report to the SEC for the
year ended December 31, 1995, furnished to the Banks, no
litigation, arbitration or administrative proceeding is
pending or, to the knowledge of Resources, threatened,
which, if determined adversely to Resources, would
materially and adversely affect the ability of Resources to
perform any of its obligations under this Agreement. There
is no litigation, arbitration or administrative proceeding
pending or, to the knowledge of Resources, threatened which
questions the validity of this Agreement.
7.6 No Violation. No part of the proceeds of the
borrowings under this Agreement or of any Letter of Credit
will be used, directly or indirectly, by Resources for the
purpose of purchasing or carrying any "margin stock" within
the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, or for any other purpose which
violates, or which conflicts with, the provisions of
Regulations G, U or X of said Board of Governors. Resources
is not engaged principally, or as one of its important
activities, in the business of extending credit for the
purpose of purchasing or carrying any such "margin stock."
7.7 ERISA. There have not been any "reportable
events," as that term is defined in Section 4043 of the
Employee Retirement Income Security Act of 1974, as amended,
which would result in a material liability to Resources.
7.8 Consents. No authorization, consent or approval
from governmental bodies or regulatory authorities is
required for the making and performance of this Agreement by
Resources, except such authorizations, consents and
approvals as have been obtained prior to the making of any
Loans and are in full force and effect at the time of the
making of each Loan.
7.9 Subsidiaries. The assets of all Subsidiaries of
PPLC do not comprise in the aggregate more than 20% of the
total consolidated assets of PPLC.
7.10 Investment Company Act. Neither Resources nor
any Subsidiary thereof is an "investment company" that is
required to be registered under the Investment Company Act
of 1940, as amended, in order not to be subject to the
prohibitions of Section 7 of such Act.
7.11 Public Utility Holding Company Act. Resources is
a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended, but is exempt from
such Act (except for the provisions of Section 9(a)(2)
thereof) by virtue of an order of the SEC pursuant to
Section 3(a)(1) thereof.
7.12 Tax Returns. Resources has filed or caused to be
filed all Federal, state, local and foreign tax returns or
materials required to have been filed by it and has paid or
caused to be paid all taxes due and payable by it and all
assessments received by it, except taxes that are being
contested in good faith by appropriate proceedings and for
which Resources shall have set aside on its books
appropriate reserves with respect thereto in accordance with
GAAP.
SECTION 8. Agent.
8.1 Appointment. The Banks hereby appoint Chemical
Bank as Agent (such term to include Agent acting as Agent)
to act as herein specified. Each Bank and the Fronting Bank
hereby irrevocably authorizes, and each assignee of any Bank
or the Fronting Bank shall be deemed irrevocably to author-
ize, the Agent to take such action on their behalf under the
provisions of this Agreement and any instruments, documents
and agreements referred to herein (such instruments,
documents and agreements being herein referred to as the
"Loan Documents") and to exercise such powers hereunder and
thereunder as are specifically delegated to the Agent by the
terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent may perform any of
its duties hereunder, or under the Loan Documents, by or
through its agents or employees.
8.2 Nature of Duties. The duties of the Agent shall
be mechanical and administrative in nature. The Agent shall
not have by reason of this Agreement a fiduciary
relationship in respect of any Bank or of the Fronting Bank.
Nothing in this Agreement or any of the Loan Documents,
expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in
respect of this Agreement or any of the Loan Documents
except as expressly set forth herein. Each Bank and the
Fronting Bank shall make its own independent investigation
of the financial condition and affairs of Resources and its
Subsidiaries in connection with the making and the
continuance of the Loans and the issuance of Letters of
Credit hereunder and shall make its own appraisal of the
creditworthiness of Resources; and the Agent shall have no
duty or responsibility, either initially or on a continuing
basis, to provide any Bank or the Fronting Bank with any
credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or
the issuance of Letters of Credit or at any time or times
thereafter. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through
agents or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible to any Bank or the
Fronting Bank for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care
except to the extent otherwise required by Sec. 8.3.
8.3 Rights, Exculpation, Etc. Neither the Agent nor
any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be liable to any Bank
or to the Fronting Bank for any action taken or omitted by
it hereunder or under any of the Loan Documents, or in
connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The Agent
shall not be responsible to any Bank or to the Fronting Bank
for any recitals, statements, representations or warranties
herein or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, or sufficiency of
this Agreement or any of the Loan Documents or the financial
condition of Resources. The Agent shall not be required to
make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of
this Agreement or any of the Loan Documents or the financial
condition of Resources, or the existence or possible
existence of any Default or Event of Default. The Agent may
at any time request instructions from the Banks with respect
to any actions or approvals which by the terms of this
Agreement or any of the Loan Documents the Agent is
permitted or required to take or to grant, and if such
instructions are requested, the Agent shall be absolutely
entitled to refrain from taking any action or to withhold
any approval and shall not be under any liability whatsoever
to any Person for refraining from any action or withholding
any approval under this Agreement or any of the Loan
Documents until it shall have received such instructions
from the Required Banks. Without limiting the foregoing, no
Bank shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from
acting hereunder or under any of the Loan Documents in
accordance with the instructions of the Required Banks.
8.4 Reliance. The Agent shall be entitled to rely
upon any written notice, statement, certificate, order or
other document or any telephone message believed by it to be
genuine and correct and to have been signed, sent or made by
the proper Person, and, with respect to all legal matters
pertaining to this Agreement or any of the Loan Documents
and its duties hereunder or thereunder, upon advice of
counsel selected by it.
8.5 Indemnification. To the extent that the Agent is
not reimbursed and indemnified by Resources, the Banks will
reimburse and indemnify the Agent for and against any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent, acting pursuant
hereto, in any way relating to or arising out of this Agree-
ment or any of the Loan Documents or any action taken or
omitted by the Agent under this Agreement or any of the Loan
Documents, in proportion to their respective Commitments
hereunder; provided, however, that no Bank shall be liable
for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expen-
ses or disbursements resulting from the Agent's gross negli-
gence or wilful misconduct. The obligations of the Banks
under this Sec. 8.5 shall survive the payment in full of
outstanding Loans, the expiration of any Letter of Credit
and the termination of this Agreement.
8.6 The Agent, Individually. With respect to its
Commitment hereunder and the Loans made by it, the Agent
shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any
other Bank. The terms "Banks," "Required Banks" or any
similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity as a
Bank or one of the Required Banks. The Agent may accept
deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with Resources as
if it were not acting pursuant hereto.
8.7 Resignation by the Agent. The Agent may resign
from the performance of all its functions and duties
hereunder at any time by giving 15 Business Days' prior
written notice to Resources and the Banks. Such resignation
shall take effect upon the expiration of such 15 Business
Day period or upon the earlier appointment of a successor.
Upon any such resignation, the Required Banks shall appoint
a successor Agent who shall be satisfactory to Resources and
shall be an incorporated bank or trust company. In the
event no such successor shall have been so appointed, then
any notification, demand or other communication required or
permitted to be given by the Agent on behalf of the Banks to
Resources hereunder shall be sufficiently given if given by
the Required Banks, and any notification, demand, other
communication, document, statement, other paper or payment
required to be made, given or furnished by Resources to the
Agent for distribution to the Banks shall be sufficiently
made, given or furnished if made, given or furnished by
Resources directly to each Bank entitled thereto and, in the
case of payments, in the amount to which each such Bank is
entitled. All powers specifically delegated to the Agent by
the terms hereof may be exercised by the Required Banks.
SECTION 9. Miscellaneous.
9.1 Definitions. As used herein the following terms
shall have the meanings herein specified and shall include
in the singular number the plural and in the plural number
the singular:
"Affected Bank" shall have the meaning assigned
that term in Sec. 2.5(c).
"Agent" shall mean Chemical Bank and shall include
(i) any successor corporation thereto by merger,
consolidation or otherwise and (ii) any successor to the
Agent appointed pursuant to Sec. 8.7.
"Aggregate Credit Exposure" shall mean the
aggregate amount of the Banks' Credit Exposures.
"Agreement" shall mean this Revolving Credit
Agreement, as it may from time to time be amended, supple-
mented or otherwise modified.
"Applicable Eurodollar Margin" shall have the
meaning assigned that term in the definition of "Applicable
Rate".
"Applicable Facility Fee Percentage" shall have
the meaning assigned that term in the definition of
"Applicable Rate".
"Applicable Lending Office" shall mean, with
respect to each Bank, (i) such Bank's Base Rate Lending
Office in the case of a Base Rate Loan and (ii) such Bank's
Eurodollar Lending Office in the case of a Eurodollar Rate
Loan.
"Applicable Percentage" of any Bank at any time
shall mean the percentage of the Total Commitment
represented by such Bank's Commitment. In the event the
Commitments shall have expired or been terminated, the
Applicable Percentages shall be determined on the basis of
the Commitments most recently in effect, but giving effect
to assignments pursuant to Sec. 9.6.
"Applicable Rate" shall mean and include the
Applicable Facility Fee Percentage and Applicable Eurodollar
Margin and at any time will be determined based on the
highest Category set forth below in which PPLC's First
Mortgage Bonds have been assigned ratings by both Moody's
and S&P which meet both of the applicable criteria set forth
below (the highest category being Category A).
Applicable Applicable
Facility Fee Eurodollar
Criteria Percentage Margin
Category A:
A- or better and A3
or better .150% .250%
Category B:
BBB+ or better and
Baa1 or better .200% .300%
Category C:
BBB or better and
Baa2 or better .250% .300%
Category D:
BBB- or better and
Baa3 or better .375% .300%
Category E:
BB+ or below or
Ba1 or below .500% .750%
"Bank" shall have the meaning assigned that term
in the first paragraph in this Agreement.
"Bankruptcy Code" shall have the meaning assigned
that term in Sec. 6.5.
"Base Rate" shall mean, for any day, a rate per
annum equal to the higher of (i) the Prime Rate and (ii) 1/2
of 1% plus the Federal Funds Rate, each as in effect from
time to time.
"Base Rate Lending Office" means, with respect to
each Bank, the office of such Bank specified as its "Base
Rate Lending Office" on the signature pages to the Agreement
or such other office of such Bank as such Bank may from time
to time specify as such to Resources and the Agent.
"Base Rate Loan" shall mean any Loan during any
period during which such Loan is bearing interest at the
rates provided for in Sec. 2.1(a).
"Borrowing" shall mean the incurrence of one Type
of Loan from all the Banks on a given date, all of which
Eurodollar Loans shall have the same Interest Period,
pursuant to Sec. 1.2; provided, however, that Loans of a
different Type extended by one or more Banks pursuant to
Sec. 2.5(b) shall be considered a part of the related
Borrowing.
"Business Day" shall mean (i) for all purposes
other than as covered by clause (ii) below, any day
excluding Saturday, Sunday and any day on which banks in New
York City are authorized by law or other governmental
actions to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day
for trading by and between banks in U.S. dollar deposits in
the London interbank Eurodollar market.
"Capital Lease Obligations" of any person shall
mean obligations of such person to pay rent or other amounts
under any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof,
which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such
person under GAAP, and the amount of such obligations shall
be the capitalized amount thereof determined in accordance
with GAAP.
"Closing Date" shall mean May 30, 1996.
"Commitment", for each Bank, shall mean the amount
specified opposite its name on Schedule I hereto, such
Commitment to be reduced by the amount of any reduction
thereto effected pursuant to Sec. 1.7 and/or Sec. 6.
"Credit Exposure", for each Bank at any time,
shall mean the aggregate principal amount at such time of
all outstanding Loans of such Bank to Resources, plus the
aggregate amount at such time of such Bank's L/C Exposure.
"Default" shall mean any event, act or condition
which with notice or lapse of time or both would constitute
an Event of Default.
"Eligible Transferee" shall mean and include a
commercial bank, financial institution or other "accredited
investor" (as defined in SEC Regulation D).
"Eurodollar Lending Office" shall mean, with
respect to each Bank, the office of such Bank specified as
its "Eurodollar Lending Office" on the signature pages to
the Agreement or such other office of such Bank as such Bank
may from time to time specify as such to Resources and the
Agent.
"Eurodollar Loan" shall mean any loan during any
period during which such Loan is bearing interest at the
rates provided for in Sec. 2.1(b).
"Event of Default" shall mean each of the Events
of Default specified in Sec. 6.
"Expiry Date" shall mean the date 364 days from
the date hereof.
"Facility Fee" shall have the meaning assigned
that term in Sec. 1.6(a).
"Federal Funds Rate" shall mean for any day, a
fluctuating interest rate equal for each day during such
period to the weighted average of the rates on overnight
Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Agent from three Federal Funds brokers of recognized
standing selected by the Agent.
"First Mortgagee Bonds" shall mean the first
mortgage bonds issued by PPLC pursuant to its Mortgage and
Deed of Trust dated as of October 1, 1945, as supplemented.
"Fronting Bank Fees" shall have the meaning
assigned to that term in Sec. 1.6(b).
"GAAP" shall mean United States generally accepted
accounting principles applied on a consistent basis.
"Guarantee" of or by any person shall mean any
obligation, contingent or otherwise, of such person
guaranteeing or having the economic effect of guaranteeing
any Indebtedness of any other person (the "primary obligor")
in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security
for payment of such Indebtedness, (b) to purchase or lease
property, securities or services for the purpose of assuring
the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity
capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided, however, that
the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Indebtedness" of any person shall mean, without
duplication, (a) all obligations of such person for borrowed
money, (b) all obligations of such person with respect to
deposits or advances of any kind, (c) all obligations of
such person evidenced by bonds, debentures, notes or similar
instruments, (d) all obligations of such person under
conditional sale or other title retention agreements
relating to property or assets purchased by such person,
(e) all obligations of such person issued or assumed as the
deferred purchase price of property or services (excluding
trade accounts payable and accrued obligations incurred in
the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien or property owned or acquired by
such person, whether or not the obligations secured thereby
have been assumed but shall not include any obligations that
are without recourse to such person, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease
Obligations of such person, (i) all obligations of such
person in respect of Interest Rate Protection Agreements,
foreign currency exchange agreements or other interest or
exchange rate hedging arrangements (the amount of any such
obligation to be the amount that would be payable upon the
acceleration, termination or liquidation thereof) and
(j) all obligations of such person as an account party in
respect of letters of credit and bankers' acceptances.
"Initial Banks" shall mean Chemical Bank and
Citibank, N.A.
"Interest Period" shall mean (a) as to any
Eurodollar Loan, the period commencing on the date of such
Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day)
in the calendar month that is 1, 2, 3 or 6 months
thereafter, as Resources may elect in a Notice of Borrowing
or Notice of Conversion and (b) as to any Base Rate Loan,
the period commencing on the date of such Loan and ending on
the date 90 days thereafter or, if earlier, on the Expiry
Date or the date of prepayment of such Loan. If any
Interest Period would otherwise expire on a day which is not
a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest
Period applicable to a Borrowing of Eurodollar Loans would
otherwise expire on a day which is not a Business Day but is
a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on
the next preceding Business Day.
"Interest Rate Protection Agreement" shall mean
any agreement providing for an interest rate swap, cap or
collar, or for any other financial arrangement designed to
protect against fluctuations in interest rates.
"L/C Commitment" shall mean the commitment of the
Fronting Bank to issue Letters of Credit pursuant to
Sec. 1A.
"L/C Disbursement" shall mean a payment or
disbursement made by the Fronting Bank pursuant to a Letter
of Credit.
"L/C Exposure" shall mean at any time the sum of
(a) the aggregate undrawn amount of all outstanding Letters
of Credit at such time plus (b) the aggregate principal
amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Bank at
any time shall mean its Applicable Percentage of the
aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning
assigned to such term in Sec. 1.6(b).
"Letter of Credit" shall mean any letter of credit
issued pursuant to Sec. 1A.
"Lien" shall mean, with respect to any asset,
(a) any mortgage, deed of trust, lien, pledge, encumbrance,
charge or security interest in or on such asset, (b) the
interest of a vender or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and
(c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such
securities.
"Loan" shall have the meaning assigned that term
in Sec. 1.1.
"Loan Documents" shall have the meaning assigned
that term in Sec. 8.1.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service,
Inc. or any successor thereto.
"Notice of Borrowing" shall have the meaning
assigned that term in Sec. 1.2.
"Notice of Conversion" shall have the meaning
assigned that term in Sec. 2.4(a).
"Payment Office" shall mean the office of the
Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
or such other office as the Agent may hereafter designate
in writing as such to the other parties hereto.
"Permitted Liens" shall mean (a) Liens for taxes,
assessments or governmental charges or levies to the extent
not past due, or which are being contested in good faith in
appropriate proceedings for which Resources has provided
appropriate reserves for the payment thereof in accordance
with GAAP; (b) pledges or deposits in the ordinary course of
business to secure obligations under worker's compensation
laws or similar legislation; (c) other pledges or deposits
in the ordinary course of business (other than for borrowed
monies) that, in the aggregate, are not material to
Resources; (d) Liens imposed by law such as materialmen's,
mechanics', carriers', workers' and repairmen's Liens and
other similar Liens arising in the ordinary course of
business for sums not yet due or currently being contested
in good faith by appropriate proceedings; (e) attachment,
judgment or other similar Liens arising in connection with
court proceedings, provided that such Liens, in the
aggregate, shall not exceed $50,000,000 at any one time
outstanding, and (f) other Liens not otherwise referred to
in the foregoing clauses (a) through (e) above, provided
that such other Liens do not secure at any time obligations
in an aggregate amount in excess of $100,000,000 at any time
outstanding.
"Persons" shall mean and include any individual,
firm, corporation, association, trust or other enterprise or
any governmental or political subdivision or agency, depart-
ment or instrument thereof.
"PPLC" shall mean Pennsylvania Power & Light
Company, a Pennsylvania corporation that is a direct
Subsidiary of Resources.
"Prime Rate" shall mean the rate which Chemical
Bank announces from time to time as its prime lending rate,
such Prime Rate to change when and as such prime lending
rate changes. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually
charged to any customer. Chemical Bank may make commercial
loans or other loans at rates of interest at, above or below
the Prime Rate.
"Quoted Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period, the rate (rounded
upwards to the nearest 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to the Agent's
portion of such Eurodollar Loan and for a maturity
comparable to such Interest Period are offered to the
principal London office of the Agent in immediately
available funds in the London interbank market at
approximately 11:00 A.M. (London time) 2 Business Days prior
to the commencement of such Interest Period, without any
addition to such offered quotation to give effect to the
reserve requirements established for Eurodollar transactions
by Regulation D.
"Register" shall have the meaning provided in
1.4(b).
"Regulation D" shall mean Regulation D of the
Board of Governors of the Federal Reserve System as from
time to time in effect or any successor to all or a portion
thereof establishing reserve requirements.
"Required Banks" shall mean Banks having Loans
the outstanding principal amount of which aggregate (or, if
no Loans are outstanding, Banks with Commitments
aggregating) at least the majority of the aggregate
outstanding principal amount of all Loans (or of the Total
Commitment).
"Resources" shall have the meaning assigned that
term in the first paragraph of this Agreement.
"SEC" shall have the meaning assigned that term in
Sec. 5.1(c).
"SEC Regulation D" shall mean Regulation D as
promulgated under the Securities Act of 1933, as amended, as
the same may be in effect from time to time."
"S&P" shall mean Standard & Poor's Ratings
Services, a Division of the ▇▇▇▇▇▇-▇▇▇▇ Companies Inc. or
any successor thereto.
"Subsidiary" shall mean any company, partnership,
association or other business entity in which Resources and
its Subsidiaries now have or may hereafter acquire an
aggregate of at least 50% of the voting stock or ownership
interests.
"Taxes" shall have the meaning assigned that term
in Sec. 3.4.
"Total Commitment" shall mean the aggregate of all
the Commitments of all the Banks.
"Type" shall mean any type of Loan, i.e., whether
a Loan is a Base Rate Loan or a Eurodollar Loan.
"Unaffected Bank" shall have the meaning assigned
that term in Sec. 2.5(c).
"written" or "in writing" shall mean any form of
written communication or a communication by means of telex,
telecopier device, telegraph or cable.
9.2 Accounting Principles. All statements to be
prepared and determinations to be made under this Agreement,
including (without limitation) those pursuant to Sec. 5,
shall be prepared and made in accordance with generally
accepted accounting principles applied on a basis consistent
with the accounting principles reflected in the audited
financial statements of Resources for the fiscal year ended
December 31, 1995 referred to in Sec. 7.4, except for
changes in accounting principles consistent with GAAP.
9.3 Exercise of Rights. Neither the failure nor
delay on the part of any of the Banks or the Fronting Bank
to exercise any right, power or privilege under this Agree-
ment shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege under
this Agreement preclude any other or further exercise there-
of, or the exercise of any other right, power or privilege.
The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which
the Banks would otherwise have. No notice to or demand on
Resources in any case shall entitle Resources to any other
or further notice or demand in similar or other cir-
cumstances or constitute a waiver of the right of the Banks
or the Fronting Bank to any other or further action in any
circumstances without notice or demand.
9.4 Amendment and Waiver. Neither this Agreement nor
any other Loan Document nor any terms hereof or thereof may
be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing
signed by Resources and the Required Banks, provided that no
such change, waiver, discharge or termination shall, without
the consent of each Bank directly affected thereby, (i)
extend the final scheduled maturity of any Loan, or reduce
the rate or extend the time of payment of interest or
Facility Fees thereon (except in connection with a waiver of
the applicability of any post-default increase in interest
rates), or reduce the principal amount thereof (except to
the extent repaid in cash), (ii) amend, modify or waive any
provision of this Sec. 9.4, (iii) reduce the percentage
specified in the definition of Required Banks or (iv)
consent to the assignment or transfer by Resources of any of
its rights and obligations under this Agreement; provided
further, that no such change, waiver, discharge or termina-
tion shall (x) increase the Commitments of any Bank over the
amount thereof then in effect without the consent of such
Bank (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of
Default shall not constitute an increase of the Commitment
of any Bank) or (y) without the consent of the Agent, amend,
modify or waive any provision of Sec. 9 as same applies to
such Agent or any other provision as same relates to the
rights or obligations of such Agent.
9.5 Expenses; Indemnification. (a) Resources agrees
to pay all reasonable out-of-pocket expenses (i) of the
Agent and the Fronting Bank incurred in connection with the
preparation, execution, delivery, enforcement and
administration (exclusive of any internal overhead expenses)
of this Agreement and any and all agreements supplementary
hereto and the making and repayment of the Loans, the
issuance of the Letters of Credit and the payment of
interest, including, without limitation, the reasonable fees
and expenses of Cravath, Swaine & ▇▇▇▇▇, special counsel for
the Agent, (ii) of each Initial Bank in connection with any
assignments of Commitments or Loans hereunder and (iii) of
the Agent, the Fronting Bank and each Bank incurred in
connection with the enforcement of this Agreement,
including, without limitation, the reasonable fees and
expenses of any counsel for any of the Banks with respect to
such enforcement.
(b) Resources further agrees to pay, and to save
the Agent, the Fronting Bank and the Banks harmless from all
liability for, any stamp or other documentary taxes which
may be payable in connection with Resources' execution or
delivery of this Agreement, its borrowings hereunder or
Letters of Credit, or its issuance of any notes or of any
other instruments or documents provided for herein or deliv-
ered or to be delivered by it hereunder or in connection
herewith.
(c) Resources agrees to indemnify the Agent, the
Fronting Bank and each Bank and each of their respective
affiliates, directors, officers and employees (each such
person being called an "Indemnitee") against all losses,
claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Agent,
the Fronting Bank or any Bank is a party thereto) which any
of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions
contemplated hereby. The direct or indirect application or
proposed application of the proceeds of any Loan hereunder
or the issuance of Letters of Credit and provided that such
indemnification shall not extend to disputes solely among
the Agent, the Fronting Bank and the Banks; and provided
further that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or
wilful misconduct of such Indemnitee.
(d) All obligations provided for in this Sec. 9.5
shall survive any termination of this Agreement.
9.6 Successors and Assigns. (a) This Agreement shall
be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the
parties hereto, provided that Resources may not assign or
transfer any of its interests hereunder, except to the
extent any such assignment results from the consummation of
a transaction permitted under Sec. 5.2, without the prior
written consent of the Banks and provided further that the
rights of each Bank to transfer, assign or grant
participations in its rights and/or obligations hereunder
shall be limited as set forth below in this Sec. 9.6,
provided that nothing in this Sec. 9.6 shall prevent or
prohibit any Bank from pledging its rights under this
Agreement and/or its Loans hereunder to a Federal Reserve
Bank in support of borrowings made by such Bank from such
Federal Reserve Bank. In order to facilitate such an
assignment to a Federal Reserve Bank, Resources shall, at
the request of the assigning Bank, duly execute and deliver
to the assigning Bank a promissory note evidencing its
Commitment or Loans made by the assigning Bank hereunder.
(b) Each Bank shall have the right to transfer,
assign or grant participations in all or any part of its
remaining rights and obligations hereunder on the basis set
forth below in this clause (b).
(A) Assignments. Each Bank may assign all
or a portion of its rights and obligations hereunder
pursuant to this clause (b)(A) to (x) one or more Banks or
any affiliates of any Bank or (y) one or more other Eligible
Transferees, provided that (i) any such assignment pursuant
to clause (y) above shall be in the aggregate amount of at
least $5,000,000, (ii) after giving effect to any such
assignment pursuant to clause (x) or (y) above, no Bank
shall have a Commitment of less than $5,000,000 unless such
Bank's Commitment is reduced to zero pursuant to such
assignment, (iii) any assignment pursuant to clause (y),
other than an assignment by an Initial Bank, shall require
the consent of Resources, which consent shall not be
unreasonably withheld, (iv) an Initial Lender shall not
assign any percentage of its rights and obligations
hereunder without the other Initial Lender assigning the
same percentage of its rights and obligations hereunder, and
provided further, that, so long as no Loans, together with
interest thereon, shall be outstanding and no Default or
Event of Default shall have occurred and then be continuing,
Resources may at its option terminate the portion of such
assigning Bank's Commitment proposed to be assigned pursuant
to clause (y) above in lieu of consenting to such
assignment, and the Total Commitment shall be reduced in the
amount of such termination. Assignments or terminations of
all or any portion of any Bank's Commitment pursuant to this
clause (b)(A) will only be effective if the Agent shall have
received a written notice from the assigning Bank and the
assignee, or, in the case of a termination, Resources, and,
in the case of an assignment (other than as assignment by an
Initial Bank), payment of a nonrefundable assignment fee of
$2,500 to the Agent by either the assigning Bank or the
assignee. No later than five Business Days after its receipt
of any written notice of assignment or termination, the
Agent will record such assignment or termination, and the
resultant effects thereof on the Commitment of the assigning
or terminating Bank and, in the case of an assignment, the
assignee, in the Register, at which time such assignment or
termination shall become effective, provided that the Agent
shall not be required to, and shall not, so record any
assignment or termination in the Register on or after the
date on which any proposed amendment, modification or
supplement in respect of this Agreement has been circulated
to the Banks for approval until the earlier of (x) the
effectiveness of such amendment, modification or supplement
in accordance with Sec. 9.4 or (y) 30 days following the
date on which such proposed amendment, modification or
supplement was circulated to the Banks. Upon the
effectiveness of any assignment or termination pursuant to
this clause (b)(A), (x) the assignee, in the case of an
assignment, will become a "Bank" for all purposes of this
Agreement and the other Loan Documents with a Commitment as
so recorded by the Agent in the Register, and to the extent
of such assignment or termination, the assigning or
terminating Bank shall be relieved of its obligations
hereunder with respect to the portion of its Commitment
being assigned or terminated.
(B) Participations. Each Bank may transfer,
grant or assign participations in all or any part of such
Bank's interests and obligations hereunder pursuant to this
clause (b)(B) to any Eligible Transferee, provided that (i)
such Bank shall remain a "Bank" for all purposes of this
Agreement and the transferee of such participation shall not
constitute a Bank hereunder and (ii) no participant under
any such participation shall have any rights under the
Agreement or other Loan Document or any rights to approve
any amendment to or waiver of this Agreement or any other
Loan Document except to the extent such amendment or waiver
would (x) extend the final scheduled maturity of any of the
Loans or the Commitment in which such participant is
participating or (y) reduce the interest rate (other than as
a result of waiving the applicability of any post-default
increases in interest rates) or Facility Fee or other fees
applicable to any of the Loans or Commitments in which such
participant is participating or postpone the payment of any
thereof. In the case of any such participation, the
participant shall not have any rights under this Agreement
or any of the other Loan Documents (the participant's rights
against the granting Bank in respect of such participation
to be those set forth in the agreement with such Bank
creating such participation) and all amounts payable by
Resources hereunder shall be determined as if such Bank had
not sold such participation, provided that such participant
shall be entitled to receive additional amounts under
Sections 1.8 and 2.5 on the same basis as if it were a Bank
but in no case shall be entitled to any amount greater than
would have been payable had the Bank not sold such partici-
pations.
(c) Each Bank hereby represents, and each Person
that becomes a Bank pursuant to an assignment permitted by
the preceding clause (b)(A) will upon its becoming party to
this Agreement represent, that it is an Eligible Transferee
which makes loans in the ordinary course of its business and
that it will make or acquire Loans for its own account in
the ordinary course of such business, provided that, subject
to the preceding clauses (a) and (b), the disposition of any
promissory notes or other evidences of or interests in Loans
held by such Bank shall at all times be within its exclusive
control.
9.7 Notices, Requests, Demands. All notices,
requests, demands or other communications to or upon the
respective parties hereto shall be deemed to have been given
or made (i) in the case of notice by mail, when actually
received, (ii) in the case of telex or telegraphic notice,
when delivered to the telex or telegraph company and (iii)
in the case of telex or telecopier notice sent over a telex
or a telecopier machine owned or operated by a party hereto,
when sent, in each case addressed to Resources, the Agent
or the respective Bank, as the case may be, at their
respective addresses shown below their signatures hereto or
at such other address as such party may hereafter specify in
writing to the others. No other method of giving notice is
hereby precluded.
9.8 Survival of Representations and Warranties. All
representations and warranties contained herein or otherwise
made in writing by Resources in connection herewith shall
survive the execution and delivery of this Agreement.
9.9 Governing Law. This Agreement and the rights and
obligations of the parties under this Agreement (other than
as relates to Letters of Credit) shall be governed by and
construed and interpreted in accordance with the laws of the
State of New York. Each Letter of Credit shall be governed
by, and construed and interpreted in accordance with the
laws or rules designated in such Letter of Credit, or if no
such laws or rules are designated, the Uniform Customs and
Practice for Documentary Credits (1993 revision),
International Chamber of Commerce, publication no. 500 (the
"Uniform Customs") and, as to matters not governed by the
Uniform Customs, the laws of the State of New York.
9.10 Counterparts. This Agreement may be executed in
any number of copies, and by the different parties hereto on
the same or separate counterparts, each of which shall be
deemed to be an original instrument. Complete counterparts
of this Agreement shall be lodged with Resources and the
Agent.
9.11 Effectiveness. This Agreement shall become
effective on the Closing Date.
9.12 Transfer of Office. (a) Each Bank may transfer
and carry its Loans at, to or for the account of any branch
office, subsidiary or affiliate of such Bank; provided that
such Bank shall continue to bear all of its obligations
under this Agreement; and provided further that Resources
shall not be responsible for costs arising under Sec. 1.8,
2.5 or 3.4 resulting from any such transfer to the extent
not otherwise applicable to such Bank prior to such
transfer.
(b) Upon a Bank becoming aware of any event which
will entitle it to any additional amount pursuant to
Sec. 2.5(a) or Sec. 3.4, such Bank shall take all reasonable
steps (including but not limited to making, maintaining or
funding the affected Loan through another office of such
Bank) to avoid or reduce the additional amount payable by
Resources; provided that, such steps will not result in any
additional costs, liabilities or expenses (not reimbursable
by Resources) to such Bank and are not otherwise
inconsistent with the interests of such Bank determined in
good faith.
9.13 Proration of Payments. The Banks agree among
themselves that, with respect to all amounts received by
them which are applicable to the payment of principal of or
interest on the Loans, equitable adjustment will be made so
that, in effect, all such amounts will be shared ratably
among the Banks on the basis of the amounts then owed each
of them in respect of such obligation, whether received by
voluntary payment, by realization upon security, by the
exercise of any right of set-off or bankers' lien, by
counterclaim or cross action, under or pursuant to this
Agreement or otherwise. Each of the Banks agrees that if it
should receive any payment on its Loans of a sum or sums in
excess of its pro rata portion, then the Bank receiving such
excess payment shall purchase for cash from the other Banks
an interest in the Notes of such Banks in such amount as
shall result in a ratable participation by each of the Banks
in the aggregate unpaid amount of all outstanding Loans then
held by all of the Banks. If all or any portion of such
excess payment is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
Resources agrees that any Bank so purchasing a participation
from another Bank pursuant to this Sec. 9.13 may exercise
all its rights of payment with respect to such participation
as fully as if such Bank were the direct creditor of
Resources in the amount of such participation.
9.14 Headings Descriptive. The headings of the
various provisions of this Agreement are inserted for con-
venience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Agreement to be duly executed
and delivered as of the date first above written.
PP&L RESOURCES, INC.,
By /s/ R. E. Hill
Name: R. E. Hill
Title: Senior Vice President -
Financial & Treasurer
CHEMICAL BANK,
Individually and as Agent and
Fronting Bank
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
CITIBANK, N.A.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney in Fact
Name of Bank and Address Eurodollar Lending
for Notices Base Rate Lending Office Office
CHEMICAL BANK Same as Name of Bank Same as Name of Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Att: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CITIBANK N.A. Same as Name of Bank Same as Name of Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
Att: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I
CHEMICAL BANK $ 150,000,000
CITIBANK, N.A. 150,000,000
Total Commitment $300,000,000
EXHIBIT A
OPINION OF COUNSEL FOR Resources
The opinion of Counsel for Resources, referred to
in Sec. 4.1(b) of the Agreement shall be to the effect that
(terms used herein shall have the meanings specified
therefor in the Agreement):
1. Resources is duly incorporated, validly
existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and has the corporate power
to make and perform the Agreement and to borrow under the
Agreement.
2. The making and performance by Resources of
the Agreement, have been duly authorized by all necessary
corporate action and do not and will not violate any
provision of law or regulation, or any decree, order, writ
or judgment, or any provision of its charter or by-laws, or
result in the breach of or constitute a default under any
indenture or other agreement or instrument known to such
counsel to which Resources is a party.
3. The Agreement constitutes the legal, valid
and binding obligation of Resources enforceable in
accordance with its terms except to the extent limited by
bankruptcy, insolvency or reorganization laws or by other
laws relating to or affecting the enforceability of
creditors' rights generally and by general equitable
principles.
4. Except as disclosed in or contemplated by
Resources's Form 10-K Report to the Securities and Exchange
Commission for the year 1995, no litigation, arbitration or
administrative proceeding is pending or, to the knowledge
of such counsel, threatened, which, if determined adversely
to Resources, would materially and adversely affect the
ability of Resources to perform any of its obligations
under the Agreement. There is no litigation, arbitration
or administrative proceeding pending or, to the knowledge
of such counsel, threatened which questions the validity of
the Agreement.
5. Resources is not engaged principally, or as
one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System.
6. There have not been any "reportable events,"
as that term is defined in Section 4043 of the Employee
Retirement Income Security Act of 1974, as amended, which
would result in a material liability to Resources.
7. No authorization, consent or approval from
governmental bodies or regulatory authorities is required
for the making and performance of the Agreement by
Resources or for the borrowings thereunder, except such
authorizations, consents and approvals as have been
obtained prior to the making of any Loans and are in full
force and effect.