EXECUTION COPY
PP&L, INC.
PP&L CAPITAL FUNDING, INC.,
as Borrowers
PP&L RESOURCES, INC.,
as Guarantor of the obligations of
PP&L Capital Funding, Inc.
$150,000,000
364-DAY REVOLVING CREDIT AGREEMENT
_________________
Dated as of November 20, 1997
[CS&M #6700-601]
TABLE OF CONTENTS
Page
SECTION 1. Amounts and Terms of Loans ............. 1
1.1 Commitments ............................. 1
1.2 Notices of Borrowing .................... 2
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 .................. 12
2.4 Conversions; Interest Periods ........... 13
2.5 Increased Costs, Illegality, Etc. ....... 14
2.6 Extension of Expiry Date ................ 18
SECTION 3. Payments ................................ 20
3.1 Payments on Non-Business Days ........... 20
3.2 Voluntary Prepayments ................... 20
3.3 Method and Place of Payment, Etc. ....... 21
3.4 Net Payments ............................ 21
SECTION 4. Conditions Precedent .................... 22
4.1 Conditions to Effectiveness ............ 22
4.2A Conditions to Each Loan to PPL and
Each Issuance of Letter of Credit on
behalf of PPL .......................... 24
4.2B Conditions to Each Loan to Finance Co.
and Each Issuance of a Letter of
Credit on behalf of Finance Co. ........ 25
SECTION 5.A Covenants of PPL ....................... 26
5.1A Financial Statements ................... 26
5.2A Mergers ................................ 27
5.3A Ratings ................................ 27
5.4A Consolidated Indebtedness to
Consolidated Capitalization............. 27
SECTION 5.B Covenants of Finance Co. and Resources.. 28
5.1B Financial Statements ................... 28
5.2B Mergers ................................ 29
5.3B Ratings ................................ 30
5.4B Liens .................................. 30
5.5B Consolidated Indebtedness to
Consolidated Capitalization ............ 30
SECTION 6.A Events of Default for PPL .............. 30
6.1A Representations, Etc. .................. 30
6.2A Principal and Interest ................. 30
6.3A Defaults by PPL Under Other Agreements . 30
6.4A Judgments .............................. 31
6.5A Bankruptcy, Etc. ....................... 31
6.6A Other Covenants ........................ 32
SECTION 6.B Events of Default for Finance Co. ..... 32
6.1B Representations, Etc. ................. 32
6.2B Principal and Interest ................ 32
6.3B Defaults by PPL, Finance Co. or
Resources Under This Agreement or
Other Agreements ...................... 32
6.4B Judgments ............................. 33
6.5B Bankruptcy, Etc. ...................... 33
6.6B Other Covenants ....................... 34
6.7B Events of Default With Respect to PPL . 34
SECTION 7.A Representations and Warranties of PPL . 35
7.1A Corporate Status ...................... 35
7.2A Authority; No Conflict ................ 36
7.3A Legality, Etc. ........................ 36
7.4A Financial Statements .................. 36
7.5A Litigation ............................ 36
7.6A No Violation .......................... 36
7.7A ERISA ................................. 37
7.8A Consents .............................. 37
7.9A Subsidiaries .......................... 37
7.10A Investment Company Act ................ 37
7.11A Public Utility Holding Company Act .... 37
7.12A Tax Returns ........................... 37
7.13A Compliance with Laws .................. 38
SECTION 7.B Representations and Warranties of
Finance Co. and Resources ............. 38
7.1B Corporate Status ...................... 38
7.2B Authority; No Conflict ................ 38
7.3B..Legality, Etc. ........................ 38
7.4B Financial Statements .................. 39
7.5B Litigation ............................ 39
7.6B No Violation .......................... 39
7.7B ERISA ................................. 39
7.8B Consents .............................. 40
7.9B Investment Company Act ................ 40
7.10B Public Utility Holding Company Act .... 40
7.11B Tax Returns ........................... 40
7.12B Compliance with Laws .................. 40
SECTION 8. Agent ................................. 41
8.1 Appointment ........................... 41
8.2 Nature of Duties ...................... 41
8.3 Rights, Exculpation, Etc. ............. 42
8.4 Reliance .............................. 42
8.5 Indemnification ....................... 43
8.6 The Agent, Individually ............... 43
8.7 Resignation by the Agent .............. 43
SECTION 9. Resources' Guarantee .................. 44
SECTION 10. Miscellaneous ......................... 46
10.1 Definitions ........................... 46
10.2 Accounting Principles ................. 58
10.3 Exercise of Rights .................... 58
10.4 Amendment and Waiver .................. 59
10.5 Expenses; Indemnification ............. 59
10.6 Successors and Assigns ................ 60
10.7 Notices, Requests, Demands ............ 64
10.8 Survival of Representations and
Warranties ............................ 64
10.9 Governing Law ......................... 64
10.10 Counterparts .......................... 64
10.11 Effectiveness ......................... 65
10.12 Transfer of Office .................... 65
10.13 Proration of Payments ................. 65
10.14 Jurisdiction; Consent to Service
of Process ............................ 66
10.15 WAIVER OF JURY TRIAL .................. 67
10.16 Headings Descriptive .................. 67
EXHIBIT A - Form of Opinion of general counsel or senior
counsel of PPLC, Finance Co. and Resources
EXHIBIT B - Form of Opinion of Reid & Priest LLP
EXHIBIT C - Form of Extension Letter
EXHIBIT D1- Form of PPL Compliance Certificate
EXHIBIT D2- Form of Resources Compliance Certificate
364-DAY REVOLVING CREDIT AGREEMENT, dated as of
November 20, 1997, among PP&L, INC., a Pennsylvania
corporation ("PPL"), and PP&L CAPITAL FUNDING, INC., a
Delaware corporation ("Finance Co."), as Borrowers; PP&L
RESOURCES, INC., a Pennsylvania corporation ("Resources"),
as guarantor of the obligations of Finance Co. hereunder;
the banks listed on Schedule I hereto (each a "Bank" and
collectively the "Banks"); and THE CHASE MANHATTAN 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 Section 8 below (in such capacity, the "Agent")
(all capitalized terms used herein shall have the meanings
specified therefor in Section 10.1 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
PPL and Finance Co. the credit facility herein provided for
working capital and other general corporate purposes of the
Borrowers, including investments in, or loans to, affiliates
of the Borrowers;
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 and not
jointly agrees, at any time and from time to time prior to
the Expiry Date, as such date may be extended pursuant to
Section 2.6, to make a loan or loans (each a "Loan" and
collectively for all Banks, the "Loans") to PPL or Finance
Co., as requested by such Borrower, which Loans (i) shall at
the option of PPL or Finance Co., as applicable, be
initially maintained as Base Rate Loans or Eurodollar Loans,
provided that all the Loans made by all the Banks at any one
Borrowing to a Borrower 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 a Borrower
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
10:00 A.M. (New York time) on the date of such Borrowing
written notice or telephonic notice (confirmed in writing)
of each Base Rate Loan to be made hereunder. Each such
notice (each a "Notice of Borrowing") shall state that the
Borrowing is being made hereunder and shall specify the
aggregate principal amount the applicable Borrower desires
to borrow hereunder, the date of Borrowing (which shall be a
Business Day), the Type of Loans to be made pursuant to such
Borrowing and the Interest Period to be applicable thereto.
The Agent shall promptly give each Bank telephonic notice
(confirmed in writing) of the proposed Borrowing, of such
Bank's proportionate share thereof and of the other matters
covered by 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 Section 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 the applicable Borrower not later than
1:00 P.M. (New York time) (or, in the case of Base Rate
Loans, 3:00 P.M. (New York time)) on such date at the
Payment Office the aggregate of the amounts in immediately
available funds made available by the Banks against delivery
to the Agent at the Payment Office, or at such other office
as the Agent may specify, of the documents and papers
provided for herein. The Agent shall deliver the documents
and papers received by it for the account of each Bank to
such Bank or upon its order.
(b) If the Fronting Bank shall not have received from a
Borrower the payment required to be made by such Borrower
pursuant to Section 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 such Borrower
pursuant to Section 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
by the Borrower to which such Loan was made on the Expiry
Date, subject to the provisions of Section 2.6. Each Loan
shall bear interest from the date thereof on the outstanding
principal balance thereof as set forth in Section 2.1. Each
Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness to such Bank
resulting from each Loan made by such Bank from time to time
to each Borrower, including the amounts of principal and
interest payable and paid to such Bank from time to time
under this Agreement. The Agent shall maintain the Register
pursuant to Section1.4(b), and a subaccount for each Bank
and each Borrower, in which Register and subaccounts (taken
together) shall be recorded (i) the amount of each Loan made
hereunder, the Type of each Loan made and the Interest
Period applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable
from the applicable Borrower to each Bank hereunder and
(iii) the amount of any sum received by the Agent hereunder
from each Borrower and each Bank's share thereof. The
entries made in the Register and accounts maintained
pursuant to this Section 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 each Borrower to repay
the Loans in accordance with their terms. The obligations
of the Borrowers with respect to their respective Loans
shall be several, not joint.
(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 each Borrower from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for
all purposes, absent manifest error. The Register shall be
available for inspection by each Borrower, the Agent or any
Bank at any reasonable time and from time to time upon
reasonable prior notice.
1.5 Special Payment Provisions. Unless the Agent
shall have been notified by any Bank prior to any date of a
Borrowing that such Bank does not intend to make available
to the Agent such Bank's portion of the Loans to be made on
such date, the Agent may assume that such Bank has made such
amount available to the Agent on such date of a Borrowing
and the Agent may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount.
If such amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such
amount on demand from such Bank. If such Bank does not pay
such amount forthwith upon the Agent's demand therefor, the
Agent shall promptly notify the applicable Borrower and the
applicable Borrower shall pay such amount to the Agent. The
Agent shall also be entitled to recover from such Bank or
the applicable Borrower, as the case may be, interest on
such amount in respect of each day from the date such amount
was made available by the Agent to the applicable Borrower
to the date such amount is recovered by the Agent, at a rate
per annum equal to (i) in the case of such Bank, the Federal
Funds Rate and (ii) in the case of either Borrower, the
applicable rate provided in Section 2.1 for the applicable
Type of Loan. Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its Commitment hereunder
or to prejudice any rights which the applicable Borrower may
have against any Bank as a result of the failure of such
Bank to perform its obligations hereunder.
1.6 Fees. (a) The Borrowers agree to pay to the Agent
for pro rata distribution to each Bank a Commitment Fee
(the "Commitment Fee"), for the period from the Closing Date
until the Expiry Date (or such earlier date as the Total
Commitment shall be terminated as to both Borrowers), on the
average daily unused amount of the Commitments, computed at
the Applicable Commitment Fee Percentage per annum computed
on the basis of the number of days actually elapsed over a
year of 365 or 366 days and payable quarterly in arrears on
the last day of each calendar quarter and on the Expiry Date
(or such earlier date as the Total Commitment shall be
terminated as to both Borrowers).
(b) Each Borrower agrees to pay 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 as to both Borrowers), on that portion of the
average daily L/C Exposure attributable to Letters of Credit
issued for the account of such Borrower (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 for
such Borrower 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.
All L/C Participation 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. The Borrowers
shall have the right, upon at least 3 Business Days' prior
written notice to the Agent at the Payment Office (which
notice the Agent shall promptly transmit to each of the
Banks), to reduce permanently the Total Commitment, in an
aggregate amount equal to an integral multiple of $1,000,000
and not less than $10,000,000, or to terminate the
unutilized portion of the Total Commitment, provided that
(i) any 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. The applicable Borrower shall
compensate each Bank, upon such Bank's written request given
promptly after learning of the same, for all losses,
expenses and liabilities (including, without limitation, any
interest paid by such Bank to lenders of funds borrowed by
it to make or carry its Eurodollar Loans and any loss
sustained by such Bank in connection with the re-employment
of such funds), which the Bank sustains: (i) if for any
reason (other than a failure of such Bank to perform its
obligations) a Borrowing of any Eurodollar Loan does not
occur on a date specified therefor in a Notice of Borrowing
or notice of conversion (whether or not withdrawn or
canceled pursuant to Section 2.5 or otherwise), (ii) if any
repayment or conversion (pursuant to Section 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 Section 2 hereof, as a consequence of any other
default by such Borrower to repay its Eurodollar Loans when
required by the terms of this Agreement. A certificate as
to any amounts payable to any Bank under this Section 1.8
submitted to the applicable Borrower by such Bank shall show
the amount payable and the calculations used to determine
such amount and shall, absent manifest error, be final,
conclusive and binding upon all parties hereto.
SECTION 1A. Letters of Credit. (a) General. A
Borrower may from time to time request the issuance of
Letters of Credit for its own account (for obligations of
such Borrower or any of its Subsidiaries, or in the case of
Finance Co., for any of Resources' Subsidiaries (other than
PPL and 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), the applicable Borrower 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 the
applicable Borrower 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
the applicable Borrower forthwith on the date due as
provided in Section 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, the
applicable Borrower shall pay to the Agent an amount equal
to such L/C Disbursement not later than two hours after the
applicable Borrower shall have received notice from the
Fronting Bank that payment of such draft will be made, or,
if the applicable Borrower 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. The applicable Borrower's
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 the applicable Borrower, any other party
guaranteeing, or otherwise obligated with, either Borrower
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 the applicable Borrower's
obligations hereunder.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and
unconditional obligation of the Borrowers 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 the applicable Borrower to
the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby
waived by the applicable Borrower to the extent permitted by
applicable law) suffered by the applicable Borrower 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 the applicable Borrower (and, if
the applicable Borrower is Finance Co., 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 the applicable Borrower 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 the applicable Borrower 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 the applicable Borrower or the date on which
interest shall commence to accrue on the Base Rate Loans
resulting from such L/C Disbursement as provided in
Section 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
with respect to a Borrower shall occur and be continuing,
such Borrower 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 portion of the L/C Exposure attributable
to Letters of Credit issued for the account of such Borrower
and outstanding 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
attributable to Letters of Credit issued for the account of
the Borrower depositing such moneys for which the Fronting
Bank has not been reimbursed, and any remaining amounts will
either (i) be held for the satisfaction of the reimbursement
obligations of such Borrower for the L/C Exposure at such
time or (ii) if the maturity of the Loans of such Borrower
has been accelerated, be applied to satisfy the obligations
of such Borrower under this Agreement. If a Borrower 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 such Borrower within three Business Days after
all Events of Default have been cured or waived.
SECTION 20 Interest.
2.1 Rates of Interest. (a) Each Borrower agrees to
pay interest in respect of the unpaid principal amount of
each Base Rate Loan made to it from the date the proceeds
thereof are made available to it until prepayment pursuant
to Section 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) Each Borrower agrees to pay interest in respect of
the unpaid principal amount of each Eurodollar Loan made to
it from the date the proceeds thereof are made available to
it until prepayment pursuant to Section 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) Each Borrower agrees to pay interest in respect of
overdue principal of, and (to the extent permitted by law)
overdue interest in respect of, each Loan made to it, on
demand, at a rate per annum which shall be 2% in excess of
the Base Rate in effect from time to time.
(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 any Interest
Period with respect to a Eurodollar Loan, the Agent shall
determine (which determination, absent manifest error, shall
be final, conclusive and binding upon all parties) the rate
of interest which shall be applicable to such Eurodollar
Loan for the Interest Period applicable thereto and shall
promptly give notice thereof (in writing or by telephone,
confirmed in writing) to the applicable Borrower and the
Banks. In the event that there is no applicable rate for
such Eurodollar Loan: (i) the Agent shall promptly give
notice thereof (in writing or by telephone, confirmed in
writing) to the applicable Borrower and the Banks and
(ii) such Loan shall be deemed to have been requested to be
made as a Base Rate Loan and (iii) the rate applicable to
such Loan shall be the Base Rate in effect from time to
time.
2.3 Interest Payment Dates. Accrued interest shall be
payable (i) in 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) Each Borrower
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 to it pursuant to one or
more Borrowings of one Type of Loans into a Borrowing or
Borrowings of another Type of Loan, provided that (i) except
as provided in Section 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 with respect to such Borrower is in existence on the
date of the conversion. Each such conversion shall be
effected by such Borrower by giving the Agent at its Payment
Office, prior to 12:00 Noon (New York time), at least three
Business Days (or by 12:00 Noon on the same Business Day in
the case of a conversion into Base Rate Loans) prior written
notice (or telephonic notice promptly confirmed in writing)
(each a "Notice of Conversion") specifying the Loans to be
so converted, the Borrowing or Borrowings pursuant to which
such Loans were made, the Type of Loans to be converted into
and, if to be converted into a Borrowing of Eurodollar
Loans, the Interest Period to be initially applicable
thereto. The Agent shall give each Bank prompt notice of
any such proposed conversion affecting any of its Loans.
(b) At the time a Borrower gives a Notice of Borrowing
or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the
case of the initial Interest Period applicable thereto) or
prior to 12:00 Noon (New York time) on the third Business
Day prior to the expiration of an Interest Period applicable
to a Borrowing of Eurodollar Loans (in the case of any
subsequent Interest Period), such Borrower shall have the
right to elect, by giving the Agent written notice (or
telephonic notice promptly confirmed in writing), the
Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of such Borrower, be a one, two,
three or six month period or, subject to availability on the
part of each Bank, such shorter period as ends on the Expiry
Date. Notwithstanding anything to the contrary contained
above:
(i) the initial Interest Period for 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, a
Borrower 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 Section 2.4(a)(ii) above, such
Borrower shall be deemed to have elected to convert such
Borrowing into a Borrowing of Base Rate Loans effective as
of the expiration date of such current Interest Period.
2.5 Increased Costs, Illegality, Etc. (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 the
applicable Borrower and the Agent on the date of such
determination) that:
(i) on any date for determining the Quoted Rate for
any Interest Period, by reason of any change after the date
hereof affecting the interbank Eurodollar market or
affecting the position of such Bank (if a Reference Bank),
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
confirmed in writing) to each applicable Borrower and to the
Agent (who shall give similar notice to each Bank) of such
determination. Thereafter, (x) in the case of clause (i),
(ii) or (iii) above, each applicable Borrower shall pay to
such Bank, upon written demand therefor, such additional
amounts deemed in good faith by such Bank to be material (in
the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its
discretion shall determine) as shall be required to cause
such Bank to receive interest with respect to its affected
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), each applicable
Borrower shall take one of the actions specified in
Section 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
each applicable Borrower and 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 Section 2.5(a) each
applicable Borrower may (i) if the affected Eurodollar Loan
is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Agent notice thereof by telephone
(confirmed in writing) on the same date that such Borrower
was notified by the affected Bank pursuant to Section 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 Section 2.5(b).
(c) In the event that a Borrower shall be paying
additional amounts to a Bank pursuant to Section 2.5(a)(i),
(ii) or (iii) or Section 2.5(d) (and, in the case of
Section 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 Section 2.5(a)(iv)
(any such Bank, an "Affected Bank") covering a period of 90
consecutive days, the Borrowers, the Agent and the Affected
Bank shall consult with a view towards (but being under no
obligation to) amending this Agreement, with the consent of
the Banks other than the Affected Bank (the "Unaffected
Banks") which, at such time, have outstanding two-thirds of
the aggregate principal amount of the Loans outstanding
hereunder (exclusive of the aggregate principal amount of
the Loans outstanding of the Affected Bank), to provide for
(i) the termination of the Affected Bank's Commitment,
provided that such termination is accompanied by payment in
full of the outstanding amount of all Loans of the Affected
Bank, interest accrued on such amount to the date of payment
and all other liabilities and obligations of the Borrowers
hereunder (including, without limitation, amounts payable
pursuant to Section 1.8, Section 2.5(a) or Section 2.5(d))
with respect to the Affected Bank, and (ii) the substitution
of another bank for the Affected Bank and/or the increase,
pro rata or otherwise, 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 Section 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 Section 2.5(d), the applicable Borrowers agree to pay
such Bank such additional amounts as shall be required to
compensate such Bank for the increased cost to such Bank of
making Loans to (or issuing Letters of Credit for the
account of) the Borrowers, 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 Section 2.5(d) is delivered to the
applicable Borrowers by such Bank, written demand for
payment may be submitted for each Compensation Period
thereafter that this Agreement remains in effect as to such
Bank. Each such written demand shall (i) specify (a) the
event pursuant to which such Bank is entitled to claim the
additional amount, (b) the date on which the event occurred
and became applicable to the Bank and (c) the Compensation
Period for which the amount is due and (ii) set out in
reasonable detail the basis and computation of such
additional amount. Each period for which the additional
amounts may be claimed by such Bank (a "Compensation
Period") shall be the lesser of (x) the number of days
actually elapsed since the date the event occurred and
became applicable to such Bank or (y) 90 days. Payments
made by the applicable Borrowers to any Bank in respect of
this Section 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 Section 2.5(d), such
Bank's determination of compensation owing under this
Section 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 Section 2.5(d)
for any costs incurred with respect to any date unless it
shall have notified the applicable Borrowers 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 Section 2.5(d) with
respect to such Bank, such Bank shall, if requested by the
Borrowers, 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
Section 2.5(e) shall affect or postpone any of the
obligations of a Borrower or the right of any Bank provided
in Section 2.5(d).
2.6 Extension of Expiry Date. (i) The Borrowers may,
by sending an Extension Letter to the Agent (in which case
the Agent shall promptly deliver a copy to each of the
Banks), not less than 30 days and not more than 45 days
prior to the Expiry Date then in effect (the "Current Expiry
Date"), request that the Banks extend the Expiry Date so
that it will occur 364 days after the Current Expiry Date.
Each Bank, acting in its sole discretion, shall, by notice
to the Agent given not less than 20 days and not more than
30 days prior to the Current Expiry Date, advise the Agent
in writing whether or not such Bank agrees to such extension
(each Bank that so advises the Agent that it will not extend
the Expiry Date being referred to herein as a "Non-extending
Bank"); provided that any Bank that does not advise the
Agent by the 20th day prior to the Current Expiry Date shall
be deemed to be a Non-extending Bank. The election of any
Bank to agree to such extension shall not obligate any other
Bank to agree.
(ii) (A) If Banks holding Commitments that aggregate
at least 51% of the Total Commitment on that 20th day prior
to the Current Expiry Date shall not have agreed to extend
the Expiry Date, then the Current Expiry Date shall not be
so extended and the outstanding principal balance of all
loans and other amounts payable hereunder shall be payable
on the Current Expiry Date. (B) If (and only if) Banks
holding Commitments that aggregate at least 51% of the Total
Commitment on the 20th day prior to the Current Expiry Date
shall have agreed to extend the Expiry Date, then the Expiry
Date applicable to the Banks that are not Non-extending
Banks shall be the day that is 364 days after the Current
Expiry Date. In the event of such extension, the Commitment
of each Non-extending Bank shall terminate on the Current
Expiry Date, all Loans and other amounts payable hereunder
to such Non-extending Banks shall become due and payable on
the Current Expiry Date and the Total Commitment of the
Banks hereunder shall be reduced by the Commitments of Non-
extending Banks so terminated on and after such Current
Expiry Date.
(iii) In the event that the conditions of clause (B)
of paragraph (ii) above have been satisfied, the Borrowers
shall have the right on or before the Current Expiry Date,
at their own expense, to require any Non-extending Bank to
transfer and assign without recourse (except as to title and
the absence of Liens created by it) (in accordance with and
subject to the restrictions contained in Section 10.6) all
its interests, rights and obligations under this Agreement
(including with respect to any L/C Exposure) to one or more
other banks or other financial institutions (which may
include any Bank) (each, an "Additional Commitment Bank"),
provided that (x) such Additional Commitment Bank, if not
already a Bank hereunder, shall be subject to the approval
of the Agent (not to be unreasonably withheld), (y) such
assignment shall become effective as of the Current Expiry
Date and (z) the Additional Commitment Bank, shall pay to
such Non-extending Bank in immediately available funds on
the effective date of such assignment the principal of and
interest accrued to the date of payment on the Loans made by
such Non-extending Bank hereunder and all other amounts
accrued for such Non-extending Bank's account or owed to it
hereunder. Notwithstanding the foregoing, no extension of
the Expiry Date shall become effective unless, on the
Current Expiry Date the conditions set forth in paragraphs
(a), (b) and (d) of Sections 4.2A and 4.2B shall be
satisfied (with all references in such paragraphs to the
making of a Loan or issuance of a Letter of Credit being
deemed to be references to the extension of the Commitments
on the Current Expiry Date) and the Agent shall have
received a certificate to that effect dated the Current
Expiry Date and executed by a responsible officer of each of
the Borrowers and Resources.
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. Each Borrower shall have
the right to prepay its Loans in whole or in part, without
premium or penalty, from time to time pursuant to this
Section 3.2 on the following terms and conditions: (i) the
applicable Borrower shall give the Agent at the Payment
Office at least 3 Business Days' prior written notice or
telephonic notice (confirmed in writing) of its intent to
prepay such Loans, which notice shall specify the amount of
such prepayment and the specific Borrowing to be prepaid,
which notice the Agent shall promptly transmit to each of
the Banks; (ii) each prepayment shall be in an integral
multiple of $1,000,000 and not less than $10,000,000 (or, if
less, the amount then remaining outstanding in respect of
the Borrowing being prepaid); (iii) each prepayment in
respect of Loans made pursuant to one Borrowing shall be
applied pro rata among the Banks on the basis of such Loans,
except as otherwise provided in Section 2.5; (iv) at the
time of any prepayment, the applicable Borrower shall pay
all interest accrued on the principal amount of said
prepayment and, if the applicable Borrower prepays any
Eurodollar Loan on any day other than the last day of an
Interest Period applicable thereto, the applicable Borrower
shall compensate the Banks for losses sustained as a result
of such prepayment to the extent and as provided in
Section 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
(or, if such payment is made in respect of principal of or
interest on any Eurodollar Loan, for the account of such
non-U.S. office of the Agent as the Agent may from time to
time direct). Unless the Agent shall have been notified by
the applicable Borrower prior to the date on which any
payment to be made by the applicable Borrower hereunder is
due that the applicable Borrower does not intend to remit
such payment, the Agent may, at its discretion, assume that
the applicable Borrower has remitted such payment when so
due and the Agent may, at its discretion and in reliance
upon such assumption, make available to each Bank (for the
account of its applicable lending office) on such payment
date an amount equal to such Bank's share of such assumed
payment. If the applicable Borrower has not in fact
remitted such payment to the Agent, each Bank shall
forthwith on demand repay to the Agent the amount of such
assumed payment made available to such Bank together with
interest thereon in respect of each day from and including
the date such amount was made available by the Agent to such
Bank to the date such amount is repaid to the Agent at a
rate per annum equal to the Federal Funds Rate. On the
commencement date of each Interest Period and on each date
occurring two Business Days prior to an Interest Payment
Date, the Agent shall notify the applicable Borrower of the
amount of interest and/or fees due at the end of such
Interest Period or on such Interest Payment Date (assuming,
in the case of Base Rate Loans, that there is no change in
the rate of interest applicable to the applicable Base Rate
Loan); provided, however, that failure to so notify the
applicable Borrower shall not affect such Borrower's
obligation to make any such payments.
3.4 Net Payments. All payments under this Agreement
shall be made without set-off or counterclaim and in such
amounts as may be necessary in order that all such payments
of principal and interest in connection with Loans (after
deduction or withholding for or on account of (i) any
present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or
any political subdivision or taxing authority thereof, 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 Section 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 Section 3.4 submitted to the
applicable Borrower by such Bank shall show in reasonable
detail the amount payable and the calculations used to
determine such amount and shall, absent manifest error, be
final, conclusive and binding upon all parties hereto. With
respect to each deduction or withholding for or on account
of any Taxes, the applicable Borrower shall promptly furnish
to each Bank such certificates, receipts and other documents
as may be required (in the judgment of such Bank) to
establish any tax credit to which such Bank may be entitled.
SECTION 4. Conditions Precedent.
4.1 Conditions to Effectiveness. On the Closing Date:
(a) The Agent shall have received from the general
counsel or senior counsel of PPL a favorable opinion dated
the Closing Date substantially in the form of Exhibit A
hereto.
(b) The Agent shall have received an opinion of Reid &
Priest LLP, counsel for PPL, Finance Co. and Resources,
addressed to the Agent, the Fronting Bank and the Banks,
dated the Closing Date, with respect to the enforceability
of this Agreement against PPL and Finance Co., and with
respect to the enforceability of the guarantee hereunder by
Resources of the obligations of Finance Co. against
Resources, substantially in the form of Exhibit B hereto.
(c) 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 PPL, Finance Co. and 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) The Agent shall have received from each of the
Banks, the Fronting Bank, PPL, Finance Co. and Resources a
duly executed and delivered counterpart hereof.
(e) The conditions set forth in Sections 4.2A and 4.2B
(other than Section 4.2A(c) and Section 4.2B(c)) shall have
been satisfied.
(f) The Agent shall have received evidence
satisfactory to it of the termination of the Revolving
Credit Agreement dated as of August 30, 1994, among PPL, the
banks party thereto and The Chase Manhattan Bank (as
successor by merger to Chemical Bank), as agent for the
banks.
(g) The Agent shall have received evidence
satisfactory to it of the termination of the Revolving
Credit Agreement dated as of May 30, 1996, as amended as of
May 27, 1997, among Resources, the banks party thereto and
The Chase Manhattan Bank as fronting bank, collateral agent
and agent for the banks.
(h) The Agent shall have received a certificate signed
by appropriate officers of PPL stating that all regulatory
approvals necessary to permit PPL to enter into this
Agreement and to perform its obligations hereunder have been
obtained and are in full force and effect and attaching
evidence of all such regulatory approvals.
4.2A Conditions to Each Loan to PPL and Each Issuance
of a Letter of Credit for the account of PPL. The
obligation of each Bank to make each Loan to PPL (excluding
any conversions of one Type of Loan to another Type pursuant
to Section 2.5(b)) and of the Fronting Bank to issue each
Letter of Credit for the account of PPL 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 PPL that the conditions
specified in Sections 4.2A(a), (b), (d) and (e) below are
then satisfied:
(a) No Default. At the time of the making each such
Loan to PPL, and the issuance of each Letter of Credit for
the account of PPL and after giving effect thereto, there
shall exist no Default or Event of Default with respect to
PPL.
(b) Representations and Warranties. At the time of
the making of each such Loan to PPL and the issuance of each
such Letter of Credit for the account of PPL and after
giving effect thereto, all representations and warranties
contained in Section 7A 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 from PPL as required by
Section 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 from PPL requesting the issuance of such Letter of
Credit as required by Section 1A(b).
(d) No Adverse Change. Since December 31, 1996, there
shall have been no change in the business, assets, financial
condition or operations of PPL and its Subsidiaries taken as
a whole which materially and adversely affects the ability
of PPL to perform any of its obligations hereunder.
(e) Regulatory Approval. The making of such Loan to
PPL or the issuance of such Letter of Credit for the account
of PPL shall not cause the aggregate dollar amount of Loans
and Letters of Credit outstanding for the account of PPL to
exceed the amount of such obligations for which PPL has
obtained the necessary regulatory approval.
4.2B Conditions to Each Loan to Finance Co. and Each
Issuance of a Letter of Credit for the account of Finance
Co. The obligation of each Bank to make each Loan to
Finance Co. (excluding any conversions of one Type of Loan
to another Type pursuant to Section 2.5(b)) and of the
Fronting Bank to issue each Letter of Credit for the account
of Finance Co. 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 Finance
Co. that the conditions specified in Sections 4.2B(a), (b)
and (d) below are then satisfied:
(a) No Default. At the time of the making of each
such Loan to Finance Co. and the issuance of each Letter of
Credit for the account of Finance Co. and after giving
effect thereto, there shall exist no Default or Event of
Default with respect to Finance Co.
(b) Representations and Warranties. At the time of
the making of each such Loan to Finance Co. and the issuance
of each such Letter of Credit for the account of Finance Co.
and after giving effect thereto, all representations and
warranties contained in Section 7B 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 from Finance Co. as required by
Section 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 from Finance Co. requesting the issuance of such
Letter of Credit as required by Section 1A(b).
(d) No Adverse Change. Since December 31, 1996, 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.A Covenants of PPL.
While this Agreement is in effect and until the Total
Commitment has been terminated with respect to PPL, all
obligations of PPL hereunder shall have been paid in full
and all Letters of Credit issued for the account of PPL
shall have been canceled or have expired and all amounts
drawn thereunder shall have been reimbursed in full, PPL
agrees that:
5.1A Financial Statements. PPL will furnish to each
Bank:
(a) within 120 days after the end of each fiscal year
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
PPL 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 it;
(b) within 60 days after the end of each of the first
three quarters in each fiscal year, a balance sheet as at
the close of such quarterly period and statements of income,
shareowners' common equity and cash flows for such quarterly
period for itself and its consolidated Subsidiaries prepared
in conformity with GAAP;
(c) within 120 days after the end of each fiscal year,
a copy of its Form 10-K Report to the Securities and
Exchange Commission ("SEC") and within 60 days after the end
of each of the first three quarters in each fiscal year, a
copy of its Form 10-Q Report to the SEC;
(d) from time to time, with reasonable promptness,
such further information regarding its business, affairs and
financial condition as any Bank and the Fronting Bank may
reasonably request; and
(e) upon acquiring knowledge of the existence of a
Default or Event of Default with respect to it a certificate
of a financial officer specifying: (i) the nature of such
Default or Event of Default, (ii) the period of the
existence thereof, and (iii) the actions that PPL 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 PPL to
the effect that no Default or Event of Default with respect
to it has occurred and is continuing. The financial
statements required to be furnished pursuant to clause (a)
above shall also be accompanied by a Compliance Certificate
in the form of Exhibit D-1 hereto ("PPL Compliance
Certificate") demonstrating compliance with Section 5.4A.
5.2A Mergers. PPL will not merge or consolidate with
any Person if PPL is not the survivor unless (a) the
survivor assumes the obligations of PPL hereunder, (b) the
survivor is a utility whose business is not substantially
different in character or composition from that of PPL and
(c) the senior secured debt ratings of the survivor by
Moody's and S&P as available (or if the ratings of Moody's
and S&P are not available, of such other rating agency as
shall be acceptable to the Agent), are at least equal to the
ratings of PPL's First Mortgage Bonds (or other senior
secured debt) immediately prior to such merger or
consolidation.
5.3A Ratings. PPL will use its best efforts to
promptly notify the Banks upon obtaining knowledge of any
change in, or cessation of, ratings of PPL's First Mortgage
Bonds (or other senior secured debt) by Moody's or S&P.
5.4A Consolidated Indebtedness to Consolidated
Capitalization. The ratio of Consolidated Indebtedness of
PPL to Consolidated Capitalization of PPL shall not exceed
70% at any time.
SECTION 5.B Covenants of Finance Co. and Resources.
While this Agreement is in effect and until the Total
Commitment has been terminated with respect to Finance Co.,
all obligations of Finance Co. and Resources hereunder shall
have been paid in full and all Letters of Credit issued for
the account of Finance Co. shall have been canceled or have
expired and all amounts drawn thereunder shall have been
reimbursed in full, each of Finance Co. and Resources agrees
that:
5.1B Financial Statements. Resources will furnish to
each Bank:
(a) within 120 days after the end of each fiscal year
(i) an auditors' report, including a balance sheet as at the
close of such fiscal year and statements of income,
shareowners' common equity and cash flows for such year for
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 it and (ii) Resources' unconsolidated
balance sheet as at the close of such fiscal year and
statements of income, shareholders common equity and cash
flows for such year;
(b) within 60 days after the end of each of the first
three quarters in each fiscal year, a balance sheet as at
the close of such quarterly period and statements of income,
shareowners' common equity and cash flows for such quarterly
period for (i) Resources and its consolidated Subsidiaries
prepared in conformity with GAAP, and (ii) Resources'
unconsolidated balance sheet as at the close of such
quarterly period and statements of income, shareowners'
common equity and cash flow for such quarterly period;
(c) within 120 days after the end of each fiscal year,
a copy of Resources' Form 10-K Report to the Securities and
Exchange Commission ("SEC") and within 60 days after the end
of each of the first three quarters in each fiscal year, a
copy of Resources' Form 10-Q Report to the SEC;
(d) from time to time, with reasonable promptness,
such further information regarding Resources' business,
affairs and financial condition as any Bank and the Fronting
Bank may reasonably request; and
(e) upon acquiring knowledge of the existence of a
Default or Event of Default with respect to Finance Co. a
certificate of a financial officer of Resources and an
officer of Finance Co. specifying: (i) the nature of such
Default or Event of Default, (ii) the period of the
existence thereof, and (iii) the actions that Resources and
Finance Co. propose to take with respect thereto.
The financial statements required to be furnished
pursuant to clauses (a) and (b) above shall be accompanied
by a certificate of a principal financial officer of
Resources to the effect that no Default or Event of Default
with respect to Finance Co. has occurred and is continuing.
The financial statements required to be furnished pursuant
to clause (a) above shall also be accompanied by a
Compliance Certificate in the form of Exhibit D-2 hereto
("Resources Compliance Certificate") demonstrating
compliance with Section 5.5B.
5.2B Mergers. (i) (1) Resources will not merge or
consolidate with any Person if Resources is not the survivor
unless (a) the survivor assumes Resources' obligations
hereunder, (b) substantially all of the consolidated assets
and consolidated revenues of the survivor are anticipated to
come from a utility business or utility businesses and
(c) the senior unsecured debt ratings of the survivor by
Moody's or S&P, as available (or if the ratings of Moody's
and S&P are not available, of such other rating agency as
shall be acceptable to the Required Banks), are at least
equal to the ratings of Resource's senior unsecured debt
immediately prior to such merger or consolidation; (2)
Resources will not dispose of any common stock of either
Borrower or any securities convertible into common stock of
either Borrower, except in connection with any merger or
consolidation permitted under this Section 5.2B or under
Section 5.2A, and except that Resources shall be allowed to
sell, transfer or otherwise dispose of PPL's common stock to
PPL.
(ii) Finance Co. will not merge into or consolidate
with any other Person except (a) Resources or a successor of
Resources permitted by this Section or (b) any other Person
which is a wholly owned subsidiary of Resources or a
successor of Resources permitted by this Section.
5.3B Ratings. Finance Co. and Resources will each use
their best efforts to promptly notify the Banks upon
obtaining knowledge of any change in, or cessation of,
ratings of Resources' senior unsecured debt by Moody's or
S&P.
5.4B Liens. Resources will not create, incur, or
suffer to exist any Lien in or on the common stock of PPL or
Finance Co. or on securities convertible into the common
stock of PPL or Finance Co. (in either case, now or
hereafter acquired) other than Permitted Liens.
5.5B Consolidated Indebtedness to Consolidated
Capitalization. The ratio of Consolidated Indebtedness of
Resources to Consolidated Capitalization of Resources shall
not exceed 70% at any time.
SECTION 6.A Events of Default with Respect to PPL.
Each of the following events shall constitute an "Event
of Default" with respect to PPL:
6.1A Representations, Etc. Any certificate furnished
by PPL 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 PPL
herein or in connection herewith shall prove to have been
incorrect in any material respect when made; or
6.2A Principal and Interest. PPL shall fail to make
any payment of principal on any of its Loans or any other
payment payable by PPL hereunder (including the
reimbursement of any L/C Disbursement) when due or, in the
case of interest or fees, within 10 days of the due date
thereof; or
6.3A Defaults by PPL Under Other Agreements. PPL
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 of $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
6.4A Judgments. PPL 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
6.5A Bankruptcy, Etc. PPL shall commence a voluntary
case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy" as now or hereafter in effect or
any successor thereto (the "Bankruptcy Code"); or an
involuntary case shall be commenced against PPL or such case
shall be controverted but shall not be dismissed within 60
days after the commencement of the case; or PPL shall not
generally be paying its debts as they become due; or a
custodian (as defined in the Bankruptcy Code) shall be
appointed for, or shall take charge of, all or substantially
all of the property of PPL or PPL shall commence any other
proceeding under any reorganization, arrangement,
readjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to PPL or there
shall be commenced against PPL any such proceeding which
remains undismissed for a period of 60 days or PPL shall be
adjudicated insolvent or bankrupt; or PPL shall fail to
controvert in a timely manner any such case under the
Bankruptcy Code or any such proceeding, or any order of
relief or other order approving any such case or proceeding
shall be entered; or PPL by any act or failure to act shall
indicate its consent to, approval of or acquiescence in any
such case or proceeding or in the appointment of any
custodian or the like for it or any substantial part of its
property or shall suffer any such appointment to continue
undischarged or unstayed for a period of 60 days; or PPL
shall make a general assignment for the benefit of
creditors; or any corporate action shall be taken by PPL for
the purpose of effecting any of the foregoing; or
6.6A Other Covenants. PPL 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 PPL from the Agent or the Required Banks.
SECTION 6.B Events of Default with Respect to Finance
Co.
Each of the following events shall constitute an "Event
of Default" with respect to Finance Co.:
6.1B Representations, Etc. Any certificate furnished
by Finance Co. or 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 Finance Co. or Resources herein or in
connection herewith shall prove to have been incorrect in
any material respect when made; or
6.2B Principal and Interest. Either Finance Co. or
Resources shall fail to make any payment of principal on any
Loan to Finance Co. or any other payment payable by Finance
Co. or Resources hereunder (including the reimbursement of
any L/C Disbursement) when due or, in the case of interest
or fees, within 10 days of the due date thereof; or
6.3B Defaults by Finance Co. or Resources Under Other
Agreements. Finance Co. or Resources shall (i) fail to pay
any principal or interest, regardless of amount, due in
respect of any Indebtedness in a principal amount in excess
of $40,000,000, in the case of Indebtedness of Resources or
Indebtedness of Finance Co. guaranteed by Resources or, in
the case of Indebtedness of Finance Co. not guaranteed by
Resources, $10,000,000, if such failure shall continue
beyond any period of grace provided with respect thereto, or
(ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or
instrument (including any term, covenant, condition or
agreement herein) evidencing or governing any such
Indebtedness in a principal amount in excess of, in the case
of Indebtedness of Resources or Indebtedness of Finance Co.
guaranteed by Resources, $40,000,000 or, in the case of
Indebtedness of Finance Co. not guaranteed by Resources,
$10,000,000, if such failure shall continue beyond any
period of grace provided with respect thereto if the effect
of any failure referred to in this clause (ii) is to cause,
or to permit the holder or holders of such Indebtedness or a
trustee on its or their behalf to cause, such Indebtedness
to become due prior to its stated maturity; or
6.4B Judgments. Finance Co. or Resources 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
6.5B Bankruptcy, Etc. Finance Co. or Resources shall
commence a voluntary case concerning itself under Title 11
of the United States Code entitled "Bankruptcy" as now or
hereafter in effect or any successor thereto (the
"Bankruptcy Code"); or an involuntary case shall be
commenced against Finance Co. or Resources or such case
shall be controverted but shall not be dismissed within 60
days after the commencement of the case; or Finance Co. or
Resources shall not generally be paying its debts as they
become due; or a custodian (as defined in the Bankruptcy
Code) shall be appointed for, or shall take charge of, all
or substantially all of the property of Finance Co. or
Resources or Finance Co. or Resources shall commence any
other proceeding under any reorganization, arrangement,
readjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Finance Co.
or Resources or there shall be commenced against Finance Co.
or Resources any such proceeding which remains undismissed
for a period of 60 days or Finance Co. or Resources shall be
adjudicated insolvent or bankrupt; or Finance Co. or
Resources shall fail to controvert in a timely manner any
such case under the Bankruptcy Code or any such proceeding,
or any order of relief or other order approving any such
case or proceeding shall be entered; or Finance Co. or
Resources by any act or failure to act shall indicate its
consent to, approval of or acquiescence in any such case or
proceeding or in the appointment of any custodian or the
like for it or any substantial part of its property or shall
suffer any such appointment to continue undischarged or
unstayed for a period of 60 days; Finance Co. or Resources
shall make a general assignment for the benefit of
creditors; or any corporate action shall be taken by Finance
Co. or Resources for the purpose of effecting any of the
foregoing; or
6.6B Other Covenants. Finance Co. or 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 Finance Co. or
Resources, as the case may be, from the Agent or the
Required Banks; or
6.7B Events of Default with Respect to PPL. An Event
of Default shall occur with respect to PPL.
If any Event of Default with respect to PPL as specified in
Section 6A shall then be continuing, then either or both of
the following actions may be taken: (i) the Agent, at the
direction of the Required Banks, shall by written notice to
PPL, declare the principal of and accrued interest in
respect of all of PPL's outstanding Loans to be, whereupon
the same and all other amounts due from PPL 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 PPL, anything contained
herein to the contrary notwithstanding, and (ii) the Agent,
at the direction of the Required Banks, shall by written
notice to PPL, declare the Total Commitment as to PPL
terminated, whereupon the Commitment of each Bank (insofar
as it is available to PPL) and the obligation of each Bank
to make its Loans hereunder to PPL and the obligation of the
Fronting Back to issue Letters of Credit for the account of
PPL hereunder shall terminate immediately and any accrued
Commitment Fee owed by PPL shall forthwith become due and
payable without any other notice of any kind; provided that
if an Event of Default described in Section 6.5A shall occur
with respect to PPL, the results which would otherwise occur
only upon the giving of written notice by the Agent to PPL
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.
If any Event of Default with respect to Finance Co. as
specified in Section 6B shall then be continuing, then
either or both of the following actions may be taken:
(i) the Agent, at the direction of the Required Banks, shall
by written notice to Resources and Finance Co., declare the
principal of and accrued interest in respect of all of
Finance Co.'s outstanding Loans to be, whereupon the same
and all other amounts due from Resources or Finance Co.
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 and
Finance Co., anything contained herein to the contrary
notwithstanding, and (ii) the Agent, at the direction of the
Required Banks, shall, by written notice to Resources and
Finance Co., declare the Total Commitment as to Finance Co.
terminated (insofar as it is available to Finance Co.),
whereupon the Commitment of each Bank and the obligation of
each Bank to make its Loans to Finance Co. hereunder and the
obligations of the Fronting Bank to issue Letters of Credit
for the account of Finance Co. shall terminate immediately
and any accrued Commitment Fee owed by Finance Co. shall
forthwith become due and payable without any other notice of
any kind; provided that if an Event of Default described in
Section 6.5B shall occur with respect to Finance Co., the
results which would otherwise occur only upon the giving of
written notice by the Agent to Finance Co. as specified in
clauses (i) and (ii) above shall occur automatically without
the giving of any such notice and without any instruction by
the Required Banks to give such notice.
SECTION 7.A Representations and Warranties of PPL.
In order to induce the Banks and the Fronting Bank to
enter into this Agreement and to make the Loans to PPL and
issue the Letters of Credit for the account of PPL, in each
case, as provided for herein, PPL makes the following
representations and warranties to the Banks and the Fronting
Bank:
7.1A Corporate Status. It 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.
7.2A Authority; No Conflict. The making and
performance by it 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.
7.3A Legality, Etc. This Agreement constitutes the
legal, valid and binding obligation of PPL, 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.
7.4A Financial Statements. The consolidated financial
statements of PPL and its consolidated Subsidiaries for the
year ended as at December 31, 1996, furnished to the Banks,
fairly present its consolidated financial position at
December 31, 1996 and the results of its consolidated opera-
tions for the year then ended and were prepared in
accordance with GAAP. Since that date there has been no
adverse change in the business, assets, financial condition
or operations of PPL that would materially and adversely
affect the ability of PPL to perform any of its obligations
hereunder.
7.5A Litigation. Except as disclosed in or
contemplated by PPL's Form 10-K Report to the SEC for the
year ended December 31, 1996 or in any subsequent Form 10-Q
Report or otherwise furnished in writing to the Banks, no
litigation, arbitration or administrative proceeding is
pending or, to its knowledge, threatened, which, if
determined adversely to PPL, would materially and adversely
affect its ability to perform any of its obligations under
this Agreement. There is no litigation, arbitration or
administrative proceeding pending or, to the knowledge of
PPL, threatened which questions the validity of this
Agreement.
7.6 A No Violation. No part of the proceeds of the
borrowings by PPL under this Agreement or of any Letter of
Credit issued for its account will be used, directly or in-
directly by PPL 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. PPL 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."
7.7A 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 PPL.
7.8A Consents. No authorization, consent or approval
from governmental bodies or regulatory authorities is
required for the making and performance by PPL of this
Agreement, except such authorizations, consents and
approvals as have been obtained prior to the making of any
Loans or the issuance of any Letters of Credit and are in
full force and effect at the time of the making of each Loan
and the issuance of each Letter of Credit.
7.9A Subsidiaries. The assets of all Subsidiaries of
PPL do not comprise in the aggregate more than 20% of the
total consolidated assets of PPL.
7.10A Investment Company Act. PPL is not 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.
7.11A Public Utility Holding Company Act. PPL 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)(2) thereof.
7.12A Tax Returns. PPL 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 PPL shall have set aside on its books appropriate
reserves with respect thereto in accordance with GAAP.
7.13A Compliance with Laws. PPL is in compliance with
all laws, regulations and orders of any governmental
authority except to the extent (A) such compliance is being
contested in good faith by appropriate proceedings or
(B) non-compliance would not reasonably be expected to
materially and adversely affect its ability to perform any
of its obligations hereunder.
SECTION 7.B Representations and Warranties of Finance
Co. and Resources.
In order to induce the Banks and the Fronting Bank to
enter into this Agreement and to make the Loans to Finance
Co. and issue the Letters of Credit for the account of
Finance Co., in each case as provided for herein, each of
Finance Co. and Resources makes the following
representations and warranties to the Banks and the Fronting
Bank:
7.1B 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
Finance Co. is duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, and
has the corporate power to make and perform this Agreement
and to borrow hereunder.
7.2B Authority; No Conflict. The making and
performance by Resources and Finance Co. of this Agreement
have been duly authorized by all necessary corporate action
and do not and will not violate any provision of law or
regulation, or any decree, order, writ or judgment, or any
provision of its charter or by-laws, or result in the breach
of or constitute a default under any indenture or other
agreement or instrument to which Resources or Finance Co.,
as the case may be, is a party.
7.3B Legality, Etc. This Agreement constitutes the
legal, valid and binding obligation of each of Resources and
Finance Co., enforceable against Resources or Finance Co.,
as the case may be, in accordance with its terms except to
the extent limited by bankruptcy, insolvency or
reorganization laws or by other laws relating to or
affecting the enforceability of creditors' rights generally
and by general equitable principles which may limit the
right to obtain equitable remedies.
7.4B Financial Statements. The consolidated financial
statements of Resources for the year ended as at
December 31, 1996, furnished to the Banks, fairly present
Resources' consolidated financial position at December 31,
1996 and the results of its consolidated operations for the
year then ended and were prepared in accordance with GAAP.
Since that date there has been no adverse change in the
business, assets, financial condition or operations of
Resources that would materially and adversely affect its
ability to perform any of its obligations hereunder.
7.5B Litigation. Except as disclosed in or
contemplated by Resources's Form 10-K Report to the SEC for
the year ended December 31, 1996, or in any subsequent Form
10-Q Report or otherwise furnished in writing to the Banks,
no litigation, arbitration or administrative proceeding
against Resources or Finance Co. is pending or, to
Resources' knowledge, threatened, which, if determined
adversely, 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.
7.6B No Violation. No part of the proceeds of the
borrowings by Finance Co. under this Agreement or of any
Letter of Credit issued for its account will be used,
directly or indirectly by Finance Co. or any Subsidiary of
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. Neither Resources nor Finance Co. is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing
or carrying any such "margin stock."
7.7B 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.
7.8B Consents. No authorization, consent or approval
from governmental bodies or regulatory authorities is
required for the making and performance by Resource or
Finance Co. of this Agreement, except such authorizations,
consents and approvals as have been obtained prior to the
making of any Loans or the issuance of any Letters of Credit
and are in full force and effect at the time of the making
of each Loan and the issuance of each Letter of Credit.
7.9B Investment Company Act. Neither Resources nor
Finance Co. is an "investment company" that is required to
be registered under the Investment Company Act of 1940, as
amended, in order not to be subject to the prohibitions of
Section 7 of such Act.
7.10B 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. Finance Co. is not a
"holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.11B Tax Returns. Resources and Finance Co. have
filed or caused to be filed all Federal, state, local and
foreign tax returns or materials required to have been filed
by it and has paid or caused to be paid all taxes due and
payable by it and all assessments received by it, except
taxes that are being contested in good faith by appropriate
proceedings and for which Resources shall have set aside on
its books appropriate reserves with respect thereto in
accordance with GAAP.
7.12B Compliance with Laws. Each of Resources and
Finance Co. is in compliance with all laws, regulations and
orders of any governmental authority except to the extent
(A) such compliance is being contested in good faith by
appropriate proceedings or (B) non-compliance would not
reasonably be expected to materially and adversely affect
its ability to perform any of its obligations hereunder.
SECTION 8. Agent.
8.1 Appointment. The Banks hereby appoint The Chase
Manhattan 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 authorize, the Agent to take such action on
their behalf under the provisions of this Agreement and any
instruments, documents and agreements referred to herein
(such instruments, documents and agreements being herein
referred to as the "Loan Documents") and to exercise such
powers hereunder and thereunder as are specifically
delegated to the Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The
Agent may perform any of its duties hereunder, or under the
Loan Documents, by or through its agents or employees.
8.2 Nature of Duties. The duties of the Agent shall
be mechanical and administrative in nature. The Agent shall
not have by reason of this Agreement a fiduciary
relationship in respect of any Bank 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 PPL, Finance Co.
and Resources and each of their 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 PPL, Resources and
Finance Co.; 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 Section 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 PPL, Finance Co. or 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 PPL, Finance Co. or 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 or all Banks, as
required. Without limiting the foregoing, no Bank shall
have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting
hereunder or under any of the Loan Documents in accordance
with the instructions of the Required Banks or all Banks, as
required.
8.4 Reliance. The Agent shall be entitled to rely
upon any written notice, statement, certificate, order or
other document or any telephone message believed by it to be
genuine and correct and to have been signed, sent or made by
the proper Person, and, with respect to all legal matters
pertaining to this Agreement or any of the Loan Documents
and its duties hereunder or thereunder, upon advice of
counsel selected by it.
8.5 Indemnification. To the extent that the Agent is
not reimbursed and indemnified by PPL, Resources or Finance
Co., the Banks will reimburse and indemnify the Agent for
and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against
the Agent, acting pursuant hereto, in any way relating to or
arising out of this Agreement or any of the Loan Documents
or any action taken or omitted by the Agent under this
Agreement or any of the Loan Documents, in proportion to
their respective Commitments hereunder; provided, however,
that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or wilful
misconduct. The obligations of the Banks under this
Section 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 PPL, Finance
Co. or 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 30 Business Days' prior
written notice to each Borrower, Resources and the Banks.
Such resignation shall take effect upon the expiration of
such 30 Business Day period or upon the earlier appointment
of a successor. Upon any such resignation, the Required
Banks shall appoint a successor Agent who shall be
satisfactory to the Borrowers and 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
the Borrowers 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 PPL, Finance Co.
or Resources to the Agent for distribution to the Banks
shall be sufficiently made, given or furnished if made,
given or furnished by PPL, Finance Co. or Resources, as
applicable, directly to each Bank entitled thereto and, in
the case of payments, in the amount to which each such Bank
is entitled from the applicable Borrower. All powers
specifically delegated to the Agent by the terms hereof may
be exercised by the Required Banks.
SECTION 9. Resources Guarantee.
In order to induce the Banks to extend credit hereunder
to Finance Co., Resources hereby irrevocably and
unconditionally guarantees, as primary obligor and not
merely as a surety, the Finance Co. Obligations. Resources
further agrees that the due and punctual payment of the
Finance Co. Obligations may be extended or renewed, in whole
or in part, without notice to or further assent from it, and
that it will remain bound upon its Guarantee hereunder
notwithstanding any such extension or renewal of any Finance
Co. Obligation.
Resources waives presentment to, demand of payment from
and protest to Finance Co. of any of the Finance Co.
Obligations, and also waives notice of acceptance of its
obligations and notice of protest for nonpayment. The
obligations of Resources hereunder shall not be affected by
(a) the failure of any Bank or the Agent to assert any claim
or demand or to enforce any right or remedy against Finance
Co. under the provisions of this Agreement or otherwise,
(b) change or increase in the amount of any of the Finance
Co. Obligations, whether or not consented to by Resources,
or (c) any rescission, waiver, amendment or modification of
any of the terms or provisions of this Agreement or any
other agreement.
Resources further agrees that its agreement hereunder
constitutes a promise of payment when due (whether or not
any bankruptcy or similar proceeding shall have stayed the
accrual or collection of any of the Finance Co. Obligations
or operated as a discharge thereof) and not merely of
collection, and waives any right to require that any resort
be had by any Bank to any balance of any deposit account or
credit on the books of any Bank in favor of any other
person.
The obligations of Resources hereunder shall not be
subject to any reduction, limitation, impairment or
termination for any reason, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or
unenforceability of the Finance Co. Obligations, any
impossibility in the performance of the Finance Co.
Obligations or otherwise. Without limiting the generality
of the foregoing, the obligations of Resources hereunder
shall not be discharged or impaired or otherwise affected by
the failure of the Agent or any Bank to assert any claim or
demand or to enforce any remedy under this Agreement or any
other agreement, by any waiver or modification in respect of
any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Finance Co.
Obligations, or by any other act or omission which may or
might in any manner or to any extent vary the risk of
Resources or otherwise operate as a discharge of Resources
or Finance Co. as a matter of law or equity.
Resources further agrees that its obligations hereunder
shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any
Finance Co. Obligation is rescinded or must otherwise be
restored by the Agent or any Bank upon the bankruptcy or
reorganization of Finance Co or otherwise.
In furtherance of the foregoing and not in limitation
of any other right which the Agent or any Bank may have at
law or in equity against Resources by virtue hereof, upon
the failure of Finance Co. to pay any Finance Co. Obligation
when and as the same shall become due, whether at maturity,
by acceleration, after notice of prepayment or otherwise,
Resources hereby promises to and will, upon receipt of
written demand by the Agent, forthwith pay, or cause to be
paid, in cash the amount of such unpaid Finance Co.
Obligation.
Upon payment by Resources of any Finance Co.
Obligation, each Bank shall, in a reasonable manner, assign
the amount of such Finance Co. Obligation owed to it and so
paid to Resources, such assignment to be pro tanto to the
extent to which the Finance Co. Obligation in question was
discharged by Resources, or make such disposition thereof as
Resources shall direct (all without recourse to any Bank and
without any representation or warranty by any Bank).
Upon payment by Resources of any sums as provided
above, all rights of Resources against Finance Co. arising
as a result thereof by way of right of subrogation or
otherwise shall in all respects be subordinate and junior in
right of payment to the prior indefeasible payment in full
of all the Finance Co. Obligations owed by Finance Co. to
the Banks.
SECTION 10. Miscellaneous.
10.1 Definitions. As used herein the following terms
shall have the meanings herein specified and shall include
in the singular number the plural and in the plural number
the singular:
"5-Year Agreement" shall mean the $300,000,000 5-Year
Revolving Credit Agreement among PPL, Finance Co.,
Resources, as guarantor of the obligations of Finance Co.,
the banks from time to time party thereto and The Chase
Manhattan Bank, as fronting bank, collateral agent and as
agent for the banks party thereto.
"Affected Bank" shall have the meaning assigned that
term in Section 2.5(c).
"Agent" shall mean The Chase Manhattan Bank and shall
include (i) any successor corporation thereto by merger,
consolidation or otherwise and (ii) any successor to the
Agent appointed pursuant to Section 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, supplemented or
otherwise modified.
"Applicable Commitment Fee Percentage" shall mean for
the Borrowers, the percentage specified as such in the table
in the definition of "Applicable Rate" opposite the highest
rating category in which PPL's First Mortgage Bonds have
been assigned a rating by either of Moody's or S&P.
"Applicable Eurodollar Margin" shall mean (i) for PPL,
the margin specified as such in the table in the definition
of "Applicable Rate" opposite the highest rating category in
which PPL's First Mortgage Bonds have been assigned ratings
by either of Moody's or S&P or (ii) for Finance Co., the
margin specified as such in the table in the definition of
"Applicable Rate" opposite the highest rating category in
which Resources' senior unsecured debt has been assigned
ratings by either of Moody's or S&P.
"Applicable Lending Office" shall mean, with respect to
each Bank, (i) such Bank's Base Rate Lending Office in the
case of a Base Rate Loan and (ii) such Bank's Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable 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 Section 10.6.
"Applicable Rate" shall mean and include the Applicable
Commitment Fee Percentage for undrawn Commitments or
Applicable Eurodollar Margin for any Loans or issued Letters
of Credit and at any time will be determined based on the
highest applicable Category set forth below (the highest
category being Category A).
Applicable
Commitment Applicable
Fee Eurodollar
Criteria Percentage Margin
Category A:
A- or better/
A3 or better .080% .300%
Category B:
BBB+/Baa1 .100% .350%
Category C:
BBB/Baa2 .125% .400%
Category D:
BBB-/Baa3 .150% .450%
Category E:
BB+ or below/
Ba1 or below .200% .625%
"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 Section 6.5.
"Base Rate" shall mean, for any day, a rate per annum
equal to the higher of (i) the Prime Rate and (ii) 1/2 of 1%
plus the Federal Funds Rate, each as in effect from time to
time.
"Base Rate Lending Office" means, with respect to each
Bank, the office of such Bank specified as its "Base Rate
Lending Office" on the signature pages to the Agreement or such
other office of such Bank as such Bank may from time to time
specify as such to the Borrowers 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 Section 2.1(a).
"Borrower" shall mean either PPL or Finance Co. and
"Borrowers" shall mean PPL and Finance Co.
"Borrowing" shall mean the incurrence of one Type of Loan
to a Borrower from all the Banks on a given date, all of which
Eurodollar Loans shall have the same Interest Period, pursuant
to Section 1.2; provided, however, that Loans to a Borrower of
a different Type extended by one or more Banks pursuant to
Section 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 November 20, 1997.
"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 Section 1.7, Section 6 and/or
Section 10.6(b)(A).
"Commitment Fee" shall have the meaning assigned that term
in Section 1.6(a).
"Consolidated Capitalization of PPL" shall mean the sum of
(A) the Consolidated Indebtedness of PPL and (B)(i) the
consolidated shareowners' equity (determined in accordance with
GAAP) of the common, preference and preferred stockholders of
PPL and (ii) the aggregate amount of Hybrid Preferred
Securities of PPL, except that for purposes of calculating
Consolidated Capitalization of PPL, Consolidated Indebtedness
of PPL shall exclude Non-Recourse Indebtedness of PPL and
Consolidated Capitalization of PPL shall exclude that portion
of shareholder equity attributable to assets securing Non-
Recourse Indebtedness of PPL.
"Consolidated Capitalization of Resources" shall mean the
sum of (A) the Consolidated Indebtedness of Resources and
(B)(i) the consolidated shareowners' equity (determined in
accordance with GAAP) of the common, preference and preferred
stockholders of Resources and (ii) the aggregate amount of
Hybrid Preferred Securities of Resources, except that for
purposes of calculating Consolidated Capitalization of
Resources, Consolidated Indebtedness of Resources shall exclude
Non-Recourse Indebtedness of Resources and Consolidated
Capitalization of Resources shall exclude that portion of
shareholder equity attributable to assets securing Non-Recourse
Indebtedness of Resources.
"Consolidated Indebtedness of PPL" shall mean the
consolidated Indebtedness of PPL (determined in accordance with
GAAP), except that for purposes of this definition (1)
Consolidated Indebtedness of PPL shall exclude Non-Recourse
Indebtedness of PPL and (2) Consolidated Indebtedness of PPL
shall exclude any Hybrid Preferred Securities of PPL.
"Consolidated Indebtedness of Resources" shall mean the
consolidated Indebtedness of Resources (determined in
accordance with GAAP), except that for purposes of this
definition (1) Consolidated Indebtedness of Resources shall
exclude Non-Recourse Indebtedness of Resources and (2)
Consolidated Indebtedness of Resources shall exclude any Hybrid
Preferred Securities of Resources.
"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 the Borrowers plus the aggregate amount
at such time of such Bank's L/C Exposure.
"Default" with respect to a Borrower, shall mean any
event, act or condition which with notice or lapse of time or
both would constitute an Event of Default with respect to that
Borrower.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as
defined in SEC Regulation D).
"Eurodollar Lending Office" shall mean, with respect to
each Bank, the office of such Bank specified as its "Eurodollar
Lending Office" on the signature pages to the Agreement or such
other office of such Bank as such Bank may from time to time
specify as such to the Borrowers 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 Section 2.1(b).
"Event of Default" shall mean with respect to PPL each of
the Events of Default specified in Section 6A and with respect
to Finance Co., each of the Events of Default specified in
Section 6B.
"Expiry Date" shall mean the date 364 days from the date
hereof subject to extension pursuant to Section 2.6.
"Extension Letter" shall mean a letter from the Borrowers
requesting an extension of the Expiry Date substantially in the
form of Exhibit C hereto.
"Federal Funds Rate" shall mean for any day, a fluctuating
interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds
brokers of recognized standing selected by the Agent.
"Finance Co." shall have the meaning assigned that term in
the first paragraph of this Agreement.
"Finance Co. Obligations" shall mean all obligations of
Finance Co. under this Agreement to pay (i) the principal of
and interest on the Loans and LC Disbursements when and as due,
whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (ii) all other payment
obligations of Finance Co. hereunder.
"First Mortgagee Bonds" shall mean the first mortgage
bonds issued by PPL pursuant to its Mortgage and Deed of Trust
dated as of October 1, 1945, as supplemented.
"GAAP" shall mean United States generally accepted
accounting principles applied on a consistent basis.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having
the economic effect of guaranteeing any Indebtedness of any
other person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for payment of such Indebtedness,
(b) to purchase or lease property, securities or services for
the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working
capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable
the primary obligor to pay such Indebtedness; provided,
however, that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business.
"Hybrid Preferred Securities of PPL" means (1) the
preferred securities and subordinated debt described in the
Prospectus dated as of April 3, 1997 of PP&L Capital Trust and
PPL and the preferred securities and subordinated debt
described in the Prospectus dated as of June 9, 1997 of PP&L
Capital Trust II and PPL (collectively, the "Existing TOPrS")
and (2) any additional preferred securities and subordinated
debt (with a maturity of at least twenty years) similar to the
Existing TOPrS and in an aggregate amount not to exceed
$100,000,000, issued by business trusts, limited liability
companies, limited partnerships (or similar entities) (i) all
of the common equity, general partner or similar interests of
which are owned (either directly or indirectly through one or
more wholly-owned Subsidiaries) at all times by PPL, (ii) that
have been formed for the purpose of issuing hybrid preferred
securities and (iii) substantially all the assets of which
consist of (A) subordinated debt of PPL or a Subsidiary of PPL,
as the case may be, and (B) payments made from time to time on
the subordinated debt.
"Hybrid Preferred Securities of Resources" means (1) the
preferred securities and subordinated debt described in the
Prospectus dated as of April 3, 1997 of PP&L Capital Trust and
PPL and the preferred securities and subordinated debt
described in the Prospectus dated as of June 9, 1997 of PP&L
Capital Trust II and PPL (collectively, the "Existing TOPrS")
and (2) any additional preferred securities and subordinated
debt (with a maturity of at least twenty years) similar to the
Existing TOPrS and in an aggregate amount not to exceed
$100,000,000, issued by business trusts, limited liability
companies, limited partnerships (or similar entities) (i) all
of the common equity, general partner or similar interests of
which are owned (either directly or indirectly through one or
more wholly-owned Subsidiaries) at all times by Resources or
PPL, (ii) that have been formed for the purpose of issuing
hybrid preferred securities and (iii) substantially all the
assets of which consist of (A) subordinated debt of Resources
or a Subsidiary of Resources, as the case may be, and (B)
payments made from time to time on the subordinated debt.
"Indebtedness" of any person shall mean, without
duplication, (a) all obligations of such person for borrowed
money, (b) all obligations of such person with respect to
deposits or advances of any kind, (c) all obligations of such
person evidenced by bonds, debentures, notes or similar
instruments, (d) all obligations of such person under
conditional sale or other title retention agreements relating
to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding 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.
"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 the applicable
Borrower may elect in a Notice of Borrowing or Notice of
Conversion and (b) as to any Base Rate Loan, the period
commencing on the date of such Loan and ending on the date 90
days thereafter or, if earlier, on the Expiry Date or the date
of prepayment of such Loan. If any Interest Period would
otherwise expire on a day which is not a Business Day, such
Interest Period shall expire on the next succeeding Business
Day, provided that if any Interest Period applicable to a Bor-
rowing 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 Section 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 Section 1.6(b).
"Letter of Credit" shall mean any letter of credit issued
pursuant to Section 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
Section 1.1.
"Loan Documents" shall have the meaning assigned that term
in Section 8.1.
"Moody's" shall mean Moody's Investors Service, Inc. or
any successor thereto.
"Non-Recourse Indebtedness of PPL" shall mean indebtedness
that is nonrecourse to PPL or any of its Subsidiaries.
"Non-Recourse Indebtedness of Resources" shall mean
indebtedness that is nonrecourse to Resources, either Borrower
or any of PPL's Subsidiaries.
"Notice of Borrowing" shall have the meaning assigned that
term in Section 1.2.
"Notice of Conversion" shall have the meaning assigned
that term in Section 2.4(a).
"Payment Office" shall mean the office of the Agent
located at 270 Park Avenue, New York, New York 10017, 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, department or
instrument thereof.
"PPL" shall have the meaning assigned that term in the
first paragraph of this Agreement.
"Prime Rate" shall mean the rate which The Chase Manhattan
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. The Chase Manhattan 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 average 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 Reference Banks 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. Each Reference Bank
shall use its best efforts to furnish rates to the Agent as
contemplated hereby. If any one of the Reference Banks shall
be unable or otherwise fail to supply such rates to the Agent
upon its request, the applicable rate shall be determined on
the basis of the rates submitted by the remaining two Reference
Banks. If more than one Reference Bank shall be unable or
otherwise fail to supply such rates, there shall be no
applicable rate.
"Reference Banks" shall mean The Chase Manhattan Bank,
Citibank, N.A. and Morgan Guaranty Trust Company.
"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
Section 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 Group or any
successor thereto.
"Subsidiary" shall mean any company, partnership,
association or other business entity in which any Person and
its Subsidiaries now have or may hereafter acquire an aggregate
of at least 50% of the voting stock or ownership interests.
"Taxes" shall have the meaning assigned that term in
Section 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 Section 2.5(c).
"written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier
device, telegraph or cable.
10.2 Accounting Principles. All statements to be
prepared and determinations to be made under this Agreement,
including (without limitation) those pursuant to Section 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 PPL and Resources for the fiscal year
ended December 31, 1996, referred to in Section 7.4, except for
changes in accounting principles consistent with GAAP.
10.3 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 Agreement
shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this
Agreement preclude any other or further exercise thereof, or
the exercise of any other right, power or privilege. The
rights and remedies herein expressly provided are cumulative
and not exclusive of any rights or remedies which the Banks
would otherwise have. No notice to or demand on PPL, Finance
Co. or Resources in any case shall entitle PPL, Finance Co. or
Resources, as applicable, to any other or further notice or
demand in similar or other circumstances or constitute a waiver
of the right of the Banks or the Fronting Bank to any other or
further action in any circumstances without notice or demand.
10.4 Amendment and Waiver. Neither this Agreement nor
any other Loan Document nor any terms hereof or thereof may be
changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by PPL,
Finance Co. and 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 (except as
provided for in Section 2.6), or reduce the rate or extend the
time of payment of interest or Commitment Fees thereon (except
in connection with a waiver of the applicability of any post-
default increase in interest rates), or reduce the principal
amount thereof (except to the extent repaid in cash),
(ii) amend, modify or waive any provision of this Section 10.4,
(iii) reduce the percentage specified in the definition of
Required Banks or (iv) consent to the assignment or transfer by
PPL, Finance Co. or Resources of any of its rights and
obligations under this Agreement or the release of Resources
from its guarantee hereunder; provided further, that no such
change, waiver, discharge or termination shall (x) increase the
Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that
waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default shall not constitute an increase
of the Commitment of any Bank) or (y) without the consent of
the Agent, amend, modify or waive any provision of Section 8 as
such Section applies to such Agent or any other provision as
such Section relates to the rights or obligations of such
Agent.
10.5 Expenses; Indemnification. (a) The Borrowers agree
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 & Moore, counsel for the Agent and (ii) 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; provided
that none of the Borrowers or Resources shall be liable for any
fees, charges or disbursements of any counsel for the Banks or
the Agent other than Cravath, Swaine & Moore associated with
the preparation, execution and delivery of this Agreement and
the closing documentation contemplated hereby.
(b) The Borrowers further agree 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 the Borrowers' execution or
delivery of this Agreement, their borrowings hereunder or
Letters of Credit, or the issuance of any notes or of any other
instruments or documents provided for herein or delivered or to
be delivered by each of them hereunder or in connection
herewith.
(c) The Borrowers agree 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; 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 Section 10.5
shall survive any termination of this Agreement or the
resignation, withdrawal or removal of any Bank.
10.6 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 none of PPL, Finance Co. or Resources may assign
or transfer any of its interests hereunder, except to the
extent any such assignment results from the consummation of a
transaction permitted under Section 5.2, without the prior
written consent of the Banks and provided further that the
right of each Bank to transfer, assign or grant participations
in its rights and/or obligations hereunder shall be limited as
set forth below in this Section 10.6, provided that nothing in
this Section 10.6 shall prevent or prohibit any Bank from
pledging its rights under this Agreement and/or its Loans
hereunder to a Federal Reserve Bank in support of borrowings
made by such Bank from such Federal Reserve Bank. In order to
facilitate such an assignment to a Federal Reserve Bank, the
Borrowers 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) the assigning Bank shall not
assign any of its rights and obligations under this Agreement
without assigning the same percentage of its rights and
obligations under the 5-Year Agreement, provided that no Banks
shall be required to make an assignment under the 5-Year
Agreement with respect to assignments made pursuant to Section
2.6 hereunder, (iv) any assignment pursuant to clause (y) shall
require the consent of the Borrowers, which consent shall not
be unreasonably withheld, and provided further, that, so long
as no Loans or interest thereon shall be outstanding and no
Default or Event of Default shall have occurred with respect to
PPL, Finance Co. or Resources and then be continuing, the
Borrowers may at their 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, the Borrowers, and, in the case of an
assignment, 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 Section 10.4 or (y) 30 days following the date
on which such proposed amendment, modification or supplement
was circulated to the Banks. Upon the effectiveness of any
assignment 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, (y) reduce the
interest rate (other than as a result of waiving the
applicability of any post-default increases in interest rates)
or Commitment Fee or other fees applicable to any of the Loans
or Commitments in which such participant is participating or
postpone the payment of any thereof or reduce the principal
amount of any Loan (except to the extent repaid in cash) or
(z) release Resources from its obligations as a guarantor
hereunder. In the case of any such participation, the
participant shall not have any rights under this Agreement or
any of the other Loan Documents (the participant's rights
against the granting Bank in respect of such participation to
be those set forth in the agreement with such Bank creating
such participation) and all amounts payable by each of the
Borrowers 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 participations.
(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.
10.7 Notices, Requests, Demands. All notices, requests,
demands or other communications to or upon the respective
parties hereto shall be deemed to have been given or made (i)
in the case of notice by mail, when actually received, and (ii)
in the case of telecopier notice sent over a telecopier machine
owned or operated by a party hereto, when sent, in each case
addressed to the party or parties to which such notice is given
at their respective addresses shown below their signatures
hereto or at such other address as such party may hereafter
specify in writing to the others. No other method of giving
notice is hereby precluded.
10.8 Survival of Representations and Warranties. All
representations and warranties contained herein or otherwise
made in writing by PPL, Finance Co. or Resources in connection
herewith shall survive the execution and delivery of this
Agreement.
10.9 Governing Law. This Agreement and the rights and
obligations of the parties under this Agreement (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.
10.10 Counterparts. This Agreement may be executed in
any number of copies, and by the different parties hereto on
the same or separate counterparts, each of which shall be
deemed to be an original instrument. Complete counterparts of
this Agreement shall be lodged with each Borrower, Resources
and the Agent.
10.11 Effectiveness. This Agreement shall become
effective on the Closing Date.
10.12 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 the Borrowers shall
not be responsible for costs arising under Sections 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 Section 2.5(a)
or Section 3.4, such Bank shall take all reasonable steps
(including but not limited to making, maintaining or funding
the affected Loan through another office of such Bank) to avoid
or reduce the additional amount payable by the applicable
Borrower; provided that, such steps will not result in any
additional costs, liabilities or expenses (not reimbursable by
the applicable Borrower) to such Bank and are not otherwise
inconsistent with the interests of such Bank determined in good
faith.
10.13 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 (other than as
expressly contemplated by Section 2.6(ii)), then the Bank
receiving such excess payment shall purchase for cash from the
other Banks an interest in the Loans of such Banks in such
amount as shall result in a ratable participation by each of
the Banks in the aggregate unpaid amount of all outstanding
Loans then held by all of the Banks. If all or any portion of
such excess payment is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
The Borrowers agree that any Bank so purchasing a
participation from another Bank pursuant to this Section 10.13
may exercise all its rights with respect to such participation
as fully as if such Bank were the direct creditor of the
Borrowers in the amount of such participation.
10.14 Jurisdiction; Consent to Service of Process. (a)
Each of PPL, Finance Co. and Resources hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may
be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any
right that the Agent, the Fronting Bank or any Bank may
otherwise have to bring any action or proceeding relating to
this Agreement against any of PPL, Finance Co., Resources or
its properties in the courts of any jurisdiction.
(b) Each of PPL, Finance Co. and Resources hereby
irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this
Agreement in any court referred to in paragraph (a) of this
Section. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 10.7. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other
manner permitted by law.
10.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
10.16 Headings Descriptive. The headings of the various
provisions of this Agreement are inserted for convenience of
reference only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
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, INC.,
By /s/ John R. Biggar
Name:
Title: Vice President Finance
PP&L CAPITAL FUNDING, INC.,
By /s/ R.E. Hill
Name:
Title: President
PP&L RESOURCES, INC.,
By /s/ James E. Abel
Name:
Title: Treasurer
THE CHASE MANHATTAN BANK,
Individually and as Agent
and Fronting Bank
By /s/ Thomas Kozlark
Name:
Title: Vice President
CITIBANK, N.A.
By /s/ Robert J. Harrity, Jr.
Name:
Title: Managing Director
THE BANK OF NEW YORK
By /s/ John N. Watt
Name:
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ J. Alan Edwards
Name:
Title: Authorized Signatory
CORESTATES BANK, N.A.
By /s/ Anthony D. Braxton
Name:
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By /s/ J. Scott Karro
Name:
Title: Associate
By /s/ Eric J. Eckholdt
Name:
Title: Associate
DEUTSCHE BANK AG,
NEW YORK BRANCH and/or
CAYMAN ISLANDS BRANCH
By /s/ Gabrielle C. Upton
Name:
Title: Assistant Vice
President
By /s/ Steven A. Cohen
Name:
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO
By /s/ Kenneth J. Bauer
Name:
Title: Authorized Agent
FIRST UNION NATIONAL BANK
By /s/ Michael J. Kolosowsky
Name:
Title: Vice President
FUJI BANK LIMITED
By /s/ Toshiaki Yakura
Name:
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
By /s/ Philip S. Detjens
Name:
Title: Vice President
MELLON BANK, N.A.
By /s/ A. Gary Chace
Name:
Title: Senior Vice President
NATIONSBANK, N.A.
By /s/ Gretchen P. Burud
Name:
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ Darlene Riedel
Name:
Title: Vice President
Bank Address Schedule
Name of Bank and Address Phone
Number(s) Fax Number(s)
The Chase Manhattan Bank
Attn: Jaimin Patel
270 Park Avenue
New York, NY 10017 (212) 270-1354 (212) 270-2101
The Bank of New York
Attn: John Watt
One Wall Street
New York, NY 10286 (212) 635-7533 (212) 635-7533
The Bank of Nova Scotia
Attn: Phil Adsetts
One Liberty Plaza
26th Floor
New York, NY 10006 (212) 225-5010 (212) 225-5090
Citibank, N.A.
Attn: Phil Kron
Jean Chastain
399 Park Avenue
9th Floor
New York, NY 10043 (212) 559-1500 (212) 793-6130
Corestates Bank, N.A.
Attn: Anthony Braxton
Jon Peterson
Widener Bldg. (215) 786-4353 (215) 786-7721
1339 Chestnut Street (215) 786-7799 (215) 786-7704
Philadelphia, PA 19101-7618
Credit Suisse First Boston
Attn: James Moran
11 Madison Avenue
20th Floor
New York, NY 10010 (212) 325-9176 (212) 325-8314
Deutsche Bank AG
Attn: Gabrielle Upton
Rosemary Kelley
31 West 52nd Street
24th Floor (212) 469-7368 (212) 469-4638
New York, NY 10019 (212) 469-8677
The First National Bank
of Chicago
Attn: Kenneth Bauer
Madeleine Pember
One First National Plaza
Suite 0360 (312) 732-6282 (312) 732-3055
Chicago, IL 60670 (312) 732-9727
First Union National Bank
Attn: Brian Tate
301 South College Street
5th Floor
Charlotte, NC 28288-0735 (704) 383-0510 (704) 383-6670
Fuji Bank Limited
Attn: Michael Gebauer
Mark Olson
Two World Trade Center (212) 898-2064 (212) 321-9407
New York, NY 10048 (212) 898-2066
Morgan Guaranty Trust Company
Attn: Philip Detjens
60 Wall Street
New York, NY 10005 (212) 648-8454 (212) 648-5014
Mellon Bank, N.A.
Attn: Mary Ellen Usher
A. Gary Chace
1 Mellon Bank Center
Suite 4425 (412) 236-1203 (412) 236-1840
Pittsburgh, PA 15258-0001 (412) 236-2786
NationsBank, N.A.
Attn: Brenda Tate
Andrew Hemsley
100 North Tyron Street
8th Floor (704) 386-1644 (704) 386-1270
Charlotte, NC 28255 (704) 386-0710
Toronto Dominion (Texas), Inc.
Attn: Katherine Lucey
31 West 52nd Street
New York, NY 10019-6101 (212) 468-0785 (212) 262-1929
SCHEDULE I
BANK COMMITMENT
THE CHASE MANHATTAN BANK ...................... $15,000,000
CITIBANK, N.A. ................................ $15,000,000
THE BANK OF NEW YORK .......................... $10,000,000
THE BANK OF NOVA SCOTIA ....................... $10,000,000
CORESTATES BANK, N.A. ......................... $10,000,000
CREDIT SUISSE FIRST BOSTON .................... $10,000,000
DEUTSCHE BANK AG .............................. $10,000,000
THE FIRST NATIONAL BANK OF CHICAGO ............ $10,000,000
FIRST UNION NATIONAL BANK ..................... $10,000,000
FUJI BANK LIMITED. ............................ $10,000,000
MORGAN GUARANTY TRUST COMPANY ................. $10,000,000
MELLON BANK, N.A. ............................. $10,000,000
NATIONSBANK, N.A. ............................. $10,000,000
TORONTO DOMINION (TEXAS), INC. ................ $10,000,000
TOTAL COMMITMENT ...... $150,000,000
EXHIBIT A
OPINION OF GENERAL COUNSEL OR SENIOR COUNSEL FOR PPL,
FINANCE CO. AND RESOURCES
The opinion of Counsel for PPL, Finance Co. and Resources,
referred to in Section 4.1(b) of the 364-Day Revolving
Credit Agreement among PPL, Finance Co., Resources, as
guarantor of the obligations of Finance Co., the banks from
time to time party thereto and The Chase Manhattan Bank, as
fronting bank, collateral agent and as agent for the banks
thereto and the 5-Year Revolving Credit Agreement among PPL,
Finance Co., Resources, as guarantor of the obligations of
Finance Co., the banks from time to time party thereto and
The Chase Manhattan Bank, as fronting bank, collateral agent
and as agent for the banks thereto (each individually an
"Agreement" and together, the "Agreements") shall be to the
effect that (terms used herein shall have the meanings
specified therefor in the Agreements):
1. Each of PPL and Resources is duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and each of PPL and Finance Co.
has the corporate power to make and perform the Agreements
and to borrow under the Agreements and Resources has the
corporate power to guarantee the obligations of Finance Co.
under the Agreements.
2. The making and performance by each of PPL and
Finance Co. of the Agreements, and the guarantee by
Resources of the obligations of Finance Co. under the
Agreements 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 any of them is a party.
3. The Agreements constitute the legal, valid and
binding obligations of PPL, Finance Co. and Resources
enforceable in accordance with their respective 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 PPL's or
Resources' Form 10-K Report to the Securities and Exchange
Commission for the year 1996, no litigation, arbitration or
administrative proceeding is pending or, to the knowledge of
such counsel, threatened, which, if determined adversely to
PPL or Resources, would materially and adversely affect the
ability of PPL or Resources to perform any of its
obligations under the Agreements. There is no litigation,
arbitration or administrative proceeding pending or, to the
knowledge of such counsel, threatened which questions the
validity of the Agreements.
5. Neither PPL nor Finance Co. is engaged principally,
or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying
any "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 of PPL or Resources.
7. No authorization, consent or approval from
governmental bodies or regulatory authorities is required
for the making and performance of the Agreement by PPL,
Finance Co. or Resources or by PPL or Finance Co. 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, all of which are
listed on Annex I hereto.
EXHIBIT B
To Each of the Banks party to the
Revolving Credit Agreements
referred to below, and The Chase
Manhattan Bank, as Fronting Bank,
as Collateral Agent and as Agent
for such Banks
Re: $150,000,000 364-Day Revolving Credit Agreement
$300,000,000 5-Year Revolving Credit Agreement
Dear Ladies and Gentlemen:
We have acted as Counsel to PP&L, Inc. ("PPL"), PP&L
Capital Funding, Inc. ("Finance Co.") and PP&L Resources,
Inc. (individually "Resources" and collectively with PPL and
Finance Co, the "Loan Parties") in connection with the 364-
Day Revolving Credit Agreement dated November [ ], 1997
among the Loan Parties, the Banks listed on Schedule I
thereto, and you as Fronting Bank, as Collateral Agent and
as Agent for such Banks and the 5-Year Revolving Credit
Agreement dated November [ ], 1997 among the Loan Parties,
the Banks listed on Schedule I thereto, and you as Fronting
Bank, as Collateral Agent and as Agent for such Banks
(individually each an "Agreement" and collectively, the
"Agreements").
We are familiar with the Agreements and the other
documents executed and delivered by the Loan Parties in
connection with the Agreements. We have also examined such
other documents and satisfied ourselves as to such other
matters as we have deemed necessary in order to render this
opinion.
Based on the foregoing, we are of the opinion that
Finance Co. is duly incorporated, validly existing and in
good standing under the laws of Delaware and Finance Co. has
the corporate power to make and perform the Agreements and
to borrower under the Agreements. We are also of the
opinion that the Agreements constitute the legal, valid and
binding obligations of the Loan Parties enforceable in
accordance with their terms except to the extent limited by
bankruptcy, insolvency or reorganization laws or by other
laws relating to or affective the enforceability of
creditors' rights generally and by general equitable
principles.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the Commonwealth of
Pennsylvania. Insofar as the opinions set forth herein are
affected by the laws of the Commonwealth of Pennsylvania, we
have relied upon the opinion of even date herewith addressed
to you by [ ]. In rendering his opinion,
[ ] is hereby authorized to rely on this opinion as
to matters of New York law addressed herein as if it were
addressed to him. This opinion is not being delivered for
the benefit of, nor may it be relied upon by, any person to
which it is not specifically addressed or to which reliance
has not been expressly authorized in writing.
Very truly yours,
EXHIBIT C
[Form of Extension Letter]
[Date]1)
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: The Chase Manhattan Bank, as Agent, as Fronting
Bank and as Collateral Agent, and the Banks party to the
Credit Agreement
Re: Extension of Expiry Date
Ladies and Gentlemen:
Reference is hereby made to that certain 364-Day
Revolving Credit Agreement (as amended, supplemented or
otherwise modified from time to time, the "Credit
Agreement") dated as of November [ ], 1997, among PP&L, Inc.
("PPL"), PP&L Capital Funding, Inc. ("Finance Co.") and PP&L
Resources, Inc. ("Resources"), the banks party thereto (the
"Banks"), The Chase Manhattan Bank, as fronting bank, as
collateral agent and as agent for the Banks. Terms used and
not defined herein shall have the meaning assigned to such
terms in the Credit Agreement.
1. Prior to giving effect to the extension referred to
below, the Expiry Date is __________ (the "Current Expiry
Date").
2. PPL and Finance Co. hereby request that the Expiry
Date be extended to _________.2)
____________________
1) This Letter shall be delivered to the Agent not less
than 30 and not more than 45 days prior to the Current
Expiry Date.
2) Such date shall be 364 days after the Current Expiry
Date.
3. Pursuant to Section 2.6 of the Credit Agreement,
such extension of the Current Expiry Date shall become
effective on the 20th day prior to the Current Expiry Date
if (and only if) Banks holding Commitments that aggregate at
least 51% of the Total Commitment on such date shall have
agreed to such extension as evidenced by their signatures
below.
This letter may be executed in two or more
counterparts, each of which shall constitute an original but
all of which when taken together shall constitute but one
instrument. The delivery by telecopy of an executed
counterpart hereof shall be effective as delivery of an
original manually executed counterpart.
Very truly yours,
PP&L, Inc. PP&L Capital Funding, Inc.
By: By:
______________________ ______________________
______________________ ______________________
Name: Name:
Title: Title:
Exhibit C
Page 3
PP&L Resources, Inc.
By:
______________________
______________________
Name:
Title:
Acknowledged and agreed to
as of the date noted above:
THE CHASE MANHATTAN BANK,
individually and as [BANK]
Agent, Collateral Agent
and Fronting Bank,
By: By:
______________________ ______________________
______________________ ______________________
Name: Name:
Title: Title: