$450,000,000
REVOLVING CREDIT AGREEMENT
dated as of September 15, 1999
among
PECO ENERGY COMPANY
as Borrower
THE BANKS NAMED HEREIN
as Banks
THE FIRST NATIONAL BANK OF CHICAGO
as Administrative Agent
CITIBANK, N.A.
as Documentation Agent
and
BANC ONE CAPITAL MARKETS, INC.
as Lead Arranger
TABLE OF CONTENTS
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Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms......................................... 1
1.02 Computation of Time Periods................................... 9
1.03 Accounting Principles......................................... 9
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01 The Advances.................................................. 10
2.02 Making the Advances........................................... 10
2.03 Fees.......................................................... 11
2.04 Reduction of the Commitments.................................. 11
2.05 Repayment of Advances......................................... 11
2.06 Interest on Advances.......................................... 12
2.07 Additional Interest on Advances............................... 12
2.08 Interest Rate Determination................................... 12
2.09 Conversion of Advances........................................ 13
2.10 Prepayments................................................... 13
2.11 Increased Costs............................................... 14
2.12 Illegality.................................................... 15
2.13 Payments and Computations..................................... 15
2.14 Taxes......................................................... 16
2.15 Sharing of Payments, Etc...................................... 18
2.16 Extension of Termination Date................................. 18
2.17 Additional Lenders............................................ 19
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Initial Advances...................... 20
3.02 Conditions Precedent to Certain Borrowings.................... 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the Borrower................ 21
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Affirmative Covenants......................................... 23
5.02 Negative Covenants............................................ 25
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Section Page
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ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default............................................. 27
ARTICLE VII
THE AGENTS
7.01 Authorization and Action...................................... 28
7.02 Agents' Reliance, Etc......................................... 29
7.03 Agents and Affiliates......................................... 29
7.04 Lender Credit Decision........................................ 29
7.05 Indemnification............................................... 29
7.06 Successor Administrative Agent................................ 30
7.07 Documentation Agent and Lead Arranger......................... 30
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc............................................... 30
8.02 Notices, Etc.................................................. 30
8.03 No Waiver; Remedies........................................... 31
8.04 Costs and Expenses; Indemnification........................... 31
8.05 Right of Set-off.............................................. 32
8.06 Binding Effect................................................ 32
8.07 Assignments and Participations................................ 32
8.08 Governing Law................................................. 35
8.09 Consent to Jurisdiction....................................... 35
8.10 Execution in Counterparts; Integration........................ 35
Schedule I List of Applicable Lending Offices
Exhibit A Form of Note
Exhibit B Notice of a Borrowing
Exhibit C Assignment and Acceptance
Exhibit D Form of Opinion of Special Counsel for the Borrower
Exhibit E Form of Opinion of Counsel to the Administrative Agent
Exhibit F Form of Annual and Quarterly Compliance Certificate
Exhibit G Form of Additional Lender Supplement
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REVOLVING CREDIT AGREEMENT
dated as of September 15, 1999
PECO Energy Company, a Pennsylvania corporation (the
"Borrower"), the banks listed on the signature pages hereof (the "Banks"), The
First National Bank of Chicago ("First Chicago"), as administrative agent for
the Lenders hereunder (in such capacity, the "Administrative Agent"), Citibank,
N.A., as documentation agent for the Lenders hereunder (in such capacity, the
"Documentation Agent"), and Banc One Capital Markets, Inc. ("Banc One Capital
Markets"), as lead arranger hereunder (in such capacity, the "Lead Arranger"),
hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, each of the following terms shall have the meaning set forth next to
such term below (each such meaning to be equally applicable to both the singular
and plural forms of the term defined):
"Additional Lender" has the meaning specified in Section 2.17.
"Administrative Agent" means First Chicago in its capacity as
administrative agent for the Lenders pursuant to Article VII, and not
in its individual capacity as a Lender, and any successor
Administrative Agent appointed pursuant to Article VII.
"Advance" means an advance by a Lender to the Borrower as part
of a Borrowing and refers to a Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "Type" of Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"Agents" means the Administrative Agent, the Documentation
Agent and the Lead Arranger, collectively.
"Applicable Commitment Fee Rate" means (i) during any Level 1
Rating Period, 0.10% per annum, (ii) during any Level 2 Rating Period,
0.125% per annum, (iii) during any Level 3 Rating Period, 0.150% per
annum, (iv) during any Level 4 Rating Period, 0.1875% per annum and (v)
during any Level 5 Rating Period, 0.30% per annum. The Applicable
Commitment Fee Rate shall change when and as the Rating Period changes.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance, and such Lender's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance.
"Applicable Margin" means, on any date, for a Base Rate
Advance or a Eurodollar Rate Advance, the interest rate per annum set
forth below in the column entitled "Base Rate" or "Eurodollar Rate", as
appropriate, opposite the applicable Rating Period in effect on such
date:
Rating Period Base Rate Eurodollar Rate
------------- --------- ---------------
Level 1 0 .375%
Level 2 0 .450%
Level 3 0 .600%
Level 4 0 .750%
Level 5 0 1.00%
provided, that the Applicable Margin for Eurodollar Advances shall be
increased by .10% for any day when the unused portion of the
Commitments is less than or equal to 50% of the aggregate Commitments.
The Applicable Margin applicable to an outstanding Advance shall change
when and as the Rating Period changes, and when and as the unused
portion of the Commitments changes.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C hereto.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum
shall at all times be equal to the higher of:
(a) the rate of interest announced by First Chicago,
from time to time, as its corporate base rate; and
(b) the sum of 1/2 of 1% per annum plus the Federal
Funds Rate in effect from time to time.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a).
"Benchmark Debt" means the Borrower's senior secured long-term
debt or, in the event that the Borrower has no senior secured long-term
debt rated by S&P (or by a generally recognized successor to S&P) or by
Moody's (or by a generally recognized successor to Moody's), the
Borrower's senior unsecured long-term debt.
"Borrowing" means a borrowing consisting of simultaneous
Advances of the same Type and, if such Borrowing comprises Eurodollar
Rate Advances, having Interest Periods of the same duration, made by
each of the Lenders pursuant to Section 2.01 or Converted pursuant to
Section 2.10.
"Business Day" means a day of the year on which banks are not
required or authorized to close in Philadelphia, Pennsylvania, Chicago,
Illinois or New York, New York, and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried
on in the London interbank market.
"Closing Date" shall mean the date of the initial Advances
hereunder.
"Code" means the Internal Revenue Code of 1986, and the
regulations promulgated thereunder, in each case as amended, reformed
or otherwise modified from time to time.
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"Commitment" has the meaning specified in Section 2.01.
"Consolidated Adjusted Total Capitalization" on any date shall
mean the sum, without duplication, of the following with respect to the
Borrower and its consolidated Subsidiaries (exclusive, in each case, of
Nonrecourse Transition Bond Debt, to the extent Nonrecourse Transition
Bond Debt would otherwise be included in such item): (a) total
capitalization as of such date, as determined in accordance with GAAP,
(b) the current portion of liabilities which as of such date would be
classified in whole or part as long-term debt in accordance with GAAP
(it being understood that the noncurrent portion of such liabilities is
included in the total capitalization referred to in clause (a)), (c)
all obligations as lessee which, in accordance with GAAP, are
capitalized as liabilities (including the current portion thereof), and
(d) all other liabilities which would be classified as short-term debt
in accordance with GAAP (including, without limitation, all liabilities
of the types classified as "Notes Payable, Bank" on the Borrower's
audited balance sheet for December 31, 1998).
"Consolidated Adjusted Total Debt" on any date shall mean the
sum, without duplication, of the following with respect to the Borrower
and its consolidated Subsidiaries (exclusive, in each case, of
Nonrecourse Transition Bond Debt, to the extent Nonrecourse Transition
Bond Debt would otherwise be included in such item): (a) all
liabilities which as of such date would be classified in whole or in
part as long-term debt in accordance with GAAP (including the current
portion thereof), (b) all obligations as lessee which, in accordance
with GAAP, are capitalized as liabilities (including the current
portion thereof), and (c) all other liabilities which would be
classified as short-term debt in accordance with GAAP (including,
without limitation, all liabilities of the types classified as "Notes
Payable, Bank" on the Borrower's audited balance sheet for December 31,
1998).
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control that, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414(b) or
414(c) of the Code.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of another Type or the
selection of a new, or the renewal of the same, Interest Period for
Eurodollar Rate Advances pursuant to Section 2.09.
"Debt" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar
instrument, (iii) obligations to pay the deferred purchase price of
property or services (other than trade payables incurred in the
ordinary course of business), (iv) obligations as lessee under leases
that shall have been or are required to be, in accordance with GAAP,
recorded as capital leases, (v) obligations (contingent or otherwise)
under reimbursement or similar agreements with respect to the issuance
of letters of credit (other than obligations in respect of documentary
letters of credit opened to provide for the payment of goods or
services purchased in the ordinary course of business) and (vi)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (v) above.
"Documentation Agent" means Citibank, N.A., in its capacity as
Documentation Agent.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
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"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any State thereof; (ii) a
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with
the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country,
provided that such bank is acting through a branch or agency located in
the United States; (iii) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership or
other entity) engaged generally in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business;
or (iv) the central bank of any country that is a member of the OECD;
provided, however, that (A) any such Person described in clause (i),
(ii) or (iii) above shall also (x) have outstanding unsecured long-term
debt that is rated BBB- or better by S&P and Baa3 or better by Moody's
(or an equivalent rating by another nationally recognized credit rating
agency of similar standing if either such corporation is no longer in
the business of rating unsecured indebtedness of entities engaged in
such businesses) and (y) have combined capital and surplus (as
established in its most recent report of condition to its primary
regulator) of not less than $100,000,000 (or its equivalent in foreign
currency), and (B) any Person described in clause (ii), (iii) or (iv)
above shall, on the date on which it is to become a Lender hereunder,
be entitled to receive payments hereunder without deduction or
withholding of any United States Federal income taxes (as contemplated
by Section 2.14(e)).
"Eligible Successor" means a Person which (i) is a corporation
duly incorporated, validly existing and in good standing under the laws
of one of the states of the United States or the District of Columbia,
(ii) is qualified to do business in Pennsylvania, (iii) as a result of
the contemplated acquisition, consolidation or merger, will succeed to
all or substantially all of the consolidated business and assets of the
Borrower and its Subsidiaries, (iv) upon giving effect to the
contemplated acquisition, consolidation or merger, will have all or
substantially all of its consolidated business and assets conducted and
located in the United States and (v) is acceptable to the Majority
Lenders as a credit matter.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder, each as amended and modified from time to
time.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Rate Advance made as part of the same Borrowing, an interest
rate per annum equal to the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks in
London, England, to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such Reference
Bank's Eurodollar Rate Advance made as part of such Borrowing and for a
period equal to such Interest Period. The Eurodollar Rate for the
Interest Period for each Eurodollar Rate Advance made as part of the
same Borrowing shall be determined by the Administrative Agent on the
basis of applicable rates furnished to and received by the
Administrative Agent from the Reference Banks two Business Days before
the first day of such Interest Period, subject, however, to the
provisions of Section 2.08.
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"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" of any Lender for the
Interest Period for any Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period (or if more than one
such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any
such percentage shall be so applicable) under regulations issued from
time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended and modified from time to time.
"Existing Credit Agreements" shall mean (i) the $450,000,000
364-Day Credit Agreement dated as of October 7, 1997, among the
Borrower, the banks named therein, certain banks specified therein as
lead managers, certain banks specified therein as co-agents, First
Chicago Capital Markets, Inc., Mellon Bank, N.A., and Citicorp
Securities, Inc, as syndication agents, First Chicago Capital Markets,
Inc. and Mellon Bank, N.A., as arrangers, The First National Bank of
Chicago, as Administrative Agent, and Mellon Bank, N.A., as
Documentation Agent, and (ii) the $450,000,000 Credit Agreement dated
as of October 7, 1997, among the Borrower, the banks named therein,
certain specified banks, as lead arrangers, certain specified banks, as
co-agents, First Chicago Capital Markets, Inc., Mellon Bank, N.A., and
Citicorp Securities, Inc., as syndication agents, First Chicago Capital
Markets, Inc. and Mellon Bank, N.A., as arrangers, The First National
Bank of Chicago, as Administrative Agent, and Mellon Bank, N.A., as
Documentation Agent, in each case as amended, modified or supplemented
from time to time.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum 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 Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"GAAP" shall have the meaning given that term in Section 1.03.
"Granting Bank" shall have the meaning given that term in
Section 8.07(h).
"Interest Period" means, for each Advance, the period
commencing on the date of such Advance or the date of the Conversion of
any Advance into such an Advance and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be 1, 2, 3 or 6 months in
the case of a Eurodollar Rate Advance, as the Borrower may select in
accordance with Section 2.02 or 2.09; provided, however, that:
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(i) the Borrower may not select any Interest Period
that ends after the Termination Date then in effect;
(ii) Interest Periods commencing on the same date for
Advances made as part of the same Borrowing shall be of the
same duration, and
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, in the case of any
Interest Period for a Eurodollar Rate Advance, that if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding
Business Day.
"Lead Arranger" means Banc One Capital Markets in its capacity
as Lead Arranger.
"Lenders" means the Banks listed on the signature pages hereof
and each Eligible Assignee that shall become a party hereto pursuant to
Section 2.17 or 8.07.
"Level 1 Rating Period" means any period during which the
Benchmark Debt is rated A- or higher by S&P (or a comparable rating
from any generally recognized successor to S&P) or A3 or higher by
Moody's (or a comparable rating from any generally recognized successor
to Moody's) (it being understood that, for this purpose, such ratings
shall be subject to the Split Rating Adjustment).
"Level 2 Rating Period" means any period which does not
qualify as a Level 1 Rating Period during which the Benchmark Debt is
rated BBB+ or higher by S&P (or a comparable rating from any generally
recognized successor to S&P) or Baa1 or higher by Moody's (or a
comparable rating from any generally recognized successor to Moody's)
(it being understood that, for this purpose, such ratings shall be
subject to the Split Rating Adjustment).
"Level 3 Rating Period" means any period which does not
qualify as a Level 1 or Level 2 Rating Period during which the
Benchmark Debt is rated BBB or higher by S&P (or a comparable rating
from any generally recognized successor to S&P) or Baa2 or higher by
Moody's (or a comparable rating from any generally recognized successor
to Moody's) (it being understood that, for this purpose, such ratings
shall be subject to the Split Rating Adjustment).
"Level 4 Rating Period" means any period which does not
qualify as a Level 1, Level 2 or Level 3 Rating Period during which the
Benchmark Debt is rated BBB- or higher by S&P (or a comparable rating
from any generally recognized successor to S&P) or Baa3 or higher by
Moody's (or a comparable rating from any generally recognized successor
to Moody's) (it being understood that, for this purpose, such ratings
shall be subject to the Split Rating Adjustment).
"Level 5 Rating Period" means any period which does not
qualify as a Level 1, Level 2, Level 3 or Level 4 Rating Period (it
being understood that, for this purpose, such ratings shall be subject
to the Split Rating Adjustment).
"Lien" means any lien (statutory or other), mortgage, pledge,
security interest or other charge or encumbrance, or any other type of
preferential arrangement (including, without limitation, the interest
of a vendor or lessor under any conditional sale, capitalized lease or
other title retention agreement).
"Majority Lenders" means, at any time prior to the
Termination Date, Lenders having at least 51% of the Commitments, and,
at any time on or after the Termination Date, Lenders having at least
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51% of the Advances outstanding (provided that, for purposes hereof,
neither the Borrower, nor any of its Affiliates, if a Lender, shall be
included in (i) the Lenders having such amount of the Commitments or
the Advances or (ii) determining the total amount of the Commitments or
the Advances).
"Material Adverse Change" and "Material Adverse Effect" each
means, relative to any occurrence, fact or circumstances of whatsoever
nature (including, without limitation, any determination in any
litigation, arbitration or governmental investigation or proceeding),
(i) any materially adverse change in, or materially adverse effect on,
the financial condition, operations, assets or business of the Borrower
and its consolidated Subsidiaries, taken as a whole or (ii) any
materially adverse effect on the validity or enforceability of this
Agreement or any of the Notes.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means the First and Refunding Mortgage, dated as of
May 1, 1923, between The Counties Gas & Electric Company (to which the
Borrower is successor) and Fidelity Trust Company, Trustee (to which
First Union National Bank is successor), as amended, supplemented or
refinanced from time to time, provided, that no effect shall be given
to any amendment, supplement or refinancing after the date of this
Agreement that would broaden the definition of "excepted encumbrances"
as defined in the Mortgage as constituted on the date of this
Agreement.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which more
than one employer is obligated to make contributions.
"Non-Consenting Lender" has the meaning specified in Section
2.16(a).
"Nonrecourse Transition Bond Debt" means obligations evidenced
by "transition bonds" (as defined in 66 Pa. Cons. Stat. Ann. ss.
2812(g) (West Supp. 1997), or any successor provision of similar
import), rated AA or higher by S&P (or a comparable rating from a
generally recognized successor to S&P) or Aa2 or higher by Moody's (or
a comparable rating from a generally recognized successor to Moody's),
representing a securitization of "intangible transition property" (as
defined in the foregoing statute), as to which obligations neither the
Borrower nor any Subsidiary of the Borrower (other than a Special
Purpose Subsidiary) has any direct or indirect liability (whether as
primary obligor, guarantor, or surety, provider of collateral security,
put option, asset repurchase agreement or capital maintenance
agreement, debt subordination agreement, or through other right or
arrangement of any nature providing direct or indirect assurance of
payment or performance of any such obligations in whole or in part),
except for liability to repurchase "intangible transition property"
conveyed to the securitization vehicle, on terms and conditions
customary in receivables securitizations, in the event such "intangible
transition property" violates representations and warranties of scope
customary in receivables securitizations. "Special Purpose Subsidiary"
means a direct or indirect wholly-owned corporate Subsidiary of the
Borrower, substantially all of the assets of which are "intangible
transition property" and proceeds thereof, formed solely for the
purpose of holding such assets and issuing such "transition bonds," and
which complies with the requirements customarily imposed on
bankruptcy-remote corporations in receivables securitizations.
"Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Advances made by such Lender.
"Notice of a Borrowing" has the meaning specified in Section
2.02(a).
"OECD" means the Organization for Economic Cooperation and
Development.
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"Order of Registration" has the meaning assigned to that term
in Section 3.01(a)(iii).
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency
thereof.
"Plan" means an employee pension benefit plan that is covered
by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code as to which the Borrower or any member of the
Controlled Group may have any liability.
"PPUC" means the Pennsylvania Public Utility Commission.
"Principal Subsidiary" means (i) each Utility Subsidiary and
(ii) from and after the date on which the aggregate book value of the
assets of the Subsidiaries of the Borrower that are not Utility
Subsidiaries exceeds $250,000,000, each such Subsidiary the assets of
which exceeded $75,000,000 in book value at any time during the
preceding 24-month period.
"Rating Period" means a Level 1 Rating Period, a Level 2
Rating Period, a Level 3 Rating Period, a Level 4 Rating Period or a
Level 5 Rating Period, as the case may be.
"Reference Banks" means First Chicago and Citibank, N.A.
"Register" has the meaning specified in Section 8.07(c).
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and regulations issued under such section with
respect to a Plan, excluding, however, such events as to which the PBGC
by regulation waived the requirement of Section 4043(a) of ERISA that
it be notified within 30 days of the occurrence of such event, provided
that a failure to meet the minimum funding standard of Section 412 of
the Code and Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waivers in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.
"S&P" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.
"Securities Certificate" has the meaning assigned to that term
in Section 3.01(a)(iii).
"Single Employer Plan" means a Plan maintained by the Borrower
or any member of the Controlled Group for employees of the Borrower or
any member of the Controlled Group.
"SPC" shall have the meaning assigned to that term in Section
8.07(h).
"Special Purpose Subsidiary" has the meaning assigned to that
term in the definition of "Nonrecourse Transition Bond Debt."
"Split Rating Adjustment": For the purpose of determining the
appropriate Rating Period, the rating of the Benchmark Debt shall be
subject to adjustment as follows. In the event that the Benchmark Debt
is rated at equivalent rating levels or not more than one rating level
apart by S&P (or any generally accepted successor to S&P) and Moody's
(or any generally accepted successor to Moody's), then no adjustment
shall apply. Otherwise, the higher of the two ratings shall be deemed
to be reduced to the next lower rating level. For this purpose, (i)
determination of the rating level shall take into account "+" and "-"
-8-
modifiers to S&P ratings and numerical modifiers to Moody's ratings (so
that, for example, an S&P rating of A- shall be deemed equivalent to a
Moody's rating of A3, an S&P rating of BBB+ shall be deemed equivalent
to a Moody's rating of Baa1, an S&P rating of BBB shall be deemed
equivalent to a Moody's rating of Baa2, an S&P rating of BBB- shall be
deemed equivalent to a Moody's rating of Baa3, and so on), and (ii) by
way of clarification, in the event the Benchmark Debt is rated by only
one of the two referenced rating agencies, such rating shall be deemed
to be reduced to the next lower rating level.
"Subsidiary" means, with respect to any Person, any
corporation or unincorporated entity of which more than 50% of the
outstanding capital stock (or comparable interest) having ordinary
voting power (irrespective of whether or not at the time capital stock,
or comparable interests, of any other class or classes of such
corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly
owned by such Person (whether directly or through one or more other
Subsidiaries).
"Termination Date" means the earlier of (i) September 15, 2002
(or, if such date is not a Business Day, the next preceding Business
Day) or such later date that may be established pursuant to Section
2.16(a) or (ii) the date of termination in whole of the Commitments
pursuant to Section 2.04 or Section 6.01.
"Unfunded Liabilities" means, (i) in the case of any Single
Employer Plan, the amount (if any) by which the present value of all
vested nonforfeitable benefits under such Plan exceeds the fair market
value of all Plan assets allocable to such benefits, all determined as
of the then most recent evaluation date for such Plan, and (ii) in the
case of any Multiemployer Plan, the withdrawal liability that would be
incurred by the Controlled Group if all members of the Controlled Group
completely withdrew from such Multiemployer Plan.
"Utility Subsidiary" means each Subsidiary of the Borrower
that is engaged principally in the generation, transmission, or
distribution of electricity or gas and is subject to regulation as a
public utility by federal or state regulatory authorities.
"Year 2000 Problem" shall mean that the computer hardware,
software or equipment containing embedded microchips of the Borrower or
any of its Subsidiaries which is essential to its business or operation
will, as a result of processing dates or time periods occurring after
December 31, 1999, malfunction, causing a system failure or
miscalculations resulting in disruptions of operations, including,
among other things, a temporary inability to process transactions, send
bills, operate generation stations, or engage in similar normal
business activities.
"364-Day Credit Agreement" means that certain 364-Day Credit
Agreement, dated as of the date hereof, among the Borrower, the banks
named therein, First Chicago, as administrative agent for the lenders
thereunder, Citibank, N.A., as documentation agent, and Banc One
Capital Markets, as lead arranger, as the same may be amended, modified
or supplemented from time to time.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding".
SECTION 1.03. Accounting Principles. As used in this
Agreement, "GAAP" shall mean generally accepted accounting principles in the
United States, applied on a basis consistent with the principles used in
preparing the Borrower's audited consolidated financial statements as of
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December 31, 1998 and for the fiscal year then ended. In this Agreement, except
to the extent, if any, otherwise provided herein, all accounting and financial
terms shall have the meanings ascribed to such terms by GAAP, and all
computations and determinations as to accounting and financial matters shall be
made in accordance with GAAP. In the event that the financial statements
generally prepared by the Borrower apply accounting principles other than GAAP,
the compliance certificate delivered pursuant to Section 5.01(b)(iv)
accompanying such financial statements shall include information in reasonable
detail reconciling such financial statements to GAAP to the extent relevant to
the calculations set forth in such compliance certificate.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make Advances to the Borrower
from time to time on any Business Day during the period from the date hereof
until (but excluding) the Termination Date in an aggregate amount not to exceed
at any time outstanding the amount set forth opposite such Lender's name on the
signature pages hereof or, if such Lender has entered into any Assignment and
Acceptance or Additional Lender Supplement, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(c), as
such amount may be reduced pursuant to Section 2.04 or 2.16 (such Lender's
"Commitment"). Each Borrowing shall consist of Advances of the same Type made or
Converted on the same day by the Lenders ratably according to their respective
Commitments. Each Borrowing comprising Base Rate Advances shall be in an
aggregate amount not less than $5,000,000, and each Borrowing comprising
Eurodollar Rate Advances shall be in an aggregate amount not less than
$10,000,000. Within the limits of each Lender's Commitment, the Borrower may
from time to time borrow, prepay pursuant to Section 2.10 and reborrow under
this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each Borrowing (other
than pursuant to a Conversion) shall be made on notice, given not later than
10:00 A.M. (Chicago time) on the third Business Day prior to the date of any
proposed Borrowing comprising Eurodollar Rate Advances, and on the date of any
proposed Borrowing comprising Base Rate Advances, by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof.
Each such notice of a Borrowing (a "Notice of a Borrowing") shall be sent by
telecopier, telex or cable, confirmed immediately in writing, in substantially
the form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing, (ii) Type of Advances to be made in connection with such Borrowing,
(iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing
comprising Eurodollar Rate Advances, initial Interest Period for the Advances to
be made in connection with such Borrowing. Each Lender shall, before 12:00 Noon
(Chicago time) on the date of such Borrowing, make available for the account of
its Applicable Lending Office to the Administrative Agent at its address
referred to in Section 8.02, in same day funds, such Lender's ratable portion of
such Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower at the
Administrative Agent's aforesaid address.
(b) Each Notice of a Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the related Notice of
a Borrowing specifies is to comprise Eurodollar Rate Advances, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of a Borrowing for such Borrowing the applicable conditions set
forth in Article III, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.
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(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Advances made in
connection with such Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
(e) Notwithstanding anything to the contrary contained herein,
no more than sixteen (16) Borrowings comprising Eurodollar Rate Advances may be
outstanding at any time.
SECTION 2.03. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on the
average daily unused portion of such Lender's Commitment from the date on which
the Administrative Agent determines the conditions set forth in Section 3.01 are
satisfied in the case of each Bank, and from the effective date specified in the
Assignment and Acceptance or the Additional Lender Supplement pursuant to which
it became a Lender in the case of each other Lender, until the Termination Date,
and, in the case of the termination in whole of a Lender's Commitment pursuant
to Section 2.04 or 2.16, the date of such termination, payable on the last day
of each March, June, September and December during such period, and on the
Termination Date, and, in the case of the termination in whole of a Lender's
Commitment pursuant to Section 2.04 or 2.16, the date of such termination, at a
percentage rate per annum equal to the Applicable Commitment Fee Rate in effect
from time to time, changing when and as the Applicable Commitment Fee Rate
changes.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Bank a facility fee in an amount equal to .075% of such
Bank's Commitment as in effect on the Closing Date, payable on the Closing Date.
(c) The Borrower agrees to pay to the Administrative Agent and
the Lead Arranger for their respective accounts, such additional fees, in such
amounts and payable on such dates as may be agreed to in writing from time to
time between the Borrower and the Administrative Agent or the Lead Arranger, as
the case may be.
SECTION 2.04. Reduction of the Commitments. The Borrower shall
have the right, upon at least two Business Days' notice to the Administrative
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Commitments of the Lenders; provided, that the aggregate amount
of the Commitments of the Lenders shall not be reduced to an amount that is less
than the aggregate principal amount of the Advances then outstanding; and
provided, further, that each partial reduction shall be in the aggregate amount
of $10,000,000 or an integral multiple thereof.
SECTION 2.05. Repayment of Advances. The Borrower shall repay
the principal amount of each Advance made by each Lender in accordance with the
Note to the order of such Lender.
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SECTION 2.06. Interest on Advances. The Borrower shall pay
interest on the unpaid principal amount of each Advance made by each Lender from
the date of such Advance until such principal amount shall be paid in full, at
the following rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate
Advance, a rate per annum equal at all times to the Base Rate in effect from
time to time, payable quarterly on the last day of each March, June, September
and December during such periods and on the date such Base Rate Advance shall be
Converted or paid in full.
(b) Eurodollar Rate Advances. Subject to Section 2.07, if such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during
the Interest Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin for such Eurodollar Rate Advance in
effect from time to time, payable on the last day of the Interest Period for
such Eurodollar Rate Advance (or, if the Interest Period for such Advance is six
months, accrued interest shall be payable on the day that is three months and on
the day that is six months from the date such Advance was made) or, if earlier,
on the date such Eurodollar Rate Advance shall be Converted or paid in full.
SECTION 2.07. Additional Interest on Advances. The Borrower
shall pay to each Lender, so long as such Lender shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid principal amount of
each Eurodollar Rate Advance of such Lender, from the date of such Advance until
such principal amount is paid in full or Converted, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance; provided,
that no Lender shall be entitled to demand such additional interest more than 90
days following the last day of the Interest Period in respect of which such
demand is made; provided further, however, that the foregoing proviso shall in
no way limit the right of any Lender to demand or receive such additional
interest to the extent that such additional interest relates to the retroactive
application of the reserve requirements described above if such demand is made
within 90 days after the implementation of such retroactive reserve
requirements. Such additional interest shall be determined by such Lender and
notified to the Borrower through the Administrative Agent, and such
determination shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 2.08. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Administrative Agent timely information for the
purpose of determining each Eurodollar Rate. If any one of the Reference Banks
shall not furnish such timely information to the Administrative Agent for the
purpose of determining any such interest rate, the Administrative Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks.
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.06(a) or (b), and the applicable
rate, if any, furnished by each Reference Bank for the purpose of determining
the applicable interest rate under Section 2.06(b).
(c) If either or both Reference Banks fail to furnish timely
information to the Administrative Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,
(i) the Administrative Agent shall forthwith notify the
Borrower and the Lenders that the interest rate cannot be
determined for such Eurodollar Rate Advances,
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(ii) each such Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a
Base Rate Advance (or if such Advance is then a Base Rate
Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no
longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Majority Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor
(unless prepaid or Converted to any Type of Advance other than
a Eurodollar Rate Advance prior to such date), Convert into a
Base Rate Advance, and
(ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 2.09. Conversion of Advances. (a) Voluntary. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 10:00 A.M. (Chicago time) on the third Business Day prior to the
date of any proposed Conversion into Eurodollar Rate Advances, and on the date
of any proposed Conversion into Base Rate Advances, and subject to the
provisions of Sections 2.08 and 2.12, Convert all Advances of one Type made in
connection with the same Borrowing into Advances of another Type or Types or
Advances of the same Type having the same or a new Interest Period; provided,
however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances
or Eurodollar Advances having the same or new Interest Periods shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, unless the Borrower shall also reimburse the Lenders in respect
thereof pursuant to Section 8.04(b) on the date of such Conversion. Each such
notice of a Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Advances to be Converted, and (iii) if
such Conversion is into, or with respect to, Eurodollar Rate Advances, the
duration of the Interest Period for each such Advance.
(b) Automatic. If the Borrower shall fail to select the Type
of any Advance or the duration of any Interest Period for any Borrowing
comprising Eurodollar Rate Advances in accordance with the provisions contained
in the definition of "Interest Period" in Section 1.01 and Section 2.09(a), the
Administrative Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
SECTION 2.10. Prepayments. The Borrower may, upon at least
three Business Days' notice in the case of any prepayment of Eurodollar Advances
or one Business Day's notice in the case of any prepayment of Base Rate
Advances, to the Administrative Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amounts of the Advances made as part of
the same Borrowing in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount prepaid; provided,
however, that (i) each partial prepayment shall be in an aggregate principal
amount not less than $10,000,000 in the case of any prepayment of Eurodollar
Advances or $5,000,000 in the case of any prepayment of Base Rate Advances, or
any integral multiple of $1,000,000 in excess thereof, and (ii) in the case of
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any such prepayment of a Eurodollar Rate Advance, the Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to Section
8.04(b) on the date of such prepayment.
SECTION 2.11. Increased Costs. (a) If on or after the date of
this Agreement, any Lender determines that (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve requirements,
in the case of Eurodollar Rate Advances, included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) shall increase
the cost to such Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender additional amounts
(without duplication of any amount payable pursuant to Section 2.14) sufficient
to compensate such Lender for such increased cost; provided, that no Lender
shall be entitled to demand such compensation more than 90 days following the
last day of the Interest Period in respect of which such demand is made;
provided further, however, that the foregoing proviso shall in no way limit the
right of any Lender to demand or receive such compensation to the extent that
such compensation relates to the retroactive application of any law, regulation,
guideline or request described in clause (i) or (ii) above if such demand is
made within 90 days after the implementation of such retroactive law,
interpretation, guideline or request. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agent by such
Lender, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender determines that, after the date of this
Agreement, compliance with any law or regulation or any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law) regarding capital adequacy requirements affects or would affect
the amount of capital required or expected to be maintained by such Lender or
any corporation controlling such Lender (including, in any event, any
determination after the date of this Agreement by any such governmental
authority or central bank that, for purposes of capital adequacy requirements,
any Lender's Commitment hereunder does not constitute a commitment with an
original maturity of one year or less) and that the amount of such capital is
increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type or the Advances made by such
Lender, then, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall immediately pay to the Administrative
Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
determines such increase in capital to be allocable to the existence of such
Lender's commitment to lend hereunder or the Advances made by such Lender;
provided, that no Lender shall be entitled to demand such compensation more than
one year following the payment to or for the account of such Lender of all other
amounts payable hereunder and under any Note held by such Lender and the
termination of such Lender's Commitment; provided further, however, that the
foregoing proviso shall in no way limit the right of any Lender to demand or
receive such compensation to the extent that such compensation relates to the
retroactive application of any law, regulation, guideline or request described
above if such demand is made within one year after the implementation of such
retroactive law, interpretation, guideline or request. A certificate as to such
amounts submitted to the Borrower and the Administrative Agent by such Lender
shall be conclusive and binding, for all purposes, absent manifest error.
(c) Any Lender claiming compensation pursuant to this Section
2.11 shall use its best efforts (consistent with its internal policy and legal
and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such compensation that may thereafter accrue and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender.
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SECTION 2.12. Illegality. Notwithstanding any other provision
of this Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, (i) the obligation of
such Lender to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended (subject to the following paragraph of this Section 2.12) until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist and (ii) all Eurodollar
Rate Advances of such Lender then outstanding shall, on the last day of then
applicable Interest Period (or such earlier date as such Lender shall designate
upon not less than five Business Days prior written notice to the Administrative
Agent), be automatically Converted into Base Rate Advances.
If the obligation of any Lender to make, fund or maintain
Eurodollar Rate Advances has been suspended pursuant to the preceding paragraph,
then, unless and until the Administrative Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer exist (i)
all Advances that would otherwise be made by such Lender as Eurodollar Rate
Advances shall instead be made as Base Rate Advances and (ii) to the extent that
Eurodollar Rate Advances of such Lender have been Converted into Base Rate
Advances pursuant to the preceding paragraph or made instead as Base Rate
Advances pursuant to the preceding clause (i), all payments and prepayments of
principal that would have otherwise been applied to such Eurodollar Rate
Advances of such Lender shall be applied instead to such Base Rate Advances of
such Lender.
SECTION 2.13. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 10:00 A.M.
(Chicago time) on the day when due in U.S. dollars to the Administrative Agent
at its address referred to in Section 8.02 in same day funds without setoff,
counterclaim or other deduction. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or commitment and facility fees ratably (other than
amounts payable pursuant to Section 2.02(c), 2.07, 2.11, 2.14, 2.16(a) or
8.04(b)) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to the payment of any other amount payable to
any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date specified in such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under any
Note held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall
be made by the Administrative Agent on the basis of a year of 365 or 366 days,
as the case may be, and all computations of interest based on the Eurodollar
Rate or the Federal Funds Rate and of commitment fees shall be made by the
Administrative Agent, and all computations of interest pursuant to Section 2.07
shall be made by a Lender, on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or commitment fees are payable.
Each determination by the Administrative Agent (or, in the case of Section 2.07,
by a Lender) of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
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on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(f) Notwithstanding anything to the contrary contained herein,
any amount payable by the Borrower hereunder or under any Note that is not paid
when due (whether at stated maturity, by acceleration or otherwise) shall (to
the fullest extent permitted by law) bear interest from the date when due until
paid in full at a rate per annum equal at all times to the Base Rate plus 2%,
payable upon demand.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Administrative
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender or the Administrative Agent (as
the case may be) is organized or any political subdivision thereof and, in the
case of each Lender, taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Administrative Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies to the extent arising from the execution, delivery or
registration of this Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) No Lender may claim or demand payment or reimbursement in
respect of any Taxes or Other Taxes pursuant to this Section 2.14 if such Taxes
or Other Taxes, as the case may be, were imposed solely as the result of a
voluntary change in the location of the jurisdiction of such Lender's Applicable
Lending Office.
(d) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.14) paid by such Lender or the
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Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.
(e) Prior to the date of the initial Borrowing in the case of
each Bank, and on the date of the Assignment and Acceptance or Additional Lender
Supplement pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter within 30 days from the date of request
if requested by the Borrower or the Administrative Agent, each Lender organized
under the laws of a jurisdiction outside the United States shall provide the
Administrative Agent and the Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying that such Lender is exempt from
United States withholding taxes with respect to all payments to be made to such
Lender hereunder and under the Notes. If for any reason during the term of this
Agreement, any Lender becomes unable to submit the forms referred to above or
the information or representations contained therein are no longer accurate in
any material respect, such Lender shall notify the Administrative Agent and the
Borrower in writing to that effect. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under any Note are not subject to United States
withholding tax, the Borrower or the Administrative Agent shall withhold taxes
from such payments at the applicable statutory rate in the case of payments to
or for any Lender organized under the laws of a jurisdiction outside the United
States and no Lender may claim or demand payment or reimbursement for such
withheld taxes pursuant to this Section 2.14.
(f) Any Lender claiming any additional amounts payable
pursuant to this Section 2.14 shall use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
(g) If the Borrower makes any additional payment to any Lender
pursuant to this Section 2.14 in respect of any Taxes or Other Taxes, and such
Lender determines that it has received (i) a refund of such Taxes or Other Taxes
or (ii) a credit against or relief or remission for, or a reduction in the
amount of, any tax or other governmental charge attributable solely to any
deduction or credit for any Taxes or Other Taxes with respect to which it has
received payments under this Section 2.14, such Lender shall, to the extent that
it can do so without prejudice to the retention of such refund, credit, relief,
remission or reduction, pay to the Borrower such amount as such Lender shall
have determined to be attributable to the deduction or withholding of such Taxes
or Other Taxes. If, within one year after the payment of any such amount to the
Borrower, such Lender determines that it was not entitled to such refund,
credit, relief, remission or reduction to the full extent of any payment made
pursuant to the first sentence of this Section 2.14(g), the Borrower shall upon
notice and demand of such Lender promptly repay the amount of such overpayment.
Any determination made by such Lender pursuant to this Section 2.14(g) shall in
the absence of bad faith or manifest error be conclusive, and nothing in this
Section 2.14(g) shall be construed as requiring any Lender to conduct its
business or to arrange or alter in any respect its tax or financial affairs
(except as required by Section 2.14(f)) so that it is entitled to receive such a
refund, credit or reduction or as allowing any person to inspect any records,
including tax returns, of any Lender.
(h) Without prejudice to the survival of any other agreement
of the Borrower or any Lender hereunder, the agreements and obligations of the
Borrower and the Lenders contained in this Section 2.14 shall survive the
payment in full of principal and interest hereunder and under the Notes;
provided, that no Lender shall be entitled to demand any payment under this
Section 2.14 more than one year following the payment to or for the account of
such Lender of all other amounts payable hereunder and under any Note held by
such Lender and the termination of such Lender's Commitment; provided further,
however, that the foregoing proviso shall in no way limit the right of any
Lender to demand or receive any payment under this Section 2.14 to the extent
that such payment relates to the retroactive application of any Taxes or Other
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Taxes if such demand is made within one year after the implementation of such
Taxes or Other Taxes.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances made by it (other
than pursuant to Section 2.02(c), 2.07, 2.11, 2.14, 2.16(a) or 8.04(b)) in
excess of its ratable share of payments on account of the Advances obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in the Advances made by them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them,
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.16. Extension of Termination Date. (a) Unless the
Termination Date shall have occurred, the Borrower may request the Lenders, by
written notice to the Administrative Agent not more than 90 days and not less
than 60 days prior to the then effective Termination Date, to consent to
extension of the Termination Date to the date which is one year after the then
effective Termination Date (or, if such date is not a Business Day, the next
preceding Business Day). Each Lender shall, in its sole discretion, determine
whether to consent to such request and shall notify the Administrative Agent of
its determination not more than 45 days and not less than 30 days prior to the
then-effective Termination Date. Any Lender which fails to give such notice to
the Administrative Agent shall be deemed to have not consented to such request.
If any Lender shall not have consented to such request 30 days prior to the then
effective Termination Date (such Lender being referred to herein as a
"Non-Consenting Lender"), the Administrative Agent shall promptly so notify the
Borrower and the other Lenders, whereupon each other Lender may, not more than
30 days and not less than 25 days prior to the then effective Termination Date,
revoke any consent to such extension previously given by such Lender (in which
case such Lender shall be deemed a Non-Consenting Lender). If such request shall
have been consented to by the Majority Lenders (as determined after giving
effect to the replacement of any Non-Consenting Lender pursuant to Section
8.07(g)), the Administrative Agent shall notify the Borrower and the Lenders in
writing of such consent, and such extension shall become effective (other than
with respect to any Non-Consenting Lender) upon the delivery by the Borrower to
the Administrative Agent and each Lender, on or prior to the then-effective
Termination Date, of (i) a certificate of a duly authorized officer of the
Borrower, dated such date, as to the accuracy, both before and after giving
effect to such proposed extension, of the representations and warranties set
forth in Section 4.01 and as to the absence, both before and after giving effect
to such proposed extension, of any Event of Default or event that with the
giving of notice or the passage of time or both would constitute an Event of
Default, (ii) certified copies of all corporate and governmental approvals, if
any, required to be obtained by the Borrower in connection with such proposed
extension and (iii) an opinion of counsel to the Borrower (who shall be
satisfactory to the Administrative Agent) as to the matters set forth in Exhibit
D, upon giving effect to the extension of the Termination Date, and such other
matters as any Lender, through the Administrative Agent, may reasonably request,
all of the foregoing to be satisfactory in form and substance to the
Administrative Agent. In the event of any such extension of the Termination
Date, the Commitment of each Non-Consenting Lender that has not been replaced
pursuant to Section 8.07(g) shall be terminated in whole as of such former
Termination Date, the aggregate principal amount of all Advances made by each
Non-Consenting Lender, together with accrued and unpaid interest, commitment
fees and facility fees, and all other amounts payable hereunder to or for the
account of each Non-Consenting Lender shall be due and payable on such former
Termination Date, and upon such reduction and payment of such amounts each
Non-Consenting Lender shall cease to be a party to this Agreement (although each
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Non-Consenting Lender shall continue to be entitled to indemnification pursuant
to Section 8.04(c)).
(b) Upon the effectiveness of any extension of the Termination
Date pursuant to subsection (a) above, each reference in Section 4.01(e) and
Exhibit D to (i) the year-end financial statements of the Borrower, (ii)
December 31 of any year, (iii) the quarter-end financial statements of the
Borrower and (iv) the last day of any fiscal quarter (other than December 31) of
any year, shall be deemed to be amended to be references to (A) the year-end
financial statements of the Borrower included in the Borrower's Annual Report on
Form 10-K most recently delivered to the Lenders pursuant to Section
5.01(b)(iii), (B) December 31 of the year of the financial statements described
in clause (A) above, (C) the fiscal quarter-end financial statements of the
Borrower included in the Borrower's Quarterly Report on Form 10-Q most recently
delivered to the Lenders pursuant to Section 5.01(b)(ii) and (D) the last day of
the fiscal quarter of the financial statements described in clause (C) above,
respectively.
SECTION 2.17. Additional Lenders. (a) For a period of 60 days
after extension of a Termination Date pursuant to Section 2.16(a) that has
resulted in a reduction of the aggregate Commitments of the Lenders, the
Borrower may request that one or more additional banks or other Persons (each,
an "Additional Lender") become party to this Agreement as Lenders and that the
aggregate amount of the Commitments of the Lenders be increased to reflect the
Commitments allocated to each such Additional Lender; provided, that the
aggregate Commitments of the Lenders after giving effect to such increase shall
not exceed the aggregate Commitments of the Lenders immediately prior to such
former Termination Date. Addition of an Additional Lender shall be made only
with the written consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed) and with the written consent of the Borrower
(which consent may be granted or withheld in its absolute discretion). Each
Additional Lender must be an Eligible Assignee and, without the consent of the
Administrative Agent, the initial Commitment of each Additional Lender shall not
be less than $10,000,000.
(b) Addition of an Additional Lender shall be effected by the
Additional Lender executing and delivering to the Administrative Agent, for its
acceptance and recording in the Register, a duly completed Additional Lender
Supplement in substantially the form of Exhibit G attached hereto. The Borrower
shall execute and deliver to the Administrative Agent for transmittal to such
Additional Lender a Note in substantially the form of Exhibit A attached hereto
in the amount of the Commitment of such Additional Lender. Acceptance by the
Administrative Agent of an Additional Lender is subject to the conditions that
the Administrative Agent shall have received, with a counterpart for each
Lender, (i) a certificate of a duly authorized officer of the Borrower, dated
the effective date of such Additional Lender Supplement, as to the accuracy,
both before and after giving effect to such proposed addition, of the
representations and warranties set forth in Section 4.01 and as to the absence,
both before and after giving effect to such proposed extension, of any Event of
Default or event that with the giving of notice or the passage of time or both
would constitute an Event of Default, (ii) certified copies of all corporate and
governmental approvals, if any, required to be obtained by the Borrower in
connection with such proposed addition, (iii) an opinion of counsel to the
Borrower (who shall be satisfactory to the Administrative Agent) as to the
matters set forth in Exhibit D (appropriately modified to include, in addition
to the other matters set forth therein, such Additional Lender Supplement and
the new Note), and such other matters as any Lender, through the Administrative
Agent, may reasonably request, and (iv) such other certificates and documents as
the Administrative Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to the Administrative Agent. Upon execution
and delivery of the Additional Lender Supplement, acceptance by the
Administrative Agent and recording in the Register, from and after the effective
date specified in such Additional Lender Supplement, such Additional Lender
shall be a party hereto and shall, to the extent of the Commitment specified in
such Additional Lender Supplement, have the rights and obligations of a Lender
hereunder.
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(c) If, at the time an Additional Lender is to become party to
this Agreement, the continuing Lenders have any outstanding Advances, such
Additional Lender shall offer to purchase from each continuing Lender, effective
as of the date such Additional Lender becomes party to this Agreement, a portion
of each continuing Lender's outstanding Advances, in such amounts as will have
the result that, immediately after giving effect to such Additional Lender
becoming party to this Agreement and to such purchases, each Lender (including
the Additional Lender) shall share in the outstanding Advances in the same
proportion as their respective Commitments. The Additional Lender shall offer in
writing to purchase the requisite portion of each continuing Lender's
outstanding Advances, at a price equal to the outstanding principal amount
thereof together with accrued and unpaid interest thereon to the date of
purchase, and a continuing Lender shall not unreasonably decline to accept such
offer. Each such purchase shall be made in accordance with Section 8.07 (with
the related Assignment and Acceptance modified, mutatis mutandis, to reflect
that such purchase is not a purchase of any portion of the Commitment of the
continuing Lender). Such purchases shall not be subject to the provisions of
clause (ii) of Section 8.07(a), and the Borrower shall be responsible for all
amounts payable to the Administrative Agent pursuant to clause (iv) of Section
8.07(a). The Borrower shall pay to each continuing Lender on demand any amount
that would be payable to such continuing Lender pursuant to Section 8.04(b)
(which for this purpose shall be applied as if such assignment were a prepayment
of the Advances assigned by such continuing Lender), and shall reimburse each
continuing Lender on demand for all reasonable fees and expenses (including
reasonable fees and expenses of counsel) incurred by it in connection with such
assignment.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Advances. The
obligation of each Lender to make its initial Advance is subject to the
satisfaction, prior to or concurrently with, the making of such initial Advance,
of each of the following conditions precedent:
(a) Documents and Other Agreements. The Administrative Agent
shall have received on or before the day of the initial Borrowing the following,
each dated the same date, in form and substance satisfactory to the
Administrative Agent and (except for the Notes) with one copy for each Lender:
(i) The Notes payable to the order of each of the Lenders,
respectively;
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving the transactions
contemplated by this Agreement and the Notes, and of all
documents evidencing other necessary corporate action with
respect to this Agreement and the Notes;
(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying (A) the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement and the Notes and the other documents to be
delivered hereunder; (B) that attached thereto are true and
correct copies of the Restated Articles of Incorporation and
the By-laws of the Borrower, in each case in effect on such
date; and (C) that attached thereto are true and correct
copies of all governmental and regulatory authorizations and
approvals required for the due execution, delivery and
performance of this Agreement and the Notes, including,
without limitation, the Securities Certificate filed with the
PPUC by the Borrower (the "Securities Certificate") and the
Order of Registration issued by the PPUC registering the
Securities Certificate (the "Order of Registration");
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(iv) Copies of the financial statements referred to in
Section 4.01(e);
(v) A certificate signed by either the chief financial
officer, principal accounting officer or treasurer of the
Borrower stating that (A) the representations and warranties
contained in Section 4.01 are correct on and as of the date of
such certificate as though made on and as of such date, (B) no
event has occurred and is continuing on the date of such
certificate that constitutes an Event of Default or would
constitute an Event of Default but for the requirement that
notice be given or time elapse or both and (C) stating the
specific provision of the Securities Certificate or the Order
of Registration pursuant to which this Agreement is authorized
and stating that the Borrower is in compliance with such
provision;
(vi) A favorable opinion of Ballard Spahr Andrews &
Ingersoll, special counsel for the Borrower, substantially in
the form of Exhibit D hereto; and
(vii) A favorable opinion of Reed Smith Shaw & McClay LLP,
counsel for the Administrative Agent, substantially in the
form of Exhibit E hereto.
(b) Termination of Prior Credit Facility. The Administrative
Agent shall have received evidence of (i) the payment in full of all obligations
of the Borrower under the Existing Credit Agreements, and (ii) the termination
of the "Commitments" under the Existing Credit Agreements.
SECTION 3.02. Conditions Precedent to Certain Borrowings. The
obligation of each Lender to make an Advance on the occasion of each Borrowing
(including the initial Borrowing) that would increase the aggregate amount of
Advances outstanding shall be subject to the further conditions precedent that
on the date of such Borrowing the following statements shall be true, and each
of the giving of the applicable Notice of a Borrowing and the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute a representation and
warranty by the Borrower that on the date of such Borrowing such statements are
true:
(A) The representations and warranties contained in
Section 4.01 are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing
and to the application of the proceeds therefrom, as though
made on and as of such date; and
(B) No event has occurred and is continuing, or would
result from such Borrowing or from the application of the
proceeds therefrom, that constitutes an Event of Default or
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both (it being
understood for clarification that (i) without limiting the
foregoing, it is a condition of this clause (B) that the
Borrower shall be in compliance with Section 5.01(a)(iv),
Section 5.02(a) and Section 5.02(c) upon giving effect to such
Borrowing and (ii) the conditions of this clause (B) shall
apply whether or not the respective Commitments of the Lenders
have been terminated pursuant to Section 6.01).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized. validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania.
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(b) The execution, delivery and performance by the Borrower of
this Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, and do not and will not
contravene (i) the Borrower's Restated Articles of Incorporation or By-laws,
(ii) applicable law or (iii) any contractual or legal restriction binding on or
affecting the Borrower or its properties.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrower of this
Agreement or the Notes except for the filing of the Securities Certificate with,
and the final approval of, and the Order of Registration issued by, the PPUC,
which filing has been duly made and which final approval and Order of
Registration have been duly obtained; such Order of Registration is in full
force and effect and is final; and on and after the date of the initial
Borrowing hereunder, the action of the PPUC registering the Securities
Certificate shall no longer be subject to appeal.
(d) This Agreement is, and the Notes when delivered hereunder
will be, legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms, except as the
enforceability thereof may be limited by equitable principles or bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally.
(e) The consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 1998, and the related statements of income and
retained earnings and of cash flows of the Borrower and its Subsidiaries for the
fiscal year then ended, certified by Pricewaterhouse Coopers LLP, and the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at
June 30, 1999, and the related unaudited statements of income for the six-month
period then ended, copies of which have been furnished to each Lender, fairly
present in all material respects (subject, in the case of such balance sheets
and statements of income for the period ended June 30, 1999, to year-end
adjustments) the consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the consolidated results of the operations of
the Borrower and its Subsidiaries for the periods ended on such dates, all in
accordance with GAAP, and since June 30, 1999, there has been no Material
Adverse Change.
(f) Except as disclosed in the Borrower's Annual, Quarterly or
Current Reports, each as filed with the Securities and Exchange Commission and
delivered to the Lenders (including reports filed prior to the date of execution
and delivery of this Agreement and reports delivered to the Lenders pursuant to
Section 5.01(b)), there is no pending or threatened action, investigation or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator that may reasonably be anticipated to have a
Material Adverse Effect. There is no pending or threatened action or proceeding
against the Borrower or its Subsidiaries that purports to affect the legality,
validity, binding effect or enforceability of this Agreement or any Note.
(g) No proceeds of any Advance have been or will be used
directly or indirectly in connection with the acquisition of in excess of 5% of
any class of equity securities that is registered pursuant to Section 12 of the
Exchange Act or any transaction subject to the requirements of Section 13 or 14
of the Exchange Act.
(h) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock. Not more than 25% of the value of the assets of the
Borrower and its Principal Subsidiaries is represented by margin stock.
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(i) The Borrower (i) is exempt from the provisions of the
Public Utility Holding Company Act of 1935, as amended, other than Section
9(a)(2) thereof, pursuant to Section 3(a)(2) thereof, and (ii) is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(j) During the twelve consecutive month period prior to the
date of the execution and delivery of this Agreement and prior to the date of
any Borrowing under this Agreement, no steps have been taken to terminate any
Plan, and no contribution failure by the Borrower or any member of the
Controlled Group has occurred with respect to any Plan. No condition exists or
event or transaction has occurred with respect to any Plan (including any
Multiemployer Plan) which might result in the incurrence by the Borrower or any
member of the Controlled Group of any material liability, fine or penalty.
(k) The Borrower is reviewing its operations and those of its
Subsidiaries with a view to assessing whether its business, or the business of
any of its Subsidiaries (i) will be vulnerable to a Year 2000 Problem or (ii)
will be vulnerable to the effects of a Year 2000 Problem suffered by the
Borrower's or any of its Subsidiaries' major counterparties, in the case of (ii)
as described in the Borrower's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999. The Borrower represents and warrants that it does not
believe that any Year 2000 Problem will impair the Borrower's ability to pay
principal or interest on the Notes in accordance with their terms.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Note or
any amount payable by the Borrower hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder (except with respect to subsection (a)(iv),
which shall be applicable only as of the date hereof and at any time that any
Advance is outstanding hereunder), the Borrower will, and, in the case of
Section 5.01(a), will cause its Principal Subsidiaries to, unless the Majority
Lenders shall otherwise consent in writing:
(a) Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance; Taxes.
(i) keep proper books of record and account, all in
accordance with generally accepted accounting principles;
(ii) subject to Section 5.02(b), preserve and keep in full
force and effect its existence;
(iii) maintain and preserve all of its properties (except
such properties the failure of which to maintain or preserve
would not have, individually or in the aggregate, a Material
Adverse Effect) which are used or useful in the conduct of its
business in good working order and condition, ordinary wear
and tear excepted;
(iv) comply in all material respects with the requirements
of all applicable laws, rules, regulations and orders
(including those of any governmental authority and including
with respect to environmental matters) to the extent the
failure to so comply, individually or in the aggregate, would
have either a Material Adverse Effect or a material adverse
effect on the ability of the Borrower to perform its
obligations under this Agreement and the Notes;
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(v) maintain insurance with responsible and reputable
insurance companies or associations, or self-insure, as the
case may be, in each case in such amounts and covering such
contingencies, casualties and risks as is customarily carried
by or self-insured against by companies engaged in similar
businesses and owning similar properties in the same general
areas in which the Borrower and its Principal Subsidiaries
operate;
(vi) at any reasonable time and from time to time,
pursuant to prior notice delivered to the Borrower, permit any
Lender, or any agents or representatives of any thereof, to
examine and, at such Lender's expense, make copies of, and
abstracts from the records and books of account of, and visit
the properties of, the Borrower and any of its Principal
Subsidiaries and to discuss the affairs, finances and accounts
of the Borrower and any of its Subsidiaries with any of their
respective officers; provided, that any non-public information
(which has been identified as such by the Borrower) obtained
by any Lender, or any of their respective agents or
representatives pursuant to this subsection (vi) shall be
treated confidentially by such Person; provided, further, that
such Person may disclose such information to any other party
to this Agreement, its examiners, affiliates, outside
auditors, counsel or other professional advisors in connection
with the Agreement or if otherwise required to do so by law or
regulatory process;
(vii) use the proceeds of the Advances for general
corporate purposes (including, without limitation, the
refinancing of its commercial paper, the repayment of
outstanding Advances, and the making of acquisitions) but in
no event for any purpose which would be contrary to clause (g)
or clause (h) of Section 4.01;
(viii) take the actions and commit the resources deemed
necessary by the National Electric Reliance Council ("NERC"),
the Mid-Atlantic Area Counsel, the Nuclear Regulatory
Commission and the PUC to mitigate against the Year 2000
Problem; and
(ix) at the request of the Administrative Agent, provide
the Administrative Agent with any reports submitted by the
Borrower to NERC relating to the Year 2000 Problem, within a
reasonable time after such request.
(b) Reporting Requirements. Furnish to the Lenders:
(i) as soon as possible, and in any event within 5
Business Days after the occurrence of each Event of Default or
each event which, with the giving of notice or lapse of time,
or both, would constitute an Event of Default, continuing on
the date of such statement, a statement of an authorized
officer of the Borrower setting forth details of such Event of
Default or event and the action which the Borrower proposes to
take with respect thereto;
(ii) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each
fiscal year of the Borrower, a copy of the Borrower's
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission with respect to such quarter, together
with a certificate of an authorized officer of the Borrower
stating that no Event of Default, or event which, with notice
or lapse of time or both, would constitute an Event of
Default, has occurred and is continuing or, if any Event of
Default or such event has occurred and is continuing, a
statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto;
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(iii) as soon as available and in any event within 105
days after the end of each fiscal year of the Borrower, a copy
of the Borrower's Annual Report on Form 10-K filed with the
Securities and Exchange Commission with respect to such fiscal
year, together with a certificate of an authorized officer of
the Borrower stating that no Event of Default, or event which,
with notice of lapse of time or both, would constitute an
Event of Default, has occurred and is continuing or, if any
Event of Default or such event has occurred and is continuing,
a statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto;
(iv) concurrently with the delivery of the annual and
quarterly reports referred to in Sections 5.01(b)(ii) and
5.01(b)(iii), a compliance certificate in substantially the
form set forth in Exhibit F, duly completed and signed by the
Chief Financial Officer, Treasurer or an Assistant Treasurer
of the Borrower;
(v) except as otherwise provided in subsections (ii) and
(iii) above, promptly after the sending or filing thereof,
copies of all reports that the Borrower sends to any of its
security holders, and copies of all Reports on Form 10-K, 10-Q
or 8-K, and registration statements and prospectuses that the
Borrower or any of its Subsidiaries files with the Securities
and Exchange Commission or any national securities exchange
(except to the extent that any such registration statement or
prospectus relates solely to the issuance of securities
pursuant to employee or dividend reinvestment plans of the
Borrower or such Subsidiary);
(vi) promptly upon becoming aware of the institution of
any steps by the Borrower or any other Person to terminate any
Plan, or the failure to make a required contribution to any
Plan if such failure is sufficient to give rise to a lien
under section 302(f) of ERISA, or the taking of any action
with respect to a Plan which could result in the requirement
that the Borrower furnish a bond or other security to the PBGC
or such Plan, or the occurrence of any event with respect to
any Plan, which could result in the incurrence by the Borrower
or any member of the Controlled Group of any material
liability, fine or penalty; and
(vii) such other information respecting the condition,
operations, business or prospects, financial or otherwise, of
the Borrower or any of its Subsidiaries as any Lender, through
the Administrative Agent, may from time to time reasonably
request.
SECTION 5.02. Negative Covenants. So long as any Note or any
amount payable by the Borrower hereunder shall remain unpaid or any Lender shall
have any Commitment hereunder (except with respect to subsection (a), which
shall be applicable only as of the date hereof and at any time any Advance is
outstanding hereunder), the Borrower will not, without the written consent of
the Majority Lenders:
(a) Limitation on Liens. Create, incur, assume or suffer to
exist, or permit any of its Principal Subsidiaries to create, incur, assume or
suffer to exist, any Lien on its respective property, revenues or assets,
whether now owned or hereafter acquired except (i) Liens upon or in any property
acquired by the Borrower or any of its Principal Subsidiaries in the ordinary
course of business to secure the purchase price of such property or to secure
any obligation incurred solely for the purpose of financing the acquisition of
such property, (ii) Liens existing on such property at the time of its
acquisition (other than any such Lien created in contemplation of such
acquisition unless permitted by the preceding clause (i)), (iii) Liens granted
under the Mortgage and "excepted encumbrances" as defined in the Mortgage, (iv)
Liens granted in connection with any financing arrangement for the purchase of
nuclear fuel or the financing of pollution control facilities, limited to the
fuel or facilities so purchased or acquired, (v) Liens arising in connection
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with sales or transfers of, or financing secured by, accounts receivable or
related contracts, (vi) Liens securing the Borrower's notes collateralized
solely by mortgage bonds of the Borrower issued under the terms of the Mortgage,
(vii) Liens arising in connection with sale and leaseback transactions, but only
to the extent (x) the proceeds received by the Borrower or such Principal
Subsidiary from such sale shall immediately be applied to retire mortgage bonds
of the Borrower issued under the terms of the Mortgage, or (y) the aggregate
purchase price of assets sold pursuant to such sale and leaseback transactions
where such proceeds are not so applied shall not exceed $1,000,000,000, (viii)
Liens granted by a Special Purpose Subsidiary to secure Nonrecourse Transition
Bond Debt of such Special Purpose Subsidiary, and (ix) Liens, other than those
described in clauses (i) through (viii) of this subsection granted by the
Borrower or any of its Principal Subsidiaries in the ordinary course of business
securing Debt of the Borrower and its Principal Subsidiaries in an amount not to
exceed $50,000,000 in the aggregate at any one time outstanding.
(b) Mergers and Consolidations; Disposition of Assets. Merge
with or into or consolidate with or into, or sell, assign, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to any
Person or permit any Principal Subsidiary to do so, except that (i) the Borrower
or any Principal Subsidiary may merge with or into or consolidate with or
transfer assets to any other Principal Subsidiary, (ii) any Principal Subsidiary
may merge with or into or consolidate with or transfer assets to the Borrower
and (iii) the Borrower may merge with or into or consolidate with or transfer
assets to any other Person; provided in each case, immediately thereafter in
giving effect thereto, no Event of Default or event that would, with the giving
of notice or the passage of time or both constitute an Event of Default shall
have occurred and be continuing and (A) in the case of any such merger,
consolidation or transfer of assets to which the Borrower is a party, either (x)
the Borrower shall be the surviving corporation or (y) the surviving corporation
shall be an Eligible Successor and shall have assumed all of the obligations of
the Borrower under this Agreement and the Notes pursuant to a written instrument
in form and substance satisfactory to the Administrative Agent and (B) subject
to clause (A) above, in the case of any such merger to which a Principal
Subsidiary is a party, a Principal Subsidiary shall be the surviving
corporation.
(c) Financial Covenant. Permit Consolidated Adjusted Total
Debt to exceed 65% of Consolidated Adjusted Total Capitalization at any time.
(d) Continuation of Businesses.
(i) Generation Business. (A) Cease to own (through the
Borrower or wholly-owned Subsidiaries) the business of
generating electricity, or (B) reduce the net installed
electric generating capacity (summer rating) of the
electricity generation business owned by the Borrower and its
wholly-owned Subsidiaries taken as a whole to less than 7821
Megawatts.
(ii) Distribution, Transmission and Gas Businesses. Cease
to own (directly by the Borrower, and not through
Subsidiaries) the business of distributing electricity to
end-users, the business of transmitting electricity, or the
businesses of transmitting and distributing natural gas, each
substantially as conducted by the Borrower as of the date of
this Agreement (and the Borrower warrants that as of the date
of this Agreement substantially all of such businesses
conducted by the Borrower on a consolidated basis, and the
assets relating thereto, are operated and owned by the
Borrower directly and not through Subsidiaries).
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable, or interest thereon or any other
amount payable under this Agreement or any of the Notes within three Business
Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein
or by the Borrower (or any of its officers) pursuant to the terms of this
Agreement shall prove to have been incorrect or misleading in any material
respect when made; or
(c) The Borrower shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 5.02, Section 5.01(a)(vii) or
Section 5.01(b)(i), or (ii) any other term, covenant or agreement contained in
this Agreement on its part to be performed or observed if the failure to perform
or observe such other term, covenant or agreement shall remain unremedied for 30
days after written notice thereof shall have been given to the Borrower by the
Administrative Agent (which notice shall be given by the Administrative Agent at
the written request of any Lender); or
(d) The Borrower or any Principal Subsidiary shall fail to pay
any principal of or premium or interest on any Debt that is outstanding in a
principal amount in excess of $50,000,000 in the aggregate (but excluding Debt
evidenced by the Notes and Nonrecourse Transition Bond Debt) of the Borrower or
such Principal Subsidiary (as the case may be) when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof, other than any acceleration
of any Debt secured by equipment leases or fuel leases of the Borrower or a
Principal Subsidiary as a result of the occurrence of any event requiring a
prepayment (whether or not characterized as such) thereunder, which prepayment
will not result in a Material Adverse Change; or
(e) The Borrower or any Principal Subsidiary (other than a
Special Purpose Subsidiary) shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower or any Principal
Subsidiary (other than a Special Purpose Subsidiary) seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 60 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property,)
shall occur; or the Borrower or any Principal Subsidiary (other than a Special
Purpose Subsidiary) shall take any corporate action to authorize or to consent
to any of the actions set forth above in this subsection (e); or
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(f) One or more judgments or orders for the payment of money
in an aggregate amount exceeding $50,000,000 (excluding any such judgments or
orders which are fully covered by insurance, subject to any customary
deductible, and under which the applicable insurance carrier has acknowledged
such full coverage in writing) shall be rendered against the Borrower or any
Principal Subsidiary and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) (i) any Reportable Event that the Majority Lenders
determine in good faith might constitute grounds for the termination of any Plan
or for the appointment by the appropriate United States District Court of a
trustee to administer a Plan shall have occurred and be continuing 30 days after
written notice to such effect shall have been given to the Borrower by the
Administrative Agent or (ii) any Plan shall be terminated, or (iii) a Trustee
shall be appointed by an appropriate United States District Court to administer
any Plan or (iv) the PBGC shall institute proceedings to terminate any Plan or
to appoint a trustee to administer any Plan; provided, however that on the date
of any event described in clauses (i) through (iv) above the Unfunded
Liabilities of such Plan exceed $20,000,000; or
(h) any "Event of Default" shall occur under the 364-Day
Credit Agreement;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Majority Lenders, by notice to the Borrower,
declare the respective Commitments of the Lenders to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Majority Lenders, by notice to the Borrower, declare the
principal amount outstanding under the Notes, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon
the principal amount outstanding under the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower or any
Principal Subsidiary under the Federal Bankruptcy Code, (A) the obligation of
each Lender to make Advances shall automatically be terminated and (B) the
principal amount outstanding under the Notes, all such interest and all such
amounts shall automatically and immediately become due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
and such instructions shall be binding upon all Lenders and all holders of
Notes; provided, however, that the Administrative Agent shall not be required to
take any action which exposes the Administrative Agent to personal liability or
which is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
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SECTION 7.02. Agents' Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their respective own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing: (i) the Administrative Agent may treat the payee of any Note as
the holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender which is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
8.07; (ii) the Administrative Agent may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) the Administrative Agent makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) the Administrative Agent shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement on the part of the
Borrower or to inspect the property (including the books and records) of the
Borrower; (v) the Administrative Agent shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) the Administrative Agent shall not incur any
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. Agents and Affiliates. With respect to its
Commitment, Advances and Notes, each of First Chicago and Citibank, N.A. shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not an Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include each of First
Chicago and Citibank, N.A. in its individual capacity. Each of First Chicago and
Citibank, N.A. and their affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind of business
with, the Borrower, any of its subsidiaries and any Person who may do business
with or own securities of the Borrower or any such subsidiary, all as if it were
not an Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on the financial statements referred to in Section
4.01(e) and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
each Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Notes then held by each of the Lenders
(or if no Notes are at the time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against any such Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by any such Agent
under this Agreement, provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse each such Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by such Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that such
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expenses are reimbursable by the Borrower but for which such Agent is not
reimbursed by the Borrower.
SECTION 7.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower and may be removed at any time with or without
cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank described in clause (i)
or (ii) of the definition of "Eligible Assignee" and having a combined capital
and surplus of at least $150,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
Notwithstanding the foregoing, if no Event of Default, and no event that with
the giving of notice or the passage of time, or both, would constitute an Event
of Default, shall have occurred and be continuing, then no successor
Administrative Agent shall be appointed under this Section 7.06 without the
prior written consent of the Borrower, which consent shall not be unreasonably
withheld or delayed.
SECTION 7.07. Documentation Agent and Lead Arranger. The
titles "Documentation Agent" and "Lead Arranger" are purely honorific, and the
"Documentation Agent" and the "Lead Arranger" shall have no duties or
responsibilities in such capacity.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders (other than any Lender that is
the Borrower or an Affiliate of the Borrower), do any of the following: (a)
waive any of the conditions specified in Section 3.01 or 3.02, (b) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder, or (f)
amend this Section 8.01; provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent, in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent under this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered, if to the Borrower, at its address at 2301 Market
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Street, Philadelphia, Pennsylvania 19101, Attention: Vice President-Finance and
Treasurer, S21-1, Telecopy: (215) 557-9885; if to any Bank, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance or Additional Lender Supplement pursuant to which it became a Lender;
and if to the Administrative Agent, at its address at One First National Plaza,
Mail Suite 0634, 1FPN-10, Chicago, Illinois 60670, Attention: Mr. Ron Cromey,
Telecopy: (312) 732-4840 or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telecopied, telegraphed, telexed
or cabled, be effective when deposited in the mails, telecopied, delivered to
the telegraph company, confirmed by telex answerback or delivered to the cable
company, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be effective until
received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender or the Administrative Agent to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses; Indemnification. (a) The
Borrower agrees to pay on demand all costs and expenses incurred by the
Administrative Agent and the Lead Arranger in connection with the preparation,
execution, delivery, administration, syndication, modification and amendment of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees, internal charges and
out-of-pocket expenses of counsel (including, without limitation, in-house
counsel) for such Agents with respect thereto and with respect to advising such
Agents as to their respective rights and responsibilities under this Agreement.
The Borrower further agrees to pay on demand all costs and expenses, if any
(including, without limitation, counsel fees and expenses of outside counsel and
of internal counsel), incurred by the any Agent or any Lender in connection with
the collection and enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Notes and the other documents to be
delivered hereunder, including, without limitation, reasonable counsel fees and
expenses in connection with the enforcement of rights under this Section
8.04(a).
(b) If any payment of principal of, or Conversion of any
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to
Section 2.09 or 2.12 or acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, the Borrower shall, upon demand by any
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment or Conversion, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(c) The Borrower hereby agrees to indemnify and hold each
Lender, each Agent and each of their respective Affiliates, officers, directors
and employees (each, an "Indemnified Person") harmless from and against any and
all claims, damages, losses, liabilities, costs or expenses (including
reasonable attorney's fees and expenses, whether or not such Indemnified Person
is named as a party to any proceeding or is otherwise subjected to judicial or
legal process arising from any such proceeding) that any of them may pay or
incur arising out of or relating to this Agreement, the Notes or the
transactions contemplated thereby, or the use by the Borrower or any of its
subsidiaries of the proceeds of any Advance, provided that the Borrower shall
not be liable for any portion of such claims, damages, losses, liabilities,
costs or expenses resulting from such Indemnified Person's gross negligence or
willful misconduct. The Borrower's obligations under this Section 8.04(c) shall
survive the repayment of all amounts owing to the Lenders and the Administrative
Agent under this Agreement and the Notes and the termination of the Commitments.
If and to the extent that the obligations of the Borrower under this Section
8.04(c) are unenforceable for any reason, the Borrower agrees to make the
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maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
any Note held by such Lender, whether or not such Lender shall have made any
demand under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 8.05 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agents and
when the Administrative Agent shall have been notified by each Bank that such
Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Agents and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender
may, with the prior written consent of the Borrower and the Administrative Agent
(neither of which consents shall be unreasonably withheld or delayed), and if
demanded by the Borrower pursuant to subsection (g) hereof shall to the extent
required by such subsection (g), assign to one or more banks or other entities
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement, (ii) the amount
of the Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 or, if
less, the entire amount of such Lender's Commitment, and shall be an integral
multiple of $1,000,000 or such Lender's entire Commitment, (iii) each such
assignment shall be to an Eligible Assignee, (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500 (which shall be payable by one or more of the parties
to the Assignment and Acceptance, and not by the Borrower, and shall not be
payable if the assignee is a Bank, any Affiliate of any Bank or the Federal
Reserve Bank), and (v) the consent of the Borrower shall not be required after
the occurrence and during the continuance of any Event of Default. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto (although an assigning Lender shall continue to be entitled to
indemnification pursuant to Section 8.04(c)). Notwithstanding anything contained
in this Section 8.07(a) to the contrary, (A) the consent of the Borrower and the
Administrative Agent shall not be required with respect to any assignment by any
Lender to an Affiliate of such Lender or to another Lender and (B) any Lender
may at any time, without the consent of the Borrower or the Administrative
-32-
Agent, and without any requirement to have an Assignment and Acceptance
executed, assign all or any part of its rights under this Agreement and its
Notes to a Federal Reserve Bank, provided that such assignment does not release
the transferor Lender from any of its obligations hereunder.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01(e) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance and each
Additional Lender Supplement delivered to and accepted by it and a register for
the recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Advances owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Commitment hereunder, a new Note to
the order of the assigning Lender in an amount equal to the Commitment retained
by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations to one or more banks
or other entities (each, a "Participant") in or to all or a portion of its
-33-
rights and/or obligations under this Agreement (including, without limitation,
all or a portion of its Commitment, the Advances owing to it and the Note or
Notes held by it); provided, however, that (i) such Lender's obligations under
this Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(v) such Lender shall retain the sole right to approve, without the consent of
any Participant, any amendment, modification or waiver of any provision of this
Agreement or the Note or Notes held by such Lender, other than any such
amendment, modification or waiver with respect to any Advance or Commitment in
which such Participant has an interest that forgives principal, interest or fees
or reduces the interest rate or fees payable with respect to any such Advance or
Commitment, postpones any date fixed for any regularly scheduled payment of
principal of, or interest or fees on, any such Advance or Commitment, releases
any guarantor of any such Advance or releases any substantial portion of
collateral, if any, securing any such Advance.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to the
Borrower received by it from such Lender (subject to customary exceptions
regarding regulatory requirements, compliance with legal process and other
requirements of law).
(g) If (i) any Lender shall make demand for payment under
Section 2.11(a), 2.11(b) or 2.14, or (ii) shall deliver any notice to the
Administrative Agent pursuant to Section 2.12 resulting in the suspension of
certain obligations of the Lenders with respect to Eurodollar Rate Advances or
(iii) shall fail to consent to, or shall revoke its consent to, the extension of
any Termination Date pursuant to Section 2.16 or (iv) shall fail to consent to,
or shall revoke its consent to, any extension of the "Termination Date" (as
defined in the 364-Day Credit Agreement) requested by the Borrower pursuant to
Section 2.16 of the 364-Day Credit Agreement as originally constituted (or any
successor provision of similar import), then (in the case of clause (i)) within
60 days after such demand (if, but only if, such payment demanded under Section
2.11(a), 2.11(b) or 2.14 has been made by the Borrower), or (in the case of
clause (ii)) within 60 days after such notice (if such suspension is still in
effect), or (in the case of clauses (iii) and (iv)) no later than 10 days prior
to the then effective Termination Date, as the case may be, the Borrower may
demand that such Lender assign in accordance with this Section 8.07 to one or
more Eligible Assignees designated by the Borrower and reasonably acceptable to
the Administrative Agent all (but not less than all) of such Lender's Commitment
and the Advances owing to it within the next succeeding 30 days (in the case of
clause (i) or clause (ii)), or within the next succeeding 5 days (in the case of
clauses (iii) and (iv)) . If any such Eligible Assignee designated by the
Borrower shall fail to consummate such assignment on terms acceptable to such
Lender, or if the Borrower shall fail to designate any such Eligible Assignee
for all of such Lender's Commitment or Advances, then such Lender may (but shall
not be required to) assign such Commitment and Advances to any other Eligible
Assignee in accordance with this Section 8.07 during such period.
(h) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Bank") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting Bank
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Advance that such Granting Bank would otherwise
be obligated to make to the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any Advance,
(ii) if an SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Advance, the Granting Bank shall be obligated to make
-34-
such Advance pursuant to the terms hereof. The making of an Advance by an SPC
hereunder shall utilize the Commitment of the Granting Bank to the same extent,
and as if, such Advance were made by such Granting Bank. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Bank). In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that, prior to
the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
8.07(h), any SPC may (i) with notice to, but without the prior written consent
of, the Borrower and the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Advances to the
Granting Bank or to any financial institutions (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Advances and (ii)
disclose on a confidential basis any non-public information relating to its
Advances to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPC. This Section
may not be amended without the written consent of the Granting Bank.
SECTION 8.08. Governing Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA.
SECTION 8.09. Consent to Jurisdiction. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF PENNSYLVANIA AND ANY UNITED STATES DISTRICT COURT SITTING IN THE
COMMONWEALTH OF PENNSYLVANIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE NOTES AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 8.10. Execution in Counterparts; Integration. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes all prior and
contemporaneous agreements and understandings, oral or written, relating to the
subject matter hereof.
[Remainder of the page intentionally left blank]
-35-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[SEAL] PECO ENERGY COMPANY
PECO ENERGY COMPANY
By /s/ J.B. Mitchell
---------------------------------------------
Name: J. B. Mitchell
Title: Vice President - Finance and Treasurer
/s/ Todd D. Cutler
- ------------------
Todd D. Cutler
Assistant Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
By /s/ Kenneth J. Bauer
---------------------------------------------
Name: Kenneth J. Bauer
Title: Authorized Agent
CITIBANK, N.A.,
as Documentation Agent
By: /s/ Robert J. Harrity, Jr.
--------------------------------------------
Title: Managing Director
BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger
By /s/ Kenneth J. Bauer
---------------------------------------
Name: Kenneth J. Bauer
Title: Vice President/Senior Banker
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-36-
THE BANKS
Commitment
$60,000,000
THE FIRST NATIONAL BANK OF CHICAGO, as
Administrative Agent and as Bank
By /s/ Kenneth J. Bauer
-----------------------------------
Name: Kenneth J. Bauer
Title: Authorized Agent
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-37-
Commitment
$60,000,000
CITIBANK, N.A., as Documentation
Agent and as Bank
By /s/ Robert J. Harrity, Jr.
----------------------------
Name: Robert J. Harrity, Jr.
Title: Managing Director
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-38-
Commitment
$50,000,000
BANK OF AMERICA, N.A.
as Bank
By /s/ Lawrence Saunders, Jr.
---------------------------------
Name: Lawrence Saunders, Jr.
Title: Managing Director
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-39-
Commitment
$50,000,000
THE BANK OF NEW YORK, as Bank
By /s/ John N. Watt
---------------------------
Name: John N. Watt
Title: Vice President
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-40-
Commitment
$50,000,000
CREDIT SUISSE FIRST BOSTON, as Bank
By /s/ Douglas E. Maher
--------------------------------
Name: Douglas E. Maher
Title: Vice President
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-41-
Commitment
$50,000,000
FIRST UNION NATIONAL BANK, as Bank
By /s/ Joe K. Dancey
------------------------------
Name: Joe K. Dancey
Title: Vice President
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-42-
Commitment
$50,000,000
MELLON BANK, N.A., as Bank
By /s/ Mark W. Rogers
------------------------
Name: Mark W. Rogers
Title: Vice President
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-43-
Commitment
$25,000,000
UNION BANK OF CALIFORNIA,
N.A., as Bank
By /s/ Robert J. Cole
-------------------------------
Name: Robert J. Cole
Title: Vice President
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-44-
Commitment
$25,000,000
TORONTO DOMINION (TEXAS),
INC., as Bank
By /s/ Jimmy Simien
------------------------
Name: Jimmy Simien
Title: Vice President
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-45-
Commitment
$17,500,000
COMMERCE BANK, N.A., as Bank
By /s/ Kurt J. Fuoti
-----------------------------
Name: Kurt J. Fuoti
Title: Vice President
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-46-
Commitment
$12,500,000
BARCLAYS BANK PLC, as Bank
By /s/ Sydney G. Dennis
----------------------------
Name: Sydney G. Dennis
Title: Director
This is a signature page to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger.
-47-
SCHEDULE I
Revolving Credit Agreement, dated as of September 15, 1999, among PECO Energy
Company, as Borrower, the banks named therein, as Banks, The First National Bank
of Chicago, as Administrative Agent, Citibank, N.A., as Documentation Agent, and
Banc One Capital Markets, Inc., as Lead Arranger.
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ------------ -------------- --------------
The First National Bank One First National Plaza Same
of Chicago Mail Suite 0634, 1FNP-10
Chicago, IL 60670
Attn: Gwendolyn Watson
Phone: (312) 732-4509
Fax: (312) 732-4840
The Bank of New York One Wall Street, 19th Floor Same
Energy Industries Division
New York, NY 10286
Attn: Theresa A. Foran
Phone: (212) 635-7921
Fax: (212) 635-7923
Citibank, N.A. 399 Park Avenue Same
4th Floor, Zone 20
New York, NY 10043
Attn: Tracy Smith
Phone: (302) 894-6098
Fax: (302) 894-6120
Credit Suisse First Boston 11 Madison Avenue Same
20th Floor
New York, NY 10010-3629
Attn: Jenaro Sarasola
Phone: (212) 322-1384
Fax: (212) 325-0593/0576
First Union National Bank 201 South College Street Same
24th Floor
Charlotte, NC 28288-1183
Attn: Holly Benson
Phone: (704) 383-0296
Fax: (704) 383-7999
Mellon Bank, N.A. Three Mellon Bank Center Room 2303 Same
(Loan Administration)
Pittsburgh, PA 15259-0003
Attn: Cathy Capp
Phone: (412) 234-1870
Fax: (412) 236-2027, 2028
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ------------ -------------- --------------
Union Bank of Energy Capital Services Same
California, N.A. 445 S. Figueroa Street
20th Floor
Los Angeles, CA 90071
Attn: Yolande C. Hollis
Phone: (213) 236-6199
Fax: (213) 236-4096
Commerce Bank, N.A. 2005 Market Street Same
One Commerce Square
2nd Floor
Philadelphia, PA 19103
Attn: Kim Dunda
AIM #200-01-35
Phone: (888) 751-9000 Ext. 8570
Fax: (856) 642-7704
Toronto Dominion (Texas) 909 Fannin, Suite 1700 Same
Inc. Houston, TX 77010
Attn: Herbert Simien
Phone: (713) 653-8242
Fax: (713) 951-9921
Barclays Bank PLC 222 Broadway Same
New York, NY 10038
Attn: Marsha L. Hamlette
Phone: (212) 412-4081
Fax: (212) 412-5306
Bank of America, N.A. 6610 Rockledge Drive Same
6th Floor
Bethesda, MD 20817
Attn: Paula Kramp
Phone: (301) 571-0713
Fax: (301) 571-0719
-2-
EXHIBIT A
FORM OF NOTE
$____________________ Dated: [ ], 1999
FOR VALUE RECEIVED, the undersigned, PECO Energy Company, a
Pennsylvania corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order
of (the "Lender") for the account of its Applicable Lending Office (such term
and other capitalized terms herein being used as defined in the Credit Agreement
referred to below) on the Termination Date the principal sum of U.S.$[amount of
the Lender's Commitment in figures] or, if less, the aggregate principal amount
of the Advances made by the Lender to the Borrower pursuant to the Credit
Agreement outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to The First National Bank of Chicago, as
Administrative Agent, at One First National Plaza, Chicago, Illinois 60670, in
same day funds. Each Advance made by the Lender to the Borrower pursuant to the
Credit Agreement, and all payments made on account of principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Revolving Credit Agreement, dated as of
September 15, 1999 among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger (as amended, modified or supplemented from time to time, the
"Credit Agreement"). The Credit Agreement, among other things, (i) provides for
the making of Advances by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each such
Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
PECO ENERGY COMPANY
By___________________________________
Name:
Title:
-2-
ADVANCES, MATURITIES, AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of
Maturity Principal Unpaid
Amount of of Paid or Principal Notation
Date Advance Advance Prepaid Balance Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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EXHIBIT B
NOTICE OF A BORROWING
The First National Bank of Chicago, as Administrative Agent for the Lenders
parties to the Credit Agreement referred to below
One First National Plaza
Chicago, Illinois 60670
[Date]
Attention: Utilities Department
North American Finance Group
Ladies and Gentlemen:
The undersigned, PECO Energy Company, refers to the Revolving
Credit Agreement, dated as of September 15, 1999, among PECO Energy Company, as
Borrower, the banks named therein, as Banks, The First National Bank of Chicago,
as Administrative Agent, Citibank, N.A., as Documentation Agent, and Banc One
Capital Markets, Inc., as Lead Arranger (as amended, modified or supplemented
from time to time, the "Credit Agreement"), and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is___,
19/20__.
(ii) The Type of Advances to be made in connection
with the Proposed Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing
is $____.
(iv) The Interest Period for each Advance made as
part of the Proposed Borrowing is [__days] [__month[s]].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in
Section 4.01 are correct, before and after giving effect to
the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of
the proceeds therefrom, that
constitutes an Event of Default or would constitute an Event
of Default but for the requirement that notice be given or
time elapse or both.
Very truly yours,
PECO ENERGY COMPANY
By_______________________________
Name:
Title:
-2-
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated , 19/20
---------- --
Reference is made to the Revolving Credit Agreement, dated as
of September 15, 1999 among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger (as amended, modified or supplemented from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meaning.
____________ (the "Assignor") and ____________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the date hereof which represents the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the Credit Agreement,
including, without limitation, such interest in the Assignor's Commitment, the
Advances owing to the Assignor, and the Note[s] held by the Assignor. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amount of the Advances owing to the Assignee will be as set forth in Section 2
of Schedule 1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Note[s] referred to
in paragraph 1 above and requests that the Administrative Agent exchange such
Note[s] for a new Note payable to the order of the Assignee in an amount equal
to the Commitment assumed by the Assignee pursuant hereto or new Notes payable
to the order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and the Assignor in an amount equal to the Commitment
retained by the Assignor under the Credit Agreement, respectively as specified
on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; (vi) none of
the consideration used to make the purchase being made by the Assignee hereunder
are "plan assets" as defined under ERISA and the rights and interests of the
Assignee in and under the Credit Agreement will not be "plan assets" under ERISA
[and] (vii) specifies as its, Domestic Lending Office (and address for notices)
and Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof [and (viii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying that it is exempt from United
States withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement and the Notes].1
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date of this Assignment and Acceptance shall be the date of acceptance thereof
by the Administrative Agent, unless otherwise specified on Schedule 1 hereto
(the "Effective Date").
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
- ----------
(1) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
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IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution being made
on Schedule 1 hereto.
[NAME OF ASSIGNOR]
By__________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By_________________________________
Name:
Title:
Domestic Lending
Office (and address
for notices):
[Address]
Eurodollar Lending Office:
[Address]
Consented to this _____ day
of _____________, 19/20__
PECO ENERGY COMPANY
By_______________________
Name:
Title:
Consented to and Accepted this _____ day
of _________________, 19/20__
[NAME OF ADMINISTRATIVE AGENT]
By_______________________
Name:
Title:
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Schedule 1
to
Assignment and Acceptance
Dated _______, 19/20__
Section 1.
Percentage Interest: ___%
Section 2.
Assignee's Commitment: $___
Aggregate Outstanding Principal
Amount of Advances
owing to the Assignee: $___
A Note payable to the
order of the Assignee
Dated:_________, 19/20__
Principal amount: $__
A Note payable to the
order of the Assignor
Dated:_________, 19/20__
Principal amount: $__
Section 3.
Effective Date(2): _________, 19/20__
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(2) This date should be no earlier than the date of acceptance by the
Administrative Agent.
EXHIBIT D
FORM OF OPINION OF BALLARD SPAHR
ANDREWS & INGERSOLL
__________, 19/20__
To each of the Banks, the Administrative Agent,
and the Lead Arranger party to the Revolving Credit
Agreement, dated as of September 15, 1999, among
PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago,
as Administrative Agent, Citibank, N.A., as
Documentation Agent, and Banc One Capital Markets,
Inc., as Lead Arranger
Re: PECO Energy Company
-------------------
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
3.01(a)(vi) of the Revolving Credit Agreement, dated as of September 15, 1999,
among PECO Energy Company, as Borrower, the banks named therein, as Banks, The
First National Bank of Chicago, as Administrative Agent, Citibank, N.A., as
Documentation Agent, and Banc One Capital Markets Inc, as Lead Arranger (as
amended, modified or supplemented from time to time, the "Credit Agreement").
Unless otherwise specified, terms defined in the Credit Agreement are used
herein as therein defined.
We have acted as special counsel for the Borrower in
connection with the preparation, execution and delivery of the Credit Agreement.
In that capacity we have examined the following:
(i) The Credit Agreement and the Notes;
(ii) The documents furnished by the Borrower pursuant
to Section 3.01 of the Credit Agreement;
(iii) The Amended and Restated Articles of
Incorporation of the Borrower and all amendments thereto (the
"Charter");
(iv) The by-laws of the Borrower and all amendments
thereto (the "By-laws"); and
(v) A certificate of the Secretary of State of the
Commonwealth of Pennsylvania, dated _________, 1999, attesting
to the continued subsistence of the Borrower in Pennsylvania.
We have also examined the originals, or copies certified to
our satisfaction, of such other corporate records of the Borrower, certificates
of public officials and of officers of the Borrower, and agreements, instruments
and documents, as we have deemed necessary as a basis for the opinions
hereinafter expressed. We have assumed the legal capacity and competence of
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to original documents
of documents submitted to us as certified, conformed or photostatic copies. We
have assumed that the Agents and the Banks have duly executed and delivered,
with all necessary power and authority (corporate and otherwise), the Credit
Agreement.
When an opinion or confirmation is given to our knowledge or
with reference to matters of which we are aware or which are known to us, or
with another similar qualification, the relevant knowledge or awareness is
limited to the actual knowledge or awareness of the lawyer who is the current
primary contact for the Borrower and the individual lawyers in this firm who
have participated in the specific transaction to which this opinion relates and
without any special or additional investigation undertaken for the purposes of
this opinion, except as otherwise noted herein. Based upon the foregoing and
subject to the exceptions, limitations and qualifications set forth herein, we
are of the following opinion:
1. The Borrower is a corporation duly incorporated
and validly subsisting under the laws of the Commonwealth of
Pennsylvania.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Charter
or the By-laws or (ii) any law of the United States or the
Commonwealth of Pennsylvania (including, without limitation,
any order, rule or regulation of the PPUC or (iii) to the best
of our knowledge, any agreement or instrument to which the
Borrower is a party or by which it is bound, and do not result
in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to any of its
properties.
3. No authorization, approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body of the United States or the Commonwealth of
Pennsylvania is required for the due execution, delivery and
performance by the Borrower of the Credit Agreement or the
Notes except for the filing of the Securities Certificate
with, and the final approval of, and the Order of Registration
issued by, the PPUC, which filing has been duly made and which
final approval and Order of Registration have been duly
obtained; such Order of Registration is in full force and
effect and is final; and the action of the PPUC registering
the Securities Certificate is no longer subject to appeal.
4. The Credit Agreement and the Notes have been duly
executed and delivered by the Borrower, and the Credit
Agreement and the Notes are the legal, valid and binding
obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms.
5. The Borrower (i) is exempt from the provisions of
the Public Utility Holding Company Act of 1935, as amended,
other than Section 9(a)(2) thereof, pursuant to Section
3(a)(2) thereof, and (ii) is not an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
6. We confirm to you that to our knowledge, after
inquiry of each lawyer who is the current primary contact for
the Borrower or who has devoted substantive attention to
matters on behalf of the Borrower during the preceding twelve
months and who is still currently employed by or a member of
this firm, except as disclosed in the Borrower's Annual Report
on Form 10-K for the year ended December 31, 1998 and the
Borrower's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999, no litigation or governmental proceeding is
pending or threatened in writing against the Borrower (i) with
respect to the Credit Agreement or the Notes, or (ii) which is
likely to have a material adverse effect upon the financial
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condition, business, properties or prospects of the Borrower
and its subsidiaries taken as a whole.
We draw to your attention the existence of the following two
Pennsylvania statutes in connection with the fact that the Advances bear
floating rates of interest:
(i) Section 911 of the Pennsylvania "Crime Code," 18
Pa. C.S.A. ss.911, enacted by the Act of December 6, 1972,
P.L. 1482. Section 911 of the Crime Code bears a close
resemblance to certain of the provisions of the Federal
Racketeer Influenced and Corrupt Organizations Act of 1970, 18
U.S.C. ss.ss.1961-1968, commonly known as RICO, and is
referred to hereinafter as the "Pennsylvania RICO Act." The
Pennsylvania RICO Act provides, among other things, that it is
a criminal offense, punishable as a felony, to "use or invest,
directly or indirectly ... in the acquisition of any interest
in, or the establishment or operation of, any enterprise" any
income collected in full or partial satisfaction of a loan
made "at a rate of interest exceeding 25% per annum... ."
(ii) The Act of December 29, 1982, P.L. 1671, 18 Pa.
C.S.A.ss.4806.1 et seq. (superseded volume) (the "Criminal
Usury Statute"). The Criminal Usury Statute provides, among
other things, that it is a criminal offense, punishable as a
felony, to engage in, "charging, taking or receiving any money
... on the loan ... of any money ... at a rate exceeding
thirty-six percent per annum... ."
The Criminal Usury Statute may have been repealed, but the
manner in which the repeal was enacted leaves the matter subject to uncertainty.
Both the Pennsylvania RICO Act and the Criminal Usury Statute
appear to be intended by the legislature to apply only to racketeering and loan
sharking type activities, and not to the type of commercial loan transaction
evidenced by the Loan Document. Nevertheless, in view of the plain language of
the Pennsylvania courts, we cannot say that the ultimate resolution of this
issue is free from doubt.
The foregoing opinions are subject to the following
exceptions, limitations and qualifications:
(a) Our opinion is subject to the effect of
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or similar laws
affecting creditors' rights and remedies generally, general
principles of equity, including without limitation, concepts
of materiality, reasonableness, good faith and fair dealing
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and limitations on
enforceability of rights to indemnification by federal or
state securities laws or regulations or by public policy.
(b) We express no opinion as to the application or
requirements of the Pennsylvania Securities Act or federal or
state securities, patent, trademark, copyright, antitrust and
unfair competition, pension or employee benefit, labor,
environmental health and safety or tax laws in respect of the
transactions contemplated by or referred to in the Credit
Agreement.
(c) We express no opinion as to the validity or
enforceability of any provision of the Credit Agreement or the
Notes which (i) permits the Lenders to increase the rate of
interest in the event of delinquency or default if such
increase would be deemed a penalty under applicable law; (ii)
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purports to be a waiver by Borrower of any right or benefit
except to the extent permitted by applicable law; (iii)
purports to require that waivers must be in writing to the
extent that an oral agreement or implied agreement by trade
practice or course of conduct modifying provisions of the
Credit Agreement or the Notes has been made; or (iv) purports
to exculpate any party from its own negligent acts.
We express no opinion as to the law of any jurisdiction other
than the law of the Commonwealth of Pennsylvania and the federal law of the
United States.
The foregoing opinion is solely for your benefit in connection
with the consummation of the transaction described herein and may not be used or
relied upon by you or any other Person without our express written consent for
any other purpose other than (i) any Eligible Assignee that may become a Lender
under the Credit Agreement after the date hereof and (ii) Reed Smith Shaw &
McClay LLP, which may rely upon this opinion in rendering their opinion
furnished pursuant to Article III of the Credit Agreement. The opinions given
herein are as of the date hereof, and we assume no obligation to update or
supplement this opinion to reflect facts or circumstances which may hereafter
come to our attention or any changes in laws which may hereafter occur.
Very truly yours,
BALLARD SPAHR
ANDREWS & INGERSOLL
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EXHIBIT E
FORM OF OPINION OF REED SMITH SHAW & McCLAY LLP
__________, 1999
To each of the Banks, the Administrative Agent, and the
Lead Arranger party to the Revolving Credit Agreement,
dated as of September 15, 1999 among PECO Energy
Company, as Borrower, the banks named therein, as
Banks, The First National Bank of Chicago, as
Administrative Agent, Citibank, N.A., as Documentation
Agent, and Banc One Capital Markets, Inc., as Lead
Arranger
Re: PECO Energy Company
-------------------
Ladies and Gentlemen:
We have acted as counsel to The First National Bank of
Chicago, individually and as Administrative Agent, in connection with the
preparation, execution and delivery of the Revolving Credit Agreement, dated as
of September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger (as amended, modified or supplemented from time to time, the
"Credit Agreement"). We are delivering this opinion pursuant to Section
3.01(a)(vii) of the Credit Agreement. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined.
In that connection, we have examined (i) counterparts of the
Credit Agreement, executed by the Borrower, the Banks, the Administrative Agent
and the Lead Arranger, (ii) the Notes, executed by the Borrower and (iii) the
other documents listed on Exhibit A hereto, including the opinion of Ballard
Spahr Andrews & Ingersoll, counsel to the Borrower (the "Opinion"), furnished to
the Administrative Agent pursuant to Section 3.01(a) of the Credit Agreement.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing such
documents and the conformity to the originals of all such documents submitted to
us as copies. We have also assumed that the Banks, the Administrative Agent and
the Lead Arranger have duly executed and delivered, with all necessary power and
authority (corporate and otherwise), the Credit Agreement. As to matters of
fact, we have relied solely upon the documents we have examined.
Based upon the foregoing, we are of the opinion that, while we
have not independently considered the matters covered by the Opinion to the
extent necessary to enable us to express the conclusions stated therein, each of
the Opinion and the other documents listed in Exhibit A hereto are substantially
responsive to the corresponding requirements set forth in Section 3.01 of the
Credit Agreement pursuant to which the same have been delivered.
Please note that Richard H. Glanton, Esquire, a partner in
this firm, is a director of PECO Energy Company. We have rendered and continue
to render legal services to PECO Energy Company.
The foregoing opinion is solely for your benefit and may not
be relied upon by any other Person other than any Person that may become a
lender under the Credit Agreement after the date hereof.
Very truly yours,
NJS:RKM
EXHIBIT F
FORM OF ANNUAL AND QUARTERLY COMPLIANCE CERTIFICATE
______________________, 19/20__
Pursuant to the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger (as amended, modified or supplemented from time to time, the
"Credit Agreement"), the undersigned, being ______________________ of the
Borrower, hereby certifies on behalf of the Borrower as follows:
1. Delivered herewith are the financial statements prepared
pursuant to Section 5.01(b)(ii) and Section 5.01(b)(iii) of the Credit
Agreement, for the fiscal ________ ended ___________, 19/20__. All such
financial statements comply with the applicable requirements of the Credit
Agreement.
2. Schedule I hereto sets forth in reasonable detail the
information and calculations necessary to establish compliance with the
provisions of Section 5.02(c) of the Credit Agreement as of the end of the
fiscal period referred to in paragraph 1 above.
3. (Check one and only one:)
__ No Event of Default, or event which with notice or lapse of
time or both would constitute an Event of Default, has occurred and is
continuing or exists.
__ An Event of Default, or event which with notice or lapse of
time or both would constitute an Event of Default, has occurred and is
continuing or exists, and the document(s) attached hereto as Schedule II specify
in detail the nature and period of existence of such Event of Default or such
other event as well as any and all actions with respect thereto taken or
contemplated to be taken by the Borrower.
4. The undersigned has personally reviewed the Credit
Agreement, and this certificate was based on an examination made by or under the
supervision of the undersigned sufficient to assure that this certificate is
accurate.
5. Capitalized terms used in this certificate and not
otherwise defined shall have the meanings given in the Credit Agreement.
PECO ENERGY COMPANY
By _______________________________________
Name:_____________________________________
Title:____________________________________
Date:__________________
EXHIBIT G
FORM OF ADDITIONAL LENDER SUPPLEMENT
THIS SUPPLEMENT, dated as of ____________, 19/20_____, by the
undersigned.
Recitals:
A. This Supplement is being executed and delivered in
accordance with Section 2.17 of the Revolving Credit Agreement, dated as of
September 15, 1999, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, The First National Bank of Chicago, as Administrative Agent,
Citibank, N.A., as Documentation Agent, and Banc One Capital Markets, Inc., as
Lead Arranger (as amended, modified or supplemented from time to time, the
"Credit Agreement"). Capitalized terms used herein without definition have the
meanings specified in the Credit Agreement.
B. The undersigned wishes to become a Lender party to the
Credit Agreement, as an Additional Lender.
NOW, THEREFORE, the undersigned, intending to be legally
bound, hereby agrees as follows:
1. The undersigned hereby becomes party to the Credit
Agreement as Lender thereunder, and shall be subject to and bound by all of the
provisions thereof.
2. The Commitment of the undersigned shall be $_____________.
3. The undersigned (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Additional Lender Supplement; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; (vi) none of
the consideration used to make the purchase being made by the undersigned
hereunder are "plan assets" as defined under ERISA and the rights and interests
of the undersigned in and under the Credit Agreement will not be "plan assets"
under ERISA [and] (vii) specifies as its Domestic Lending Office (and address
for notices) and Eurodollar Lending Office the offices set forth beneath its
name on the signature pages hereof [and (viii) attaches the forms prescribed by
the Internal Revenue Service of the United States certifying that it is exempt
from United States withholding taxes with respect to all payments to be made to
the undersigned under the Credit Agreement and the Notes].(3)
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(3) If the undersigned is organized under the laws of a jurisdiction outside the
United States.
4. This Supplement shall be effective upon the date of
acceptance thereof by the Administrative Agent, unless otherwise specified under
the undersigned's name signature below.
5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[NAME OF ADDITIONAL LENDER]
By:__________________________
Name:________________________
Title:_______________________
Domestic Lending Office (and
address for notices): [Address]
Eurodollar Lending Office: [Address]
Effective Date(4): __________, 19/20__
CONSENTED TO:
[NAME OF ADMINISTRATIVE AGENT]
By:___________________________
Name:_________________________
Title:________________________
CONSENTED TO:
PECO ENERGY COMPANY
By:_________________________
Name:______________________
Title:_______________________
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(4) This date should be no earlier than the date of acceptance by the
Administrative Agent.
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