EXECUTION COPY
$400,000,000
TERM LOAN AGREEMENT
dated as of November 30, 1998
among
PECO ENERGY COMPANY
as Borrower
THE BANKS NAMED HEREIN
as Banks
THE FIRST NATIONAL BANK OF CHICAGO
as Administrative Agent
SALOMON SMITH BARNEY INC.
as Syndication Agent
MELLON BANK, N.A.
as Documentation Agent
and
CERTAIN BANKS SPECIFIED HEREIN
as Co-Agents
FIRST CHICAGO CAPITAL MARKETS, INC.
As Arranger
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms............................................................... 1
1.02 Computation of Time Periods......................................................... 8
1.03 Accounting Principles............................................................... 8
ARTICLE II
AMOUNTS AND TERMS OF THE TERM ADVANCES
2.01 The Term Advances................................................................... 8
2.02 Making the Term Advances............................................................ 9
2.03 Fees................................................................................ 9
2.04 Repayment of Term Advances.......................................................... 10
2.05 Interest on Term Advances........................................................... 10
2.06 Additional Interest on Term Advances................................................ 11
2.07 Interest Rate Determination......................................................... 11
2.08 Conversion of Term Advances......................................................... 12
2.09 Prepayments......................................................................... 12
2.10 Increased Costs..................................................................... 12
2.11 Illegality.......................................................................... 13
2.12 Payments and Computations........................................................... 14
2.13 Taxes............................................................................... 14
2.14 Sharing of Payments, Etc............................................................ 16
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Term Borrowings............................................. 17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the Borrower...................................... 18
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Affirmative Covenants............................................................... 19
5.02 Negative Covenants.................................................................. 22
ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default................................................................... 23
ARTICLE VII
THE AGENTS
7.01 Authorization and Action............................................................ 25
7.02 Agents' Reliance, Etc............................................................... 25
7.03 Agents and Affiliates............................................................... 25
7.04 Lender Credit Decision.............................................................. 25
7.05 Indemnification..................................................................... 26
7.06 Successor Administrative Agent...................................................... 26
7.07 Syndication Agent, Documentation Agent and Co-Agents ............................... 26
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc..................................................................... 26
8.02 Notices, Etc........................................................................ 27
8.03 No Waiver; Remedies................................................................. 27
8.04 Costs and Expenses; Indemnification................................................. 27
8.05 Right of Set-off.................................................................... 28
8.06 Binding Effect...................................................................... 28
8.07 Assignments and Participations...................................................... 28
8.08 Governing Law....................................................................... 31
8.09 Consent to Jurisdiction............................................................. 31
8.10 Execution in Counterparts; Integration.............................................. 31
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 Administration Agent
Exhibit F Form of Annual and Quarterly Compliance Certificate
ii
TERM LOAN AGREEMENT
dated as of November 30, 1998
PECO Energy Company, a Pennsylvania corporation (the
"Borrower"), the banks listed on the signature pages hereof (the "Banks"),
certain Banks specified herein, as co-agents hereunder (in such capacity, the
"Co-Agents"), Salomon Smith Barney Inc. ("Salomon Smith Barney"), as syndication
agent hereunder (in such capacity, the "Syndication Agent"), The First National
Bank of Chicago ("First Chicago"), as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent"), and Mellon Bank, N.A.
("Mellon"), as documentation agent for the Lenders hereunder (in such capacity,
the "Documentation Agent"), 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):
"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 a Term 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, the Syndication Agent and the Co-Agents, collectively.
"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.
"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 a Term Advance that bears interest
as provided in Section 2.05(a).
"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" has the meaning specified in Section 2.01.
"Closing Fee Percentage" has the meaning specified in Section
2.03(a).
"Co-Agent" means a Bank identified as such on the signature
pages to this Agreement, in its capacity as Co-Agent, and not in its
individual capacity as a Lender.
"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.
"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, 1997).
"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,
1997).
"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 2.08.
"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.
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"Documentation Agent" means Mellon in its capacity as
documentation agent pursuant to Article VII, and not in its individual
capacity as a Lender.
"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.
"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 2.13(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.
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"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 Term 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 Term 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 Term 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 2.07.
"Eurodollar Rate Advance" means a Term Advance that bears
interest as provided in Section 2.05(c).
"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" means that certain Revolving
Credit Agreement, and that certain 364-Day Credit Agreement, each dated
as of October 7, 1997, among the Borrower, the banks named therein,
certain banks specified therein, as lead managers thereunder, certain
banks specified therein, as co-agents thereunder, First Chicago Capital
Markets, Mellon and CitiCorp, as syndication agents thereunder, First
Chicago Capital Markets and Mellon, as arrangers thereunder, First
Chicago, as administrative agent for the lenders thereunder, and
Mellon, as documentation agent for the lenders thereunder, as the same
may be 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.
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"GAAP" shall have the meaning given that term in Section 1.03.
"Interest Period" means, for each Term Advance, the period
commencing on the date of such Term Advance or the date of the
Conversion of any Term Advance into such a Term 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 as the Borrower may select in accordance with Section
2.02 or 2.08; provided, however, that:
(i) the Borrower may not select any Interest Period
that ends after the Term Loan Maturity Date then in effect;
(ii) Interest Periods commencing on the same date for
Term Advances made as part of the same Term 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, 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.
"Lenders" means the Banks listed on the signature pages hereof
and each Eligible Assignee that shall become a party hereto pursuant to
Section 8.07.
"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).
"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),
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.
"Majority Lenders" means, at any time prior to the Closing
Date, Lenders having at least 66-2/3% of the Commitments, and, at any
time on or after the Closing Date, Lenders having at least 66-2/3% of
the Term 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 Term Advances or (ii) determining the total amount of the
Commitments or the Term Advances).
"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.
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"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.
"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 Term Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"OECD" means the Organization for Economic Cooperation and
Development.
"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.
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"Reference Banks" means First Chicago, Mellon 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.
"Special Purpose Subsidiary" has the meaning assigned to that
term in the definition of "Nonrecourse Transition Bond Debt."
"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).
"Syndication Agent" means Salomon Smith Barney Inc., in its
capacity as Syndication Agent, and not in its individual capacity as a
Lender.
"Term Advance" means an advance by a Lender to the Borrower as
part of a Term Borrowing, and refers to a Base Rate Advance or a
Eurodollar Rate Advance, each of which shall be a "Type" of Term
Advance.
"Term Borrowing" means a borrowing consisting of simultaneous
Term 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 2.08. For the avoidance of doubt, it is understood
that the Lenders will advance all funds under this Agreement only on
the Closing Date, and not thereafter. The use of the term "Term
Borrowing" is for convenience and for the sake of conformity with the
Existing Credit Agreements, and does not denote or imply that any
actual borrowing or funding will occur after the Closing Date or that
the outstanding principal amount of Term Borrowings may increase after
the Closing Date.
"Term Loan Maturity Date" shall mean the date which is the
one-year anniversary of the Closing Date.
"Termination Date" means December 23, 1998.
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"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
operations 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.
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
December 31, 1997 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 TERM ADVANCES
SECTION 2.01. The Term Advances. Each Lender severally agrees,
on the terms and conditions hereinafter set forth, to make Term Advances to the
Borrower on a single Business Day (the "Closing Date") during the period from
the date hereof until (but excluding) the Termination Date in an aggregate
amount not to exceed 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, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c) (such Lender's "Commitment").
Each Term Borrowing shall consist of Term Advances of the same Type made or
Converted on the same day by the Lenders ratably according to their respective
Commitments. Each Term Borrowing comprising Base Rate Advances shall be in an
aggregate amount not less than $5,000,000, and each Term Borrowing comprising
Eurodollar Rate Advances shall be in an aggregate amount not less than
$10,000,000. All Term Borrowings with respect to which Lenders advance funds to
the Borrower shall be made simultaneously on the Closing Date. Immediately after
the Term Borrowings are made on the Closing Date the Commitments shall
automatically be reduced to zero and no increase in the outstanding Term
Borrowings shall occur thereafter The Borrower may not reborrow amounts repaid
with respect to the Term Borrowings.
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SECTION 2.02. Making the Term Advances. (a) All Term
Borrowings (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
Closing Date (if Term Borrowings comprised of Eurodollar Rate Advances are
requested), or on the Closing Date (if the Term Borrowings are comprised only of
Base Rate Advances), by the Borrower to the Administrative Agent, which shall
give to each Lender prompt notice thereof. The notice of the Term Borrowings
(the "Notice of 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) Closing Date, (ii) Types of Term Advances
to be made in connection with the Term Borrowings, (iii) the aggregate amount of
each Term Borrowing, and (iv) in the case of a Term Borrowing comprising
Eurodollar Rate Advances, the Interest Periods for such Eurodollar Advances.
Each Lender shall, before 11:00 A.M. (Chicago time) on the Closing Date 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 the Term Borrowings. 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) The Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Term Borrowing that the Notice of 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 Closing Date specified in the
Notice of 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 Term Advances to be made by such Lender as part of such Term
Borrowings when such Term Advances, as a result of such failure, are not made on
the Closing Date.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the Closing Date that such Lender will not make available
to the Administrative Agent such Lender's ratable portion of the Term
Borrowings, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the Closing Date 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 the Closing
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 Term Advances made
in connection with the Term Borrowings 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 Term
Advances as part of such Term Borrowings for purposes of this Agreement.
(d) The failure of any Lender to make any Term Advance to be
made by it on the Closing Date shall not relieve any other Lender of its
obligation, if any, hereunder to make any Term Advance on the Closing Date but
no Lender shall be responsible for the failure of any other Lender to make any
Term Advance to be made by such other Lender on the Closing Date.
(e) Notwithstanding anything to the contrary contained
herein, no more than sixteen (16) Term Borrowings comprising Eurodollar Rate
Advances may be outstanding at any time.
SECTION 2.03. Fees. (a) The Borrower agrees to pay on the
Closing Date to the Administrative Agent for the account of each Lender a
closing fee equal to the Closing Fee Percentage for each Lender times such
Lender's Commitment hereunder. The "Closing Fee Percentage" for each Lender
shall be the percentage set forth in the table below opposite the amount that
such Lender indicated that it was willing to make available to Borrower under
this Term Loan Agreement (which may be greater than its final Commitment
hereunder) in a commitment letter executed and delivered by such Lender prior to
the date hereof.
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- - --------------------------------------------------------------------------------
Closing Fee Percentage Commitment Letter Amount
---------------------- ------------------------
- - --------------------------------------------------------------------------------
.09% Greater than or equal to $50,000,000
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.08% Less than $50,000,000, but greater than or equal to
$40,000,000
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.07% Less than $40,000,000 but greater than or equal to
$30,000,000
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.05% Less than $30,000,000 but greater than or equal to
$20,000,000
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0% Less than $20,000,000
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Regardless of the amount set forth in a Lender's commitment letter and used to
calculate such Lender's closing fee under this Section 2.03, no Lender shall be
obligated to make Term Borrowings in an aggregate principal amount in excess of
its Commitment hereunder.
(b) The Borrower agrees to pay to the Administrative Agent for
its own account a closing fee, and an Administrative Agent's administration fee,
each payable in such amounts and on such dates as may be agreed to in writing
from time to time between the Borrower and the Administrative Agent.
SECTION 2.04. Repayment of Term Advances. The Borrower shall
repay the principal amount of all Term Advances on or before the Term Loan
Maturity Date.
SECTION 2.05. Interest on Term Advances. The Borrower shall
pay interest on the unpaid principal amount of each Term Advance made by each
Lender from the Closing Date until such principal amount shall be paid in full,
at the following rates per annum:
(a) Base Rate Advances. If such Term 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 2.06, if such
Term Advance is a Eurodollar Rate Advance, a rate per annum equal at all times
during the Interest Period for such Term Advance to the sum of the Eurodollar
Rate for such Interest Period plus 1%, 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.
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SECTION 2.06. Additional Interest on Term 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
Term 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 Term
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 Term 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 2.07. 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 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 2.05(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 2.05(b).
(c) If fewer than two Reference Banks 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,
(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 Term 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), Convert into a Base Rate Advance, and
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(ii) the obligation of the Lenders to make, or to
Convert Term 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 2.08. Conversion of Term 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 2.07 and 2.11, Convert all Term Advances of one Type made in
connection with the same Term Borrowing into Advances of another Type or Types
or Term Advances of the same Type having the same or a new Interest Period;
provided, however, that any Conversion of Eurodollar Rate Advances into Advances
of another Type or Advances of the same Type 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 Term 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 Term
Advance.
(b) Automatic. If the Borrower shall fail to select the Type
of any Term Advance or the duration of any Interest Period for any Term
Borrowing comprising Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01 and Section
2.08(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 2.09. Prepayments. The Borrower may, upon at least two
Business Days' notice (or same day 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 Term Advances
made as part of the same Term 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 (or $5,000,000 in the case
of any prepayment of Base Rate Advances) or, in either case, larger multiples of
$1,000,000 and (ii) in the case of any such prepayment of an 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 2.10. 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,
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 2.13) 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.
-12-
(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 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
2.10 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.
SECTION 2.11. 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 2.11) 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.
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SECTION 2.12. 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. The Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or facility fees ratably (other than
amounts payable pursuant to Section 2.02(c), 2.06, 2.10, 2.13 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 shall be made by the Administrative Agent, and
all computations of interest pursuant to Section 2.06 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 is payable. Each determination by the Administrative Agent
(or, in the case of Section 2.06, 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
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, 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.
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SECTION 2.13. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.12,
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 2.13) 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 2.13 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 2.13) paid by such Lender or the
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 Closing Date in the case of each Bank, and on
the date of the Assignment and Acceptance 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 2.13.
(f) Any Lender claiming any additional amounts payable
pursuant to this Section 2.13 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.
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(g) If the Borrower makes any additional payment to any Lender
pursuant to this Section 2.13 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 2.13, 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 2.13(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 2.13(g) shall in
the absence of bad faith or manifest error be conclusive, and nothing in this
Section 2.13(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 2.13(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 2.13 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 2.13 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 2.13 to the extent
that such payment relates to the retroactive application of any Taxes or Other
Taxes if such demand is made within one year after the implementation of such
Taxes or Other Taxes.
SECTION 2.14. 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 Term Advances made by it
(other than pursuant to Section 2.02(c), 2.06, 2.10, 2.13 or 8.04(b)) in excess
of its ratable share of payments on account of the Term Advances obtained by all
the Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Term 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 2.14 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.
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Term Borrowings. The
obligation of each Lender to make its Term Advances on the Closing Date is
subject to the satisfaction, prior to or concurrently with, the making of the
Term Advances, of each of the following conditions precedent:
(a) Documents and Other Agreements. The Administrative Agent
shall have received on or before the Closing Date the following, each dated the
Closing 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; (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") and (D) that attached thereto is a
subsistence certificate from the Secretary of the Commonwealth
of Pennsylvania dated as of a recent date;
(iv) Copies of the financial statements referred to
in Section 4.01(e);
(v) A favorable opinion of Ballard Spahr Andrews &
Ingersoll, special counsel for the Borrower, substantially in
the form of Exhibit D hereto; and
(vi) A favorable opinion of Reed Smith Shaw & McClay
LLP, counsel for the Documentation Agent, substantially in the
form of Exhibit E hereto.
(b) Representations and Warranties; Events of Default.
(i) The representations and warranties contained in
Section 4.01 shall be correct on and as of the Closing Date,
before and after giving effect to the Term Borrowings and to
the application of the proceeds therefrom, as though made on
and as of the Closing Date;
(ii) No event shall have occurred and be continuing,
or shall result from the Term Borrowings 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 (A) without
limiting the foregoing, it is a condition of this clause (ii)
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 Term Borrowings, and (B) the conditions of this
clause (ii) shall apply whether or not the respective
Commitments of the Lenders have been terminated pursuant to
Section 6.01); and
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(iii) The Administrative Agent shall have received a
certificate dated the Closing Date 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 Closing Date as though made on and as of the Closing Date
and (B) no event has occurred and is continuing on the Closing
Date 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.
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.
(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, 1997, 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 Coopers & Lybrand, and the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as at June 30,
1998 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, 1998, 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 December 31, 1997, there has been no Material
Adverse Change.
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(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.
(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 businesses, 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
clause (ii), as described in the Borrower's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1998. 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:
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(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;
(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 working
capital and general corporate purposes (including, without
limitation, the refinancing of its commercial paper, the
repayment of outstanding Advances, the repayment of other
outstanding Debt 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 Counsel
("NERC"), the Mid-Atlantic Area Counsel, the Nuclear
Regulatory Commission and the PUC to mitigate against the Year
2000 Problem; and
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(ix) at the request of the Administrative Agent,
provide the Administrative Agent with any reports submitted by
Borrower to the 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;
(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
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(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
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.
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(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).
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 Term
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
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(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
(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 either of the
Existing Credit Agreements;
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 Commitments
shall automatically be terminated and (B) the principal amount outstanding under
the Notes, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
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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. Each Lender
hereby appoints and authorizes the Administrative Agent to prepare this
Agreement and the Notes on behalf of the Lenders. 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.
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 have no
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 their respective Note, First Chicago 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 First Chicago in its
individual capacity. First Chicago and its 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 First Chicago was not the Administrative 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.
-25-
SECTION 7.05. Indemnification. The Lenders agree to indemnify
the Administrative Agent, the Documentation Agent and the Syndication 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 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. Syndication Agent, Documentation Agent and
Co-Agents. The titles "Syndication Agent," "Documentation Agent," and
"Co-Agent," are purely honorific, and the Syndication Agent, Documentation Agent
and Co-Agents shall have no duties or responsibilities in such capacities.
-26-
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, (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, 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
Street, Philadelphia, Pennsylvania 19101, Attention: Vice President-Finance and
Treasurer, S21-1, Telecopy: (215) 841-5743; 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 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: Ms. Gwendolyn Watson, 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, the Documentation Agent and the Syndication Agent 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 the 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 Administrative Agent, the Documentation Agent and 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).
-27-
(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 2.08 or 2.11 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, First Chicago Capital Markets, Inc., as Arranger, 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 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.
-28-
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) if the
assignment occurs prior to the Closing Date, the amount of the Commitment, or if
the assignment occurs on or after the Closing Date, the principal amount of the
Advances, 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 $5,000,000 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). 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 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 or the Documentation 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.
-29-
(c) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance 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) a new Note payable to the order of such Eligible Assignee
in an amount equal to the Commitment assumed by such Eligible Assignee
(if prior to the Closing Date) or the outstanding Advances purchased by
Eligible Assignee (if after the Closing Date); and
(B) if such Lender is retaining an interest in its Commitment
or outstanding Advances, a new Note payable to the order of the
Assignor in an amount equal to the Commitment retained by such Lender
(if prior to the Closing Date) or the outstanding Advances retained by
such Lender (if after the Closing Date,) all as specified on Schedule 1
hereto.
Such 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
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) 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).
-30-
(g) If (i) any Lender shall make demand for payment under
Section 2.10(a), 2.10(b) or 2.13, or (ii) shall deliver any notice to the
Administrative Agent pursuant to Section 2.11 resulting in the suspension of
certain obligations of the Lenders with respect to Eurodollar Rate Advances,
then (in the case of clause (i)) within 60 days after such demand (if, but only
if, such payment demanded under Section 2.10(a), 2.10(b) or 2.13 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), 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. 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.
SECTION 8.08. Governing Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.
SECTION 8.09. Consent to Jurisdiction. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF ILLINOIS AND ANY UNITED STATES DISTRICT COURT SITTING IN THE STATE OF
ILLINOIS 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]
-31-
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 C. Cutler
- - ------------------------
Todd D. Cutler
Assistant Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
By
-------------------------------
Name: Kenneth J. Bauer
Title: Authorized Agent
MELLON BANK, N.A.,
as Documentation Agent
By
-------------------------------
Name: Mary Ellen Usher
Title: Vice President
SALOMON SMITH BARNEY INC.,
as Syndication Agent
By
-------------------------------
Name: Robert J. Harrity, Jr.
Title: Managing Director
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
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
----------------------------------------------
Name: J.B. Mitchell
Title: Vice President - Finance and Treasurer
- - ------------------------
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
MELLON BANK, N.A.,
as Documentation Agent
By
-------------------------------
Name: Mary Ellen Usher
Title: Vice President
SALOMON SMITH BARNEY INC.,
as Syndication Agent
By
-------------------------------
Name: Robert J. Harrity, Jr.
Title: Managing Director
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
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
----------------------------------------------
Name: J.B. Mitchell
Title: Vice President - Finance and Treasurer
- - ------------------------
Todd D. Cutler
Assistant Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
By
-------------------------------
Name: Kenneth J. Bauer
Title: Authorized Agent
MELLON BANK, N.A.,
as Documentation Agent
By /s/ Mary Ellen Usher
-------------------------------
Name: Mary Ellen Usher
Title: Vice President
SALOMON SMITH BARNEY INC.,
as Syndication Agent
By
-------------------------------
Name: Robert J. Harrity, Jr.
Title: Managing Director
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
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
----------------------------------------------
Name: J.B. Mitchell
Title: Vice President - Finance and Treasurer
- - ------------------------
Todd D. Cutler
Assistant Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
By
-------------------------------
Name: Kenneth J. Bauer
Title: Authorized Agent
MELLON BANK, N.A.,
as Documentation Agent
By
-------------------------------
Name: Mary Ellen Usher
Title: Vice President
SALOMON SMITH BARNEY INC.,
as Syndication Agent
By /s/ Steven R. Motorin
-------------------------------
Name: Steven R. Motorin
Title: Attorney-in-Fact
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
THE BANKS
Commitment
$47,000,000
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 Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$47,000,000
CITIBANK, N.A., as Bank
By /s/ Anita J. Brickell
------------------------
Name: Robert J. Harrity, Jr.
Title: Attorney-in-Fact
ANITA J. BRICKELL
Attorney-In-Fact
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$47,000,000
MELLON BANK, N.A., as
Documentation Agent and as Bank
By /s/ Mary Ellen Usher
-----------------------------
Name: Mary Ellen Usher
Title: Vice President
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$47,000,000
BANK OF MONTREAL, as Co-Agent
and as Bank
By /s/ Ian M. Plester
------------------------
Name: Ian M. Plester
Title: Director
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$47,000,000
FIRST UNION NATIONAL BANK, as
Co-Agent and as Bank
By /s/ Michael J. Kolosowsky
-------------------------------
Name: Michael J. Kolosowsky
Title: Vice President
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$47,000,000
TORONTO DOMINION (TEXAS),
INC., as Co-Agent and as Bank
By /s/ Alva J. Jones
-------------------------
Name: Alva J. Jones
Title: Vice President
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$30,000,000
COMERICA BANK, as Bank
By /s/ Kimberly S. Kersten
---------------------------
Name: Kimberly S. Kersten
Title: Vice President
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$30,000,000
PNC BANK, NATIONAL
ASSOCIATION, as Bank
By /s/ Christopher N. Moravec
------------------------------
Name: Christopher N. Moravec
Title: Senior Vice President
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$20,000,000
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 Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$20,000,000
BANK HAPOALIM B.M.,
Philadephia Branch, as Bank
By /s/ Carl Kopfinger
-------------------------------
Name: Carl Kopfinger
Title: Vice President
By /s/ Amram Lador
--------------------------------
Name: Amram (Rami) Lador
Title: First Vice President and Branch
Manager
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
Commitment
$18,000,000
CIBC, INC., as Bank
By /s/ Denis O'Meara
--------------------------------
Name: Denis O'Meara
Title: Executive Director
CIBC Oppenheimer Corp.,
AS AGENT
This is a signature page to the Term Loan Agreement, dated as of November 30,
1998 among PECO Energy Company, as Borrower, the Banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent.
SCHEDULE I
Term Loan Agreement, dated as of November 30, 1998, among PECO Energy Company,
as Borrower, the banks named therein, as Banks, certain Banks specified therein,
as Co-Agents, Salomon Smith Barney Inc., as Syndication Agent, the First
National Bank of Chicago, as Administrative Agent, and Mellon Bank, N.A., as
Documentation Agent.
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- - ------------ -------------- --------------
The First National Bank of Chicago One First National Plaza Same
Suite 0634
Chicago, IL 60670
Attn: Lynn Pozsgay
Phone: (312) 732-8705
Fax: 312) 732-3055
First Union National Bank One First Union Center Same
301 South College Street
Charlotte, NC 28288-0735
Attn: Dana Maloney
Phone: (704) 383-0296
Fax: (704) 383-6670
Mellon Bank, N.A. Three Mellon Bank Center Same
Room 1203
(Loan Administration)
Pittsburgh, PA 15259-0003
Attn: Cathy Capp
Phone: (412) 234-1870
Fax: (412) 209-6111
The Toronto-Dominion Bank 909 Fannin Street Same
17th Floor
Houston, TX 77010
Attn: Alva J. Jones
Manager, Credit Administration
Phone: (713) 653-8261
Fax: (713) 951-9921
Bank Hapoalim B.M. Commercial Loan & Documentation Same
1515 Market Street, Suite 200
Philadelphia, PA 19102
Attn: Sheila D. Joe
Phone: (215) 665-2228
Fax: (215) 665-2217
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- - ------------ -------------- --------------
Bank of Montreal 115 South LaSalle Street Same
Chicago, IL 60603
Attn: Client Services
Phone: (312) 750-3748
Fax: (312) 750-4345
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. Two Penn's Way Same
Second Floor
New Castle, DE 19720
4th Floor, Zone 22
New York, New York 10021
Attn: Patrice Williams
Phone: (302) 894-6068
Fax: (302) 894-6120
Comerica Bank 500 Woodward Avenue Same
Mailcode 3280
Detroit, MI 48226
Attn: David Shirey
Phone: (313) 222-3647
Fax: (313) 222-3330
PNC Bank, National Association 249 Fifth Avenue Same
Pittsburgh, PA 15222-2707
Attn: Christopher N. Moravec
Phone: (412) 762-2540
Fax: (412) 762-2571
CIBC, Inc. 425 Lexington Street Same
New York, NY 10017
Attn: Dennis O'Meara
Phone: (212) 856-3758
Fax: (212) 856-3991
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attn: Patrice Kellaher
Phone: (770) 319-4999
Fax: (770) 319-4950
EXHIBIT A
FORM OF PROMISSORY NOTE
$____________________ Dated: November 30, 1998
FOR VALUE RECEIVED, the undersigned, PECO Energy Company, a
Pennsylvania corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order
of _________ (the "Lender") for the account of its Applicable Lending Office
(such term and other capitalized terms herein being used as defined in the Term
Loan Agreement referred to below) on the Term Loan Maturity Date the principal
sum of U.S.$[amount of the Lender's Commitment in figures] or, if less, the
aggregate principal amount of the Term Advances made by the Lender to the
Borrower pursuant to the Term Loan Agreement outstanding on the Term Loan
Maturity Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Term Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the Term Loan
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 Term Advance made by the Lender to the Borrower pursuant to
the Term Loan 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 Term Loan Agreement, dated as of November
30, 1998, among PECO Energy Company, as Borrower, the banks named therein, as
Banks, certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc.,
as Syndication Agent, The First National Bank of Chicago, as Administrative
Agent, and Mellon Bank, N.A., as Documentation Agent (as amended, modified or
supplemented from time to time, the "Term Loan Agreement"). The Term Loan
Agreement, among other things, 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 STATE OF ILLINOIS.
PECO ENERGY COMPANY
By ____________________________________
Name:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Aggregate Principal Unpaid
Term Loan Paid or Principal Notation
Advances Prepaid Balance Made By
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EXHIBIT B
NOTICE OF BORROWING
The First National Bank of Chicago, as Administrative Agent
for the Lenders parties to the Term Loan 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 Term Loan
Agreement, dated as of November 30, 1998, among PECO Energy Company, as
Borrower, the banks named therein, as Banks, certain Banks specified therein, as
Co-Agents, Salomon Smith Barney Inc., as Syndication Agent, The First National
Bank of Chicago, as Administrative Agent, and Mellon Bank, N.A., as
Documentation Agent (as amended, modified or supplemented from time to time, the
"Term Loan Agreement"), and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Term Loan Agreement that the undersigned hereby requests the
Term Borrowings under the Term Loan Agreement, and in that connection sets forth
below the information relating to such Term Borrowings (the "Proposed
Borrowings") as required by Section 2.02(a) of the Term Loan Agreement:
(i) The Closing Date is ________ , 1998.
(ii) The aggregate amount of the Proposed Borrowings
is $ ____________ .
(iii) Set forth below is the Type of each Term
Borrowing, the principal amount of each Term Borrowing and if
any Term Borrowing is comprised of Eurocurrency Advances, the
Interest Period applicable thereto:
- - --------------------------------------------------------------------------------
Type Principal Amount Interest Period
- - --------------------------------------------------------------------------------
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the Closing Date:
(A) the representations and warranties contained in
Section 4.01 are correct, before and after giving effect to
the Proposed Borrowings and to the application of the proceeds
therefrom, as though made on and as of the Closing Date; and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowings 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 ___
Reference is made to the Term Loan Agreement, dated as of
November 30, 1998, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, certain Banks specified therein, as Co-Agents, Salomon Smith
Barney Inc., as Syndication Agent, The First National Bank of Chicago, as
Administrative Agent, and Mellon Bank, N.A., as Documentation Agent (as amended,
modified or supplemented from time to time, the "Term Loan Agreement"). Terms
defined in the Term Loan 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 Term Loan
Agreement as of the date hereof which represents the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the Term
Loan 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 Term
Loan Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Term Loan 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 Term Loan 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) a new Note payable to the order of Assignee in an amount
equal to the Commitment assumed by Assignee (if prior to the Closing
Date) or the outstanding Advances purchased by Assignee (if after the
Closing Date); and
(B) if Assignor is retaining an interest in its Commitment or
outstanding Advances, a new Note payable to the order of the Assignor
in an amount equal to the Commitment retained by Assignor (if prior to
the Closing Date) or the outstanding Advances retained by Assignor (if
after the Closing Date),
all as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Term Loan 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 Documentation 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 Term Loan 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 Term Loan 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 Term Loan 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 Term Loan
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 Term Loan 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 Term
Loan 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 Term Loan 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 Term Loan Agreement and the Notes in respect of the
interest assigned hereby (including, without limitation, all payments of
principal , interest and fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Term Loan 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 STATE OF ILLINOIS.
- - -----------------
(1) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
-2-
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 ___
PECO ENERGY COMPANY
By ___________________________
Name:
Title:
Consented to and Accepted this___ day
of ____________ , 19 ___
[NAME OF ADMINISTRATIVE AGENT]
By ____________________________
Name:
Title:
-3-
Schedule 1
to
Assignment and Acceptance
Dated ______ , 19 ___
Section 1.
Percentage Interest: ____%
Section 2.
[Assignee's Commitment
(include for assignments prior
to the Closing Date only)]: $__
Aggregate Outstanding Principal
Amount of Advances
owing to the Assignee: $__
A Note payable to the
order of the Assignee
Dated:_________ , 19 __
Principal amount: $__
A Note payable to the
order of the Assignor
Dated:_________ , 19 __
Principal amount: $__
Section 3.
Effective Date(2): ______ , 19 __
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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
To each of the Banks, the Administrative Agent, the
Documentation Agent, the Syndication Agent, and the
Co-Agents party to the Term Loan Agreement, dated as
of November 30, 1998, among PECO Energy Company, as
Borrower, the banks named therein, as Banks, certain
Banks specified therein, as Co-Agents, Salomon Smith
Barney Inc., as Syndication Agent, The First
National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent
Re: PECO Energy Company
-------------------
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
3.01(a)(v) of the Term Loan Agreement, dated as of November 30, 1998, among PECO
Energy Company, as Borrower, the banks named therein, as Banks, certain Banks
specified therein, as Co-Agents, Salomon Smith Barney Inc., as Syndication
Agent, The First National Bank of Chicago, as Administrative Agent, and Mellon
Bank, N.A., as Documentation Agent (as amended, modified or supplemented from
time to time, the "Term Loan Agreement"). Unless otherwise specified, terms
defined in the Term Loan 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 Term Loan
Agreement. In that capacity we have examined the following:
(i) The Term Loan Agreement, and the Notes;
(ii) The documents furnished by the Borrower pursuant
to Section 3.01 of the Term Loan 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 , 19 ,
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 Term Loan
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 Term Loan 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 Term Loan 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 Term Loan Agreement and the Notes have been
duly executed and delivered by the Borrower.
5. The Term Loan Agreement and the Notes are the
legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their
respective terms.
6. 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.
-2-
7. 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, 1997 and the
Borrower's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, no litigation or governmental proceeding
is pending or threatened in writing against the Borrower (i)
with respect to the Term Loan Agreement or the Notes, or (ii)
which is likely to have a material adverse effect upon the
financial 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 Term Loan Agreement and the Notes. 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.
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(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 Term Loan
Agreement.
(c) We express no opinion as to the validity or
enforceability of any provision of the Term Loan 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)
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 Term
Loan 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. For purposes of the opinion expressed in Paragraph 5 above, we
have assumed, with your permission, that Illinois law is identical to
Pennsylvania law in all respects.
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 Term Loan 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 Term Loan 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
________ , 19 __
To each of the Banks, the Administrative Agent, the
Documentation Agent, the Syndication Agent, and the
Co-Agents party to the Term Loan Agreement, dated as
of November 30, 1998, among PECO Energy Company, as
Borrower, the banks named therein, as Banks, certain
Banks specified therein, as Co-Agents, Salomon Smith
Barney Inc., as Syndication Agent, The First
National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent
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 Term Loan Agreement, dated as of
November 30, 1998, among PECO Energy Company, as Borrower, the banks named
therein, as Banks, certain Banks specified therein, as Co-Agents, Salomon Smith
Barney Inc., as Syndication Agent, The First National Bank of Chicago, as
Administrative Agent, and Mellon Bank, N.A., as Documentation Agent (as amended,
modified or supplemented from time to time, the "Term Loan Agreement"). We are
delivering this opinion pursuant to Section 3.01(a)(vi) of the Term Loan
Agreement. Unless otherwise defined herein, terms defined in the Term Loan
Agreement are used herein as therein defined.
In that connection, we have examined (i) counterparts of the
Term Loan Agreement, executed by the Borrower, the Banks, the Administrative
Agent, the Documentation Agent, the Syndication Agent, and the Co-Agents, (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 Term Loan 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, the
Documentation Agent, the Syndication Agent, the Arrangers, the Co-Agents and the
Lead Managers have duly executed and delivered, with all necessary power and
authority (corporate and otherwise), the Term Loan 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
Term Loan 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 Term Loan Agreement after the date hereof.
Very truly yours,
KCK:BJB:RKM
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Other Documents
Certificate of the Secretary or Assistant Secretary of the Borrower pursuant to
Section 3.01(a)(ii) of the Term Loan Agreement.
Certificate of the Secretary or Assistant Secretary of the Borrower pursuant to
Section 3.01(a)(iii) of the Term Loan Agreement.
Certificate of the Chief Financial Officer, Principal Accounting Officer or
Treasurer of the Borrower pursuant to Section 3.01(b)(iii) of the Term Loan
Agreement.
Opinion of Ballard Spahr Andrews & Ingersoll pursuant to Section 3.01(a)(v) of
the Term Loan Agreement.
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EXHIBIT F
FORM OF ANNUAL AND QUARTERLY COMPLIANCE CERTIFICATE
______________________, 19__
Pursuant to the Term Loan Agreement, dated as of November 30,
1998, among PECO Energy Company, as Borrower, the banks named therein, as Banks,
certain Banks specified therein, as Co-Agents, Salomon Smith Barney Inc., as
Syndication Agent, The First National Bank of Chicago, as Administrative Agent,
and Mellon Bank, N.A., as Documentation Agent (as amended, modified or
supplemented from time to time, the "Term Loan 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 Term Loan
Agreement, for the fiscal ________ ended ___________, 19__. All such financial
statements comply with the applicable requirements of the Term Loan 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 Term Loan 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 Term Loan
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 Term Loan Agreement.
PECO ENERGY COMPANY
By _______________________________________
Name:_____________________________________
Title:____________________________________
Date:_________________________