Exhibit 10(a)
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$350,000,000
AMENDED AND RESTATED 364-DAY REVOLVING CREDIT AGREEMENT
Among
PP&L, INC.
PP&L CAPITAL FUNDING, INC.,
as Borrowers
PP&L RESOURCES, INC.,
as Guarantor of the obligations of
PP&L Capital Funding, Inc.
THE CHASE MANHATTAN BANK,
as Administrative Agent
CITIBANK, N.A.
as Documentation Agent
and
THE BANKS NAMED HEREIN,
Dated as of November 20, 1997 as amended and restated as of
November 19, 1998
___________________________
CHASE SECURITIES INC.,
Lead Arranger and Book Manager
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TABLE OF CONTENTS
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Page
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SECTION 1. Amounts and Terms of Loans......................................... 1
1.1 Commitments........................................................ 1
1.2 Notices of Borrowing............................................... 2
1.3 Disbursement of Funds.............................................. 2
1.4 Repayment of Loans; Evidence of Debt............................... 3
1.5 Special Payment Provisions......................................... 4
1.6 Fees............................................................... 5
1.7 Reductions in Total Commitments.................................... 5
1.8 Compensation....................................................... 6
SECTION 1A. Letters of Credit.................................................. 6
SECTION 2. Interest........................................................... 11
2.1 Rates of Interest.................................................. 11
2.2 Determination of Rate of Borrowing................................. 12
2.3 Interest Payment Dates............................................. 12
2.4 Conversions; Interest Periods...................................... 12
2.5 Increased Costs, Illegality, Etc................................... 14
2.6 Extension of Expiry Date........................................... 18
SECTION 3. Payments........................................................... 19
3.1 Payments on Non-Business Days...................................... 19
3.2 Voluntary Prepayments.............................................. 20
3.3 Method and Place of Payment, Etc................................... 20
3.4 Net Payments....................................................... 21
SECTION 4. Conditions Precedent............................................... 22
4.1 Conditions to Effectiveness........................................ 22
4.2A Conditions to Each Loan to PPL and Each Issuance of
Letter of Credit on behalf of PPL.................................. 23
4.2B Conditions to Each Loan to Finance Co. and Each Issuance
of a Letter of Credit on behalf of Finance Co...................... 24
SECTION 5.A Covenants of PPL................................................... 25
5.1A Financial Statements............................................... 25
5.2A Mergers............................................................ 26
5.3A Ratings............................................................ 26
5.4A Consolidated Indebtedness to Consolidated Capitalization........... 27
SECTION 5.B Covenants of Finance Co. and Resources............................. 27
5.1B Financial Statements............................................... 27
5.2B Mergers............................................................ 28
5.3B Ratings............................................................ 29
5.4B Liens.............................................................. 29
5.5B Consolidated Indebtedness to Consolidated Capitalization........... 29
SECTION 6.A Events of Default for PPL.......................................... 29
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6.1A Representations, Etc................................................ 29
6.2A Principal and Interest.............................................. 29
6.3A Defaults by PPL Under Other Agreements.............................. 30
6.4A Judgments........................................................... 30
6.5A Bankruptcy, Etc..................................................... 30
6.6A Other Covenants..................................................... 31
SECTION 6.B Events of Default for Finance Co.................................... 31
6.1B Representations, Etc................................................ 31
6.2B Principal and Interest.............................................. 31
6.3B Defaults by PPL, Finance Co. or Resources Under This
Agreement or Other Agreements....................................... 31
6.4B Judgments........................................................... 32
6.5B Bankruptcy, Etc..................................................... 32
6.6B Other Covenants..................................................... 33
6.7B Events of Default With Respect to PPL............................... 33
SECTION 7.A Representations and Warranties of PPL............................... 34
7.1A Corporate Status.................................................... 34
7.2A Authority; No Conflict.............................................. 34
7.3A Legality, Etc....................................................... 35
7.4A Financial Statements................................................ 35
7.5A Litigation.......................................................... 35
7.6A No Violation........................................................ 35
7.7A ERISA............................................................... 36
7.8A Consents............................................................ 36
7.9A Subsidiaries........................................................ 36
7.10A Investment Company Act.............................................. 36
7.11A Public Utility Holding Company Act.................................. 36
7.12A Tax Returns......................................................... 36
7.13A Compliance with Laws................................................ 36
7.14A Year 2000........................................................... 37
SECTION 7.B Representations and Warranties of Finance Co. and
Resources........................................................... 37
7.1B Corporate Status.................................................... 37
7.2B Authority; No Conflict.............................................. 37
7.3B Legality, Etc....................................................... 37
7.4B Financial Statements................................................ 37
7.5B Litigation.......................................................... 38
7.6B No Violation........................................................ 38
7.7B ERISA............................................................... 38
7.8B Consents............................................................ 38
7.9B Investment Company Act.............................................. 39
7.10B Public Utility Holding Company Act.................................. 39
7.11B Tax Returns......................................................... 39
7.12B Compliance with Laws................................................ 39
7.13B Year 2000........................................................... 40
SECTION 8. Agent............................................................... 39
8.1 Appointment......................................................... 39
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8.2 Nature of Duties.................................................... 40
8.3 Rights, Exculpation, Etc............................................ 40
8.4 Reliance............................................................ 41
8.5 Indemnification..................................................... 41
8.6 The Agent, Individually............................................. 42
8.7 Resignation by the Agent............................................ 42
SECTION 9. Resources' Guarantee................................................ 43
SECTION 10. Miscellaneous....................................................... 44
10.1 Definitions......................................................... 44
10.2 Accounting Principles............................................... 56
10.3 Exercise of Rights.................................................. 57
10.4 Amendment and Waiver................................................ 57
10.5 Expenses; Indemnification........................................... 58
10.6 Successors and Assigns.............................................. 59
10.7 Notices, Requests, Demands.......................................... 62
10.8 Survival of Representations and Warranties.......................... 62
10.9 Governing Law....................................................... 62
10.10 Counterparts........................................................ 63
10.11 Effectiveness....................................................... 63
10.12 Transfer of Office.................................................. 63
10.13 Proration of Payments............................................... 63
10.14 Jurisdiction; Consent to Service of Process......................... 64
10.15 WAIVER OF JURY TRIAL................................................ 65
10.16 Headings Descriptive................................................ 65
Bank Address Schedule
SCHEDULE I - Commitments
EXHIBIT A - Form of Opinion of senior counsel of PPL, Finance Co. and Resources
EXHIBIT B - Form of Opinion of Thelen Reid & Priest LLP
EXHIBIT C - Form of Extension Letter
EXHIBIT D1- Form of PPL Compliance Certificate
EXHIBIT D2- Form of Resources Compliance Certificate
364-DAY REVOLVING CREDIT AGREEMENT, dated as November 20, 1997, as
amended and restated as of November 19, 1998, among PP&L, INC., a Pennsylvania
corporation ("PPL"), and PP&L CAPITAL FUNDING, INC., a Delaware corporation
("Finance Co."), as Borrowers; PP&L RESOURCES, INC., a Pennsylvania corporation
("Resources"), as guarantor of the obligations of Finance Co. hereunder; the
banks listed on Schedule I hereto (each a "Bank" and collectively the "Banks");
THE CHASE MANHATTAN BANK, as fronting bank (in such capacity, the "Fronting
Bank") and as administrative agent for the Banks to the extent and in the manner
provided in (S) 8 below (in such capacity, the "Agent"); and CITIBANK, N.A., as
documentation agent (in such capacity, the "Documentation Agent") (all
capitalized terms used herein shall have the meanings specified therefor in (S)
10.1 unless otherwise defined herein).
W I T N E S S E T H :
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WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to PPL and Finance Co. the
credit facility herein provided for working capital and other general corporate
purposes of the Borrowers, including investments in, or loans to, affiliates of
the Borrowers;
NOW, THEREFORE, it is agreed:
SECTION 1. Amounts and Terms of Loans.
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1.1 Commitments. Subject to and upon the terms and conditions herein
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set forth, each Bank severally and not jointly agrees, at any time and from time
to time prior to the Expiry Date, as such date may be extended pursuant to (S)
2.6, to make a loan or loans (each a "Loan" and collectively for all Banks, the
"Loans") to PPL or Finance Co., as requested by such Borrower, which Loans (i)
shall at the option of PPL or Finance Co., as applicable, be initially
maintained as Base Rate Loans or Eurodollar Loans, provided that all the Loans
made by all the Banks at any one Borrowing to a Borrower hereunder must be
either all Base Rate Loans or all Eurodollar Loans, (ii) may be repaid and
borrowed in accordance with the provisions hereof and (iii) shall not exceed in
aggregate principal amount at any time outstanding the difference between such
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Bank's Commitment and the L/C Exposure of such Bank at such time.
1.2 Notices of Borrowing. Whenever a Borrower desires to make a
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Borrowing hereunder, it shall give the Agent at the Payment Office (i) no later
than 12:00 Noon (New York time) at least three Business Days' prior written
notice or telephonic notice (confirmed in writing) of each Eurodollar Loan to be
made hereunder and (ii) no later than 11:30 A.M. (New York time) on the date of
such Borrowing written notice or telephonic notice (confirmed in writing) of
each Base Rate Loan to be made hereunder. Each such notice (each a "Notice of
Borrowing") shall state that the Borrowing is being made hereunder and shall
specify the aggregate principal amount the applicable Borrower desires to borrow
hereunder, the date of Borrowing (which shall be a Business Day), the Type of
Loans to be made pursuant to such Borrowing and the Interest Period to be
applicable thereto. The Agent shall promptly give each Bank telephonic notice
(confirmed in writing) of the proposed Borrowing, of such Bank's proportionate
share thereof and of the other matters covered by the Notice of Borrowing. Each
Borrowing shall be in an integral multiple of $500,000 and not less than
$10,000,000 and shall be made from each Bank in the proportion which its
respective Commitment bears to the Total Commitment except as otherwise
specifically provided in (S) 2.5. The failure of any Bank to make any Loan
required hereby shall not release any other Bank from its obligation to make
Loans as provided herein.
1.3 Disbursement of Funds. (a) No later than 12:00 Noon (New York
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time) (or, in the case of Base Rate Loans, 2:00 P.M. (New York time)) on the
date specified in each Notice of Borrowing each Bank will make available the
amount of its pro rata portion of the Loans requested to be made on such date in
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U.S. dollars and in immediately available funds, to the Agent at the Payment
Office. The Agent will make available to the applicable Borrower not later than
1:00 P.M. (New York time) (or, in the case of Base Rate Loans, 3:00 P.M. (New
York time)) on such date at the Payment Office the aggregate of the amounts in
immediately available funds made available by the Banks against delivery to the
Agent at the Payment Office, or at such other office as the Agent may specify,
of the documents and papers provided for herein. The Agent shall deliver the
documents and papers received by it for the account of each Bank to such Bank or
upon its order.
(b) If the Fronting Bank shall not have received from a Borrower the
payment required to be made by such Borrower pursuant to (S) 1A(e) within the
time specified in such Section, the Fronting Bank will promptly notify the
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Agent of the L/C Disbursement and the Agent will promptly notify each Bank of
such L/C Disbursement and its Applicable Percentage thereof. Not later than 2:00
P.M. (New York time) on such date (or, if such Bank shall have received such
notice later than 12:00 Noon (New York time) on any day, no later than 10:00
A.M. (New York time) on the immediately following Business Day), each Bank will
make available the amount of its Applicable Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute a Base Rate
Loan of such Bank and such payment shall be deemed to have reduced the L/C
Exposure) in immediately available funds, to the Agent at the Payment Office,
and the Agent will promptly pay to the Fronting Bank amounts so received by it
from the Banks. The Agent will promptly pay to the Fronting Bank any amounts
received by it from such Borrower pursuant to (S) 1A(e) prior to the time that
any Bank makes any payment pursuant to this paragraph (b), and any such amounts
received by the Agent thereafter will be promptly remitted by the Agent to the
Banks that shall have made such payments and to the Fronting Bank, as their
interests may appear. If any Bank shall not have made its Applicable Percentage
of such L/C Disbursement available to the Agent as provided above, such Bank
agrees to pay interest on such amount, for each day from and including the date
such amount is required to be paid in accordance with this paragraph to but
excluding the date such amount is paid, to the Agent for the account of the
Fronting Bank at, for the first such day, the Federal Funds Rate, and for each
day thereafter, the Base Rate.
1.4 Repayment of Loans; Evidence of Debt. (a) The outstanding
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principal balance of each Loan shall be payable by the Borrower to which such
Loan was made on the Expiry Date, subject to the provisions of (S) 2.6. Each
Loan shall bear interest from the date thereof on the outstanding principal
balance thereof as set forth in (S) 2.1. Each Bank shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness to
such Bank resulting from each Loan made by such Bank from time to time to each
Borrower, including the amounts of principal and interest payable and paid to
such Bank from time to time under this Agreement. The Agent shall maintain the
Register pursuant to (S)1.4(b), and a subaccount for each Bank and each
Borrower, in which Register and subaccounts (taken together) shall be recorded
(i) the amount of each Loan made hereunder, the Type of each Loan made and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the applicable Borrower to
each Bank hereunder and (iii) the amount of any
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sum received by the Agent hereunder from each Borrower and each Bank's share
thereof. The entries made in the Register and accounts maintained pursuant to
this (S)1.4 shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Bank or
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the Agent to maintain such account, such Register or such subaccount, as
applicable, or any error therein shall not in any manner affect the obligations
of each Borrower to repay the Loans in accordance with their terms. The
obligations of the Borrowers with respect to their respective Loans shall be
several, not joint.
(b) The Agent shall maintain at the Payment Office a register for the
recordation of the names and addresses of the Banks, the Commitments of the
Banks from time to time, and the principal amount of the Loans owing to each
Bank from each Borrower from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error. The Register shall be available for inspection by each Borrower, the
Agent or any Bank at any reasonable time and from time to time upon reasonable
prior notice.
1.5 Special Payment Provisions. Unless the Agent shall have been
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notified by any Bank prior to any date of a Borrowing that such Bank does not
intend to make available to the Agent such Bank's portion of the Loans to be
made on such date, the Agent may assume that such Bank has made such amount
available to the Agent on such date of a Borrowing and the Agent may, in
reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. If such amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such amount on demand from
such Bank. If such Bank does not pay such amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the applicable Borrower and the
applicable Borrower shall pay such amount to the Agent. The Agent shall also be
entitled to recover from such Bank or the applicable Borrower, as the case may
be, interest on such amount in respect of each day from the date such amount was
made available by the Agent to the applicable Borrower to the date such amount
is recovered by the Agent, at a rate per annum equal to (i) in the case of such
Bank, the Federal Funds Rate and (ii) in the case of either Borrower, the
applicable rate provided in (S) 2.1 for the applicable Type of Loan. Nothing
herein shall be deemed to relieve any Bank from its obligation to fulfill its
Commitment hereunder or to prejudice any rights which the applicable
5
Borrower may have against any Bank as a result of the failure of such Bank to
perform its obligations hereunder.
1.6 Fees. (a) The Borrowers agree to pay to the Agent for pro rata
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distribution to each Bank a Commitment Fee (the "Commitment Fee"), for the
period from the Closing Date until the Expiry Date (or such earlier date as the
Total Commitment shall be terminated as to both Borrowers), on the average daily
unused amount of the Commitments, computed at the Applicable Commitment Fee
Percentage per annum computed on the basis of the number of days actually
elapsed over a year of 365 or 366 days and payable quarterly in arrears on the
last day of each calendar quarter and on the Expiry Date (or such earlier date
as the Total Commitment shall be terminated as to both Borrowers).
(b) Each Borrower agrees to pay to the Agent for pro rata distribution
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to each Bank a fee (an "L/C Participation Fee"), for the period from the Closing
Date until the Expiry Date (or such earlier date as all Letters of Credit shall
be canceled or expire and the Total Commitment shall be terminated as to both
Borrowers), on that portion of the average daily L/C Exposure attributable to
Letters of Credit issued for the account of such Borrower (excluding the portion
thereof attributable to unreimbursed L/C Disbursements), at the rate per annum
equal to the Applicable Eurodollar Margin from time to time in effect for such
Borrower and payable quarterly in arrears on the last day of each calendar
quarter and on the date on which the Total Commitment shall be terminated as
provided herein. All L/C Participation Fees shall be computed on the basis of
the number of days actually elapsed over a year of 365 or 366 days.
1.7 Reductions in Total Commitments. The Borrowers shall have the
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right, upon at least 3 Business Days' prior written notice to the Agent at the
Payment Office (which notice the Agent shall promptly transmit to each of the
Banks), to reduce permanently the Total Commitment, in an aggregate amount equal
to an integral multiple of $1,000,000 and not less than $10,000,000, or to
terminate the unutilized portion of the Total Commitment, provided that (i) any
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such reduction or termination shall apply proportionately to the Commitments of
the Banks and (ii) no such termination or reduction shall be made that would
reduce the Total Commitments to an amount less than the sum of the aggregate
outstanding principal amount of Loans and the aggregate L/C Exposure.
1.8 Compensation. The applicable Borrower shall compensate each
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Bank, upon such Bank's written request
6
given promptly after learning of the same, for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Bank to
lenders of funds borrowed by it to make or carry its Eurodollar Loans and any
loss sustained by such Bank in connection with the re-employment of such funds),
which the Bank sustains: (i) if for any reason (other than a failure of such
Bank to perform its obligations) a Borrowing of any Eurodollar Loan does not
occur on a date specified therefor in a Notice of Borrowing or notice of
conversion (whether or not withdrawn or canceled pursuant to (S) 2.5 or
otherwise), (ii) if any repayment or conversion (pursuant to (S) 2.5 or
otherwise) of any of its Eurodollar Loans occurs on a date which is not the last
day of the Interest Period applicable thereto, or (iii) without duplication of
any amounts paid pursuant to (S) 2 hereof, as a consequence of any other default
by such Borrower to repay its Eurodollar Loans when required by the terms of
this Agreement. A certificate as to any amounts payable to any Bank under this
(S) 1.8 submitted to the applicable Borrower by such Bank shall show the amount
payable and the calculations used to determine such amount and shall, absent
manifest error, be final, conclusive and binding upon all parties hereto.
SECTION 1A. Letters of Credit. (a) General. A Borrower may from
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time to time request the issuance of Letters of Credit for its own account (for
obligations of such Borrower or any of its Subsidiaries, or in the case of
Finance Co., for any of Resources' Subsidiaries (other than PPL and its
Subsidiaries)), denominated in dollars, in form reasonably acceptable to the
Agent and the Fronting Bank, at any time and from time to time while the
Commitments remain in effect. This Section shall not be construed to impose an
obligation upon the Fronting Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
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Conditions. In order to request the issuance of a Letter of Credit (or to
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amend, renew or extend an existing Letter of Credit), the applicable Borrower
shall hand deliver or telecopy to the Fronting Bank and the Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. A Letter of
7
Credit shall be issued, amended, renewed or extended only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit the applicable Borrower
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (A) the L/C Exposure shall not exceed
$5,000,000 and (B) the Aggregate Credit Exposure shall not exceed the Total
Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close
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of business on the date that is five Business Days prior to the Expiry Date,
unless such Letter of Credit expires by its terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and
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without any further action on the part of the Fronting Bank or the Banks, the
Fronting Bank hereby grants to each Bank, and each such Bank hereby acquires
from the Fronting Bank, a participation in such Letter of Credit equal to such
Bank's Applicable Percentage from time to time of the aggregate amount available
to be drawn under such Letter of Credit, effective upon the issuance of such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Bank hereby absolutely and unconditionally agrees to pay to the Agent, for the
account of the Fronting Bank, such Bank's proportionate share of each L/C
Disbursement made by the Fronting Bank and not reimbursed by the applicable
Borrower forthwith on the date due as provided in (S) 1.3(b). Each Bank
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default or the
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Fronting Bank shall make any L/C
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Disbursement in respect of a Letter of Credit, the applicable Borrower shall pay
to the Agent an amount equal to such L/C Disbursement not later than two hours
after the applicable Borrower shall have received notice from the Fronting Bank
that payment of such draft will be made, or, if the applicable Borrower shall
have received such notice later than 10:00 A.M. (New York time) on any Business
Day, not later than 10:00 A.M. (New York time) on the immediately following
Business Day.
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(f) Obligations Absolute. The applicable Borrower's obligations to
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reimburse L/C Disbursements as provided in paragraph (e) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
the applicable Borrower, any other party guaranteeing, or otherwise
obligated with, either Borrower or any subsidiary or other affiliate
thereof or any other person may at any time have against the beneficiary
under any Letter of Credit, the Fronting Bank, the Agent or any Bank or any
other person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(v) payment by the Fronting Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Fronting Bank, the Banks, the Agent or any other person or any other event
or circumstance whatsoever, whether or not similar to any of the foregoing,
that might, but for the provisions of this Section, constitute a legal or
equitable discharge of the applicable Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrowers hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Fronting Bank. However, the
foregoing shall not be construed to excuse
9
the Fronting Bank from liability to the applicable Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the applicable Borrower to the extent permitted by
applicable law) suffered by the applicable Borrower that are caused by the
Fronting Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Fronting Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Fronting Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Fronting Bank.
(g) Disbursement Procedures. The Fronting Bank shall, promptly
------------------------
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Fronting Bank shall as
promptly as possible give telephonic notification, confirmed by telecopy, to the
Agent and the applicable Borrower (and, if the applicable Borrower is Finance
Co., Resources) of such demand for payment and whether the Fronting Bank has
made or will make an L/C Disbursement thereunder; provided that any failure to
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give or delay in giving such notice shall not relieve the applicable Borrower of
its obligation to reimburse the Fronting Bank and the Banks with respect to any
such L/C Disbursement. The Agent shall promptly give each Bank notice thereof.
(h) Interim Interest. If the Fronting Bank shall make any L/C
-----------------
Disbursement in respect of a Letter of Credit, then, unless the applicable
Borrower shall reimburse such L/C Disbursement in full on the date thereof, the
unpaid amount thereof shall bear interest for
10
the account of the Fronting Bank, for each day from and including the date of
such L/C Disbursement, to but excluding the earlier of the date of payment by
the applicable Borrower or the date on which interest shall commence to accrue
on the Base Rate Loans resulting from such L/C Disbursement as provided in (S)
1.3(b), at the rate per annum that would apply to such amount if such amount
were a Base Rate Loan.
(i) Cash Collateralization. If any Event of Default with respect to
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a Borrower shall occur and be continuing, such Borrower shall, on the Business
Day it receives notice from the Agent or the Required Banks thereof and of the
amount to be deposited, deposit in an account with the Agent, for the benefit of
the Banks, an amount in cash equal to the portion of the L/C Exposure
attributable to Letters of Credit issued for the account of such Borrower and
outstanding as of such date. Such deposit shall be held by the Agent as
collateral for the payment and performance of the obligations under this
Agreement. The Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Such deposits shall not bear
interest. Moneys in such account shall automatically be applied by the Agent to
reimburse the Fronting Bank for L/C Disbursements attributable to Letters of
Credit issued for the account of the Borrower depositing such moneys for which
the Fronting Bank has not been reimbursed, and any remaining amounts will either
(i) be held for the satisfaction of the reimbursement obligations of such
Borrower for the L/C Exposure at such time or (ii) if the maturity of the Loans
of such Borrower has been accelerated, be applied to satisfy the obligations of
such Borrower under this Agreement. If a Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to such Borrower within three Business Days after all Events of Default have
been cured or waived.
SECTION 20 Interest.
--------
2.1 Rates of Interest. (a) Each Borrower agrees to pay interest in
-----------------
respect of the unpaid principal amount of each Base Rate Loan made to it from
the date the proceeds thereof are made available to it until prepayment pursuant
to (S) 3 or maturity (whether by acceleration or otherwise) at a rate per annum
which shall be the Base Rate in effect from time to time.
11
(b) Each Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date the proceeds
thereof are made available to it until prepayment pursuant to (S) 3 or maturity
(whether by acceleration or otherwise) at a rate per annum which shall be the
relevant Quoted Rate plus the Applicable Eurodollar Margin.
(c) Each Borrower agrees to pay interest in respect of overdue
principal of, and (to the extent permitted by law) overdue interest in respect
of, each Loan made to it, on demand, at a rate per annum which shall be 2% in
excess of the Base Rate in effect from time to time.
(d) Interest shall be computed on the actual number of days elapsed
on the basis of a 360-day year; provided, however, that for any rate of interest
-------- -------
determined by reference to the Prime Rate, interest shall be computed on the
actual number of days elapsed on the basis of a year of 365 or 366 days.
(e) In computing interest on the Loans, the date of the making of a
Loan shall be included and the date of payment shall be excluded, provided,
--------
however, that if a Loan is repaid on the same day on which it is made, such day
- -------
shall nevertheless be included in computing interest thereon.
2.2 Determination of Rate of Borrowing. As soon as practicable after
----------------------------------
10:00 A.M. (New York time) on the second Business Day prior to the commencement
of any Interest Period with respect to a Eurodollar Loan, the Agent shall
determine (which determination, absent manifest error, shall be final,
conclusive and binding upon all parties) the rate of interest which shall be
applicable to such Eurodollar Loan for the Interest Period applicable thereto
and shall promptly give notice thereof (in writing or by telephone, confirmed in
writing) to the applicable Borrower and the Banks. In the event that there is
no applicable rate for such Eurodollar Loan: (i) the Agent shall promptly give
notice thereof (in writing or by telephone, confirmed in writing) to the
applicable Borrower and the Banks and (ii) such Loan shall be deemed to have
been requested to be made as a Base Rate Loan and (iii) the rate applicable to
such Loan shall be the Base Rate in effect from time to time.
2.3 Interest Payment Dates. Accrued interest shall be payable (i) in
----------------------
respect of each Eurodollar Loan, at the end of the Interest Period relating
thereto and in respect of each Loan with an Interest Period of longer than
12
3 months, on each 3-month anniversary of the first day of such Interest Period,
(ii) in respect of each Base Rate Loan, at the end of each Interest Period
relating thereto and (iii) in respect of each Loan, on any prepayment (on the
amount prepaid), at maturity (whether by acceleration or otherwise) and, after
maturity, on demand.
2.4 Conversions; Interest Periods. (a) Each Borrower shall have the
-----------------------------
option to convert on any Business Day, all or a portion at least equal to
$10,000,000 of the outstanding principal amount of the Loans made to it pursuant
to one or more Borrowings of one Type of Loans into a Borrowing or Borrowings of
another Type of Loan, provided that (i) except as provided in (S)2.5(b),
--------
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable thereto and no partial conversion of a Borrowing
of Eurodollar Loans shall reduce the outstanding principal amount of the Loans
pursuant to such Borrowing to less than $10,000,000 and (ii) Loans may only be
converted into Eurodollar Loans if no Default or Event of Default with respect
to such Borrower is in existence on the date of the conversion. Each such
conversion shall be effected by such Borrower by giving the Agent at its Payment
Office, prior to 12:00 Noon (New York time), at least three Business Days (or by
12:00 Noon on the same Business Day in the case of a conversion into Base Rate
Loans) prior written notice (or telephonic notice promptly confirmed in writing)
(each a "Notice of Conversion") specifying the Loans to be so converted, the
Borrowing or Borrowings pursuant to which such Loans were made, the Type of
Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans.
13
(b) At the time a Borrower gives a Notice of Borrowing or Notice of
Conversion in respect of the making of, or conversion into, a Borrowing of
Eurodollar Loans (in the case of the initial Interest Period applicable thereto)
or prior to 12:00 Noon (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans
(in the case of any subsequent Interest Period), such Borrower shall have the
right to elect, by giving the Agent written notice (or telephonic notice
promptly confirmed in writing), the Interest Period applicable to such
Borrowing, which Interest Period shall, at the option of such Borrower, be a
one, two, three or six month period or, subject to availability on the part of
each Bank, such shorter period as ends on the Expiry Date. Notwithstanding
anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(ii) if any Interest Period applicable to a Borrowing of Eurodollar
Loans begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iii) no Interest Period in respect of any Borrowing of Loans shall
extend beyond the Expiry Date; and
(iv) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period.
If upon the expiration of any Interest Period, a Borrower has failed to elect a
new Interest Period to be applicable to the respective Borrowing of Eurodollar
Loans as provided above or is unable to elect a new Interest Period as a result
of (S) 2.4(a)(ii) above, such Borrower shall be deemed to have elected to
convert such Borrowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such current Interest Period.
2.5 Increased Costs, Illegality, Etc. (a) In the event that any
---------------------------------
Bank (including the Agent and the Fronting Bank) shall have reasonably
determined (which
14
determination shall be final and conclusive and binding upon all parties but,
with respect to the following clauses (i), (ii) and (iii), shall be made only
after consultation with the applicable Borrower and the Agent on the date of
such determination) that:
(i) on any date for determining the Quoted Rate for any Interest
Period, by reason of any change after the date hereof affecting the
interbank Eurodollar market or affecting the position of such Bank (if a
Reference Bank), in such market, adequate and fair means do not exist for
ascertaining the applicable interest rate by reference to the Quoted Rate;
or
(ii) at any time, by reason of (y) any change after the date hereof
in any applicable law or governmental rule, regulation or order (or any
interpretation thereof by a governmental authority or otherwise (provided
--------
that, in the case of an interpretation not by a governmental authority,
such interpretation shall be made in good faith and shall have a reasonable
basis) and including the introduction of any new law or governmental rule,
regulation or order), to the extent not provided for in clause (iii) below,
or (z) in the case of Eurodollar Loans, other circumstances affecting such
Bank or the interbank Eurodollar market or the position of such Bank in
such market, the Quoted Rate shall not represent the effective pricing to
such Bank for funding or maintaining the affected Eurodollar Loan; or
(iii) at any time, by reason of the requirements of Regulation D or
other official reserve requirements, the Quoted Rate shall not represent
the effective pricing to such Bank for funding or maintaining the affected
Eurodollar Loan; or
(iv) at any time, that the making or continuance of any Eurodollar
Loan or the issuance of any Letter of Credit has become unlawful by
compliance by such Bank or by the Fronting Bank in good faith with any law,
governmental rule, regulation, guideline or order, or would cause severe
hardship to such Bank or to the Fronting Bank as a result of a contingency
occurring after the date hereof which materially and adversely affects the
interbank Eurodollar market;
then, and in any such event, the Bank so affected shall on such date of
determination give notice (by telephone confirmed in writing) to each applicable
Borrower and to the
15
Agent (who shall give similar notice to each Bank) of such determination.
Thereafter, (x) in the case of clause (i), (ii) or (iii) above, each applicable
Borrower shall pay to such Bank, upon written demand therefor, such additional
amounts deemed in good faith by such Bank to be material (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Bank in its discretion shall determine) as shall be required to cause
such Bank to receive interest with respect to its affected Eurodollar Loan at a
rate per annum equal to the then Applicable Eurodollar Margin in excess of the
effective pricing to such Bank to make or maintain such Eurodollar Loan and (y)
in the case of clause (iv), each applicable Borrower shall take one of the
actions specified in (S) 2.5(b) as promptly as possible and, in any event,
within the time period required by law. A certificate as to additional amounts
owed any such Bank, showing in reasonable detail the basis for the calculation
thereof, submitted to each applicable Borrower and the Agent by such Bank shall,
absent manifest error, be final, conclusive and binding upon all of the parties
hereto.
(b) At any time that any of its Loans are affected by the
circumstances described in (S) 2.5(a) each applicable Borrower may (i) if the
affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Agent notice thereof by telephone (confirmed in writing)
on the same date that such Borrower was notified by the affected Bank pursuant
to (S) 2.5(a) or (ii) if the affected Eurodollar Loan is then outstanding, upon
at least 3 Business Days' written notice to the Bank, require the Bank to
convert such Eurodollar Loan into a Base Rate Loan; provided that if more than
one Bank is affected at any time, then all affected Banks must be treated in the
same manner pursuant to this (S) 2.5(b).
(c) In the event that a Borrower shall be paying additional amounts
to a Bank pursuant to (S) 2.5(a)(i), (ii) or (iii) or (S) 2.5(d) (and, in the
case of (S) 2.5(d), such Bank has not eliminated the increased costs by
designating a new Applicable Lending Office) or is unable to incur a Eurodollar
Loan from such Bank because of the existence of a condition described in (S)
2.5(a)(iv) (any such Bank, an "Affected Bank") covering a period of 90
consecutive days, the Borrowers, the Agent and the Affected Bank shall consult
with a view towards (but being under no obligation to) amending this Agreement,
with the consent of the Banks other than the Affected Bank (the "Unaffected
Banks") which, at such time, have outstanding two-thirds of the aggregate
principal amount of
16
the Loans outstanding hereunder (exclusive of the aggregate principal amount of
the Loans outstanding of the Affected Bank), to provide for (i) the termination
of the Affected Bank's Commitment, provided that such termination is accompanied
--------
by payment in full of the outstanding amount of all Loans of the Affected Bank,
interest accrued on such amount to the date of payment and all other liabilities
and obligations of the Borrowers hereunder (including, without limitation,
amounts payable pursuant to (S) 1.8, (S) 2.5(a) or (S) 2.5(d)) with respect to
the Affected Bank, and (ii) the substitution of another bank for the Affected
Bank and/or the increase, pro rata or otherwise, of the Commitments of the
--- ----
Unaffected Banks or otherwise, so that the Total Commitment remains the amount
which would be applicable in the absence of the occurrence of clause (i) of this
(S) 2.5(c); provided that no Commitment of any Unaffected Bank may be changed
without the consent of such Bank.
(d) If any Bank reasonably determines at any time that any applicable
law or governmental rule, regulation, order or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Bank based on the existence of
such Bank's Commitment hereunder or its obligations hereunder or under any
Letter of Credit, then promptly upon receipt of a written demand from such Bank
meeting the requirements of this (S) 2.5(d), the applicable Borrowers agree to
pay such Bank such additional amounts as shall be required to compensate such
Bank for the increased cost to such Bank of making Loans to (or issuing Letters
of Credit for the account of) the Borrowers, as a result of such increase in
capital for the first Compensation Period (as defined below). After the initial
written demand for payment in respect of this (S) 2.5(d) is delivered to the
applicable Borrowers by such Bank, written demand for payment may be submitted
for each Compensation Period thereafter that this Agreement remains in effect as
to such Bank. Each such written demand shall (i) specify (a) the event pursuant
to which such Bank is entitled to claim the additional amount, (b) the date on
which the event occurred and became applicable to the Bank and (c) the
Compensation Period for which the amount is due and (ii) set out in reasonable
detail the basis and computation of such additional amount. Each period for
which the additional amounts may be claimed by such Bank (a "Compensation
Period") shall be the lesser of (x) the number of days actually elapsed since
the date the event occurred and became applicable to such Bank or (y) 90 days.
Payments made by the applicable Borrowers to any Bank in respect of
17
this (S) 2.5(d) shall be made on the last day of the Compensation Period
specified in each written demand with a final payment to be made on the date of
termination of this Agreement as to such Bank. Provided that each Bank acts
reasonably and in good faith and uses averaging and attribution methods which
are reasonable in determining any additional amounts due under this (S) 2.5(d),
such Bank's determination of compensation owing under this (S) 2.5(d) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. No Bank shall be entitled to compensation under this (S) 2.5(d) for any
costs incurred with respect to any date unless it shall have notified the
applicable Borrowers that it will demand compensation for such costs not more
than 60 days after the later of (i) such date and (ii) the date on which it
shall have become aware of such costs.
(e) Each Bank agrees that, upon the occurrence of any event giving
rise to the operation of (S) 2.5(d) with respect to such Bank, such Bank shall,
if requested by the Borrowers, designate another Applicable Lending Office for
any Loans affected by such event with the objective of eliminating, avoiding or
mitigating the consequence of the event giving rise to the operation of such
section; provided that such Bank and its Applicable Lending Office shall not, in
the sole judgment of such Bank, suffer any economic, legal or regulatory
disadvantage. Nothing in this (S) 2.5(e) shall affect or postpone any of the
obligations of a Borrower or the right of any Bank provided in (S) 2.5(d).
2.6 Extension of Expiry Date. (i) The Borrowers may, by sending an
------------------------
Extension Letter to the Agent (in which case the Agent shall promptly deliver a
copy to each of the Banks), not less than 30 days and not more than 45 days
prior to the Expiry Date then in effect (the "Current Expiry Date"), request
that the Banks extend the Expiry Date so that it will occur 364 days after the
Current Expiry Date. Each Bank, acting in its sole discretion, shall, by notice
to the Agent given not less than 20 days and not more than 30 days prior to the
Current Expiry Date, advise the Agent in writing whether or not such Bank agrees
to such extension (each Bank that so advises the Agent that it will not extend
the Expiry Date being referred to herein as a "Non-extending Bank"); provided
--------
that any Bank that does not advise the Agent by the 20th day prior to the
Current Expiry Date shall be deemed to be a Non-extending Bank. The election of
any Bank to agree to such extension shall not obligate any other Bank to agree.
18
(ii) (A) If Banks holding Commitments that aggregate at least 51% of
the Total Commitment on that 20th day prior to the Current Expiry Date shall not
have agreed to extend the Expiry Date, then the Current Expiry Date shall not be
so extended and the outstanding principal balance of all loans and other amounts
payable hereunder shall be payable on the Current Expiry Date. (B) If (and
only if) Banks holding Commitments that aggregate at least 51% of the Total
Commitment on the 20th day prior to the Current Expiry Date shall have agreed to
extend the Expiry Date, then the Expiry Date applicable to the Banks that are
not Non-extending Banks shall be the day that is 364 days after the Current
Expiry Date. In the event of such extension, the Commitment of each Non-
extending Bank shall terminate on the Current Expiry Date, all Loans and other
amounts payable hereunder to such Non-extending Banks shall become due and
payable on the Current Expiry Date and the Total Commitment of the Banks
hereunder shall be reduced by the Commitments of Non-extending Banks so
terminated on and after such Current Expiry Date.
(iii) In the event that the conditions of clause (B) of paragraph
(ii) above have been satisfied, the Borrowers shall have the right on or before
the Current Expiry Date, at their own expense, to require any Non-extending Bank
to transfer and assign without recourse (except as to title and the absence of
Liens created by it) (in accordance with and subject to the restrictions
contained in (S) 10.6) all its interests, rights and obligations under this
Agreement (including with respect to any L/C Exposure) to one or more other
banks or other financial institutions (which may include any Bank) (each, an
"Additional Commitment Bank"), provided that (x) such Additional Commitment
Bank, if not already a Bank hereunder, shall be subject to the approval of the
Agent (not to be unreasonably withheld), (y) such assignment shall become
effective as of the Current Expiry Date and (z) the Additional Commitment Bank,
shall pay to such Non-extending Bank in immediately available funds on the
effective date of such assignment the principal of and interest accrued to the
date of payment on the Loans made by such Non-extending Bank hereunder and all
other amounts accrued for such Non-extending Bank's account or owed to it
hereunder. Notwithstanding the foregoing, no extension of the Expiry Date shall
become effective unless, on the Current Expiry Date the conditions set forth in
paragraphs (a), (b) and (d) of (S)(S) 4.2A and 4.2B shall be satisfied (with all
references in such paragraphs to the making of a Loan or issuance of a Letter of
Credit being deemed to be references to the extension of the Commitments on the
Current Expiry Date) and the Agent shall have received a
19
certificate to that effect dated the Current Expiry Date and executed by a
responsible officer of each of the Borrowers and Resources.
SECTION 3. Payments.
--------
3.1 Payments on Non-Business Days. Whenever any payment to be made
-----------------------------
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, if a
payment of principal has been so extended, interest shall be payable on such
principal at the applicable rate during such extension.
3.2 Voluntary Prepayments. Each Borrower shall have the right to
---------------------
prepay its Loans in whole or in part, without premium or penalty, from time to
time pursuant to this (S) 3.2 on the following terms and conditions: (i) the
applicable Borrower shall give the Agent at the Payment Office at least 3
Business Days' prior written notice or telephonic notice (confirmed in writing)
of its intent to prepay such Loans, which notice shall specify the amount of
such prepayment and the specific Borrowing to be prepaid, which notice the Agent
shall promptly transmit to each of the Banks; (ii) each prepayment shall be in
an integral multiple of $1,000,000 and not less than $10,000,000 (or, if less,
the amount then remaining outstanding in respect of the Borrowing being
prepaid); (iii) each prepayment in respect of Loans made pursuant to one
Borrowing shall be applied pro rata among the Banks on the basis of such Loans,
--- ----
except as otherwise provided in (S) 2.5; (iv) at the time of any prepayment, the
applicable Borrower shall pay all interest accrued on the principal amount of
said prepayment and, if the applicable Borrower prepays any Eurodollar Loan on
any day other than the last day of an Interest Period applicable thereto, the
applicable Borrower shall compensate the Banks for losses sustained as a result
of such prepayment to the extent and as provided in (S) 1.8.
3.3 Method and Place of Payment, Etc. Except as expressly provided
---------------------------------
herein, all payments under this Agreement shall be made to the Agent for the
ratable account of the Banks not later than Noon (New York time) on the date
when due and shall be made in freely transferable U.S. dollars and in
immediately available funds at the Payment Office (or, if such payment is made
in respect of principal of or interest on any Eurodollar Loan, for the account
of such non-U.S. office of the Agent as the Agent may from time to time direct).
Unless the Agent shall have been notified by the applicable Borrower prior to
the date on which any payment to be made by the applicable Borrower
20
hereunder is due that the applicable Borrower does not intend to remit such
payment, the Agent may, at its discretion, assume that the applicable Borrower
has remitted such payment when so due and the Agent may, at its discretion and
in reliance upon such assumption, make available to each Bank (for the account
of its applicable lending office) on such payment date an amount equal to such
Bank's share of such assumed payment. If the applicable Borrower has not in fact
remitted such payment to the Agent, each Bank shall forthwith on demand repay to
the Agent the amount of such assumed payment made available to such Bank
together with interest thereon in respect of each day from and including the
date such amount was made available by the Agent to such Bank to the date such
amount is repaid to the Agent at a rate per annum equal to the Federal Funds
Rate. On the commencement date of each Interest Period and on each date
occurring two Business Days prior to an Interest Payment Date, the Agent shall
notify the applicable Borrower of the amount of interest and/or fees due at the
end of such Interest Period or on such Interest Payment Date (assuming, in the
case of Base Rate Loans, that there is no change in the rate of interest
applicable to the applicable Base Rate Loan); provided, however, that failure to
so notify the applicable Borrower shall not affect such Borrower's obligation to
make any such payments.
3.4 Net Payments. All payments under this Agreement shall be made
------------
without set-off or counterclaim and in such amounts as may be necessary in order
that all such payments of principal and interest in connection with Loans (after
deduction or withholding for or on account of (i) any present or future taxes,
levies, imposts, duties or other charges of whatsoever nature imposed by any
government or any political subdivision or taxing authority thereof, other than
any tax (except such taxes referred to in clause (ii) below) on or measured by
the net income of a Bank pursuant to the income tax laws of the jurisdiction
where such Bank's principal or lending office is located or in which such Bank
maintains a place of business (collectively the "Taxes") and (ii) deduction of
an amount equal to any taxes on or measured by the net income payable by any
such Bank with respect to the amount by which the payments required to be made
by this (S) 3.4 exceed the amount otherwise specified to be paid under this
Agreement) shall not be less than the amounts otherwise specified to be paid
under this Agreement. A certificate as to any additional amounts payable to any
Bank under this (S) 3.4 submitted to the applicable Borrower by such Bank shall
show in reasonable detail the amount payable and the calculations used to
determine such amount and shall,
21
absent manifest error, be final, conclusive and binding upon all parties hereto.
With respect to each deduction or withholding for or on account of any Taxes,
the applicable Borrower shall promptly furnish to each Bank such certificates,
receipts and other documents as may be required (in the judgment of such Bank)
to establish any tax credit to which such Bank may be entitled.
SECTION 4. Conditions Precedent.
--------------------
4.1 Conditions to Effectiveness. On the Closing Date:
---------------------------
(a) The Agent shall have received from the general counsel or senior
counsel of PPL a favorable opinion dated the Closing Date substantially in
the form of Exhibit A hereto.
(b) The Agent shall have received an opinion of Reid & Priest LLP,
counsel for PPL, Finance Co. and Resources, addressed to the Agent, the
Fronting Bank and the Banks, dated the Closing Date, with respect to the
enforceability of this Agreement against PPL and Finance Co., and with
respect to the enforceability of the guarantee hereunder by Resources of
the obligations of Finance Co. against Resources, substantially in the form
of Exhibit B hereto.
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement (including
resolutions of the Board of Directors of PPL, Finance Co. and Resources and
certificates as to the incumbency of the officers signing this Agreement or
any certificate delivered in connection herewith) shall be satisfactory in
form and substance to the Agent, and the Agent shall have received all
information and copies of all documents that it has requested, such
documents where appropriate to be certified by proper corporate or
governmental authorities.
(d) The Agent shall have received from each of the Banks, the
Fronting Bank, PPL, Finance Co. and Resources a duly executed and delivered
counterpart hereof.
(e) The conditions set forth in (SS) 4.2A and 4.2B (other than (S)
4.2A(c) and (S)4.2B(c)) shall have been satisfied.
22
(f) The Agent shall have received a certificate signed by appropriate
officers of PPL stating that all regulatory approvals necessary to permit
PPL to enter into this Agreement and to perform its obligations hereunder
have been obtained and are in full force and effect and attaching evidence
of all such regulatory approvals.
4.2A Conditions to Each Loan to PPL and Each Issuance of a Letter of
---------------------------------------------------------------
Credit for the account of PPL. The obligation of each Bank to make each Loan to
- -----------------------------
PPL (excluding any conversions of one Type of Loan to another Type pursuant to
(S) 2.5(b)) and of the Fronting Bank to issue each Letter of Credit for the
account of PPL hereunder is subject, at the time of the making of each such Loan
and the issuance of each such Letter of Credit (except as hereinafter
indicated), to the satisfaction of the following conditions, with the making of
each such Loan and the issuance of each such Letter of Credit constituting a
representation and warranty by PPL that the conditions specified in (S)(S)
4.2A(a), (b), (d) and (e) below are then satisfied:
(a) No Default. At the time of the making each such Loan to PPL, and
----------
the issuance of each Letter of Credit for the account of PPL and after
giving effect thereto, there shall exist no Default or Event of Default
with respect to PPL.
(b) Representations and Warranties. At the time of the making of
------------------------------
each such Loan to PPL and the issuance of each such Letter of Credit for
the account of PPL and after giving effect thereto, all representations and
warranties contained in (S) 7A hereof shall be true and correct with the
same force and effect as though such representations and warranties had
been made as of such time.
(c) Notice of Borrowing. The Agent shall have received Notice of
-------------------
Borrowing from PPL as required by (S) 1.2 or, in the case of the issuance
of a Letter of Credit, the Fronting Bank and the Agent shall have received
a notice from PPL requesting the issuance of such Letter of Credit as
required by (S) 1A(b).
(d) No Adverse Change. Since December 31, 1997, there shall have
-----------------
been no change in the business, assets, financial condition or operations
of PPL and its Subsidiaries taken as a whole which materially and
23
adversely affects the ability of PPL to perform any of its obligations
hereunder.
(e) Regulatory Approval. The making of such Loan to PPL or the
-------------------
issuance of such Letter of Credit for the account of PPL shall not cause
the aggregate dollar amount of Loans and Letters of Credit outstanding for
the account of PPL to exceed the amount of such obligations for which PPL
has obtained the necessary regulatory approval.
4.2B Conditions to Each Loan to Finance Co. and Each Issuance of
-----------------------------------------------------------
a Letter of Credit for the account of Finance Co. The obligation of each
-------------------------------------------------
Bank to make each Loan to Finance Co. (excluding any conversions of one
Type of Loan to another Type pursuant to (S) 2.5(b)) and of the Fronting
Bank to issue each Letter of Credit for the account of Finance Co.
hereunder is subject, at the time of the making of each such Loan and the
issuance of each such Letter of Credit (except as hereinafter indicated),
to the satisfaction of the following conditions, with the making of each
such Loan and the issuance of each such Letter of Credit constituting a
representation and warranty by Finance Co. that the conditions specified in
(SS) 4.2B(a), (b) and (d) below are then satisfied:
(a) No Default. At the time of the making of each such Loan to
----------
Finance Co. and the issuance of each Letter of Credit for the account of
Finance Co. and after giving effect thereto, there shall exist no Default
or Event of Default with respect to Finance Co.
(b) Representations and Warranties. At the time of the making of
------------------------------
each such Loan to Finance Co. and the issuance of each such Letter of
Credit for the account of Finance Co. and after giving effect thereto, all
representations and warranties contained in (S) 7B hereof shall be true and
correct with the same force and effect as though such representations and
warranties had been made as of such time.
(c) Notice of Borrowing. The Agent shall have received Notice of
-------------------
Borrowing from Finance Co. as required by (S) 1.2 or, in the case of the
issuance of a Letter of Credit, the Fronting Bank and the Agent shall have
received a notice from Finance Co. requesting the issuance of such Letter
of Credit as required by (S) 1A(b).
24
(d) No Adverse Change. Since December 31, 1997, there shall have
-----------------
been no change in the business, assets, financial condition or operations
of Resources and its Subsidiaries taken as a whole which materially and
adversely affects the ability of Resources to perform any of its
obligations hereunder.
SECTION 5.A Covenants of PPL.
----------------
While this Agreement is in effect and until the Total Commitment has
been terminated with respect to PPL, all obligations of PPL hereunder shall have
been paid in full and all Letters of Credit issued for the account of PPL shall
have been canceled or have expired and all amounts drawn thereunder shall have
been reimbursed in full, PPL agrees that:
5.1A Financial Statements. PPL will furnish to each Bank:
--------------------
(a) within 120 days after the end of each fiscal year an auditors'
report, including a balance sheet as at the close of such fiscal year and
statements of income, shareowners' common equity and cash flows for such
year for PPL and its consolidated Subsidiaries prepared in conformity with
GAAP, with an opinion expressed by Price Waterhouse LLP or other
independent auditors of recognized standing selected by it;
(b) within 60 days after the end of each of the first three quarters
in each fiscal year, a balance sheet as at the close of such quarterly
period and statements of income, shareowners' common equity and cash flows
for such quarterly period for itself and its consolidated Subsidiaries
prepared in conformity with GAAP;
(c) within 120 days after the end of each fiscal year, a copy of its
Form 10-K Report to the Securities and Exchange Commission ("SEC") and
within 60 days after the end of each of the first three quarters in each
fiscal year, a copy of its Form 10-Q Report to the SEC;
(d) from time to time, with reasonable promptness, such further
information regarding its business, affairs and financial condition as any
Bank and the Fronting Bank may reasonably request; and
25
(e) upon acquiring knowledge of the existence of a Default or Event
of Default with respect to it a certificate of a financial officer
specifying: (i) the nature of such Default or Event of Default, (ii) the
period of the existence thereof, and (iii) the actions that PPL proposes to
take with respect thereto.
The financial statements required to be furnished pursuant to clauses
(a) and (b) above shall be accompanied by a certificate of a principal financial
officer of PPL to the effect that no Default or Event of Default with respect to
it has occurred and is continuing. The financial statements required to be
furnished pursuant to clause (a) above shall also be accompanied by a Compliance
Certificate in the form of Exhibit D-1 hereto ("PPL Compliance Certificate")
demonstrating compliance with (S) 5.4A.
5.2A Mergers. PPL will not merge or consolidate with any Person if
-------
PPL is not the survivor unless (a) the survivor assumes the obligations of PPL
hereunder, (b) the survivor is a utility whose business is not substantially
different in character or composition from that of PPL and (c) the senior
secured debt ratings of the survivor by Moody's and S&P as available (or if the
ratings of Moody's and S&P are not available, of such other rating agency as
shall be acceptable to the Agent), are at least equal to the ratings of PPL's
First Mortgage Bonds (or other senior secured debt) immediately prior to such
merger or consolidation.
5.3A Ratings. PPL will use its best efforts to promptly notify the
-------
Banks upon obtaining knowledge of any change in, or cessation of, ratings of
PPL's First Mortgage Bonds (or other senior secured debt) by Moody's or S&P.
5.4A Consolidated Indebtedness to Consolidated Capitalization. The
--------------------------------------------------------
ratio of Consolidated Indebtedness of PPL to Consolidated Capitalization of PPL
shall not exceed 70% at any time.
SECTION 5.B Covenants of Finance Co. and Resources.
--------------------------------------
26
While this Agreement is in effect and until the Total Commitment has
been terminated with respect to Finance Co., all obligations of Finance Co. and
Resources hereunder shall have been paid in full and all Letters of Credit
issued for the account of Finance Co. shall have been canceled or have expired
and all amounts drawn thereunder shall have been reimbursed in full, each of
Finance Co. and Resources agrees that:
5.1B Financial Statements. Resources will furnish to each Bank:
--------------------
(a) within 120 days after the end of each fiscal year (i) an
auditors' report, including a balance sheet as at the close of such fiscal
year and statements of income, shareowners' common equity and cash flows
for such year for Resources and its consolidated Subsidiaries prepared in
conformity with GAAP, with an opinion expressed by Price Waterhouse LLP or
other independent auditors of recognized standing selected by it and (ii)
Resources' unconsolidated balance sheet as at the close of such fiscal year
and statements of income, shareholders common equity and cash flows for
such year;
(b) within 60 days after the end of each of the first three quarters
in each fiscal year, a balance sheet as at the close of such quarterly
period and statements of income, shareowners' common equity and cash flows
for such quarterly period for (i) Resources and its consolidated
Subsidiaries prepared in conformity with GAAP, and (ii) Resources'
unconsolidated balance sheet as at the close of such quarterly period and
statements of income, shareowners' common equity and cash flow for such
quarterly period;
(c) within 120 days after the end of each fiscal year, a copy of
Resources' Form 10-K Report to the Securities and Exchange Commission
("SEC") and within 60 days after the end of each of the first three
quarters in each fiscal year, a copy of Resources' Form 10-Q Report to the
SEC;
(d) from time to time, with reasonable promptness, such further
information regarding Resources' business, affairs and financial condition
as any Bank and the Fronting Bank may reasonably request; and
27
(e) upon acquiring knowledge of the existence of a Default or Event
of Default with respect to Finance Co. a certificate of a financial officer
of Resources and an officer of Finance Co. specifying: (i) the nature of
such Default or Event of Default, (ii) the period of the existence thereof,
and (iii) the actions that Resources and Finance Co. propose to take with
respect thereto.
The financial statements required to be furnished pursuant to clauses
(a) and (b) above shall be accompanied by a certificate of a principal financial
officer of Resources to the effect that no Default or Event of Default with
respect to Finance Co. has occurred and is continuing. The financial statements
required to be furnished pursuant to clause (a) above shall also be accompanied
by a Compliance Certificate in the form of Exhibit D-2 hereto ("Resources
Compliance Certificate") demonstrating compliance with (S) 5.5B.
5.2B Mergers. (i) (1) Resources will not merge or consolidate with
-------
any Person if Resources is not the survivor unless (a) the survivor assumes
Resources' obligations hereunder, (b) substantially all of the consolidated
assets and consolidated revenues of the survivor are anticipated to come from a
utility business or utility businesses and (c) the senior unsecured debt ratings
of the survivor by Moody's or S&P, as available (or if the ratings of Moody's
and S&P are not available, of such other rating agency as shall be acceptable to
the Required Banks), are at least equal to the ratings of Resource's senior
unsecured debt immediately prior to such merger or consolidation; (2) Resources
will not dispose of any common stock of either Borrower or any securities
convertible into common stock of either Borrower, except in connection with any
merger or consolidation permitted under this (S) 5.2B or under (S) 5.2A, and
except that Resources shall be allowed to sell, transfer or otherwise dispose of
PPL's common stock to PPL.
(ii) Finance Co. will not merge into or consolidate with any other
Person except (a) Resources or a successor of Resources permitted by this
Section or (b) any other Person which is a wholly owned subsidiary of Resources
or a successor of Resources permitted by this Section.
5.3B Ratings. Finance Co. and Resources will each use their best
-------
efforts to promptly notify the Banks upon obtaining knowledge of any change in,
or cessation of,
28
ratings of Resources' senior unsecured debt by Moody's or S&P.
5.4B Liens. Resources will not create, incur, or suffer to exist
-----
any Lien in or on the common stock of PPL or Finance Co. or on securities
convertible into the common stock of PPL or Finance Co. (in either case, now or
hereafter acquired) other than Permitted Liens.
5.5B Consolidated Indebtedness to Consolidated Capitalization. The
--------------------------------------------------------
ratio of Consolidated Indebtedness of Resources to Consolidated Capitalization
of Resources shall not exceed 70% at any time.
SECTION 6.A Events of Default with Respect to PPL.
-------------------------------------
Each of the following events shall constitute an "Event of Default"
with respect to PPL:
6.1A Representations, Etc. Any certificate furnished by PPL to the
---------------------
Banks and the Fronting Bank pursuant hereto shall prove to have been incorrect
in any material respect or any of the representations and warranties made by PPL
herein or in connection herewith shall prove to have been incorrect in any
material respect when made; or
6.2A Principal and Interest. PPL shall fail to make any payment of
----------------------
principal on any of its Loans or any other payment payable by PPL hereunder
(including the reimbursement of any L/C Disbursement) when due or, in the case
of interest or fees, within 10 days of the due date thereof; or
6.3A Defaults by PPL Under Other Agreements. PPL shall (i) fail to
--------------------------------------
pay any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $50,000,000 beyond any period of
grace provided with respect thereto, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness in a principal amount
in excess of $50,000,000 beyond any period of grace provided with respect
thereto if the effect of any failure referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Indebtedness or a trustee on
its or their behalf to cause, such Indebtedness to become due prior to its
stated maturity; or
29
6.4A Judgments. PPL shall fail within 60 days to pay, bond or
---------
otherwise discharge any judgment or order for the payment of money in excess of
$25,000,000 that is not stayed on appeal or otherwise being appropriately
contested in good faith; or
6.5A Bankruptcy, Etc. PPL shall commence a voluntary case
----------------
concerning itself under Title 11 of the United States Code entitled "Bankruptcy"
as now or hereafter in effect or any successor thereto (the "Bankruptcy Code");
or an involuntary case shall be commenced against PPL or such case shall be
controverted but shall not be dismissed within 60 days after the commencement of
the case; or PPL shall not generally be paying its debts as they become due; or
a custodian (as defined in the Bankruptcy Code) shall be appointed for, or shall
take charge of, all or substantially all of the property of PPL or PPL shall
commence any other proceeding under any reorganization, arrangement,
readjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating
to PPL or there shall be commenced against PPL any such proceeding which remains
undismissed for a period of 60 days or PPL shall be adjudicated insolvent or
bankrupt; or PPL shall fail to controvert in a timely manner any such case under
the Bankruptcy Code or any such proceeding, or any order of relief or other
order approving any such case or proceeding shall be entered; or PPL by any act
or failure to act shall indicate its consent to, approval of or acquiescence in
any such case or proceeding or in the appointment of any custodian or the like
for it or any substantial part of its property or shall suffer any such
appointment to continue undischarged or unstayed for a period of 60 days; or PPL
shall make a general assignment for the benefit of creditors; or any corporate
action shall be taken by PPL for the purpose of effecting any of the foregoing;
or
6.6A Other Covenants. PPL shall fail to perform or observe any
---------------
other term, covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for a period
of 30 days after written notice thereof shall have been received by PPL from the
Agent or the Required Banks.
SECTION 6.B Events of Default with Respect to Finance Co.
--------------------------------------------
Each of the following events shall constitute an "Event of Default"
with respect to Finance Co.:
30
6.1B Representations, Etc. Any certificate furnished by Finance Co.
---------------------
or Resources to the Banks and the Fronting Bank pursuant hereto shall prove to
have been incorrect in any material respect or any of the representations and
warranties made by Finance Co. or Resources herein or in connection herewith
shall prove to have been incorrect in any material respect when made; or
6.2B Principal and Interest. Either Finance Co. or Resources shall
----------------------
fail to make any payment of principal on any Loan to Finance Co. or any other
payment payable by Finance Co. or Resources hereunder (including the
reimbursement of any L/C Disbursement) when due or, in the case of interest or
fees, within 10 days of the due date thereof; or
6.3B Defaults by Finance Co. or Resources Under Other Agreements.
-----------------------------------------------------------
Finance Co. or Resources shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness in a principal amount
in excess of $40,000,000, in the case of Indebtedness of Resources or
Indebtedness of Finance Co. guaranteed by Resources or, in the case of
Indebtedness of Finance Co. not guaranteed by Resources, $10,000,000, if such
failure shall continue beyond any period of grace provided with respect thereto,
or (ii) fail to observe or perform any other term, covenant, condition or
agreement contained in any agreement or instrument (including any term,
covenant, condition or agreement herein) evidencing or governing any such
Indebtedness in a principal amount in excess of, in the case of Indebtedness of
Resources or Indebtedness of Finance Co. guaranteed by Resources, $40,000,000
or, in the case of Indebtedness of Finance Co. not guaranteed by Resources,
$10,000,000, if such failure shall continue beyond any period of grace provided
with respect thereto if the effect of any failure referred to in this clause
(ii) is to cause, or to permit the holder or holders of such Indebtedness or a
trustee on its or their behalf to cause, such Indebtedness to become due prior
to its stated maturity; or
6.4B Judgments. Finance Co. or Resources shall fail within 60 days
---------
to pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $25,000,000 that is not stayed on appeal or otherwise being
appropriately contested in good faith; or
6.5B Bankruptcy, Etc. Finance Co. or Resources shall commence a
----------------
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy" as
31
now or hereafter in effect or any successor thereto (the "Bankruptcy Code"); or
an involuntary case shall be commenced against Finance Co. or Resources or such
case shall be controverted but shall not be dismissed within 60 days after the
commencement of the case; or Finance Co. or Resources shall not generally be
paying its debts as they become due; or a custodian (as defined in the
Bankruptcy Code) shall be appointed for, or shall take charge of, all or
substantially all of the property of Finance Co. or Resources or Finance Co. or
Resources shall commence any other proceeding under any reorganization,
arrangement, readjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to Finance Co. or Resources or there shall be commenced against
Finance Co. or Resources any such proceeding which remains undismissed for a
period of 60 days or Finance Co. or Resources shall be adjudicated insolvent or
bankrupt; or Finance Co. or Resources shall fail to controvert in a timely
manner any such case under the Bankruptcy Code or any such proceeding, or any
order of relief or other order approving any such case or proceeding shall be
entered; or Finance Co. or Resources by any act or failure to act shall indicate
its consent to, approval of or acquiescence in any such case or proceeding or in
the appointment of any custodian or the like for it or any substantial part of
its property or shall suffer any such appointment to continue undischarged or
unstayed for a period of 60 days; Finance Co. or Resources shall make a general
assignment for the benefit of creditors; or any corporate action shall be taken
by Finance Co. or Resources for the purpose of effecting any of the foregoing;
or
6.6B Other Covenants. Finance Co. or Resources shall fail to
---------------
perform or observe any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed and any such failure shall
remain unremedied for a period of 30 days after written notice thereof shall
have been received by Finance Co. or Resources, as the case may be, from the
Agent or the Required Banks; or
6.7B Events of Default with Respect to PPL. An Event of Default
-------------------------------------
shall occur with respect to PPL.
If any Event of Default with respect to PPL as specified in Section 6A shall
then be continuing, then either or both of the following actions may be taken:
(i) the Agent, at the direction of the Required Banks, shall by written notice
to PPL, declare the principal of and accrued interest in respect of all of PPL's
outstanding Loans to be, whereupon the same and all other amounts due from PPL
hereunder shall
32
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by PPL, anything
contained herein to the contrary notwithstanding, and (ii) the Agent, at the
direction of the Required Banks, shall by written notice to PPL, declare the
Total Commitment as to PPL terminated, whereupon the Commitment of each Bank
(insofar as it is available to PPL) and the obligation of each Bank to make its
Loans hereunder to PPL and the obligation of the Fronting Back to issue Letters
of Credit for the account of PPL hereunder shall terminate immediately and any
accrued Commitment Fee owed by PPL shall forthwith become due and payable
without any other notice of any kind; provided that if an Event of Default
described in (S) 6.5A shall occur with respect to PPL, the results which would
otherwise occur only upon the giving of written notice by the Agent to PPL as
specified in clauses (i) and (ii) above shall occur automatically without the
giving of any such notice and without any instruction by the Required Banks to
give such notice.
If any Event of Default with respect to Finance Co. as specified in Section 6B
shall then be continuing, then either or both of the following actions may be
taken: (i) the Agent, at the direction of the Required Banks, shall by written
notice to Resources and Finance Co., declare the principal of and accrued
interest in respect of all of Finance Co.'s outstanding Loans to be, whereupon
the same and all other amounts due from Resources or Finance Co. hereunder shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by Resources and
Finance Co., anything contained herein to the contrary notwithstanding, and (ii)
the Agent, at the direction of the Required Banks, shall, by written notice to
Resources and Finance Co., declare the Total Commitment as to Finance Co.
terminated (insofar as it is available to Finance Co.), whereupon the Commitment
of each Bank and the obligation of each Bank to make its Loans to Finance Co.
hereunder and the obligations of the Fronting Bank to issue Letters of Credit
for the account of Finance Co. shall terminate immediately and any accrued
Commitment Fee owed by Finance Co. shall forthwith become due and payable
without any other notice of any kind; provided that if an Event of Default
described in (S) 6.5B shall occur with respect to Finance Co., the results which
would otherwise occur only upon the giving of written notice by the Agent to
Finance Co. as specified in clauses (i) and (ii) above shall occur automatically
without the giving of any such notice and without any instruction by the
Required Banks to give such notice.
33
SECTION 7.A Representations and Warranties of PPL.
-------------------------------------
In order to induce the Banks and the Fronting Bank to enter into this
Agreement and to make the Loans to PPL and issue the Letters of Credit for the
account of PPL, in each case, as provided for herein, PPL makes the following
representations and warranties to the Banks and the Fronting Bank:
7.1A Corporate Status. It is duly incorporated, validly existing and
----------------
in good standing under the laws of the Commonwealth of Pennsylvania, and has the
corporate power to make and perform this Agreement and to borrow hereunder.
7.2A Authority; No Conflict. The making and performance by it of
----------------------
this Agreement have been duly authorized by all necessary corporate action and
do not and will not violate any provision of law or regulation, or any decree,
order, writ or judgment, or any provision of its charter or by-laws, or result
in the breach of or constitute a default under any indenture or other agreement
or instrument to which it is a party.
7.3A Legality, Etc. This Agreement constitutes the legal, valid and
--------------
binding obligation of PPL, enforceable in accordance with its terms except to
the extent limited by bankruptcy, insolvency or reorganization laws or by other
laws relating to or affecting the enforceability of creditors' rights generally
and by general equitable principles which may limit the right to obtain
equitable remedies.
7.4A Financial Statements. The consolidated financial statements of
--------------------
PPL and its consolidated Subsidiaries for the year ended as at December 31,
1997, furnished to the Banks, fairly present its consolidated financial position
at December 31, 1997 and the results of its consolidated operations for the year
then ended and were prepared in accordance with GAAP. Since that date there has
been no adverse change in the business, assets, financial condition or
operations of PPL that would materially and adversely affect the ability of PPL
to perform any of its obligations hereunder.
7.5A Litigation. Except as disclosed in or contemplated by PPL's
----------
Form 10-K Report to the SEC for the year ended December 31, 1997 or in any
subsequent Form 10-Q Report or otherwise furnished in writing to the Banks, no
litigation, arbitration or administrative proceeding is
34
pending or, to its knowledge, threatened, which, if determined adversely to PPL,
would materially and adversely affect its ability to perform any of its
obligations under this Agreement. There is no litigation, arbitration or
administrative proceeding pending or, to the knowledge of PPL, threatened which
questions the validity of this Agreement.
7.6A No Violation. No part of the proceeds of the borrowings by PPL
------------
under this Agreement or of any Letter of Credit issued for its account will be
used, directly or indirectly by PPL for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System, or for any other purpose which violates, or which
conflicts with, the provisions of Regulations G, U or X of said Board of
Governors. PPL is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any such "margin stock."
7.7A ERISA. There have not been any "reportable events," as that
-----
term is defined in Section 4043 of the Employee Retirement Income Security Act
of 1974, as amended, which would result in a material liability to PPL.
7.8A Consents. No authorization, consent or approval from
--------
governmental bodies or regulatory authorities is required for the making and
performance by PPL of this Agreement, except such authorizations, consents and
approvals as have been obtained prior to the making of any Loans or the issuance
of any Letters of Credit and are in full force and effect at the time of the
making of each Loan and the issuance of each Letter of Credit.
7.9A Subsidiaries. The assets of all Subsidiaries of PPL do not
------------
comprise in the aggregate more than 20% of the total consolidated assets of PPL.
7.10A Investment Company Act. PPL is not an "investment company"
----------------------
that is required to be registered under the Investment Company Act of 1940, as
amended, in order not to be subject to the prohibitions of Section 7 of such
Act.
7.11A Public Utility Holding Company Act. PPL is a "holding company"
----------------------------------
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, but is exempt from such Act (except for the provisions of Section
9(a)(2) thereof) by virtue of an order of the SEC pursuant to Section 3(a)(2)
thereof.
35
7.12A Tax Returns. PPL has filed or caused to be filed all Federal,
-----------
state, local and foreign tax returns or materials required to have been filed by
it and has paid or caused to be paid all taxes due and payable by it and all
assessments received by it, except taxes that are being contested in good faith
by appropriate proceedings and for which PPL shall have set aside on its books
appropriate reserves with respect thereto in accordance with GAAP.
7.13A Compliance with Laws. PPL is in compliance with all laws,
--------------------
regulations and orders of any governmental authority except to the extent (A)
such compliance is being contested in good faith by appropriate proceedings or
(B) non-compliance would not reasonably be expected to materially and adversely
affect its ability to perform any of its obligations hereunder.
7.14A Year 2000. PPL has planned and commenced reprogramming to
----------
permit the proper performance of date-sensitive functions in and following the
year 2000 by (i) PPL's computer systems and (ii) equipment containing embedded
microchips (including systems and equipment under PPL's control that are
supplied by others), and testing of all such systems and equipment, such that
PP&L expects that its computer and management information systems will be
sufficient to permit PPL to conduct its business without material adverse effect
on its ability to perform its obligations hereunder. The cost to PPL of such
reprogramming and testing is not expected to have a material adverse effect on
its ability to perform its obligations hereunder.
SECTION 7.B Representations and Warranties of Finance Co. and
-------------------------------------------------
Resources.
- ---------
In order to induce the Banks and the Fronting Bank to enter into this
Agreement and to make the Loans to Finance Co. and issue the Letters of Credit
for the account of Finance Co., in each case as provided for herein, each of
Finance Co. and Resources makes the following representations and warranties to
the Banks and the Fronting Bank:
7.1B Corporate Status. Resources is duly incorporated, validly
----------------
existing and in good standing under the laws of the Commonwealth of
Pennsylvania, and has the corporate power to make and perform this Agreement,
and Finance Co. is duly incorporated, validly existing and in
36
good standing under the laws of the State of Delaware, and has the corporate
power to make and perform this Agreement and to borrow hereunder.
7.2B Authority; No Conflict. The making and performance by Resources
----------------------
and Finance Co. of this Agreement have been duly authorized by all necessary
corporate action and do not and will not violate any provision of law or
regulation, or any decree, order, writ or judgment, or any provision of its
charter or by-laws, or result in the breach of or constitute a default under any
indenture or other agreement or instrument to which Resources or Finance Co., as
the case may be, is a party.
7.3B Legality, Etc. This Agreement constitutes the legal, valid and
--------------
binding obligation of each of Resources and Finance Co., enforceable against
Resources or Finance Co., as the case may be, in accordance with its terms
except to the extent limited by bankruptcy, insolvency or reorganization laws or
by other laws relating to or affecting the enforceability of creditors' rights
generally and by general equitable principles which may limit the right to
obtain equitable remedies.
7.4B Financial Statements. The consolidated financial statements of
--------------------
Resources for the year ended as at December 31, 1997, furnished to the Banks,
fairly present Resources' consolidated financial position at December 31, 1997
and the results of its consolidated operations for the year then ended and were
prepared in accordance with GAAP. Since that date there has been no adverse
change in the business, assets, financial condition or operations of Resources
that would materially and adversely affect its ability to perform any of its
obligations hereunder.
7.5B Litigation. Except as disclosed in or contemplated by
----------
Resources's Form 10-K Report to the SEC for the year ended December 31, 1997, or
in any subsequent Form 10-Q Report or otherwise furnished in writing to the
Banks, no litigation, arbitration or administrative proceeding against Resources
or Finance Co. is pending or, to Resources' knowledge, threatened, which, if
determined adversely, would materially and adversely affect the ability of
Resources to perform any of its obligations under this Agreement. There is no
litigation, arbitration or administrative proceeding pending or, to the
knowledge of Resources, threatened which questions the validity of this
Agreement.
7.6B No Violation. No part of the proceeds of the borrowings by
------------
Finance Co. under this Agreement or of
37
any Letter of Credit issued for its account will be used, directly or indirectly
by Finance Co. or any Subsidiary of Resources for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, or for any other purpose which
violates, or which conflicts with, the provisions of Regulations U or X of said
Board of Governors. Neither Resources nor Finance Co. is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any such "margin stock."
7.7B ERISA. There have not been any "reportable events," as that
-----
term is defined in Section 4043 of the Employee Retirement Income Security Act
of 1974, as amended, which would result in a material liability to Resources.
7.8B Consents. No authorization, consent or approval from
--------
governmental bodies or regulatory authorities is required for the making and
performance by Resource or Finance Co. of this Agreement, except such
authorizations, consents and approvals as have been obtained prior to the making
of any Loans or the issuance of any Letters of Credit and are in full force and
effect at the time of the making of each Loan and the issuance of each Letter of
Credit.
7.9B Investment Company Act. Neither Resources nor Finance Co. is an
----------------------
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended, in order not to be subject to the prohibitions
of Section 7 of such Act.
7.10B Public Utility Holding Company Act. Resources is a "holding
----------------------------------
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, but is exempt from such Act (except for the provisions of Section
9(a)(2) thereof) by virtue of an order of the SEC pursuant to Section 3(a)(1)
thereof. Finance Co. is not a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
7.11B Tax Returns. Resources and Finance Co. have filed or caused to
-----------
be filed all Federal, state, local and foreign tax returns or materials required
to have been filed by it and has paid or caused to be paid all taxes due and
payable by it and all assessments received by it, except taxes that are being
contested in good faith by appropriate proceedings and for which Resources shall
have
38
set aside on its books appropriate reserves with respect thereto in accordance
with GAAP.
7.12B Compliance with Laws. Each of Resources and Finance Co. is in
--------------------
compliance with all laws, regulations and orders of any governmental authority
except to the extent (A) such compliance is being contested in good faith by
appropriate proceedings or (B) non-compliance would not reasonably be expected
to materially and adversely affect its ability to perform any of its obligations
hereunder.
7.13B Year 2000. Resources has planned and commenced reprogramming
----------
to permit the proper performance of date-sensitive functions in and following
the year 2000 by (i) Resources' computer systems and (ii) equipment containing
embedded microchips (including systems and equipment under Resources' control
that are supplied by others), and testing of all such systems and equipment,
such that Resources expects that its computer and management information systems
will be sufficient to permit Resources to conduct its business without material
adverse effect on its ability to perform its obligations hereunder. The cost to
Resources of such reprogramming and testing is not expected to have a material
adverse effect on its ability to perform its obligations hereunder.
SECTION 8. Agent.
-----
8.1 Appointment. The Banks hereby appoint The Chase Manhattan Bank
-----------
as Agent (such term to include Agent acting as Agent) to act as herein
specified. Each Bank and the Fronting Bank hereby irrevocably authorizes, and
each assignee of any Bank or the Fronting Bank shall be deemed irrevocably to
authorize, the Agent to take such action on their behalf under the provisions of
this Agreement and any instruments, documents and agreements referred to herein
(such instruments, documents and agreements being herein referred to as the
"Loan Documents") and to exercise such powers hereunder and thereunder as are
specifically delegated to the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may perform any of
its duties hereunder, or under the Loan Documents, by or through its agents or
employees.
8.2 Nature of Duties. The duties of the Agent shall be mechanical
----------------
and administrative in nature. The Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Bank or of the Fronting
Bank. Nothing in this Agreement or any of the
39
Loan Documents, expressed or implied, is intended to or shall be so construed as
to impose upon the Agent any obligations in respect of this Agreement or any of
the Loan Documents except as expressly set forth herein. Each Bank and the
Fronting Bank shall make its own independent investigation of the financial
condition and affairs of PPL, Finance Co. and Resources and each of their
Subsidiaries in connection with the making and the continuance of the Loans and
the issuance of Letters of Credit hereunder and shall make its own appraisal of
the creditworthiness of PPL, Resources and Finance Co.; and the Agent shall have
no duty or responsibility, either initially or on a continuing basis, to provide
any Bank or the Fronting Bank with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
the issuance of Letters of Credit or at any time or times thereafter. The Agent
may execute any of its duties under this Agreement or any other Loan Document by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall not be
responsible to any Bank or the Fronting Bank for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care except to
the extent otherwise required by (S) 8.3.
8.3 Rights, Exculpation, Etc. Neither the Agent nor any of its
-------------------------
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
liable to any Bank or to the Fronting Bank for any action taken or omitted by it
hereunder or under any of the Loan Documents, or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The Agent shall not be responsible to any Bank or to the Fronting Bank for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility, or
sufficiency of this Agreement or any of the Loan Documents or the financial
condition of PPL, Finance Co. or Resources. The Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any of the Loan Documents
or the financial condition of PPL, Finance Co. or Resources, or the existence or
possible existence of any Default or Event of Default. The Agent may at any
time request instructions from the Banks with respect to any actions or
approvals which by the terms of this Agreement or any of the Loan Documents the
Agent is permitted or required to take or to grant, and if such instructions are
requested, the Agent shall be absolutely entitled to refrain from taking any
40
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under this Agreement or any of the Loan Documents until it shall have
received such instructions from the Required Banks or all Banks, as required.
Without limiting the foregoing, no Bank shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder or under any of the Loan Documents in accordance with the
instructions of the Required Banks or all Banks, as required.
8.4 Reliance. The Agent shall be entitled to rely upon any written
--------
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person, and, with respect to all legal matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or thereunder,
upon advice of counsel selected by it.
8.5 Indemnification. To the extent that the Agent is not reimbursed
---------------
and indemnified by PPL, Resources or Finance Co., the Banks will reimburse and
indemnify the Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent, acting pursuant hereto, in any way relating
to or arising out of this Agreement or any of the Loan Documents or any action
taken or omitted by the Agent under this Agreement or any of the Loan Documents,
in proportion to their respective Commitments hereunder; provided, however, that
-------- -------
no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or wilful misconduct.
The obligations of the Banks under this (S) 8.5 shall survive the payment in
full of outstanding Loans, the expiration of any Letter of Credit and the
termination of this Agreement.
8.6 The Agent, Individually. With respect to its Commitment
-----------------------
hereunder and the Loans made by it, the Agent shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Bank. The terms
"Banks," "Required Banks" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Bank or
one of the Required Banks. The Agent may accept
41
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with PPL, Finance Co. or Resources as if it were not acting
pursuant hereto.
8.7 Resignation by the Agent. The Agent may resign from the
------------------------
performance of all its functions and duties hereunder at any time by giving 30
Business Days' prior written notice to each Borrower, Resources and the Banks.
Such resignation shall take effect upon the expiration of such 30 Business Day
period or upon the earlier appointment of a successor. Upon any such
resignation, the Required Banks shall appoint a successor Agent who shall be
satisfactory to the Borrowers and Resources and shall be an incorporated bank or
trust company. In the event no such successor shall have been so appointed,
then any notification, demand or other communication required or permitted to be
given by the Agent on behalf of the Banks to the Borrowers hereunder shall be
sufficiently given if given by the Required Banks, and any notification, demand,
other communication, document, statement, other paper or payment required to be
made, given or furnished by PPL, Finance Co. or Resources to the Agent for
distribution to the Banks shall be sufficiently made, given or furnished if
made, given or furnished by PPL, Finance Co. or Resources, as applicable,
directly to each Bank entitled thereto and, in the case of payments, in the
amount to which each such Bank is entitled from the applicable Borrower. All
powers specifically delegated to the Agent by the terms hereof may be exercised
by the Required Banks.
SECTION 9. Resources Guarantee.
-------------------
In order to induce the Banks to extend credit hereunder to Finance
Co., Resources hereby irrevocably and unconditionally guarantees, as primary
obligor and not merely as a surety, the Finance Co. Obligations. Resources
further agrees that the due and punctual payment of the Finance Co. Obligations
may be extended or renewed, in whole or in part, without notice to or further
assent from it, and that it will remain bound upon its Guarantee hereunder
notwithstanding any such extension or renewal of any Finance Co. Obligation.
Resources waives presentment to, demand of payment from and protest to
Finance Co. of any of the Finance Co. Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of Resources hereunder shall not be affected by (a) the failure of
any Bank or the Agent to assert any claim or demand or to enforce any right or
42
remedy against Finance Co. under the provisions of this Agreement or otherwise,
(b) change or increase in the amount of any of the Finance Co. Obligations,
whether or not consented to by Resources, or (c) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Agreement or
any other agreement.
Resources further agrees that its agreement hereunder constitutes a
promise of payment when due (whether or not any bankruptcy or similar proceeding
shall have stayed the accrual or collection of any of the Finance Co.
Obligations or operated as a discharge thereof) and not merely of collection,
and waives any right to require that any resort be had by any Bank to any
balance of any deposit account or credit on the books of any Bank in favor of
any other person.
The obligations of Resources hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of the
Finance Co. Obligations, any impossibility in the performance of the Finance Co.
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of Resources hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Agent or any Bank to assert any claim
or demand or to enforce any remedy under this Agreement or any other agreement,
by any waiver or modification in respect of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Finance Co.
Obligations, or by any other act or omission which may or might in any manner or
to any extent vary the risk of Resources or otherwise operate as a discharge of
Resources or Finance Co. as a matter of law or equity.
Resources further agrees that its obligations hereunder shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Finance Co. Obligation is rescinded or must otherwise
be restored by the Agent or any Bank upon the bankruptcy or reorganization of
Finance Co or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which the Agent or any Bank may have at law or in equity against Resources
by virtue hereof, upon the failure of Finance Co. to pay any Finance Co.
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, Resources hereby promises
to and
43
will, upon receipt of written demand by the Agent, forthwith pay, or cause to be
paid, in cash the amount of such unpaid Finance Co. Obligation.
Upon payment by Resources of any Finance Co. Obligation, each Bank
shall, in a reasonable manner, assign the amount of such Finance Co. Obligation
owed to it and so paid to Resources, such assignment to be pro tanto to the
--- -----
extent to which the Finance Co. Obligation in question was discharged by
Resources, or make such disposition thereof as Resources shall direct (all
without recourse to any Bank and without any representation or warranty by any
Bank).
Upon payment by Resources of any sums as provided above, all rights of
Resources against Finance Co. arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be subordinate and junior in
right of payment to the prior indefeasible payment in full of all the Finance
Co. Obligations owed by Finance Co. to the Banks.
SECTION 10. Miscellaneous.
-------------
10.1 Definitions. As used herein the following terms shall have the
-----------
meanings herein specified and shall include in the singular number the plural
and in the plural number the singular:
"5-Year Agreement" shall mean the $300,000,000 5-Year Revolving Credit
----------------
Agreement dated as of November 20, 1997, among PPL, Finance Co., Resources, as
guarantor of the obligations of Finance Co., the banks from time to time party
thereto and The Chase Manhattan Bank, as fronting bank, collateral agent and as
agent for the banks party thereto.
"Affected Bank" shall have the meaning assigned that term in (S)
-------------
2.5(c).
"Agent" shall mean The Chase Manhattan Bank and shall include (i) any
-----
successor corporation thereto by merger, consolidation or otherwise and (ii) any
successor to the Agent appointed pursuant to (S) 8.7.
"Aggregate Credit Exposure" shall mean the aggregate amount of the
-------------------------
Banks' Credit Exposures.
"Agreement" shall mean this Revolving Credit Agreement, as it may from
---------
time to time be amended, supplemented or otherwise modified.
44
"Applicable Commitment Fee Percentage" shall mean for the Borrowers,
------------------------------------
the percentage specified as such in the table in the definition of "Applicable
Rate" opposite the highest rating category in which PPL's First Mortgage Bonds
have been assigned a rating by either of Moody's or S&P.
"Applicable Eurodollar Margin" shall mean (i) for PPL, the margin
----------------------------
specified as such in the table in the definition of "Applicable Rate" opposite
the highest rating category in which PPL's First Mortgage Bonds have been
assigned ratings by either of Moody's or S&P or (ii) for Finance Co., the margin
specified as such in the table in the definition of "Applicable Rate" opposite
the highest rating category in which Resources' senior unsecured debt has been
assigned ratings by either of Moody's or S&P.
"Applicable Lending Office" shall mean, with respect to each Bank, (i)
-------------------------
such Bank's Base Rate Lending Office in the case of a Base Rate Loan and (ii)
such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Percentage" of any Bank at any time shall mean the
---------------------
percentage of the Total Commitment represented by such Bank's Commitment. In
the event the Commitments shall have expired or been terminated, the Applicable
Percentages shall be determined on the basis of the Commitments most recently in
effect, but giving effect to assignments pursuant to (S) 10.6.
"Applicable Rate" shall mean and include the Applicable Commitment Fee
---------------
Percentage for undrawn Commitments or Applicable Eurodollar Margin for any Loans
or issued Letters of Credit and at any time will be determined based on the
highest applicable Category set forth below (the highest category being Category
A); provided, that on any day when the aggregate amount of outstanding Loans
--------
exceeds 50% of the aggregate Commitments, the Applicable Eurodollar Margin shall
be increased by 0.05%.
================================================================================
Criteria Applicable Applicable
Commitment Fee Eurodollar
Percentage Margin
==============================================================================
45
Category A:
A- or better/ .080% .400%
A3 or better
Category B:
BBB+/Baa1 .100% .450%
Category C:
BBB/Baa2 .125% .500%
Category D:
BBB-/Baa3 .150% .600%
Category E:
BB+ or below/ .200% .750%
Ba1 or below
"Bank" shall have the meaning assigned that term in the first
----
paragraph in this Agreement.
"Bankruptcy Code" shall have the meaning assigned that term in (S)
---------------
6.5.
"Base Rate" shall mean, for any day, a rate per annum equal to the
---------
higher of (i) the Prime Rate and (ii) 1/2 of 1% plus the Federal Funds Rate,
each as in effect from time to time.
"Base Rate Lending Office" means, with respect to each Bank, the
------------------------
office of such Bank specified as its "Base Rate Lending Office" on the signature
pages to the Agreement or such other office of such Bank as such Bank may from
time to time specify as such to the Borrowers and the Agent.
"Base Rate Loan" shall mean any Loan during any period during which
--------------
such Loan is bearing interest at the rates provided for in (S) 2.1(a).
"Borrower" shall mean either PPL or Finance Co. and "Borrowers"
-------- ---------
shall mean PPL and Finance Co.
46
"Borrowing" shall mean the incurrence of one Type of Loan to a
---------
Borrower from all the Banks on a given date, all of which Eurodollar Loans shall
have the same Interest Period, pursuant to (S) 1.2; provided, however, that
-------- -------
Loans to a Borrower of a different Type extended by one or more Banks pursuant
to (S) 2.5(b) shall be considered a part of the related Borrowing.
"Business Day" shall mean (i) for all purposes other than as covered
------------
by clause (ii) below, any day excluding Saturday, Sunday and any day on which
banks in New York City are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar deposits in the London interbank Eurodollar
market.
"Capital Lease Obligations" of any person shall mean obligations of
-------------------------
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Closing Date" shall mean November 19, 1998.
------------
"Commitment", for each Bank, shall mean the amount specified opposite
----------
its name on Schedule I hereto, such Commitment to be reduced by the amount of
any reduction thereto effected pursuant to (S) 1.7, (S) 6 and/or (S) 10.6(b)(A).
"Commitment Fee" shall have the meaning assigned that term in (S)
--------------
1.6(a).
"Consolidated Capitalization of PPL" shall mean the sum of (A) the
----------------------------------
Consolidated Indebtedness of PPL and (B)(i) the consolidated shareowners' equity
(determined in accordance with GAAP) of the common, preference and preferred
stockholders of PPL and (ii) the aggregate amount of Hybrid Preferred Securities
of PPL, except that for purposes of calculating Consolidated Capitalization of
PPL, Consolidated Indebtedness of PPL shall exclude Non-Recourse Indebtedness of
PPL and Consolidated Capitalization of PPL shall exclude that portion of
shareholder equity attributable to assets securing Non-Recourse Indebtedness of
PPL.
47
"Consolidated Capitalization of Resources" shall mean the sum of (A)
----------------------------------------
the Consolidated Indebtedness of Resources and (B)(i) the consolidated
shareowners' equity (determined in accordance with GAAP) of the common,
preference and preferred stockholders of Resources and (ii) the aggregate amount
of Hybrid Preferred Securities of Resources, except that for purposes of
calculating Consolidated Capitalization of Resources, Consolidated Indebtedness
of Resources shall exclude Non-Recourse Indebtedness of Resources and
Consolidated Capitalization of Resources shall exclude that portion of
shareholder equity attributable to assets securing Non-Recourse Indebtedness of
Resources.
"Consolidated Indebtedness of PPL" shall mean the consolidated
--------------------------------
Indebtedness of PPL (determined in accordance with GAAP), except that for
purposes of this definition (1) Consolidated Indebtedness of PPL shall exclude
Non-Recourse Indebtedness of PPL and (2) Consolidated Indebtedness of PPL shall
exclude any Hybrid Preferred Securities of PPL.
"Consolidated Indebtedness of Resources" shall mean the consolidated
--------------------------------------
Indebtedness of Resources (determined in accordance with GAAP), except that for
purposes of this definition (1) Consolidated Indebtedness of Resources shall
exclude Non-Recourse Indebtedness of Resources and (2) Consolidated Indebtedness
of Resources shall exclude any Hybrid Preferred Securities of Resources.
"Credit Exposure", for each Bank at any time, shall mean the aggregate
---------------
principal amount at such time of all outstanding Loans of such Bank to the
Borrowers plus the aggregate amount at such time of such Bank's L/C Exposure.
----
"Default" with respect to a Borrower, shall mean any event, act or
-------
condition which with notice or lapse of time or both would constitute an Event
of Default with respect to that Borrower.
"Eligible Transferee" shall mean and include a commercial bank,
-------------------
financial institution or other "accredited investor" (as defined in SEC
Regulation D).
"Eurodollar Lending Office" shall mean, with respect to each Bank, the
-------------------------
office of such Bank specified as its "Eurodollar Lending Office" on the
signature pages to the Agreement or such other office of such Bank as such Bank
48
may from time to time specify as such to the Borrowers and the Agent.
"Eurodollar Loan" shall mean any loan during any period during which
---------------
such Loan is bearing interest at the rates provided for in (S) 2.1(b).
"Event of Default" shall mean with respect to PPL each of the Events
----------------
of Default specified in (S)6A and with respect to Finance Co., each of the
Events of Default specified in (S)6B.
"Expiry Date" shall mean the date 364 days from the date hereof
-----------
subject to extension pursuant to Section 2.6.
"Extension Letter" shall mean a letter from the Borrowers requesting
----------------
an extension of the Expiry Date substantially in the form of Exhibit C hereto.
"Federal Funds Rate" shall mean for any day, a fluctuating interest
------------------
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Finance Co." shall have the meaning assigned that term in the first
-----------
paragraph of this Agreement.
"Finance Co. Obligations" shall mean all obligations of Finance Co.
-----------------------
under this Agreement to pay (i) the principal of and interest on the Loans and
LC Disbursements when and as due, whether at maturity, by acceleration, upon one
or more dates set for prepayment or otherwise, and (ii) all other payment
obligations of Finance Co. hereunder.
"First Mortgagee Bonds" shall mean the first mortgage bonds issued by
---------------------
PPL pursuant to its Mortgage and Deed of Trust dated as of October 1, 1945, as
supplemented.
"GAAP" shall mean United States generally accepted accounting
----
principles applied on a consistent basis.
49
"Guarantee" of or by any person shall mean any obligation, contingent
---------
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
---------------
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
-------- -------
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hybrid Preferred Securities of PPL" means (1) the preferred
----------------------------------
securities and subordinated debt described in the Prospectus dated as of April
3, 1997 of PP&L Capital Trust and PPL and the preferred securities and
subordinated debt described in the Prospectus dated as of June 9, 1997 of PP&L
Capital Trust II and PPL (collectively, the "Existing TOPrS") and (2) any
additional preferred securities and subordinated debt (with a maturity of at
least twenty years) similar to the Existing TOPrS and in an aggregate amount not
to exceed $100,000,000, issued by business trusts, limited liability companies,
limited partnerships (or similar entities) (i) all of the common equity, general
partner or similar interests of which are owned (either directly or indirectly
through one or more wholly-owned Subsidiaries) at all times by PPL, (ii) that
have been formed for the purpose of issuing hybrid preferred securities and
(iii) substantially all the assets of which consist of (A) subordinated debt of
PPL or a Subsidiary of PPL, as the case may be, and (B) payments made from time
to time on the subordinated debt.
"Hybrid Preferred Securities of Resources" means (1) the preferred
----------------------------------------
securities and subordinated debt described in the Prospectus dated as of April
3, 1997 of PP&L Capital Trust and PPL and the preferred securities and
subordinated debt described in the Prospectus dated as of June 9, 1997 of PP&L
Capital Trust II and PPL (collectively, the "Existing TOPrS") and (2) any
additional preferred securities and subordinated debt (with a maturity of at
least twenty years) similar to the Existing TOPrS and in an aggregate amount not
to exceed $100,000,000, issued by business trusts, limited liability companies,
limited partnerships (or similar
50
entities) (i) all of the common equity, general partner or similar interests of
which are owned (either directly or indirectly through one or more wholly-owned
Subsidiaries) at all times by Resources or PPL, (ii) that have been formed for
the purpose of issuing hybrid preferred securities and (iii) substantially all
the assets of which consist of (A) subordinated debt of Resources or a
Subsidiary of Resources, as the case may be, and (B) payments made from time to
time on the subordinated debt.
"Indebtedness" of any person shall mean, without duplication, (a) all
------------
obligations of such person for borrowed money, (b) all obligations of such
person with respect to deposits or advances of any kind, (c) all obligations of
such person evidenced by bonds, debentures, notes or similar instruments, (d)
all obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien or property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed but shall not include any obligations that are without recourse to
such person, (g) all Guarantees by such person of Indebtedness of others, (h)
all Capital Lease Obligations of such person, (i) all obligations of such person
in respect of Interest Rate Protection Agreements, foreign currency exchange
agreements or other interest or exchange rate hedging arrangements (the amount
of any such obligation to be the amount that would be payable upon the
acceleration, termination or liquidation thereof) and (j) all obligations of
such person as an account party in respect of letters of credit and bankers'
acceptances.
"Interest Period" shall mean (a) as to any Eurodollar Loan, the
---------------
period commencing on the date of such Loan and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
applicable Borrower may elect in a Notice of Borrowing or Notice of Conversion
and (b) as to any Base Rate Loan, the period commencing on the date of such Loan
and ending on the date 90 days thereafter or, if earlier, on the Expiry Date or
the date of prepayment of such Loan. If any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided that if any Interest
--------
51
Period applicable to a Borrowing of Eurodollar Loans would otherwise expire on a
day which is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day.
"Interest Rate Protection Agreement" shall mean any agreement
----------------------------------
providing for an interest rate swap, cap or collar, or for any other financial
arrangement designed to protect against fluctuations in interest rates.
"L/C Commitment" shall mean the commitment of the Fronting Bank to
--------------
issue Letters of Credit pursuant to (S) 1A.
"L/C Disbursement" shall mean a payment or disbursement made by the
----------------
Fronting Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
------------
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
----
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Bank at any time shall mean
its Applicable Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term
---------------------
in (S) 1.6(b).
"Letter of Credit" shall mean any letter of credit issued pursuant to
----------------
(S) 1A.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
----
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vender or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan" shall have the meaning assigned that term in (S) 1.1.
----
"Loan Documents" shall have the meaning assigned that term in (S) 8.1.
--------------
"Moody's" shall mean Moody's Investors Service, Inc. or any successor
-------
thereto.
52
"Non-Recourse Indebtedness of PPL" shall mean indebtedness that is
--------------------------------
nonrecourse to PPL or any of its Subsidiaries.
"Non-Recourse Indebtedness of Resources" shall mean indebtedness that
--------------------------------------
is nonrecourse to Resources, either Borrower or any of PPL's Subsidiaries.
"Notice of Borrowing" shall have the meaning assigned that term in (S)
-------------------
1.2.
"Notice of Conversion" shall have the meaning assigned that term in
--------------------
(S) 2.4(a).
"Payment Office" shall mean the office of the Agent located at 270
--------------
Park Avenue, New York, New York 10017, or such other office as the Agent may
hereafter designate in writing as such to the other parties hereto.
"Permitted Liens" shall mean (a) Liens for taxes, assessments or
---------------
governmental charges or levies to the extent not past due, or which are being
contested in good faith in appropriate proceedings for which Resources has
provided appropriate reserves for the payment thereof in accordance with GAAP;
(b) pledges or deposits in the ordinary course of business to secure obligations
under worker's compensation laws or similar legislation; (c) other pledges or
deposits in the ordinary course of business (other than for borrowed monies)
that, in the aggregate, are not material to Resources; (d) Liens imposed by law
such as materialmen's, mechanics', carriers', workers' and repairmen's Liens and
other similar Liens arising in the ordinary course of business for sums not yet
due or currently being contested in good faith by appropriate proceedings; (e)
attachment, judgment or other similar Liens arising in connection with court
proceedings, provided that such Liens, in the aggregate, shall not exceed
$50,000,000 at any one time outstanding, and (f) other Liens not otherwise
referred to in the foregoing clauses (a) through (e) above, provided that such
other Liens do not secure at any time obligations in an aggregate amount in
excess of $100,000,000 at any time outstanding.
"Persons" shall mean and include any individual, firm, corporation,
-------
association, trust or other enterprise or any governmental or political
subdivision or agency, department or instrument thereof.
53
"PPL" shall have the meaning assigned that term in the first paragraph
---
of this Agreement.
"Prime Rate" shall mean the rate which The Chase Manhattan Bank
----------
announces from time to time as its prime lending rate, such Prime Rate to change
when and as such prime lending rate changes. The Prime Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer. The Chase Manhattan Bank may make commercial loans or other loans
at rates of interest at, above or below the Prime Rate.
"Quoted Rate" shall mean, with respect to any Eurodollar Loan for any
-----------
Interest Period, the average rate (rounded upwards to the nearest 1/16 of 1%) at
which dollar deposits approximately equal in principal amount to the Agent's
portion of such Eurodollar Loan and for a maturity comparable to such Interest
Period are offered to the principal London office of the Reference Banks in
immediately available funds in the London interbank market at approximately
11:00 A.M. (London time) 2 Business Days prior to the commencement of such
Interest Period, without any addition to such offered quotation to give effect
to the reserve requirements established for Eurodollar transactions by
Regulation D. Each Reference Bank shall use its best efforts to furnish rates
to the Agent as contemplated hereby. If any one of the Reference Banks shall be
unable or otherwise fail to supply such rates to the Agent upon its request, the
applicable rate shall be determined on the basis of the rates submitted by the
remaining two Reference Banks. If more than one Reference Bank shall be unable
or otherwise fail to supply such rates, there shall be no applicable rate.
"Reference Banks" shall mean The Chase Manhattan Bank, Citibank, N.A.
---------------
and Morgan Guaranty Trust Company.
"Register" shall have the meaning provided in 1.4(b).
--------
"Regulation D" shall mean Regulation D of the Board of Governors of
------------
the Federal Reserve System as from time to time in effect or any successor to
all or a portion thereof establishing reserve requirements.
"Required Banks" shall mean Banks having Loans the outstanding
--------------
principal amount of which aggregate (or, if no Loans are outstanding, Banks with
Commitments aggregating) at least the majority of the aggregate outstanding
principal amount of all Loans (or of the Total Commitment).
54
"Resources" shall have the meaning assigned that term in the first
---------
paragraph of this Agreement.
"SEC" shall have the meaning assigned that term in (S) 5.1(c).
---
"SEC Regulation D" shall mean Regulation D as promulgated under the
----------------
Securities Act of 1933, as amended, as the same may be in effect from time to
time."
"S&P" shall mean Standard & Poor's Ratings Group or any successor
---
thereto.
"Subsidiary" shall mean any company, partnership, association or other
----------
business entity in which any Person and its Subsidiaries now have or may
hereafter acquire an aggregate of at least 50% of the voting stock or ownership
interests.
"Taxes" shall have the meaning assigned that term in (S) 3.4.
-----
"Total Commitment" shall mean the aggregate of all the Commitments of
----------------
all the Banks.
"Type" shall mean any type of Loan, i.e., whether a Loan is a Base
---- ----
Rate Loan or a Eurodollar Loan.
"Unaffected Bank" shall have the meaning assigned that term in (S)
---------------
2.5(c).
"written" or "in writing" shall mean any form of written communication
------- ----------
or a communication by means of telex, telecopier device, telegraph or cable.
10.2 Accounting Principles. All statements to be prepared and
---------------------
determinations to be made under this Agreement, including (without limitation)
those pursuant to (S) 5, shall be prepared and made in accordance with generally
accepted accounting principles applied on a basis consistent with the accounting
principles reflected in the audited financial statements of PPL and Resources
for the fiscal year ended December 31, 1997, referred to in (S) 7.4, except for
changes in accounting principles consistent with GAAP.
10.3 Exercise of Rights. Neither the failure nor delay on the part
------------------
of any of the Banks or the Fronting Bank to exercise any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise there-
55
of, or the exercise of any other right, power or privilege. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Banks would otherwise have. No notice to or demand
on PPL, Finance Co. or Resources in any case shall entitle PPL, Finance Co. or
Resources, as applicable, to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the right of the Banks or the
Fronting Bank to any other or further action in any circumstances without notice
or demand.
10.4 Amendment and Waiver. Neither this Agreement nor any other Loan
--------------------
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by PPL, Finance Co. and Resources, and the Required Banks, provided that
--------
no such change, waiver, discharge or termination shall, without the consent of
each Bank directly affected thereby, (i) extend the final scheduled maturity of
any Loan (except as provided for in (S)2.6), or reduce the rate or extend the
time of payment of interest or Commitment Fees thereon (except in connection
with a waiver of the applicability of any post-default increase in interest
rates), or reduce the principal amount thereof (except to the extent repaid in
cash), (ii) amend, modify or waive any provision of this (S) 10.4, (iii) reduce
the percentage specified in the definition of Required Banks or (iv) consent to
the assignment or transfer by PPL, Finance Co. or Resources of any of its rights
and obligations under this Agreement or the release of Resources from its
guarantee hereunder; provided further, that no such change, waiver, discharge or
----------------
termination shall (x) increase the Commitments of any Bank over the amount
thereof then in effect without the consent of such Bank (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default shall not constitute an increase of the Commitment of any
Bank) or (y) without the consent of the Agent, amend, modify or waive any
provision of (S) 8 as such Section applies to such Agent or any other provision
as such Section relates to the rights or obligations of such Agent.
10.5 Expenses; Indemnification. (a) The Borrowers agree to pay all
-------------------------
reasonable out-of-pocket expenses (i) of the Agent and the Fronting Bank
incurred in connection with the preparation, execution, delivery, enforcement
and administration (exclusive of any internal overhead expenses) of this
Agreement and any and all agreements supplementary hereto and the making and
repayment of the Loans, the issuance of the Letters of Credit and the payment of
interest, including, without limitation, the reasonable fees and expenses of
Cravath, Swaine & Moore, counsel for the
56
Agent and (ii) of the Agent, the Fronting Bank and each Bank incurred in
connection with the enforcement of this Agreement, including, without
limitation, the reasonable fees and expenses of any counsel for any of the Banks
with respect to such enforcement; provided that none of the Borrowers or
--------
Resources shall be liable for any fees, charges or disbursements of any counsel
for the Banks or the Agent other than Cravath, Swaine & Moore associated with
the preparation, execution and delivery of this Agreement and the closing
documentation contemplated hereby.
(b) The Borrowers further agree to pay, and to save the Agent, the
Fronting Bank and the Banks harmless from all liability for, any stamp or other
documentary taxes which may be payable in connection with the Borrowers'
execution or delivery of this Agreement, their borrowings hereunder or Letters
of Credit, or the issuance of any notes or of any other instruments or documents
provided for herein or delivered or to be delivered by each of them hereunder or
in connection herewith.
(c) The Borrowers agree to indemnify the Agent, the Fronting Bank and
each Bank and each of their respective affiliates, directors, officers and
employees (each such person being called an "Indemnitee") against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Agent, the Fronting Bank or any Bank is a party thereto) which any of
them may pay or incur arising out of or relating to this Agreement, the other
Loan Documents, the transactions contemplated hereby, the direct or indirect
application or proposed application of the proceeds of any Loan hereunder or the
issuance of Letters of Credit; provided that such indemnification shall not
--------
extend to disputes solely among the Agent, the Fronting Bank and the Banks; and
provided further that such indemnity shall not, as to any Indemnitee, be
- -------- -------
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(d) All obligations provided for in this (S) 10.5 shall survive any
termination of this Agreement or the resignation, withdrawal or removal of any
Bank.
10.6 Successors and Assigns. (a) This Agreement shall be binding
----------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto, provided that none of PPL, Finance Co. or
--------
57
Resources may assign or transfer any of its interests hereunder, except to the
extent any such assignment results from the consummation of a transaction
permitted under (S) 5.2, without the prior written consent of the Banks and
provided further that the right of each Bank to transfer, assign or grant
- ----------------
participations in its rights and/or obligations hereunder shall be limited as
set forth below in this (S) 10.6, provided that nothing in this (S) 10.6 shall
--------
prevent or prohibit any Bank from pledging its rights under this Agreement
and/or its Loans hereunder to a Federal Reserve Bank in support of borrowings
made by such Bank from such Federal Reserve Bank. In order to facilitate such
an assignment to a Federal Reserve Bank, the Borrowers shall, at the request of
the assigning Bank, duly execute and deliver to the assigning Bank a promissory
note evidencing its Commitment or Loans made by the assigning Bank hereunder.
(b) Each Bank shall have the right to transfer, assign or grant
participations in all or any part of its remaining rights and obligations
hereunder on the basis set forth below in this clause (b).
(A) Assignments. Each Bank may assign all or a portion of its
-----------
rights and obligations hereunder pursuant to this clause (b)(A) to (x)
one or more Banks or any affiliates of any Bank or (y) one or more
other Eligible Transferees, provided that (i) any such assignment
--------
pursuant to clause (y) above shall be in the aggregate amount of at
least $5,000,000, (ii) after giving effect to any such assignment
pursuant to clause (x) or (y) above, no Bank shall have a Commitment
of less than $5,000,000 unless such Bank's Commitment is reduced to
zero pursuant to such assignment, (iii) unless the Borrowers and the
Administrative Agent shall otherwise agree, the assigning Bank shall
not assign any of its rights and obligations under this Agreement
without assigning the same percentage of its rights and obligations
under the 5-Year Agreement, provided that no Banks shall be required
--------
to make an assignment under the 5-Year Agreement with respect to
assignments made pursuant to (S) 2.6 hereunder, (iv) any assignment
pursuant to clause (y) shall require the consent of the Borrowers,
which consent shall not be unreasonably withheld, and provided
--------
further, that, so long as no Loans or interest thereon shall be
-------
outstanding and no Default or Event of Default shall have occurred
with respect to PPL, Finance Co. or
58
Resources and then be continuing, the Borrowers may at their option
terminate the portion of such assigning Bank's Commitment proposed to
be assigned pursuant to clause (y) above in lieu of consenting to such
assignment, and the Total Commitment shall be reduced in the amount of
such termination. Assignments or terminations of all or any portion of
any Bank's Commitment pursuant to this clause (b)(A) will only be
effective if the Agent shall have received a written notice from the
assigning Bank and the assignee, or, in the case of a termination, the
Borrowers, and, in the case of an assignment, payment of a
nonrefundable assignment fee of $2,500 to the Agent by either the
assigning Bank or the assignee. No later than five Business Days after
its receipt of any written notice of assignment or termination, the
Agent will record such assignment or termination, and the resultant
effects thereof on the Commitment of the assigning or terminating Bank
and, in the case of an assignment, the assignee, in the Register, at
which time such assignment or termination shall become effective,
provided that the Agent shall not be required to, and shall not, so
--------
record any assignment or termination in the Register on or after the
date on which any proposed amendment, modification or supplement in
respect of this Agreement has been circulated to the Banks for
approval until the earlier of (x) the effectiveness of such amendment,
modification or supplement in accordance with (S) 10.4 or (y) 30 days
following the date on which such proposed amendment, modification or
supplement was circulated to the Banks. Upon the effectiveness of any
assignment or termination pursuant to this clause (b)(A), (x) the
assignee, in the case of an assignment, will become a "Bank" for all
purposes of this Agreement and the other Loan Documents with a
Commitment as so recorded by the Agent in the Register, and to the
extent of such assignment or termination, the assigning or terminating
Bank shall be relieved of its obligations hereunder with respect to
the portion of its Commitment being assigned or terminated.
(B) Participations. Each Bank may transfer, grant or assign
--------------
participations in all or any part of such Bank's interests and
obligations hereunder pursuant to this clause (b)(B) to any Eligible
Transferee, provided that (i) such Bank shall remain a "Bank" for all
--------
purposes of this Agreement
59
and the transferee of such participation shall not constitute a Bank
hereunder and (ii) no participant under any such participation shall
have any rights under the Agreement or other Loan Document or any
rights to approve any amendment to or waiver of this Agreement or any
other Loan Document except to the extent such amendment or waiver
would (x) extend the final scheduled maturity of any of the Loans or
the Commitment in which such participant is participating, (y) reduce
the interest rate (other than as a result of waiving the applicability
of any post-default increases in interest rates) or Commitment Fee or
other fees applicable to any of the Loans or Commitments in which such
participant is participating or postpone the payment of any thereof or
reduce the principal amount of any Loan (except to the extent repaid
in cash) or (z) release Resources from its obligations as a guarantor
hereunder. In the case of any such participation, the participant
shall not have any rights under this Agreement or any of the other
Loan Documents (the participant's rights against the granting Bank in
respect of such participation to be those set forth in the agreement
with such Bank creating such participation) and all amounts payable by
each of the Borrowers hereunder shall be determined as if such Bank
had not sold such participation, provided that such participant shall
--------
be entitled to receive additional amounts under (S)(S) 1.8 and 2.5 on
the same basis as if it were a Bank but in no case shall be entitled
to any amount greater than would have been payable had the Bank not
sold such participations.
(c) Each Bank hereby represents, and each Person that becomes a Bank
pursuant to an assignment permitted by the preceding clause (b)(A) will upon its
becoming party to this Agreement represent, that it is an Eligible Transferee
which makes loans in the ordinary course of its business and that it will make
or acquire Loans for its own account in the ordinary course of such business,
provided that, subject to the preceding clauses (a) and (b), the disposition of
- --------
any promissory notes or other evidences of or interests in Loans held by such
Bank shall at all times be within its exclusive control.
10.7 Notices, Requests, Demands. All notices, requests, demands or
--------------------------
other communications to or upon the respective parties hereto shall be deemed to
have been given or made (i) in the case of notice by mail, when actually
received, and (ii) in the case of telecopier notice sent
60
over a telecopier machine owned or operated by a party hereto, when sent, in
each case addressed to the party or parties to which such notice is given at
their respective addresses shown below their signatures hereto or at such other
address as such party may hereafter specify in writing to the others. No other
method of giving notice is hereby precluded.
10.8 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties contained herein or otherwise made in writing by PPL, Finance Co.
or Resources in connection herewith shall survive the execution and delivery of
this Agreement.
10.9 Governing Law. This Agreement and the rights and obligations of
-------------
the parties under this Agreement (other than as relates to Letters of Credit)
shall be governed by and construed and interpreted in accordance with the laws
of the State of New York. Each Letter of Credit shall be governed by, and
construed and interpreted in accordance with the laws or rules designated in
such Letter of Credit, or if no such laws or rules are designated, the Uniform
Customs and Practice for Documentary Credits (1993 revision), International
Chamber of Commerce, publication no. 500 (the "Uniform Customs") and, as to
matters not governed by the Uniform Customs, the laws of the State of New York.
10.10 Counterparts. This Agreement may be executed in any number of
------------
copies, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
Complete counterparts of this Agreement shall be lodged with each Borrower,
Resources and the Agent.
10.11 Effectiveness. This Agreement shall become effective on the
-------------
Closing Date.
10.12 Transfer of Office. (a) Each Bank may transfer and carry its
------------------
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Bank; provided that such Bank shall continue to bear all of its obligations
--------
under this Agreement; and provided further that the Borrowers shall not be
-------- -------
responsible for costs arising under (S) 1.8, 2.5 or 3.4 resulting from any such
transfer to the extent not otherwise applicable to such Bank prior to such
transfer.
(b) Upon a Bank becoming aware of any event which will entitle it to
any additional amount pursuant to (S) 2.5(a) or (S) 3.4, such Bank shall take
all reasonable steps
61
(including but not limited to making, maintaining or funding the affected Loan
through another office of such Bank) to avoid or reduce the additional amount
payable by the applicable Borrower; provided that, such steps will not result in
any additional costs, liabilities or expenses (not reimbursable by the
applicable Borrower) to such Bank and are not otherwise inconsistent with the
interests of such Bank determined in good faith.
10.13 Proration of Payments. The Banks agree among themselves that,
---------------------
with respect to all amounts received by them which are applicable to the payment
of principal of or interest on the Loans, equitable adjustment will be made so
that, in effect, all such amounts will be shared ratably among the Banks on the
basis of the amounts then owed each of them in respect of such obligation,
whether received by voluntary payment, by realization upon security, by the
exercise of any right of set-off or bankers' lien, by counterclaim or cross
action, under or pursuant to this Agreement or otherwise. Each of the Banks
agrees that if it should receive any payment on its Loans of a sum or sums in
excess of its pro rata portion (other than as expressly contemplated by (S)
--- ----
2.6(ii)), then the Bank receiving such excess payment shall purchase for cash
from the other Banks an interest in the Loans of such Banks in such amount as
shall result in a ratable participation by each of the Banks in the aggregate
unpaid amount of all outstanding Loans then held by all of the Banks. If all or
any portion of such excess payment is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Borrowers agree that any Bank so
purchasing a participation from another Bank pursuant to this (S) 10.13 may
exercise all its rights with respect to such participation as fully as if such
Bank were the direct creditor of the Borrowers in the amount of such
participation.
10.14 Jurisdiction; Consent to Service of Process. (a) Each of PPL,
--------------------------------------------
Finance Co. and Resources hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the
62
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Agent, the Fronting Bank or any Bank may otherwise have to bring
any action or proceeding relating to this Agreement against any of PPL, Finance
Co., Resources or its properties in the courts of any jurisdiction.
(b) Each of PPL, Finance Co. and Resources hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (a) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.7. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
10.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
---------------------
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.16 Headings Descriptive. The headings of the various provisions of
--------------------
this Agreement are inserted for convenience of reference only and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.
63
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
PP&L, INC.,
By /s/ James E. Abel
-----------------------------------
Name: James E. Abel
Title: Treasurer
PP&L CAPITAL FUNDING, INC.,
By /s/ James E. Abel
-----------------------------------
Name: James E. Abel
Title: Treasurer
PP&L RESOURCES, INC.,
By /s/ John R. Biggar
-----------------------------------
Name: John R. Biggar
Title: Senior Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK,
Individually and as Agent
and Fronting Bank
By /s/ Thomas H. Kozlark
-----------------------------------
Name: Thomas H. Kozlark
Title: Vice President
CITIBANK, N.A.,
Individually and as Documentation Agent
By /s/ Anita J. Brickell
-----------------------------------
Name: Anita J. Brickell
Title: Managing Director
THE BANK OF NEW YORK,
By /s/ John N. Watt
-----------------------------------
Name: John N. Watt
Title: Vice President
THE BANK OF NOVA SCOTIA,
By /s/ J. Alan Edwards
-----------------------------------
Name: J. Alan Edwards
Title: Authorized Signatory
CREDIT SUISSE FIRST BOSTON,
By /s/ James P. Moran
-----------------------------------
Name: James P. Moran
Title: Director
By /s/ Douglas E. Maher
-----------------------------------
Name: Douglas E. Maher
Title: Vice President
DEUTSCHE BANK AG, NEW YORK
BRANCH and/or CAYMAN ISLANDS BRANCH,
By /s/ Lydia Zaininger
-----------------------------------
Name: Lydia Zaininger
Title: Vice President
By /s/ Michael A. Hamilton
-----------------------------------
Name: Michael A. Hamilton
Title: Associate
THE FIRST NATIONAL BANK OF
CHICAGO,
By /s/ Madeleine N. Pember
-----------------------------------
Name: Madeleine N. Pember
Title: Assistant Vice President
FIRST UNION NATIONAL BANK,
By /s/ Michael J. Kolosowsky
-----------------------------------
Name: Michael J. Kolosowsky
Title: Vice President
MORGAN GUARANTY TRUST COMPANY,
By /s/ Robert Bottamedi
-----------------------------------
Name: Robert Bottamedi
Title: Vice President
MELLON BANK, N.A.,
By /s/ Mark W. Rogers
-----------------------------------
Name: Mark W. Rogers
Title: Vice President
NATIONSBANK, N.A.,
By /s/ Paula Z. Kramp
-----------------------------------
Name: Paula Z. Kramp
Title: Vice President
TORONTO DOMINION (TEXAS),INC.,
By /s/ Sonja R. Jordan
-----------------------------------
Name: Sonja R. Jordan
Title: Vice President
Bank Address Schedule
---------------------
- ------------------------------------------------------------------------------------------------
PHONE
NAME OF BANK AND ADDRESS FAX NUMBER(S)
NUMBER(S)
- ------------------------------------------------------------------------------------------------
The Chase Manhattan Bank
Attn: Jaimin Patel (212) 270-1354 (212) 270-2101
270 Park Avenue
New York, NY 10017
- ------------------------------------------------------------------------------------------------
THE BANK OF NEW YORK
Attn: John Watt (212) 635-7533 (212) 635-7923
One Wall Street
New York, NY 10286
- ------------------------------------------------------------------------------------------------
THE BANK OF NOVA SCOTIA
Attn: Phil Adsetts (212) 225-5010 (212) 225-5090
One Liberty Plaza
26th Floor
New York, NY 10006
- ------------------------------------------------------------------------------------------------
CITIBANK, N.A.
Attn: Anita Brickell (212) 559-1288 (212) 583-7185
Robert Harrity (212) 559-6482 (212) 793-6130
Cecelia Leyden (212) 559-4354 (212) 793-6130
399 Park Avenue
9th Floor
New York, NY 10043
- ------------------------------------------------------------------------------------------------
CREDIT SUISSE FIRST BOSTON
Attn: James Moran (212) 325-9176 (212) 325-8314
11 Madison Avenue
20th Floor
New York, NY 10010
- ------------------------------------------------------------------------------------------------
DEUTSCHE BANK AG
Attn: Lydia Zaininger (212) 469-8634 (212) 429-8256
31 West 52nd Street
24th Floor
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
PHONE
NAME OF BANK AND ADDRESS FAX NUMBER(S)
NUMBER(S)
- ------------------------------------------------------------------------------------------------
New York, NY 10019
- ------------------------------------------------------------------------------------------------
THE FIRST NATIONAL BANK
OF CHICAGO
Attn: Kenneth Bauer (312) 732-6282 (312) 732-3055
Madeleine Pember (312) 732-9727
One First National Plaza
Suite 0360
Chicago, IL 60670
- ------------------------------------------------------------------------------------------------
FIRST UNION NATIONAL BANK
Attn: Brian Tate (704) 383-0510 (704) 383-6670
301 South College Street
5th Floor
Charlotte, NC 28288-0735
- ------------------------------------------------------------------------------------------------
MORGAN GUARANTY TRUST COMPANY
Attn: Jim Finch (212) 648-7141 (212) 648-5014
Clifford Potter (212) 648-8672
J.P. Morgan
60 Wall Street
New York, NY 10005
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MELLON BANK, N.A.
Attn: Mary Ellen Usher (412) 236-1203 (412) 236-1840
Mark Rogers (412) 234-1888
1 Mellon Bank Center
Suite 4425
Pittsburgh, PA 15258-0001
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NATIONSBANK, N.A.
Attn: Paula Kramp (301) 571-0713 (301) 571-0719
Lawrence Saunders (301) 571-0704
6610 Rockledge Drive, 6th Fl.
Bethesda, MD 20817
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TORONTO DOMINION (TEXAS), INC.
Attn: Katherine Lucey (212) 468-0785 (212) 262-1929
31 West 52nd Street
New York, NY 10019-6101
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SCHEDULE I
BANK COMMITMENT
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THE CHASE MANHATTAN BANK..................................... $ 40,000,000
CITIBANK, N.A................................................ $ 40,000,000
THE BANK OF NEW YORK......................................... $ 30,000,000
THE BANK OF NOVA SCOTIA...................................... $ 30,000,000
CREDIT SUISSE FIRST BOSTON................................... $ 32,000,000
DEUTSCHE BANK AG............................................. $ 10,000,000
THE FIRST NATIONAL BANK OF CHICAGO........................... $ 32,000,000
FIRST UNION NATIONAL BANK.................................... $ 32,000,000
MORGAN GUARANTY TRUST COMPANY................................ $ 30,000,000
MELLON BANK, N.A............................................. $ 32,000,000
NATIONSBANK, N.A............................................. $ 32,000,000
TORONTO DOMINION (TEXAS), INC................................ $ 10,000,000
TOTAL COMMITMENT......................... $350,000,000
EXHIBIT C
[Form of Extension Letter]
[Date]/1/
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: The Chase Manhattan Bank, as Agent and as Fronting Bank, and the
Banks party to the Credit Agreement
Re: Extension of Expiry Date
Ladies and Gentlemen:
Reference is hereby made to that certain 364-Day Revolving Credit Agreement
dated as of November 20, 1997, as amended and restated as of November 19, 1998
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among PP&L, Inc. ("PPL"), PP&L Capital Funding, Inc. ("Finance
Co.") and PP&L Resources, Inc. ("Resources"), the banks party thereto (the
"Banks"), The Chase Manhattan Bank, as fronting bank and as agent for the Banks.
Terms used and not defined herein shall have the meaning assigned to such terms
in the Credit Agreement.
____________________
/1/ This Letter shall be delivered to the Agent not less than 30 and not more
than 45 days prior to the Current Expiry Date.
1. Prior to giving effect to the extension referred to below, the Expiry
Date is __________ (the "Current Expiry Date").
2. PPL and Finance Co. hereby request that the Expiry Date be extended to
_________./2/
3. Pursuant to Section 2.6 of the Credit Agreement, such extension of the
Current Expiry Date shall become effective on the 20th day prior to
the Current Expiry Date if (and only if) Banks holding Commitments
that aggregate at least 51% of the Total Commitment on such date shall
have agreed to such extension as evidenced by their signatures below.
This letter may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one instrument. The delivery by telecopy of an executed
counterpart hereof shall be effective as delivery of an original manually
executed counterpart.
Very truly yours,
PP&L, Inc. PP&L Capital Funding, Inc.
By: By:
______________________________ ______________________________
______________________________ ______________________________
Name: Name:
Title: Title:
___________________
/2/ Such date shall be 364 days after the Current Expiry Date.
EXHIBIT C
Page 3
PP&L Resources, Inc.
By:
______________________________
______________________________
Name:
Title:
Acknowledged and agreed to
as of the date noted above:
THE CHASE MANHATTAN BANK,
individually and as [BANK]
Agent, Collateral Agent
and Fronting Bank,
By: By:
______________________________ ______________________________
______________________________ ______________________________
Name: Name:
Title: Title: