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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 20, 2000
EXELON CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-16169 23-2990190
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
37th Floor, 10 South Dearborn
Post Office Box A-3005
Chicago, Illinois 60690-3005
(address of principal executive offices)
Registrant's telephone number, including area code: (312) 394-4321
N/A
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 20, 2000, pursuant to a Second Amended and Restated Agreement
and Plan of Exchange and Merger dated as of September 22, 1999 as amended and
restated as of October 10, 2000, among PECO Energy Company, a Pennsylvania
corporation ("PECO Energy"), Exelon Corporation, a Pennsylvania corporation
("Exelon") and Unicom Corporation, an Illinois corporation ("Unicom"), PECO
Energy, Exelon and Unicom consummated the merger and exchange as described
below (the "Merger and Exchange").
The Merger and Exchange involved two transactions. The first step was a
share exchange between PECO Energy and its wholly owned subsidiary Exelon,
pursuant to which PECO Energy became a wholly owned subsidiary of Exelon. The
second step was a merger of Unicom into Exelon, pursuant to which Unicom's
separate corporate existence ended and its subsidiaries, including
Commonwealth Edison Company, became subsidiaries of Exelon.
In the first step exchange, each outstanding share of PECO Energy common
stock (other than shares owned by PECO Energy, which were automatically
canceled) was automatically converted into the right to receive one share of
Exelon common stock and all shares of Exelon common stock held by PECO Energy
were automatically canceled.
At the completion of the second step merger, which occurred shortly
following the completion of the first step exchange, Unicom was merged with
and into Exelon, and each share of Unicom common stock (other than shares
owned by Unicom or Exelon, which were automatically canceled) was
automatically converted into the right to receive 0.875 shares of Exelon
common stock and $3.00 in cash.
A copy of the press release issued by Exelon on October 20, 2000 with
respect to the effectiveness of the exchange and merger is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
On October 13, 2000, Exelon established a $1.25 billion bank credit
facility (the "Credit Facility") pursuant to the Term Loan Agreement dated as
of October 13, 2000 among Exelon, the banks listed on the signature pages
thereof, Bank One, N.A., as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent (the "Credit
Agreement"). Approximately $510,000,000 of the Credit Facility is being
borrowed to finance the cash consideration to be paid to former holders of
Unicom common stock in the second step merger. It is anticipated that
borrowings will be made under the remaining Credit Facility as needed.
A copy of the Credit Agreement is attached hereto as Exhibit 99.2 and is
incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial statements of businesses acquired:
Pursuant to the instructions to Item 7 of Form 8-K, the financial
information required by Item 7(a) will be filed by Amendment within
60 days of the date of this filing.
(b) Pro forma financial information:
Pursuant to the instructions to Item 7 of Form 8-K, the financial
information required by Item 7(b) will be filed by Amendment within
60 days of the date of this filing.
(c) Exhibits:
EXHIBIT
NO. DESCRIPTION
99.1 Press Release issued by Exelon Corporation.
99.2 Term Loan Agreement dated as of October 13, 2000 among Exelon,
the banks listed on the signature pages thereof, Bank One,
N.A., as Administrative Agent, Credit Suisse First Boston, as
Documentation Agent, and Citibank, N.A., as Syndication Agent.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 20, 2000 EXELON CORPORATION
By: /s/ Ruth Ann M. Gillis
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Name: Ruth Ann M. Gillis
Title: Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
The following exhibits are filed herewith:
EXHIBIT
NO. DESCRIPTION
99.1 Press Release issued by Exelon Corporation on October 20, 2000.
99.2 Term Loan Agreement dated as of October 13, 2000 among Exelon,
the banks listed on the signature pages thereof, Bank One,
N.A., as Administrative Agent, Credit Suisse First Boston, as
Documentation Agent, and Citibank, N.A., as Syndication Agent.
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Exhibit 99.1
News Release
From: Exelon FOR IMMEDIATE RELEASE
Corporate Communications October 20, 2000
P.O. Box 767
Chicago, IL 60690-0767
Contact: Don Kirchoffner
312.394.3001
UNICOM CORPORATION AND PECO ENERGY COMPANY COMPLETE MERGER;
NEWLY MERGED EXELON CORPORATION TO BEGIN PUBLIC TRADING ON
OCTOBER 23, 2000
Chicago and Philadelphia (October 20, 2000) Unicom Corporation and PECO
Energy Company today announced that they have completed their merger and on
October 23, 2000 will begin trading as Exelon Corporation (NYSE: EXC) on
the New York Stock Exchange (NYSE) under the ticker symbol EXC. Exelon will
also be listed on the Chicago and Philadelphia stock exchanges.
The merger of Unicom and PECO Energy creates Exelon, one of the nation's
largest electric utilities, with more than $12 billion in annual revenues.
The company has one of the industry's largest portfolios of electricity
generation capacity, with a nationwide reach and strong positions in the
Midwest and Mid-Atlantic. Exelon distributes electricity and gas to
approximately five million customers in Illinois and Pennsylvania. The
company also has holdings in such competitive businesses as energy,
infrastructure services, energy services and telecommunications. Exelon is
headquartered in Chicago.
Unicom's last quarterly dividend of 40 cents per share is payable November
1, 2000, to Unicom shareholders of record at 5:00 p.m. on October 6, 2000.
In addition, with the completion of the merger on October 20, 2000, Unicom
shareholders of record at the close of business on October 19, 2000 will
receive a pro-rata dividend of $0.0923077 per share, payable within 30 days
after the merger closing. This pro-rata dividend is equivalent to $0.40 per
share for the full quarter, and was calculated at a per-day rate of
$0.004395604 per share over the 21-day period from September 29, 2000
through October 19, 2000.
With the completion of the merger on October 20, 2000, PECO Energy
shareholders of record at the close of business on October 19, 2000 will
receive a pro-rata dividend of $0.1582279 per share, payable December 20,
2000. This pro-rata dividend is equivalent to $0.25 per share for the full
quarter, and was calculated at a per-day rate of $0.003164557 per share
over the 50-day period from August 31, 2000 through October 19, 2000.
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This press release contains certain forward-looking statements within the
meaning of the safe-harbor provisions of the Securities Exchange Act of
1934; these forward-looking statements are subject to various risks and
uncertainties. The factors that could cause actual results to differ
materially from the projections, forecasts, estimates and expectations
discussed herein may include factors that are beyond the company's ability
to control or estimate precisely, such as estimates of future market
conditions, the behavior of other market participants and the actions of
the Federal and State regulators. Other factors include, but are not
limited to, actions in the financial markets, weather conditions, economic
conditions in the company's service territories, fluctuations in
energy-related commodity prices, conversion activity, other marketing
efforts and other uncertainties. Other risk factors are detailed from time
to time in the company's SEC reports. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of
the date of this press release. The company does not undertake any
obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date of this press
release.
IR Contacts:
Eunice Collins, 312.394.8354
Susan Coan, 215.841.5747
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Exhibit 99.2
$1,250,000,000
TERM LOAN AGREEMENT
dated as of October 13, 2000
among
EXELON CORPORATION
as Borrower
THE BANKS NAMED HEREIN
as Banks
BANK ONE, NA
as Administrative Agent
CREDIT SUISSE FIRST BOSTON
as Documentation Agent
and
CITIBANK, NA
as Syndication Agent
CREDIT SUISSE FIRST BOSTON
and
SALOMON SMITH BARNEY
Joint Lead Arrangers and Book Runners
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...............................1
SECTION 1.01. Certain Defined Terms.............................1
SECTION 1.02. Computation of Time Periods......................13
SECTION 1.03. Accounting Principles............................13
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES..............................3
SECTION 2.01. The Loans........................................14
SECTION 2.02. The Drawdowns....................................14
SECTION 2.03. Fees.............................................15
SECTION 2.04. Reduction of the Commitments.....................15
SECTION 2.05. Repayment of Loans...............................15
SECTION 2.06. Interest on Advances.............................16
SECTION 2.07. Additional Interest on Advances..................16
SECTION 2.08. Interest Rate Determination......................16
SECTION 2.09. Conversion of Advances...........................17
SECTION 2.10. Prepayments......................................18
SECTION 2.11. Increased Costs..................................18
SECTION 2.12. Illegality.......................................19
SECTION 2.13. Payments and Computations........................20
SECTION 2.14. Taxes............................................21
SECTION 2.15. Sharing of Payments, Etc.........................23
ARTICLE III CONDITIONS OF LENDING..........................................4
SECTION 3.01. Conditions Precedent to First Drawdown...........24
SECTION 3.02. Conditions Precedent to Second Drawdown..........25
SECTION 3.03. Conditions Precedent to Each Drawdown............25
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................6
SECTION 4.01. Representations and Warranties of the Borrower...26
ARTICLE V COVENANTS OF THE BORROWER......................................8
SECTION 5.01. Affirmative Covenants............................28
SECTION 5.02. Negative Covenants...............................30
ARTICLE VI EVENTS OF DEFAULT..............................................2
SECTION 6.01. Events of Default................................32
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Page
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ARTICLE VII THE AGENTS.....................................................4
SECTION 7.01. Authorization and Action.........................34
SECTION 7.02. Agents' Reliance, Etc............................34
SECTION 7.03. Agents and Affiliates............................35
SECTION 7.04. Lender Credit Decision...........................35
SECTION 7.05. Indemnification..................................35
SECTION 7.06. Successor Administrative Agent...................36
SECTION 7.07. Documentation Agent, Syndication Agent and
Lead Arrangers...................................36
ARTICLE VIII MISCELLANEOUS.................................................36
SECTION 8.01. Amendments, Etc..................................36
SECTION 8.02. Notices, Etc.....................................37
SECTION 8.03. No Waiver; Remedies..............................37
SECTION 8.04. Costs and Expenses; Indemnification..............37
SECTION 8.05. Right of Set-off.................................38
SECTION 8.06. Binding Effect...................................38
SECTION 8.07. Assignments and Participations...................39
SECTION 8.08. Governing Law....................................42
SECTION 8.09. Consent to Jurisdiction..........................42
SECTION 8.10. Execution in Counterparts; Integration...........42
Schedule I List of Applicable Lending Offices
Exhibit A Form of Note
Exhibit B Notice of Drawdown
Exhibit C Assignment and Acceptance
Exhibit D Form of Opinion of Special Counsel for the Borrower
Exhibit E Form of Opinion of Counsel to the Administrative Agent
Exhibit F Form of Annual and Quarterly Compliance Certificate
ii
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TERM LOAN AGREEMENT
dated as of October 13, 2000
Exelon Corporation, a Pennsylvania corporation (the "Borrower"), the
banks listed on the signature pages hereof, Bank One, NA ("Bank One"), as
Administrative Agent, Credit Suisse First Boston, as Documentation Agent, and
Citibank N.A., as Syndication Agent, hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the respective meanings set forth below (each such
meaning to be equally applicable to both the singular and plural forms of the
term defined):
"Administrative Agent" means Bank One in its capacity as
administrative agent for the Lenders pursuant to Article VII, and not
in its individual capacity as a Lender, and any successor
Administrative Agent appointed pursuant to Article VII.
"Advance" means a Base Rate Advance or a Eurodollar Rate Advance,
each of which is a "Type" of Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"Agents" means the Administrative Agent, the Documentation Agent,
the Syndication Agent and the Lead Arrangers, collectively; and
"Agent" means any one of the foregoing.
"Applicable Commitment Fee Rate" means (a) prior to the date on
which the Benchmark Debt is rated by both S&P and Moody's, 0.09%
(provided that the rate determined pursuant to this clause (a) shall
increase to 0.20% on the 30th day after the Closing Date if the
Benchmark Debt is not rated by both S&P and Moody's prior to such
date); and (b) thereafter: (1) during any Level 1 Rating Period,
0.075% per annum, (2) during any Level 2 Rating Period, 0.09% per
annum, (3) during any Level 3 Rating Period, 0.11% per annum, (4)
during any Level 4 Rating Period, 0.15% per annum and (5) during any
Level 5 Rating Period, 0.20% per annum. The Applicable Commitment Fee
Rate shall change when and as the Rating Period changes.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate
Advance, and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
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"Applicable Margin" means, on any date, for a Base Rate Advance
or a Eurodollar Rate Advance, (a) prior to the date on which the
Benchmark Debt is rated by both S&P and Moody's, 0.000% for a Base
Rate Advance and 0.750% for a Eurodollar Rate Advance (provided that
the rate for a Eurodollar Advance shall increase to 1.25% on the 30th
day after the Closing Date if the Benchmark Debt is not rated by S&P
and Moody's prior to such date); and (b) thereafter, the interest rate
per annum set forth below in the column entitled "Base Rate" or
"Eurodollar Rate", as appropriate, opposite the applicable Rating
Period in effect on such date:
Rating Period Base Rate Eurodollar Rate
------------- --------- ---------------
Level 1 0 0.625 %
Level 2 0 0.750%
Level 3 0 0.875%
Level 4 0 1.000%
Level 5 0 1.250%
The Applicable Margin for Base Rate Advances and Eurodollar Rate
Advances as determined above shall increase by 0.250% on July 1, 2001
and by an additional 0.250% on the first day of each month thereafter
so long as any Loans remain outstanding. The Applicable Margin
applicable to an outstanding Advance shall change when and as the
Rating Period changes.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C hereto.
"Base Rate" means, for any period, a fluctuating interest rate
per annum at all times be equal to the higher of:
(a) the Prime Rate; and
(b) the sum of 1/2 of 1% per annum plus the Federal Funds
Rate in effect from time to time.
"Base Rate Advance" means a tranche of a Loan that bears interest
as provided in Section 2.06(a).
"Benchmark Debt" means the Borrower's senior unsecured long-term
debt without credit enhancement. If the Borrower has no such debt
outstanding but Moody's has issued an "Issuer Rating" for the Borrower
and S&P has issued a "Corporate Credit
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Rating" for the Borrower, then the references herein to ratings
of the Benchmark Debt shall be deemed to be references to such
ratings by Moody's and S&P.
"Borrowing" means a group of tranches of the Loans of the
Lenders of the same Type and, if such Borrowing consists of
Eurodollar Rate Advances, having Interest Periods of the same
duration.
"Business Day" means a day of the year on which banks are not
required or authorized to close in Philadelphia, Pennsylvania,
Chicago, Illinois or New York, New York, and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"Closing Date" shall mean the date of the initial drawdown
hereunder.
"Code" means the Internal Revenue Code of 1986, and the
regulations promulgated thereunder, in each case as amended, reformed
or otherwise modified from time to time.
"Commitment" has the meaning specified in Section 2.01.
"Commonwealth" means Commonwealth Edison Company, an Illinois
corporation.
"Commonwealth Mortgage" means the Mortgage, dated July 1, 1923,
as amended and supplemented by supplemental indentures, including the
Supplemental Indenture, dated August 1, 1994, from Commonwealth to
Harris Trust and Savings Bank and D.G. Donovan, as trustees; provided
that no effect shall be given to any amendment, supplement or
refinancing after the date of this Agreement that would broaden the
definition of "permitted liens" as defined in the Commonwealth
Mortgage as constituted on the date of this Agreement.
"Consolidated Adjusted Total Capitalization" on any date shall
mean the sum, without duplication, of the following with respect to
the Borrower and its consolidated Subsidiaries (exclusive, in each
case, to the extent otherwise included in such item, of (i)<-1-
95>Nonrecourse Indebtedness of any Subsidiary of the Borrower and (ii)
the aggregate principal amount of Transitional Funding Instruments of
the Borrower and its consolidated Subsidiaries): (a) total
capitalization as of such date, as determined in accordance with GAAP,
(b) the current portion of liabilities which as of such date would be
classified in whole or part as long-term debt in accordance with GAAP
(it being understood that the noncurrent portion of such liabilities
is included in the total capitalization referred to in clause (a)),
(c) all obligations as lessee which, in accordance with GAAP, are
capitalized as liabilities (including the current portion thereof),
and (d) all other liabilities which would be classified as short-term
debt in accordance with GAAP (including, without limitation, all
liabilities of the types classified as "Notes Payable, Bank" on PECO's
audited balance sheet for December 31, 1999).
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"Consolidated Adjusted Total Debt" on any date shall mean the
sum, without duplication, of the following with respect to the
Borrower and its consolidated Subsidiaries determined on a
consolidated basis (exclusive, in each case, to the extent otherwise
included in such item, of (i) Nonrecourse Indebtedness of any
Subsidiary of the Borrower, (ii) the aggregate principal amount of
Subordinated Deferrable Interest Securities of the Borrower and its
Subsidiaries and (iii) the aggregate principal amount of Transitional
Funding Instruments of the Borrower and its Subsidiaries): (a) all
liabilities which as of such date would be classified in whole or in
part as long-term debt in accordance with GAAP (including the current
portion thereof), (b) all obligations as lessee which, in accordance
with GAAP, are capitalized as liabilities (including the current
portion thereof), and (c) all other liabilities which would be
classified as short-term debt in accordance with GAAP (including,
without limitation, all liabilities of the types classified as "Notes
Payable, Bank" on PECO's audited balance sheet for December 31, 1999).
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not
incorporated) under common control that, together with the Borrower or
any Subsidiary, are treated as a single employer under Section 414(b)
or 414(c) of the Code.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type or
the selection of a new, or the renewal of the same, Interest Period
for Eurodollar Rate Advances pursuant to Section 2.09.
"Debt" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar
instrument, (iii) obligations to pay the deferred purchase price of
property or services (other than trade payables incurred in the
ordinary course of business), (iv) obligations as lessee under leases
that shall have been or are required to be, in accordance with GAAP,
recorded as capital leases, (v) obligations (contingent or otherwise)
under reimbursement or similar agreements with respect to the issuance
of letters of credit (other than obligations in respect of documentary
letters of credit opened to provide for the payment of goods or
services purchased in the ordinary course of business) and (vi)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (v) above.
"Documentation Agent" means Credit Suisse First Boston, in its
capacity as documentation agent hereunder.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or
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such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"Eligible Assignee" means (i) a commercial bank organized under
the laws of the United States, or any State thereof; (ii) a commercial
bank organized under the laws of any other country that is a member of
the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements
to Borrow, or a political subdivision of any such country, provided
that such bank is acting through a branch or agency located in the
United States; (iii) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership or
other entity) engaged generally in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business;
or (iv) the central bank of any country that is a member of the OECD;
provided, however, that (A) any such Person described in clause (i),
(ii) or (iii) above shall also (x) have outstanding unsecured
long-term debt that is rated BBB- or better by S&P and Baa3 or better
by Moody's (or an equivalent rating by another nationally recognized
credit rating agency of similar standing if either such corporation is
no longer in the business of rating unsecured indebtedness of entities
engaged in such businesses) and (y) have combined capital and surplus
(as established in its most recent report of condition to its primary
regulator) of not less than $100,000,000 (or its equivalent in foreign
currency), and (B) any Person described in clause (ii), (iii) or (iv)
above shall, on the date on which it is to become a Lender hereunder,
be entitled to receive payments hereunder without deduction or
withholding of any United States Federal income taxes (as contemplated
by Section 2.14(e)).
"Eligible Successor" means a Person which (i) is a corporation
duly incorporated, validly existing and in good standing under the
laws of one of the states of the United States or the District of
Columbia, (ii) as a result of the contemplated acquisition,
consolidation or merger, will succeed to all or substantially all of
the consolidated business and assets of the Borrower and its
Subsidiaries, (iii) upon giving effect to the contemplated
acquisition, consolidation or merger, will have all or substantially
all of its consolidated business and assets conducted and located in
the United States and (iv) is acceptable to the Majority Lenders as a
credit matter.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder, each as amended and modified from time
to time.
"Eurocurrency Liabilities" has the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such
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Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Rate Advance made as part of the same Borrowing, an
interest rate per annum equal to the average (rounded upward to
the nearest whole multiple of 1/16 of 1% per annum, if such
average is not such a multiple) of the rate per annum at which
deposits in U.S. dollars are offered by the principal office of
each of the Reference Banks in London, England, to prime banks in
the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an
amount substantially equal to such Reference Bank's Eurodollar
Rate Advance made as part of such Borrowing and for a period
equal to such Interest Period. The Eurodollar Rate for the
Interest Period for each Eurodollar Rate Advance made as part of
the same Borrowing shall be determined by the Administrative
Agent on the basis of applicable rates furnished to and received
by the Administrative Agent from the Reference Banks two Business
Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.08.
"Eurodollar Rate Advance" means a tranche of a Loan that bears
interest as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" of any Lender for the
Interest Period for any Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period (or if more
than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest
Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having
a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended and modified from time to time.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"GAAP" shall have the meaning given that term in Section 1.03.
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"Genco" means Exelon Generation Company, LLC or any other
entity to which Commonwealth or PECO transfers all or any
substantial portion of its electric generating assets.
"Granting Bank" shall have the meaning given that term in
Section 8.07(h).
"Interest Period" means, for each Eurodollar Rate Advance,
the period commencing on the date such Eurodollar Rate Advance is
made or is Converted from a Base Rate Advance and ending on the
last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each
Interest Period shall be 1, 2, 3 or 6 months, as the Borrower may
select in accordance with Section 2.02 or 2.09; provided that:
(i) the Borrower may not select any Interest Period that
ends after the scheduled Maturity Date;
(ii) Interest Periods commencing on the same date for
Advances made as part of the same Borrowing shall be of the same
duration, and
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would
cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day.
"Lead Arrangers" means Credit Suisse First Boston and Salomon
Smith Barney in their capacities as Joint Lead Arrangers and Book
Runners.
"Lenders" means the Banks listed on the signature pages hereof
and each Eligible Assignee that shall become a party hereto pursuant
to Section 8.07.
"Level 1 Rating Period" means any period during which the
Benchmark Debt is rated A- or higher by S&P (or a comparable rating
from any generally recognized successor to S&P) or A3 or higher by
Moody's (or a comparable rating from any generally recognized
successor to Moody's) (it being understood that, for this purpose,
such ratings shall be subject to the Split Rating Adjustment).
"Level 2 Rating Period" means any period which does not qualify
as a Level 1 Rating Period during which the Benchmark Debt is rated
BBB+ or higher by S&P (or a comparable rating from any generally
recognized successor to S&P) or Baa1 or higher by Moody's (or a
comparable rating from any generally recognized successor to Moody's)
(it being understood that, for this purpose, such ratings shall be
subject to the Split Rating Adjustment).
18
"Level 3 Rating Period" means any period which does not qualify
as a Level 1 or Level 2 Rating Period during which the Benchmark Debt
is rated BBB or higher by S&P (or a comparable rating from any
generally recognized successor to S&P) or Baa2 or higher by Moody's
(or a comparable rating from any generally recognized successor to
Moody's) (it being understood that, for this purpose, such ratings
shall be subject to the Split Rating Adjustment).
"Level 4 Rating Period" means any period which does not qualify
as a Level 1, Level 2 or Level 3 Rating Period during which the
Benchmark Debt is rated BBB- or higher by S&P (or a comparable rating
from any generally recognized successor to S&P) or Baa3 or higher by
Moody's (or a comparable rating from any generally recognized
successor to Moody's) (it being understood that, for this purpose,
such ratings shall be subject to the Split Rating Adjustment).
"Level 5 Rating Period" means any period which does not qualify
as a Level 1, Level 2, Level 3 or Level 4 Rating Period (it being
understood that, for this purpose, such ratings shall be subject to
the Split Rating Adjustment).
"Lien" means any lien (statutory or other), mortgage,
pledge, security interest or other charge or encumbrance, or any
other type of preferential arrangement (including, without
limitation, the interest of a vendor or lessor under any
conditional sale, capitalized lease or other title retention
agreement).
"Loan" has the meaning specified in Section 2.01.
"Majority Lenders" means Lenders having Pro Rata Shares of
more than 50% (provided that, for purposes of this definition,
neither the Borrower, nor any of its Affiliates, if a Lender,
shall be included in (i) the Lenders having such amount of the
Pro Rata Shares or (ii) determining the amount of the Commitments
and/or the Loans which constitute 100% of the Pro Rata Shares).
"Material Adverse Change" and "Material Adverse Effect" each
means, relative to any occurrence, fact or circumstances of
whatsoever nature (including, without limitation, any
determination in any litigation, arbitration or governmental
investigation or proceeding), (i) any materially adverse change
in, or materially adverse effect on, the financial condition,
operations, assets or business of the Borrower and its
consolidated Subsidiaries (including Commonwealth and PECO),
taken as a whole or (ii) any materially adverse effect on the
validity or enforceability of this Agreement or any of the Notes.
"Material Subsidiary" means each of Commonwealth, PECO and
Genco and any holding company for any of the foregoing.
"Maturity Date" means October 12, 2001 (or such earlier date on
which the Loans become due and payable in full).
19
"Merger Agreement" means the Amended and Restated Agreement
and Plan of Exchange and Merger, dated as of September 22, 1999,
as amended and restated as of January 7, 2000 and as of October
10, 2000, among PECO Energy Company, Newholdco Corporation (now
known as Exelon Corporation) and Unicom Corporation.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which
more than one employer is obligated to make contributions.
"Net Cash Proceeds" means any cash proceeds received by the
Borrower or Genco pursuant to any issuance of equity securities
or Debt of the types described in clause (i) or (ii) of the
definition of "Debt", net of the direct costs relating to such
issuance (including sales and underwriter's discounts and
commissions, upfront fees and legal, accounting and investment
banking fees).
"Nonrecourse Indebtedness" means any Debt that finances the
acquisition, development, ownership or operation of an asset in
respect of which the Person to which such Debt is owed has no
recourse whatsoever to the Borrower or any of its Affiliates
other than:
(i) recourse to the named obligor with respect to such Debt
(the "Debtor") for amounts limited to the cash flow or
net cash flow (other than historic cash flow) from the
asset;
(ii) recourse to the Debtor for the purpose only of enabling
amounts to be claimed in respect of such Debt in an
enforcement of any security interest or lien given by the
Debtor over the asset or the income, cash flow or other
proceeds deriving from the asset (or given by any
shareholder or the like in the Debtor over its shares or
like interest in the capital of the Debtor) to secure the
Debt, but only if the extent of the recourse to the Debtor
is limited solely to the amount of any recoveries made on
any such enforcement; and
(iii) recourse to the Debtor generally or indirectly to any
Affiliate of the Debtor, under any form of assurance,
undertaking or support, which recourse is limited to a
claim for damages (other than liquidated damages and
damages required to be calculated in a specified way)
for a breach of an obligation (other than a payment
obligation or an obligation to comply or to procure
compliance by another with any financial ratios or
other tests of financial condition) by the Person
against which such recourse is available.
20
"Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the Loan of such Lender to the Borrower.
"Notice of Drawdown" has the meaning specified in Section
2.02(a).
"OECD" means the Organization for Economic Cooperation and
Development.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"PECO" means PECO Energy Company, a Pennsylvania corporation.
"PECO Mortgage" means the First and Refunding Mortgage,
dated as of May 1, 1923, between The Counties Gas & Electric
Company (to which PECO is successor) and Fidelity Trust Company,
Trustee (to which First Union National Bank is successor), as
amended, supplemented or refinanced from time to time, provided
that no effect shall be given to any amendment, supplement or
refinancing after the date of this Agreement that would broaden
the definition of "excepted encumbrances" as defined in the PECO
Mortgage as constituted on the date of this Agreement.
"PECO/Unicom Merger" means the merger described in the Proxy
Statement (including the share exchange pursuant to which holders
of common stock of PECO will receive a corresponding number of
shares of common stock of the Borrower and the subsequent merger
of Unicom into the Borrower pursuant to which the holders of
common stock of Unicom will receive 0.875 common shares of the
Borrower and $3.00 in cash for each share of common stock of
Unicom).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability
company or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means an employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Borrower
or any member of the Controlled Group may have any liability.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced by Bank One or by its parent, BANK ONE CORPORATION
(which is not necessarily the lowest rate charged to any customer),
changing when and as said prime rate changes.
"Principal Subsidiary" means (i) each Utility Subsidiary and
(ii) each other Subsidiary of the Borrower the assets of which
exceeded $75,000,000 in book value at any time during the
preceding 24-month period.
21
"Pro Rata Share" means, for any Lender, the percentage which
(a) the sum of such Lender's Commitment and the outstanding
principal amount of such Lender's Loan is of (b) the sum of all
Commitments of all Lenders plus the outstanding principal amount
of all Loans.
"Proxy Statement" means the Joint Proxy Statement for 2000
Annual Meetings of Shareholders and Prospectus dated May 15, 2000
issued by PECO and Unicom.
"Rating Period" means a Level 1 Rating Period, a Level 2
Rating Period, a Level 3 Rating Period, a Level 4 Rating Period
or a Level 5 Rating Period, as the case may be.
"Reference Banks" means Bank One, Citibank, N.A. and Credit
Suisse First Boston]
"Register" has the meaning specified in Section 8.07(c).
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and regulations issued under such section
with respect to a Plan, excluding, however, such events as to
which the PBGC by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event, provided that a failure to meet the
minimum funding standard of Section 412 of the Code and Section
302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waivers in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"S&P" means Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc.
"Single Employer Plan" means a Plan maintained by the
Borrower or any member of the Controlled Group for employees of
the Borrower or any member of the Controlled Group.
"Sithe Acquisition" means the acquisition by a subsidiary of
the Borrower of 49.9% of Sithe Energies' North American
businesses pursuant to the Stock Purchase Agreement dated as of
August 11, 2000 among Exelon (Fossil) Holdings, Inc., as Buyer,
certain stockholders of Sithe Energies, Inc. and Sithe Energies,
Inc.
"SPC" shall have the meaning assigned to that term in Section
8.07(h).
"Special Purpose Subsidiary" means a direct or indirect
wholly owned corporate Subsidiary of the Borrower, substantially
all of the assets of which are "intangible transition property"
(as defined in Section 18-102 of the Illinois Public Utilities
Law, as amended, or in 66 Pa. Cons. Stat. Ann. ss.2812(g) (West
Supp. 1997) or any successor provision of similar import) and
proceeds thereof, formed solely for the purpose of holding such
assets and issuing such Transitional Funding Instruments, and
which
22
complies with the requirements customarily imposed on
bankruptcy-remote corporations in receivables securitizations.
"Split Rating Adjustment": For the purpose of determining
the appropriate Rating Period, the rating of the Benchmark Debt
shall be subject to adjustment as follows. If the Benchmark Debt
is rated at equivalent rating levels, then no adjustment shall
apply. If the Benchmark Debt is rated not more than one rating
level apart by S&P (or any generally accepted successor to S&P)
and Moody's (or any generally accepted successor to Moody's),
then the higher rating shall apply. Otherwise, the intermediate
rating at the midpoint shall apply. If there is no midpoint, the
higher of the two intermediate ratings will apply. For this
purpose, (i) determination of the rating level shall take into
account "+" and "-" modifiers to S&P ratings and numerical
modifiers to Moody's ratings (so that, for example, an S&P rating
of A- shall be deemed equivalent to a Moody's rating of A3, an
S&P rating of BBB+ shall be deemed equivalent to a Moody's rating
of Baa1, an S&P rating of BBB shall be deemed equivalent to a
Moody's rating of Baa2, an S&P rating of BBB- shall be deemed
equivalent to a Moody's rating of Baa3, and so on), and (ii) by
way of clarification, in the event the Benchmark Debt is rated by
only one of the two referenced rating agencies, such rating shall
be deemed to be reduced to the next lower rating level.
"Subordinated Deferrable Interest Securities" means all
obligations of the Borrower and its Subsidiaries, as set forth from
time to time in the consolidated balance sheets of the Borrower and
its Subsidiaries delivered pursuant to Section 5.01(b) hereof, in
respect of "ComEd-Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts" or "Company-Obligated Mandatorily
Redeemable Preferred Securities of a Partnership."
"Subsidiary" means, with respect to any Person, any corporation
or unincorporated entity of which more than 50% of the outstanding
capital stock (or comparable interest) having ordinary voting power
(irrespective of whether or not at the time capital stock, or
comparable interests, of any other class or classes of such
corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly
owned by such Person (whether directly or through one or more other
Subsidiaries).
"Syndication Agent" means Citibank, N.A.
"Termination Date" means the earliest of (i) February 16, 2001,
(ii) the date of the second drawdown hereunder or (iii) the date of
termination in whole of the Commitments pursuant to Section 2.04 or
Section 6.01.
"Transitional Funding Instrument" means any instruments,
pass-through certificates, notes, debentures, certificates of
participation, bonds, certificates of beneficial interest or
other evidences of indebtedness or instruments evidencing a
beneficial interest which (i) in the case of Commonwealth (A) are
issued pursuant to a "transitional funding order" (as such term
is defined in Section 18-102 of the Illinois
23
Public Utilities Act, as amended) issued by the Illinois
Commerce Commission at the request of an electric utility and (B)
are secured by or otherwise payable from non-bypassable cent per
kilowatt hour charges authorized pursuant to such order to be
applied and invoiced to customers of such utility and (ii) in the
case of PECO, are "transition bonds" (as defined in 66 Pa. Cons.
Stat. Ann. ss/2812(g) (West Supp. 1997), or any successor
provision of similar import), representing a securitization of
"intangible transition property" (as defined in the foregoing
statute). The instrument funding charges so applied and invoiced
must be deducted and stated separately from the other charges
invoiced by such utility against its customers.
"Unfunded Liabilities" means, (i) in the case of any Single
Employer Plan, the amount (if any) by which the present value of
all vested nonforfeitable benefits under such Plan exceeds the
fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent evaluation date for
such Plan, and (ii) in the case of any Multiemployer Plan, the
withdrawal liability that would be incurred by the Controlled
Group if all members of the Controlled Group completely withdrew
from such Multiemployer Plan.
"Unicom" means, prior to the PECO/Unicom Merger, Unicom
Corporation, an Illinois corporation.
"Utility Subsidiary" means Commonwealth, PECO and each other
Subsidiary of the Borrower that is engaged principally in the
generation, transmission, or distribution of electricity or gas
and is subject to regulation as a public utility by federal or
state regulatory authorities.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Principles. As used in this Agreement, "GAAP"
shall mean generally accepted accounting principles in the United States,
applied on a basis consistent with the principles used in preparing PECO's
audited consolidated financial statements as of December 31, 1999 and for the
fiscal year then ended. In this Agreement, except to the extent, if any,
otherwise provided herein, all accounting and financial terms shall have the
meanings ascribed to such terms by GAAP, and all computations and determinations
as to accounting and financial matters shall be made in accordance with GAAP. In
the event that the financial statements generally prepared by the Borrower apply
accounting principles other than GAAP, the compliance certificate delivered
pursuant to Section 5.01(b)(iv) accompanying such financial statements shall
include information in reasonable detail reconciling such financial statements
to GAAP to the extent relevant to the calculations set forth in such compliance
certificate.
24
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Loans. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a term loan (each a
"Loan") to the Borrower in an amount not to exceed the amount set forth
opposite such Lender's name on the signature pages hereof or, if such
Lender has entered into any Assignment and Acceptance, set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(c), as such amount may be reduced pursuant to Section 2.04
(such Lender's "Commitment"). The Borrower may borrow the Loans in up to
two drawdowns on any Business Day during the period from the date hereof
until the Termination Date. Each drawdown shall be on an integral multiple
of $5,000,000. The Loan of each Lender may be divided into tranches which
may be Base Rate Advances or Eurodollar Rate Advances; provided that each
Lender's Advances shall be maintained so that at all times such Lender has
a Pro Rata Share of each Borrowing. Each Borrowing comprised of Base Rate
Advances shall be in the amount of $5,000,000 or a higher integral multiple
of $1,000,000, and each Borrowing comprised of Eurodollar Rate Advances
shall be in the amount of $10,000,000 or a higher integral multiple of
$1,000,000.
SECTION 2.02. The Drawdowns. Each drawdown shall be made on
notice, given not later than 10:00 A.M. (Chicago time) on the third
Business Day prior to the date of the proposed drawdown if such drawdown is
to include Eurodollar Rate Advances, and on the date of the proposed
drawdown if such drawdown is solely comprised of Base Rate Advances, by the
Borrower to the Administrative Agent, which shall give to each Lender
prompt notice thereof. Each such notice of drawdown (a "Notice of
Drawdown") shall be sent by telecopier, telex or cable, confirmed
immediately in writing, in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such drawdown, (ii) Type of
Advances to be made in connection with such drawdown, (iii) aggregate
amount of such drawdown (which, in the case of the first drawdown, shall
not exceed $525,000,000 and, in the case of the second drawdown, shall not
exceed the aggregate amount of the remaining Commitments), and (iv) in the
case of a drawdown which includes one or more Borrowings of Eurodollar Rate
Advances, the initial Interest Period for each such Borrowing. Each Lender
shall, before 12:00 Noon (Chicago time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section 8.02, in same
day funds, such Lender's Pro Rata Share of such drawdown. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower at the Administrative
Agent's aforesaid address.
(b) Each Notice of Drawdown shall be irrevocable and binding on
the Borrower. If a Notice of Drawdown specifies that the related drawdown is to
include Eurodollar Rate Advances, the Borrower shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Drawdown
the applicable conditions set forth in Article III, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of
25
deposits or other funds acquired by such Lender to fund any Eurodollar Rate
Advance to be made by such Lender as part of such drawdown when such Eurodollar
Rate Advance, as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of a drawdown that such Lender will not
make available to the Administrative Agent such Lender's ratable portion of
such drawdown, the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the date of such
drawdown in accordance with subsection (a) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent
that such Lender shall not have so made such ratable portion available to
the Administrative Agent, such Lender and the Borrower severally (but
without duplication) agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate (or the average of the rates)
applicable at the time to Advances made in connection with such drawdown
and (ii) in the case of such Lender, the Federal Funds Rate.
(d) The failure of any Lender to fund any portion of the Loan to
be made by it on the date of a drawdown shall not relieve any other Lender
of its obligation, if any, hereunder to fund the relevant portion of its
Loan on the date of such drawdown, but no Lender shall be responsible for
the failure of any other Lender to fund any portion of the Loan to be made
by such other Lender on the date of a drawdown.
(e) Notwithstanding anything to the contrary contained herein, no
more than six Borrowings comprised of Eurodollar Rate Advances may be
outstanding at any time.
SECTION 2.03. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on the
average daily undrawn portion of such Lender's Commitment from the date on
which the Administrative Agent determines the conditions set forth in
Section 3.01 are satisfied in the case of each Bank, and from the effective
date specified in the Assignment and Acceptance pursuant to which it became
a Lender in the case of each other Lender, until the Termination Date,
payable on December 31, 2000 (if the Termination Date has not previously
occurred) and on the Termination Date, at a percentage rate per annum equal
to the Applicable Commitment Fee Rate in effect from time to time, changing
when and as the Applicable Commitment Fee Rate changes.
(b) The Borrower agrees to pay to the Administrative Agent and
the Lead Arrangers, for their respective accounts, such additional fees, in
such amounts and payable on such dates as may be agreed to in writing from
time to time between the Borrower and the Administrative Agent or the Lead
Arrangers, as the case may be.
SECTION 2.04. Reduction of the Commitments. The Borrower shall
have the right, upon at least two Business Days' notice to the
Administrative Agent, to terminate in whole or reduce ratably in part the
undrawn portions of the respective Commitments of the Lenders;
26
provided that each partial reduction shall be in the aggregate amount of
$10,000,000 or an integral multiple thereof. In addition, (i) on the date
of the first drawdown of the Loans, the Commitment of each Lender shall be
reduced by the principal amount of the Advance of such Lender on such date;
(ii) concurrently with the receipt by the Borrower or Genco of any Net Cash
Proceeds, the Commitment of each Lender shall be further reduced by an
amount equal to such Lender's Pro Rata Share of the remainder (rounded
down, if necessary, to an integral multiple of $1,000,000) of (x) all Net
Cash Proceeds received since the Closing Date minus (y) the sum of the
aggregate amount of such Net Cash Proceeds previously applied, or
concurrently required to be applied, to prepay Loans pursuant to Section
2.10(b) plus the amount of Net Cash Proceeds previously applied to reduce
the Commitments pursuant to this clause (ii); and (iii) upon the making of
the second drawdown, the Commitments shall be reduced to zero.
SECTION 2.05. Repayment of Loans. The Borrower shall repay the
principal amount of each Loan on or before the Maturity Date.
SECTION 2.06. Interest on Advances. The Borrower shall pay
interest on the unpaid principal amount of each Advance of each Lender, at
the following rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate Advance,
a rate per annum equal at all times to the Base Rate in effect from time to
time, payable on the last day of each calendar quarter and on the date such
Base Rate Advance shall be Converted or paid in full.
(b) Eurodollar Rate Advances. Subject to Section 2.07, if such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times
during each Interest Period for such Advance to the sum of the Eurodollar
Rate for such Interest Period plus the Applicable Margin in effect from
time to time, payable on the last day of each Interest Period for such
Eurodollar Rate Advance (or, if such Interest Period is six months, accrued
interest shall be payable on the day that is three months and on the day
that is six months from the date such Advance was made) or, if earlier, on
the date such Eurodollar Rate Advance is Converted or paid in full.
SECTION 2.07. Additional Interest on Advances. The Borrower shall
pay to each Lender, so long as such Lender shall be required under
regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, for each
Interest Period for such Eurodollar Rate Advance, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Interest Period from (ii) the rate obtained by
dividing such Eurodollar Rate by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance; provided
that no Lender shall be entitled to demand such additional interest more
than 90 days following the last day of the Interest Period in respect of
which such demand is made; provided further, however, that the foregoing
proviso shall in no way limit the right of any Lender to demand or receive
such additional interest to the extent that such additional interest
relates to the retroactive application of the reserve requirements
described
27
above if such demand is made within 90 days after the implementation of
such retroactive reserve requirements. Such additional interest shall be
determined by such Lender and notified to the Borrower through the
Administrative Agent, and such determination shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.08. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Administrative Agent timely information for
the purpose of determining each Eurodollar Rate. If any one of the
Reference Banks shall not furnish such timely information to the
Administrative Agent for the purpose of determining any such interest rate,
the Administrative Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks.
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.06(a) or (b), and the
applicable rate, if any, furnished by each Reference Bank for the purpose
of determining the applicable interest rate under Section 2.06(b).
(c) If all of the Reference Banks fail to furnish timely
information to the Administrative Agent for determining the Eurodollar Rate
for any Eurodollar Rate Advances,
(i) the Administrative Agent shall forthwith notify the
Borrower and the Lenders that the interest rate cannot be
determined for such Eurodollar Rate Advances,
(ii) each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert
into a Base Rate Advance (or if such Advance is then a Base
Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders notify the Administrative Agent that the Eurodollar Rate
for any Interest Period for such Advances will not adequately reflect the
cost to such Majority Lenders of making, funding or maintaining their
respective Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the
Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor
(unless prepaid prior to such date), Convert into a Base
Rate Advance, and
(ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent
28
shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.09. Conversion of Advances. (a) Voluntary. The Borrower
may on any Business Day, upon notice given to the Administrative Agent not
later than 10:00 A.M. (Chicago time) on the third Business Day prior to the
date of any proposed Conversion into Eurodollar Rate Advances, and on the
date of any proposed Conversion into Base Rate Advances, and subject to the
provisions of Sections 2.08 and 2.12, Convert all Advances of one Type made
in connection with the same Borrowing into Advances of the other Type or
Eurodollar Rate Advances having a new Interest Period; provided, however,
that any Conversion of Eurodollar Rate Advances into Base Rate Advances or
Eurodollar Rate Advances having a new Interest Period shall be made on, and
only on, the last day of an Interest Period for such Eurodollar Rate
Advances, unless the Borrower shall also reimburse the Lenders in respect
thereof pursuant to Section 8.04(b) on the date of such Conversion. Each
such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted,
and (iii) if such Conversion is into, or with respect to, Eurodollar Rate
Advances, the duration of the Interest Period for such Advances.
(b) Automatic. If the Borrower shall fail to select the Type of
any Advance or the duration of any Interest Period for any Borrowing
comprising Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01 and
Section 2.09(a), the Administrative Agent will forthwith so notify the
Borrower and the Lenders and such Advances will automatically, on the last
day of the then existing Interest Period therefor, Convert into Base Rate
Advances.
SECTION 2.10. Prepayments. (a) The Borrower may, upon at least
three Business Days' notice in the case of any prepayment of Eurodollar
Rate Advances, or one Business Day's notice in the case of any prepayment
of Base Rate Advances, to the Administrative Agent stating the proposed
date and aggregate principal amount of the prepayment, and if such notice
is given the Borrower shall, prepay the outstanding principal amounts of
the Advances made as part of the same Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that each partial prepayment
shall be in an aggregate principal amount not less than $10,000,000 or a
higher integral multiple of $1,000,000 in the case of any prepayment of
Eurodollar Rate Advances and $5,000,000 or a higher integral multiple of
$1,000,000 in the case of any prepayment of Base Rate Advances.
(b) Concurrently with the receipt by the Borrower or Genco of
any Net Cash Proceeds, the Borrower shall make a prepayment of the Loans in an
amount equal to the remainder (rounded down, if necessary, to an integral
multiple of $1,000,000) of (i) all Net Cash Proceeds received since the
Closing Date minus (ii) the sum of the aggregate amount of such Net Cash
Proceeds previously applied to prepay Loans pursuant to this Section
2.10(b) plus the aggregate amount of Net Cash Proceeds applied to reduce
the Commitments pursuant to clause (ii) of the second sentence of Section
2.04. Any such prepayment shall be applied ratably to the Loans of the
Lenders in accordance with their respective Pro Rata Shares and to such
Advances as the Borrower shall specify.
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(c) If the Borrower prepays any Eurodollar Rate Advance on a day
other than the last day of an Interest Period therefor, the Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to Section
8.04(b) on the date of such prepayment. The Borrower shall have no right to
reborrow any portion of a Loan which has been prepaid.
SECTION 2.11. Increased Costs. (a) If on or after the date of
this Agreement, any Lender determines that (i) the introduction of or any
change (other than any change by way of imposition or increase of reserve
requirements, in the case of Eurodollar Rate Advances, included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any law
or regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the
force of law) shall increase the cost to such Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances, then the Borrower
shall from time to time, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts (without duplication of any
amount payable pursuant to Section 2.14) sufficient to compensate such
Lender for such increased cost; provided that no Lender shall be entitled
to demand such compensation more than 90 days following the last day of the
Interest Period in respect of which such demand is made; provided further,
however, that the foregoing proviso shall in no way limit the right of any
Lender to demand or receive such compensation to the extent that such
compensation relates to the retroactive application of any law, regulation,
guideline or request described in clause (i) or (ii) above if such demand
is made within 90 days after the implementation of such retroactive law,
interpretation, guideline or request. A certificate as to the amount of
such increased cost, submitted to the Borrower and the Administrative Agent
by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that, after the date of this
Agreement, compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or
not having the force of law) regarding capital adequacy requirements
affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender
(including, in any event, any determination after the date of this
Agreement by any such governmental authority or central bank that, for
purposes of capital adequacy requirements, any Lender's Commitment
hereunder does not constitute a commitment with an original maturity of one
year or less) and that the amount of such capital is increased by or based
upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type or the Loan made by such Lender, then, upon demand
by such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall immediately pay to the Administrative Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation
in the light of such circumstances, to the extent that such Lender
determines such increase in capital to be allocable to the existence of
such Lender's commitment to lend hereunder or the Advances made by such
Lender; provided that no Lender shall be entitled to demand such
compensation more than one year following the later of the payment to or
for the account of such Lender of all other amounts payable hereunder and
under any Note held by such Lender and the termination of such Lender's
Commitment; provided further,
30
however, that the foregoing proviso shall in no way limit the right of any
Lender to demand or receive such compensation to the extent that such
compensation relates to the retroactive application of any law, regulation,
guideline or request described above if such demand is made within one year
after the implementation of such retroactive Law, interpretation, guideline
or request. A certificate as to such amounts submitted to the Borrower and
the Administrative Agent by such Lender shall be conclusive and binding,
for all purposes, absent manifest error.
(c) Any Lender claiming compensation pursuant to this Section
2.11 shall use its best efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such compensation that may
thereafter accrue and would not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to such Lender.
SECTION 2.12. Illegality. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Administrative Agent that
the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Eurodollar
Lending Office to perform its obligations to make or maintain Eurodollar
Rate Advances hereunder, (i) Advances into, Eurodollar Rate Advances shall
be suspended (subject to the following paragraph of this Section 2.12)
until the Administrative Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist and (ii) all
Eurodollar Rate Advances of such Lender then outstanding shall, on the last
day of then applicable Interest Period (or such earlier date as such Lender
shall designate upon not less than five Business Days prior written notice
to the Administrative Agent), be automatically Converted into Base Rate
Advances.
If the obligation of any Lender to make or maintain Eurodollar
Rate Advances has been suspended pursuant to the preceding paragraph, then,
unless and until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist, (i)
all Advances that would otherwise be made or maintained by such Lender as
Eurodollar Rate Advances shall instead be made or maintained as Base Rate
Advances and (ii) to the extent that Eurodollar Rate Advances of such
Lender have been Converted into Base Rate Advances pursuant to the
preceding paragraph or made instead as Base Rate Advances pursuant to the
preceding clause (i), all payments and prepayments of principal that would
have otherwise been applied to such Eurodollar Rate Advances of such Lender
shall be applied instead to such Base Rate Advances of such Lender.
SECTION 2.13. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes not later than 10:00 A.M.
(Chicago time) on the day when due in U.S. dollars to the Administrative
Agent at its address referred to in Section 8.02 in same day funds without
setoff, counterclaim or other deduction. The Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or commitment and facility fees ratably
(other than amounts payable pursuant to Section 2.02(c), 2.07, 2.11, 2.12
(with respect to interest on a Base Rate Advance which, absent an event
described in such Section, would otherwise be a Eurodollar Rate Advance),
2.14 or 8.04(b)) to
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the Lenders for the account of their respective Applicable Lending Offices,
and like funds relating to the payment of any other amount payable to any
Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement.
Upon its acceptance of an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to Section 8.07(d),
from and after the effective date specified in such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior
to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under
any Note held by such Lender, to charge from time to time against any or
all of the Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Administrative Agent on the basis of a year of 365 or 366 days,
as the case may be, and all computations of interest based on the
Eurodollar Rate or the Federal Funds Rate and of commitment fees shall be
made by the Administrative Agent, and all computations of interest pursuant
to Section 2.07 shall be made by a Lender, on the basis of a year of 360
days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest
or commitment fees are payable. Each determination by the Administrative
Agent (or, in the case of Section 2.07, by a Lender) of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or
commitment fee, as the case may be; provided, however, if such extension
would cause payment of interest on or principal of Eurodollar Rate Advances
to be made in the next following calendar month, such payment shall be made
on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent that the Borrower shall not have so made such payment
in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
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(f) Notwithstanding anything to the contrary contained herein,
any amount payable by the Borrower hereunder or under any Note that is not
paid when due (whether at stated maturity, by acceleration or otherwise)
shall (to the fullest extent permitted by law) bear interest from the date
when due until paid in full at a rate per annum equal at all times to the
Base Rate plus 2%, payable upon demand.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section
2.13, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
the Administrative Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender or
the Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.14)
such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies to the extent arising from the execution, delivery or
registration of this Agreement or the Notes (hereinafter referred to as
"Other Taxes").
(c) No Lender may claim or demand payment or reimbursement in
respect of any Taxes or Other Taxes pursuant to this Section 2.14 if such
Taxes or Other Taxes, as the case may be, were imposed solely as the result
of a voluntary change in the location of the jurisdiction of such Lender's
Applicable Lending Office.
(d) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.14) paid by such
Lender or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from
the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
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(e) Prior to the date of the first drawdown in the case of each
Bank, and on the date of the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender, and from time to time
thereafter within 30 days from the date of request if requested by the
Borrower or the Administrative Agent, each Lender organized under the laws
of a jurisdiction outside the United States shall provide the
Administrative Agent and the Borrower with the forms prescribed by the
Internal Revenue Service of the United States certifying that such Lender
is exempt from United States withholding taxes with respect to all payments
to be made to such Lender hereunder and under the Notes. If for any reason
during the term of this Agreement, any Lender becomes unable to submit the
forms referred to above or the information or representations contained
therein are no longer accurate in any material respect, such Lender shall
notify the Administrative Agent and the Borrower in writing to that effect.
Unless the Borrower and the Administrative Agent have received forms or
other documents satisfactory to them indicating that payments hereunder or
under any Note are not subject to United States withholding tax, the
Borrower or the Administrative Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments to or for
any Lender organized under the laws of a jurisdiction outside the United
States and no Lender may claim or demand payment or reimbursement for such
withheld taxes pursuant to this Section 2.14.
(f) Any Lender claiming any additional amounts payable pursuant
to this Section 2.14 shall use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a
change would avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
(g) If the Borrower makes any additional payment to any Lender
pursuant to this Section 2.14 in respect of any Taxes or Other Taxes, and
such Lender determines that it has received (i) a refund of such Taxes or
Other Taxes or (ii) a credit against or relief or remission for, or a
reduction in the amount of, any tax or other governmental charge
attributable solely to any deduction or credit for any Taxes or Other Taxes
with respect to which it has received payments under this Section 2.14,
such Lender shall, to the extent that it can do so without prejudice to the
retention of such refund, credit, relief, remission or reduction, pay to
the Borrower such amount as such Lender shall have determined to be
attributable to the deduction or withholding of such Taxes or Other Taxes.
If, within one year after the payment of any such amount to the Borrower,
such Lender determines that it was not entitled to such refund, credit,
relief, remission or reduction to the full extent of any payment made
pursuant to the first sentence of this Section 2.14(g), the Borrower shall
upon notice and demand of such Lender promptly repay the amount of such
overpayment. Any determination made by such Lender pursuant to this Section
2.14(g) shall in the absence of bad faith or manifest error be conclusive,
and nothing in this Section 2.14(g) shall be construed as requiring any
Lender to conduct its business or to arrange or alter in any respect its
tax or financial affairs (except as required by Section 2.14(f)) so that it
is entitled to receive such a refund, credit or reduction or as allowing
any Person to inspect any records, including tax returns, of any Lender.
34
(h) Without prejudice to the survival of any other agreement of
the Borrower or any Lender hereunder, the agreements and obligations of the
Borrower and the Lenders contained in this Section 2.14 shall survive the
payment in full of principal and interest hereunder and under the Notes;
provided that no Lender shall be entitled to demand any payment under this
Section 2.14 more than one year following the payment to or for the account
of such Lender of all other amounts payable hereunder and under any Note
held by such Lender and the termination of such Lender's Commitment;
provided further, however, that the foregoing proviso shall in no way limit
the right of any Lender to demand or receive any payment under this Section
2.14 to the extent that such payment relates to the retroactive application
of any Taxes or Other Taxes if such demand is made within one year after
the implementation of such Taxes or Other Taxes.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) on account of its Loan (other than
pursuant to Section 2.02(c), 2.07, 2.11, 2.12 (with respect to interest on
a Base Rate Advance which, absent an event described in such Section, would
otherwise be a Eurodollar Rate Advance), 2.14 or 8.04(b)) in excess of its
ratable share of payments on account of the Loans obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of
them, provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to
the proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 2.15 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to First Drawdown. The
obligation of each Lender to make the relevant portion of its Loan
available in connection with the first drawdown is, in addition to the
conditions precedent set forth in Section 3.03, is subject to the
satisfaction, prior to or concurrently with the making of such drawdown, of
each of the following conditions precedent:
(a) Documents and Other Agreements. The Administrative Agent
shall have received on or before the day of the first drawdown the
following, each dated the same date (or
35
such other date as is satisfactory to the Administrative Agent), in form
and substance satisfactory to the Administrative Agent and (except for the
Notes) with one copy for each Lender:
(i) The Notes payable to the order of each of the
Lenders, respectively;
(ii) Certified copies of the resolutions of the Board
of Directors of the Borrower approving the transactions
contemplated by this Agreement and the Notes, and of all
documents evidencing other necessary corporate action with
respect to this Agreement and the Notes;
(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying (A) the names and true
signatures of the officers of the Borrower authorized to
sign this Agreement and the Notes and the other documents to
be delivered hereunder; (B) that attached thereto are true
and correct copies of the Articles of Incorporation and the
By-laws of the Borrower, in each case as in effect on such
date; and (C) that attached thereto are true and correct
copies of all governmental and regulatory authorizations and
approvals required for the due execution, delivery and
performance of this Agreement and the Notes;
(iv) A Federal Reserve Form U-1, appropriately
completed;
(v) A certificate signed by either the chief financial
officer, principal accounting officer or treasurer of the
Borrower stating that (A) the representations and warranties
contained in Section 4.01 are correct on and as of the date
of such certificate as though made on and as of such date,
(B) no event has occurred and is continuing on the date of
such certificate that constitutes an Event of Default or
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both, and (C) the
PECO/Unicom Merger has been completed;
(vi) A copy of the order of the Securities and Exchange
Commission granting the Application-Declaration of Form U-1
in File No. 70-9645, as amended, with regard to the
acquisition by Borrower of the common stock of Commonwealth,
PECO, Genco and the other transactions described therein.
(vii) favorable opinion of Ballard Spahr Andrews
Ingersoll, LLP, special counsel for the Borrower,
substantially in the form of Exhibit D hereto; and
(viii) A favorable opinion of Mayer, Brown & Platt,
counsel for the Administrative Agent, substantially in the
form of Exhibit E hereto.
(b) Unicom/PECO Merger. The Administrative Agent shall have
received evidence, satisfactory to the Administrative Agent, that the
PECO/Unicom Merger will be completed on or before the date of such
drawdown.
36
SECTION 3.02. Conditions Precedent to Second Drawdown. The
obligation of each Lender to make the relevant portion of its Loan
available in connection with the second drawdown is, in addition to the
conditions precedent set forth in Section 3.03, subject to the
satisfaction, prior to or concurrently with the making of such drawdown, of
each of the following conditions precedent:
(a) Certificate. A certificate signed by either the chief
financial officer, principal accounting officer or treasurer of the
Borrower stating that (A) the representations and warranties contained in
Section 4.01 are correct on and as of the date of such certificate as
though made on and as of such date and (B) no event has occurred and is
continuing on the date of such certificate that constitutes an Event of
Default or would constitute an Event of Default but for the requirement
that notice be given or time elapse or both;
(b) Sithe Acquisition. The Administrative Agent shall have
received evidence, satisfactory to the Administrative Agent, that the Sithe
Acquisition has been (or concurrently with such drawdown will be)
completed.
SECTION 3.03. Conditions Precedent to Each Drawdown. The
obligation of each Lender to make the relevant portion of its Loan
available in connection with each drawdown is subject to the further
conditions precedent that on the date of such drawdown the following
statements shall be true, and each of the giving of the applicable Notice
of Drawdown and the acceptance by the Borrower of the proceeds of such
drawdown shall constitute a representation and warranty by the Borrower
that on the date of such drawdown such statements are true:
(A) The representations and warranties contained in
Section 4.01 are correct on and as of the date of such
drawdown, before and after giving effect to such drawdown
and to the application of the proceeds therefrom, as though
made on and as of such date; and
(B) No event has occurred and is continuing, or would
result from such drawdown or from the application of the
proceeds therefrom, that constitutes an Event of Default or
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both (it being
understood for clarification that without limiting the
foregoing, it is a condition of this clause (B) that the
Borrower shall be in compliance with Section 5.01(a)(iv),
Section 5.02(a) and Section 5.02(c) upon giving effect to
such drawdown).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
37
(a) The Borrower is a corporation duly organized. validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania.
(b) The execution, delivery and performance by the Borrower of
this Agreement and the Notes are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, and do not and
will not contravene (i) the Borrower's Articles of Incorporation or Bylaws,
(ii) applicable law or (iii) any contractual or legal restriction binding
on or affecting the Borrower or its properties.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrower of
this Agreement or the Notes, except, upon completion of the PECO/Unicom
Merger, approval of the Securities and Exchange Commission under the Public
Utility Holding Company Act of 1935.
(d) This Agreement is, and the Notes when delivered hereunder
will be, legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms, except as
the enforceability thereof may be limited by equitable principles or
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally.
(e) (i) The consolidated balance sheet of PECO and its
Subsidiaries as at December 31, 1999, and the related statements of income
and retained earnings and of cash flows of PECO and its Subsidiaries for
the fiscal year then ended, certified by Pricewaterhouse Coopers LLP, and
the unaudited consolidated balance sheet of PECO and its Subsidiaries as at
June 30, 2000, and the related unaudited statements of income for the
six-month period then ended, copies of which have been furnished to each
Lender, fairly present in all material respects (subject, in the case of
such balance sheets and statements of income for the period ended June 30,
2000, to year-end adjustments) the consolidated financial condition of PECO
and its Subsidiaries as at such dates and the consolidated results of the
operations of PECO and its Subsidiaries for the periods ended on such
dates, all in accordance with GAAP. (ii) The consolidated balance sheet of
Unicom and its Subsidiaries as at June 30, 2000 and the related
consolidated statements of income, retained earnings and cash flows of
Unicom for the twelve months then ended, together with the report thereon
of Arthur Anderson LLP included in Unicom's Quarterly Report on Form 10-Q
for the fiscal quarter then ended, copies of which have been furnished to
each Lender, fairly present in all material respects (subject to year-end
adjustments) the consolidated financial condition of Unicom and its
Subsidiaries as at such date and the consolidated results of the operations
of Unicom and its Subsidiaries for the period ended on such date in
accordance with GAAP. (iii) The unaudited pro forma combined condensed
financial data of PECO and Unicom set forth in the Proxy Statement fairly
presents the pro forma financial condition of the Borrower as at December
31, 1999 and as at and for the three months ended March 31, 2000 (in each
case giving effect to the purchase of Unicom by PECO). (iv) Since December
31, 1999, in the case of PECO, June 30, 2000, in the case of Commonwealth,
and the date of preparation of the pro forma financial data referred to in
clause (iii) above, in the case of the Borrower, there has been no Material
Adverse Change.
38
(f) Except as disclosed in PECO's, Unicom's or the Borrower's
Annual, Quarterly or Current Reports, each as filed with the Securities and
Exchange Commission and delivered to the Lenders (including reports filed
prior to the date of execution and delivery of this Agreement and reports
delivered to the Lenders pursuant to Section 5.01(b)), there is no pending
or threatened action, investigation or proceeding affecting the Borrower or
any of its Subsidiaries before any court, governmental agency or arbitrator
that may reasonably be anticipated to have a Material Adverse Effect. There
is no pending or threatened action or proceeding against the Borrower or
its Subsidiaries that purports to affect the legality, validity, binding
effect or enforceability of this Agreement or any Note.
(g) Except as contemplated by the Merger Agreement, no proceeds
of any Loan have been or will be used directly or indirectly in connection
with the acquisition of in excess of 5% of any class of equity securities
that is registered pursuant to Section 12 of the Exchange Act or any
transaction subject to the requirements of Section 13 or 14 of the Exchange
Act.
(h) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and, except as contemplated by the Merger Agreement, no
proceeds of any Advance will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock. Not more than 25% of the value of the assets of the Borrower
and its Material Subsidiaries is represented by margin stock.
(i) The Borrower is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(j) During the twelve consecutive month period prior to the date
of the execution and delivery of this Agreement and prior to the date of
any Borrowing under this Agreement, no steps have been taken to terminate
any Plan, and no contribution failure by the Borrower or any member of the
Controlled Group has occurred with respect to any Plan. No condition exists
or event or transaction has occurred with respect to any Plan (including
any Multiemployer Plan) which might result in the incurrence by the
Borrower or any member of the Controlled Group of any material liability,
fine or penalty.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Note or any
amount payable by the Borrower hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower will, and, in the case of
Section 5.01(a), will cause its Principal Subsidiaries to, unless the
Majority Lenders shall otherwise consent in writing:
39
(a) Keep Books; Corporate Existence; Maintenance of Properties;
Compliance with Laws; Insurance; Taxes.
(i) keep proper books of record and account, all in
accordance with generally accepted accounting principles;
(ii) subject to Section 5.02(b), preserve and keep in
full force and effect its existence;
(iii) maintain and preserve all of its properties
(except such properties the failure of which to maintain or
preserve would not have, individually or in the aggregate, a
Material Adverse Effect) which are used or useful in the
conduct of its business in good working order and condition,
ordinary wear and tear excepted;
(iv) comply in all material respects with the
requirements of all applicable laws, rules, regulations and
orders (including those of any governmental authority and
including with respect to environmental matters) to the
extent the failure to so comply, individually or in the
aggregate, would have either a Material Adverse Effect or a
material adverse effect on the ability of the Borrower to
perform its obligations under this Agreement and the Notes;
(v) maintain insurance with responsible and reputable
insurance companies or associations, or self-insure, as the
case may be, in each case in such amounts and covering such
contingencies, casualties and risks as is customarily
carried by or self-insured against by companies engaged in
similar businesses and owning similar properties in the same
general areas in which the Borrower and its Principal
Subsidiaries operate;
(vi) at any reasonable time and from time to time,
pursuant to prior notice delivered to the Borrower, permit
any Lender, or any agents or representatives of any thereof,
to examine and, at such Lender's expense, make copies of,
and abstracts from the records and books of account of, and
visit the properties of, the Borrower and any of its
Principal Subsidiaries and to discuss the affairs, finances
and accounts of the Borrower and any of its Subsidiaries
with any of their respective officers; provided that any
non-public information (which has been identified as such by
the Borrower) obtained by any Lender, or any of their
respective agents or representatives pursuant to this
subsection (vi) shall be treated confidentially by such
Person; provided, further, that such Person may disclose
such information to any other party to this Agreement, its
examiners, affiliates, outside auditors, counsel or other
professional advisors in connection with the Agreement or if
otherwise required to do so by law or regulatory process;
and
(vii) use the proceeds of the first drawdown to make
the payments to common shareholders of Unicom required by
the Merger Agreement and to pay
40
interest on the Loans; and use the proceeds of the second
drawdown to consummate the Sithe Acquisition.
(b) Reporting Requirements. Furnish to the Lenders:
(i) as soon as possible, and in any event within 5
Business Days after the occurrence of each Event of Default
or each event which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default,
continuing on the date of such statement, a statement of an
authorized officer of the Borrower setting forth details of
such Event of Default or event and the action which the
Borrower proposes to take with respect thereto;
(ii) as soon as available and in any event within 60
days after the end of each of the first three quarters of
each fiscal year of the Borrower (commencing with the
quarter ending March 31, 2001), a copy of the Borrower's
Quarterly Report on Form 10Q filed with the Securities and
Exchange Commission with respect to such quarter, together
with a certificate of an authorized officer of the Borrower
stating that no Event of Default, or event which, with
notice or lapse of time or both, would constitute an Event
of Default, has occurred and is continuing or, if any Event
of Default or such event has occurred and is continuing, a
statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto;
(iii) as soon as available and in any event within 105
days after the end of each fiscal year of the Borrower, a
copy of the Borrower's Annual Report on Form 10-K filed with
the Securities and Exchange Commission with respect to such
fiscal year, together with a certificate of an authorized
officer of the Borrower stating that no Event of Default, or
event which, with notice of lapse of time or both, would
constitute an Event of Default, has occurred and is
continuing or, if any Event of Default or such event has
occurred and is continuing, a statement as to the nature
thereof and the action which the Borrower proposes to take
with respect thereto;
(iv) concurrently with the delivery of the annual and
quarterly reports referred to in Sections 5.01(b)(ii) and
5.01(b)(iii), a compliance certificate in substantially the
form set forth in Exhibit F, duly completed and signed by
the Chief Financial Officer, Treasurer or an Assistant
Treasurer of the Borrower;
(v) except as otherwise provided in subsections (ii)
and (iii) above, promptly after the sending or filing
thereof, copies of all reports that the Borrower sends to
any of its security holders, and copies of all Reports on
Form 10K, 10Q or 8K, and registration statements and
prospectuses that the Borrower or any of its Subsidiaries
files with the Securities and Exchange Commission or any
national securities exchange (except to the extent that any
such registration statement or prospectus relates solely to
the issuance of
41
securities pursuant to employee or dividend reinvestment
plans of the Borrower or such Subsidiary);
(vi) promptly upon becoming aware of the institution of
any steps by the Borrower or any other Person to terminate
any Plan, or the failure to make a required contribution to
any Plan if such failure is sufficient to give rise to a
lien under section 302(f) of ERISA, or the taking of any
action with respect to a Plan which could result in the
requirement that the Borrower furnish a bond or other
security to the PBGC or such Plan, or the occurrence of any
event with respect to any Plan, which could result in the
incurrence by the Borrower or any member of the Controlled
Group of any material liability, fine or penalty; and
(vii) such other information respecting the condition,
operations, business or prospects, financial or otherwise,
of the Borrower or any of its Subsidiaries as any Lender,
through the Administrative Agent, may from time to time
reasonably request.
SECTION 5.02. Negative Covenants. So long as any Note or any
amount payable by the Borrower hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder (except with respect to subsection (a),
which shall be applicable only as of the date hereof and at any time any
Advance is outstanding hereunder), the Borrower will not, without the
written consent of the Majority Lenders:
(a) Limitation on Liens. Create, incur, assume or suffer to
exist, or permit any of its Material Subsidiaries to create, incur, assume
or suffer to exist, any Lien on its respective property, revenues or
assets, whether now owned or hereafter acquired except (i) Liens imposed by
law, such as carriers', warehousemen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business; (ii) Liens on the
capital stock of or any other equity interest in any of the Borrower's
Subsidiaries (excluding the stock of Commonwealth, PECO, Genco and any
holding company for any of the foregoing) or any such Subsidiary's assets
to secure Nonrecourse Indebtedness; (iii) Liens upon or in any property
acquired by the Borrower or any of its Material Subsidiaries in the
ordinary course of business to secure the purchase price of such property
or to secure any obligation incurred solely for the purpose of financing
the acquisition of such property; (iv) Liens existing on such property at
the time of its acquisition (other than any such Lien created in
contemplation of such acquisition unless permitted by the preceding clause
(iii)); (v) Liens on the property, revenues and/or assets of any Person
that exist at the time such Person becomes a Subsidiary and the
continuation of such Liens in connection with any refinancing or
restructuring of the obligations secured by such Liens; (vi) Liens arising
under the Commonwealth Mortgage and "permitted liens" as defined in the
Commonwealth Mortgage; (vii) Liens granted under the PECO Mortgage and
"excepted encumbrances" as defined in the PECO Mortgage; (viii) Liens
granted in connection with any financing arrangement for the purchase of
nuclear fuel or the financing of pollution control facilities, limited to
the fuel or facilities so purchased or acquired; (ix) Liens arising in
connection with sales or transfers of, or financing secured by, accounts
receivable or related contracts; (x) Liens securing PECO's notes
collateralized solely by mortgage bonds of PECO
42
issued under the terms of the PECO Mortgage, (xi) Liens arising in
connection with sale and leaseback transactions entered into by PECO or a
Subsidiary thereof, but only to the extent (A) the proceeds received by
PECO or such Subsidiary from such sale shall immediately be applied to
retire mortgage bonds of PECO issued under the terms of the PECO Mortgage,
or (B) the aggregate purchase price of assets sold pursuant to such sale
and leaseback transactions where such proceeds are not so applied shall not
exceed $1,000,000,000; (xii) Liens granted by a Special Purpose Subsidiary
to secure Transitional Funding Instruments of such Special Purpose
Subsidiary; and (xiii) Liens, other than those described in clauses (i)
through (xii) of this subsection granted by the Borrower or any of its
Material Subsidiaries in the ordinary course of business securing Debt of
the Borrower and its Material Subsidiaries in an amount not to exceed
$50,000,000 in the aggregate at any one time outstanding.
(b) Mergers and Consolidations; Disposition of Assets. Except for
the PECO/Unicom Merger, merge with or into or consolidate with or into, or
sell, assign, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to any Person or permit any
Principal Subsidiary to do so, except that (i) the Borrower or any
Principal Subsidiary may merge with or into or consolidate with or transfer
assets to any other Principal Subsidiary, (ii) any Principal Subsidiary may
merge with or into or consolidate with or transfer assets to the Borrower
and (iii) the Borrower or any Principal Subsidiary may merge with or into
or consolidate with or transfer assets to any other Person; provided in
each case, immediately thereafter in giving effect thereto, no Event of
Default or event that would, with the giving of notice or the passage of
time or both constitute an Event of Default shall have occurred and be
continuing and (A) in the case of any such merger, consolidation or
transfer of assets to which the Borrower is a party, either (x) the
Borrower shall be the surviving corporation or (y) the surviving
corporation shall be an Eligible Successor and shall have assumed all of
the obligations of the Borrower under this Agreement and the Notes pursuant
to a written instrument in form and substance satisfactory to the
Administrative Agent, (B) subject to clause (A) above, in the case of any
such merger to which a Principal Subsidiary is a party, a Principal
Subsidiary shall be the surviving corporation and (C) subject to clause (A)
above, in the case of any such merger to which a Material Subsidiary is a
party, a Material Subsidiary shall be the surviving corporation.
(c) Financial Covenant. Permit Consolidated Adjusted Total Debt
to exceed 65% of Consolidated Adjusted Total Capitalization at any time.
(d) Continuation of Businesses. Engage in, or permit any
Subsidiary to engage in, any material line of business other than
businesses engaged in by the Borrower and its Subsidiaries as of the date
hereof (assuming the PECO/Unicom Merger had been completed) and reasonable
extensions thereof.
(e) Capital Structure. Fail to complete the PECO/Unicom Merger
within one Business Day after the first drawdown hereunder; fail at any
time thereafter to own, free and clear of all Liens, 95% of the issued and
outstanding shares of common stock of Commonwealth and 100% of the issued
and outstanding shares of common stock of PECO (or of a holding company
which owns, free and clear of all Liens, 95% of the issued and outstanding
shares of
43
common stock of Commonwealth and 100% of the issued and outstanding shares
of common stock of each of PECO); or fail, at any time after the date on
which Commonwealth and/or PECO transfers any substantial part of its
generating assets to Genco, to own, free and clear of all Liens, 100% of
the issued and outstanding common shares of GENCO (or of a holding company
which owns, free and clear of all Liens, 100% of the common shares of
GENCO).
(f) Restrictive Agreements. Permit either PECO or Commonwealth
to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon the ability of either PECO or Commonwealth to declare or pay
dividends to the Borrower, except, in the case of PECO, for (i) existing
restrictions relating to the priority of payments on its subordinated
debentures contained in the Indenture dated as of July 1, 1994 between PECO
Energy Company and First Union National Bank, as trustee, as amended and
supplemented to the date hereof, and (ii) existing restrictions relating to
the priority payment of quarterly dividends on its preferred stock
contained in its Amended and Restated Articles of Incorporation as in
effect on the date hereof.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance
when the same becomes due and payable, or interest thereon or any other
amount payable under this Agreement or any of the Notes within three
Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein or
by the Borrower (or any of its officers) pursuant to the terms of this
Agreement shall prove to have been incorrect or misleading in any material
respect when made; or
(c) The Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.02, Section 5.01(a)(vii) or
Section 5.01(b)(i), or (ii) any other term, covenant or agreement contained
in this Agreement on its part to be performed or observed if the failure to
perform or observe such other term, covenant or agreement shall remain
unremedied for 30 days after written notice thereof shall have been given
to the Borrower by the Administrative Agent (which notice shall be given by
the Administrative Agent at the written request of any Lender); or
(d) The Borrower or any Principal Subsidiary shall fail to pay
any principal of or premium or interest on any Debt that is outstanding in
a principal amount in excess of $50,000,000 in the aggregate (but excluding
Debt evidenced by the Notes, Nonrecourse Indebtedness and Transitional
Funding Instruments) of the Borrower or such Principal Subsidiary (as the
case may be) when the same becomes due and payable (whether by scheduled
44
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or any other event
shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof, other than any
acceleration of any Debt secured by equipment leases or fuel leases of the
Borrower or a Principal Subsidiary as a result of the occurrence of any
event requiring a prepayment (whether or not characterized as such)
thereunder, which prepayment will not result in a Material Adverse Change;
or
(e) The Borrower or any Principal Subsidiary (other than a
Special Purpose Subsidiary) shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against the Borrower or any
Principal Subsidiary (other than a Special Purpose Subsidiary) seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed for a
period of 60 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property,) shall occur;
or the Borrower or any Principal Subsidiary (other than a Special Purpose
Subsidiary) shall take any corporate action to authorize or to consent to
any of the actions set forth above in this subsection (e); or
(f) One or more judgments or orders for the payment of money in
an aggregate amount exceeding $50,000,000 (excluding any such judgments or
orders which are fully covered by insurance, subject to any customary
deductible, and under which the applicable insurance carrier has
acknowledged such full coverage in writing) shall be rendered against the
Borrower or any Principal Subsidiary and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(g) (i) Any Reportable Event that the Majority Lenders determine
in good faith might constitute grounds for the termination of any Plan or
for the appointment by the appropriate United States District Court of a
trustee to administer a Plan shall have occurred and be continuing 30 days
after written notice to such effect shall have been given to the Borrower
by the Administrative Agent or (ii) any Plan shall be terminated, or (iii)
a Trustee shall be appointed by an appropriate United States District Court
to administer any Plan or (iv) the PBGC shall institute proceedings to
terminate any Plan or to appoint a trustee to administer any
45
Plan; provided, however that on the date of any event described in clauses
(i) through (iv) above the Unfunded Liabilities of such Plan exceed
$20,000,000;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Majority Lenders, by notice to the
Borrower, declare the respective Commitments of the Lenders to be
terminated, whereupon the same shall forthwith terminate, and/or (ii) shall
at the request, or may with the consent, of the Majority Lenders, by notice
to the Borrower, declare the principal amount outstanding under the Notes,
all interest thereon and all other amounts payable under this Agreement to
be forthwith due and payable, whereupon the principal amount outstanding
under the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to the Borrower or any Principal
Subsidiary under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make any Loan shall automatically be terminated and (B) the
principal amount outstanding under the Notes, all such interest and all
such amounts shall automatically and immediately become due and payable,
without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Administrative
Agent shall not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided, however, that the
Administrative Agent shall not be required to take any action which exposes
the Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. Agents' Reliance, Etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or
in connection with this Agreement, except for its or their respective own
gross negligence or willful misconduct. Without limitation of the
generality of the foregoing: (i) the Administrative Agent may treat the
payee of any Note as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the
Lender which is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as
46
provided in Section 8.07; (ii) the Administrative Agent may consult with
legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (iii) the
Administrative Agent makes no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with
this Agreement; (iv) the Administrative Agent shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of the
Borrower or to inspect the property (including the books and records) of
the Borrower; (v) the Administrative Agent shall not be responsible to any
Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument
or document furnished pursuant hereto; and (vi) the Administrative Agent
shall not incur any liability under or in respect of this Agreement by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03. Agents and Affiliates With respect to its
Commitment, Advances and Notes, each of Bank One, Citibank, N.A. and Credit
Suisse First Boston shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were
not an Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include each of Bank One, Citibank, N.A. and Credit
Suisse First Boston in its individual capacity. Each of Bank One, Citibank,
N.A., Credit Suisse First Boston and their affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower, any of its subsidiaries
and any Person who may do business with or own securities of the Borrower
or any such subsidiary, all as if it were not an Agent and without any duty
to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative
Agent or any other Lender and based on the financial statements referred to
in Section 4.01(e) and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
each Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Notes then held by
each of the Lenders (or if no Notes are at the time outstanding, ratably
according to the respective amounts of their Commitments), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against any
such Agent in any way relating to or arising out of this Agreement or any
action taken or omitted by any such Agent under this Agreement, provided
that no Lender shall
47
be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse each such Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) incurred by such
Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent
that such expenses are reimbursable by the Borrower but for which such
Agent is not reimbursed by the Borrower.
SECTION 7.06. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving written notice thereof to the
Lenders and the Borrower and may be removed at any time with or without
cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by
the Majority Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be a
commercial bank described in clause (i) or (ii) of the definition of
"Eligible Assignee" and having a combined capital and surplus of at least
$150,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement. Notwithstanding the foregoing, if no Event of
Default, and no event that with the giving of notice or the passage of
time, or both, would constitute an Event of Default, shall have occurred
and be continuing, then no successor Administrative Agent shall be
appointed under this Section 7.06 without the prior written consent of the
Borrower, which consent shall not be unreasonably withheld or delayed.
SECTION 7.07. Documentation Agent, Syndication Agent and Lead
Arrangers. The titles "Documentation Agent," "Syndication Agent" and "Lead
Arrangers" are purely honorific, and the "Documentation Agent," "Syndication
Agent" and the "Lead Arrangers" shall have no duties or responsibilities in such
capacity.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Lenders, and
48
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no amendment, waiver or consent shall, unless in writing and signed by
all the Lenders (other than any Lender that is the Borrower or an Affiliate
of the Borrower), do any of the following: (a) waive any of the conditions
specified in Section 3.01 or 3.02, (b) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (c) reduce
the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, (d) postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Lenders, that shall
be required for the Lenders or any of them to take any action hereunder, or
(f) amend this Section 8.01; provided, further, that no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent,
in addition to the Lenders required above to take such action, affect the
rights or duties of the Administrative Agent under this Agreement or any
Note.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered, if to the Borrower, at its
address at 10 South Dearborn Street, 37th floor, Chicago, Illinois 60603,
Attention: Vice President-Finance and Treasurer, Telecopy: (312) 394-2867;
if to any Bank, at its Domestic Lending Office specified opposite its name
on Schedule I hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Administrative Agent, at its address at 1
Bank One Plaza, Mail Suite 0634, 1FPN-10, Chicago, Illinois 60670,
Attention: Mr. Ron Cromey, Telecopy: (312) 732-4840 or, as to each party,
at such other address as shall be designated by such party in a written
notice to the other parties. All such notices and communications shall,
when mailed, telecopied, telegraphed, telexed or cabled, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company,
respectively, except that notices and communications to the Administrative
Agent pursuant to Article II or VII shall not be effective until received
by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs and Expenses; Indemnification. (a) The
Borrower agrees to pay on demand all costs and expenses incurred by the
Administrative Agent and the Lead Arrangers in connection with the
preparation, execution, delivery, administration, syndication, modification
and amendment of this Agreement, the Notes and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees,
internal charges and out-of-pocket expenses of counsel (including, without
limitation, in-house counsel) for such Agents with respect thereto and with
respect to advising such Agents as to their respective rights and
responsibilities under this Agreement. The Borrower further agrees to pay
on demand all costs
49
and expenses, if any (including, without limitation, counsel fees and
expenses of outside counsel and of internal counsel), incurred by the any
Agent or any Lender in connection with the collection and enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, reasonable counsel fees and expenses in
connection with the enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of, or Conversion of any
Eurodollar Rate Advance, is made other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to
Section 2.09 or 2.12 or acceleration of the maturity of the Notes pursuant
to Section 6.01 or for any other reason, the Borrower shall, upon demand by
any Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender any amount required
to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss, cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by
any Lender to fund or maintain such Advance.
(c) The Borrower hereby agrees to indemnify and hold each
Lender, each Agent and each of their respective Affiliates, officers, directors
and employees (each, an "Indemnified Person") harmless from and against any and
all claims, damages, losses, liabilities, costs or expenses (including
reasonable attorney's fees and expenses, whether or not such Indemnified Person
is named as a party to any proceeding or is otherwise subjected to judicial or
legal process arising from any such proceeding) that any of them may pay or
incur arising out of or relating to this Agreement, the Notes or the
transactions contemplated thereby, or the use by the Borrower or any of its
subsidiaries of the proceeds of any Advance, provided that the Borrower shall
not be liable for any portion of such claims, damages, losses, liabilities,
costs or expenses resulting from such Indemnified Person's gross negligence or
willful misconduct. The Borrower's obligations under this Section 8.04(c) shall
survive the repayment of all amounts owing to the Lenders and the Administrative
Agent under this Agreement and the Notes and the termination of the Commitments.
If and to the extent that the obligations of the Borrower under this Section
8.04(c) are unenforceable for any reason, the Borrower agrees to make the
maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to
authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement and any Note held
by such Lender, whether or not such Lender shall have made any demand under
this Agreement or such Note and although such obligations may be unmatured.
Each Lender
50
agrees promptly to notify the Borrower after any such set-off and
application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 8.05 are in addition to other
rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agents
and when the Administrative Agent shall have been notified by each Bank
that such Bank has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agents and each Lender and their
respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender
may, with the prior written consent of the Borrower and the Administrative
Agent (neither of which consents shall be unreasonably withheld or
delayed), and if demanded by the Borrower pursuant to subsection (g) hereof
shall to the extent required by such subsection (g), assign to one or more
banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of
its Commitment, the Loan owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement, (ii) the aggregate amount of the Loan and
remaining Commitment (if any) of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no
event be less than $10,000,000 or, if less, the entire amount of such
Lender's Loan and remaining Commitment, and shall be an integral multiple
of $1,000,000 or such Lender's entire Loan and remaining Commitment, (iii)
each such assignment shall be to an Eligible Assignee, (iv) the parties to
each such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note or Notes subject to such assignment and
a processing and recordation fee of $3,500 (which shall be payable by one
or more of the parties to the Assignment and Acceptance, and not by the
Borrower, and shall not be payable if the assignee is a Bank, any Affiliate
of any Bank or a Federal Reserve Bank), and (v) the consent of the Borrower
shall not be required after the occurrence and during the continuance of
any Event of Default. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment
and Acceptance, (x) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto (although an assigning Lender shall
continue to be entitled to indemnification pursuant to Section 8.04(c)).
Notwithstanding anything contained in this Section 8.07(a) to the contrary,
(A) the consent of the Borrower and the Administrative Agent shall not be
required with respect to any assignment by any Lender to an Affiliate of
such
51
Lender or to another Lender and (B) any Lender may at any time, without the
consent of the Borrower or the Administrative Agent, and without any
requirement to have an Assignment and Acceptance executed, assign all or
any part of its rights under this Agreement and its Notes to a Federal
Reserve Bank, provided that such assignment does not release the transferor
Lender from any of its obligations hereunder.
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument
or document furnished pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01(e) and such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon the Administrative Agent, such assigning Lender or any other Lender
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal
amount of the Loan owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the
52
Register and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange
for the surrendered Note or Notes a new Note to the order of such Eligible
Assignee in an amount equal to the sum of the Loan assigned to it and any
remaining Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Loan or any
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the sum of the Loan and the remaining Commitment retained
by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance
and shall otherwise be in substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations to one or more banks or
other entities (each, a "Participant") in or to all or a portion of its
rights and/or obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, its Loan and the Note or
Notes held by it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment (if
any) to the Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder
of any such Note for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) such Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of this Agreement or the Note or
Notes held by such Lender, other than any such amendment, modification or
waiver with respect to any Advance or Commitment in which such Participant
has an interest that forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Advance or
Commitment, postpones any date fixed for any regularly scheduled payment of
principal of, or interest or fees on, any such Advance or Commitment,
releases any guarantor of any such Advance or releases any substantial
portion of collateral, if any, securing any such Advance.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any confidential information
relating to the Borrower received by it from such Lender (subject to
customary exceptions regarding regulatory requirements, compliance with
legal process and other requirements of law).
(g) If (i) any Lender shall make demand for payment under Section
2.11(a), 2.11(b) or 2.14 or (ii) shall deliver any notice to the
Administrative Agent pursuant to Section 2.12 resulting in the suspension
of certain obligations of the Lenders with respect to Eurodollar Rate
Advances, then (in the case of clause (i)) within 60 days after such demand
(if, but only if, such payment demanded under Section 2.11(a), 2.11(b) or
2.14 has been made by the Borrower),
53
or (in the case of clause (ii)) within 60 days after such notice (if such
suspension is still in effect), or as the case may be, the Borrower may
demand that such Lender assign in accordance with this Section 8.07 to one
or more Eligible Assignees designated by the Borrower and reasonably
acceptable to the Administrative Agent all (but not less than all) of such
Lender's Commitment (if any) and the Loan owing to it within the next
succeeding 30 days. If any such Eligible Assignee designated by the
Borrower shall fail to consummate such assignment on terms acceptable to
such Lender, or if the Borrower shall fail to designate any such Eligible
Assignee for all of such Lender's Commitment or Loan, then such Lender may
(but shall not be required to) assign such Commitment and Loan to any other
Eligible Assignee in accordance with this Section 8.07 during such period.
(h) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Bank") may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the
Granting Bank to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Advance that such Granting
Bank would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to make any Advance, (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Advance, the
Granting Bank shall be obligated to make such Advance pursuant to the terms
hereof. The making of an Advance by an SPC hereunder shall utilize the
Commitment of the Granting Bank to the same extent, and as if, such Advance
were made by such Granting Bank. Each party hereto hereby agrees that no
SPC shall be liable for any indemnity or similar payment obligation under
this Agreement (all liability for which shall remain with the Granting
Bank). In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of
all outstanding commercial paper or other senior indebtedness of any SPC,
it will not institute against, or join any other person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under the laws of the United States or any State
thereof. In addition, notwithstanding anything to the contrary contained in
this Section 8.07, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its
interests in any Advances to the Granting Bank or to any financial
institutions (consented to by the Borrower and Administrative Agent,
neither of which consents shall be unreasonably withheld or delayed)
providing liquidity and/or credit support to or for the account of such SPC
to support the funding or maintenance of Advances and (ii) disclose on a
confidential basis any nonpublic information relating to its Advances to
any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This Section
8.7(h) may not be amended in a manner which adversely affects a Granting
Bank or an SPC without the written consent of such Granting Bank or SPC.
SECTION 8.08. Governing Law. THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA.
54
SECTION 8.09. Consent to Jurisdiction. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF PENNSYLVANIA AND ANY UNITED STATES DISTRICT COURT SITTING
IN THE COMMONWEALTH OF PENNSYLVANIA IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE NOTES AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 8.10. Execution in Counterparts; Integration. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. This Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes
all prior and contemporaneous agreements and understandings, oral or
written, relating to the subject matter hereof.
[Remainder of the page intentionally left blank]
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as
of the date first above written.
EXELON CORPORATION
By____________________________
Name:_________________________
Title:________________________
This is a signature page to the Term Loan Agreement dated as of October 13,
2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent.
56
THE AGENTS
BANK ONE, NA (Main Office Chicago),
as Administrative Agent
By_________________________________
Name: Kenneth J. Bauer
Title: Authorized Agent
This is a signature page to the Term Loan Agreement dated as of October 13,
2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent.
57
CREDIT SUISSE FIRST BOSTON, as
Documentation Agent
By________________________________
Name: ____________________________
Title:____________________________
This is a signature page to the Term Loan Agreement dated as of October 13,
2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent.
58
CITIBANK, N.A., as Syndication
Agent
By________________________________
Name: ____________________________
Title:____________________________
This is a signature page to the Term Loan Agreement dated as of October 13,
2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent.
59
THE BANKS
Commitment
$416,666,666
BANK ONE, NA (Main Office Chicago), as
a Bank
By_________________________________
Name: Kenneth J. Bauer
Title: Authorized Agent
This is a signature page to the Term Loan Agreement dated as of October 13,
2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent.
60
Commitment
$416,666,667
CREDIT SUISSE FIRST BOSTON, as a
Bank
By_______________________________
Name: ___________________________
Title: __________________________
This is a signature page to the Term Loan Agreement dated as of October 13,
2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent.
61
Commitment
$416,666,667
Citibank, N.A.as a Bank
By_______________________________
Name: ___________________________
Title: __________________________
This is a signature page to the Term Loan Agreement dated as of October 13,
2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent.
62
SCHEDULE I
Term Loan Agreement dated as of October 13, 2000, among Exelon Corporation,
as Borrower, the banks named therein, as Banks, Bank One, N.A., as
Administrative Agent, Credit Suisse First Boston, as Documentation Agent,
and Citibank, N.A. as Syndication Agent.
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ------------ -------------- --------------
Bank One, NA 1 Bank One Plaza Same
Mail Suite 0634, 1FNP-10
Chicago, IL 60670
Attn: Ronald Cromey
Phone: (312) 732-7494
Fax: (312) 732-4840
Citibank, N.A. 399 Park Avenue Same
4th Floor, Zone 20
New York, NY 10043
Attn: Tracy Smith
Phone: (302) 894-6098
Fax: (302) 894-6120
Credit Suisse First Boston 11 Madison Avenue Same
20th Floor
New York, NY 10010-3629
Attn: Jenaro Sarasola
Phone: (212) 322-1384
Fax: (212) 325-0593/0576
63
EXHIBIT A
FORM OF NOTE
$____________________ Dated: [ ], 2000
FOR VALUE RECEIVED, the undersigned, Exelon Corporation, a
Pennsylvania corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of ____________ (the "Lender") for the account of its Applicable
Lending Office (such term and other capitalized terms herein being used as
defined in the Term Loan Agreement referred to below) on the Maturity Date
the principal sum of U.S.$[amount of the Lender's Commitment in figures]
or, if less, the aggregate principal amount of the Loan made by the Lender
to the Borrower pursuant to the Term Loan Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of each Loan at the rate(s) and at the time(s) specified in the Term
Loan Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Bank One, NA, as Administrative Agent, at 1
Bank One Plaza, Chicago, Illinois 60670, in same day funds.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Term Loan Agreement dated as of October
13, 2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston as
Documentation Agent, and Citibank, N.A. as Syndication Agent (as amended,
modified or supplemented from time to time, the "Term Loan Agreement"). The
Term Loan Agreement, among other things, (i) provides for the making of a
Loan by the Lender to the Borrower in not more than two drawdowns in an
aggregate amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such Loan being
evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver
of such rights.
64
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
EXELON CORPORATION
By_____________________________
Name:__________________________
Title:_________________________
65
EXHIBIT B
NOTICE OF DRAWDOWN
Bank One, NA, as Administrative Agent
for the Lenders which are parties to the
Term Loan Agreement referred to below
1 Bank One Plaza
Chicago, Illinois 60670
[Date]
Attention: Utilities Department
North American Finance Group
Ladies and Gentlemen:
The undersigned, Exelon Corporation, refers to the Term Loan
Agreement, dated as of October 13, 2000, among Exelon Corporation, as
Borrower, the banks named therein, as Banks, Bank One, NA, as
Administrative Agent, Credit Suisse First Boston, as Documentation Agent,
and Citibank N.A., as Syndication Agent (as amended, modified or
supplemented from time to time, the "Term Loan Agreement"), and hereby
gives you notice, irrevocably, pursuant to Section 2.02 of the Term Loan
Agreement that the undersigned hereby requests a drawdown under the Term
Loan Agreement, and in that connection sets forth below the information
relating to such drawdown (the "Proposed Drawdown") as required by Section
2.02(a) of the Term Loan Agreement:
(i) The Business Day of the Proposed Drawdown is _____, 20___.
(ii) The Type of Advances to be made in connection with the
Proposed Drawdown is [Base Rate Advances] [Eurodollar Rate
Advances].
(iii) The aggregate amount of the Proposed Drawdown is $______.
(iv) The Interest Period for each Advance made as part of
the Proposed Drawdown is [__ month[s]].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Drawdown:
(A) the representations and warranties contained in Section
4.01 are correct, before and after giving effect to the Proposed
Drawdown and to the application of the proceeds therefrom, as
though made on and as of such date;
66
(B) and no event has occurred and is continuing, or would
result from such Proposed Drawdown or from the application of the
proceeds therefrom, that constitutes an Event of Default or would
constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
Very truly yours,
EXELON CORPORATION
By___________________________
Name:________________________
Title:_______________________
67
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated _____, 20_____
Reference is made to the Term Loan Agreement dated as of October
13, 2000 among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston as
Documentation Agent, and Citibank, N.A., as Syndication Agent (as amended,
modified or supplemented from time to time, the "Term Loan Agreement").
Terms defined in the Term Loan Agreement are used herein with the same
meaning.
________ (the "Assignor") and ________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in
and to all of the Assignor's rights and obligations under the Term Loan
Agreement as of the date hereof which represents the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Term Loan Agreement, including, without limitation, such interest in the
Assignor's Commitment (if any), the Loan owing to the Assignor (and a
corresponding share of each Advance included therein), and the Note[s] held
by the Assignor. After giving effect to such sale and assignment, the
Assignee's Commitment and the amount of the Loan owing to the Assignee will
be as set forth in Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Term Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Term Loan
Agreement or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance
or observance by the Borrower of any of its obligations under the Term Loan
Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Note[s] referred to in paragraph 1 above and requests
that the Administrative Agent exchange such Note[s] for a new Note payable
to the order of the Assignee in an amount equal to the sum of the Loan
assigned to the Assignee and the Commitment assumed by the Assignee
pursuant hereto or new Notes payable to the order of (x) the Assignee in an
amount equal to the sum of Loan assigned to the Assignee and the Commitment
assumed by the Assignee pursuant hereto and (y) the Assignor in an amount
equal to the sum of the Loan and the Commitment retained by the Assignor
under the Term Loan Agreement, respectively as specified on Schedule 1
hereto.
3. The Assignee (i) confirms that it has received a copy of the
Term Loan Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof
68
and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Term Loan Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the
Term Loan Agreement as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Term Loan Agreement are
required to be performed by it as a Lender; (vi) none of the consideration
used to make the purchase being made by the Assignee hereunder are "plan
assets" as defined under ERISA and the rights and interests of the Assignee
in and under the Term Loan Agreement will not be "plan assets" under ERISA
[and] (vii) specifies as its, Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth beneath its
name on the signature pages hereof [and (viii) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying
that it is exempt from United States withholding taxes with respect to all
payments to be made to the Assignee under the Term Loan Agreement and the
Notes].1
4. Following the execution of this Assignment and Acceptance by
the Assignor and the Assignee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The
effective date of this Assignment and Acceptance shall be the date of
acceptance thereof by the Administrative Agent, unless otherwise specified
on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to the
Term Loan Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii)
the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Term Loan Agreement.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall
make all payments under the Term Loan Agreement and the Notes in respect of
the interest assigned hereby (including, without limitation, all payments
of principal, interest and commitment fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Term Loan Agreement and the Notes for periods prior
to the Effective Date directly between themselves.
- ----------------------
1 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
69
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
70
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers
thereunto duly authorized, as of the date first above written, such
execution being made on Schedule 1 hereto.
[NAME OF ASSIGNOR]
By___________________________
Name:________________________
Title:_______________________
[NAME OF ASSIGNEE]
By___________________________
Name:________________________
Title:_______________________
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Consented to this ___ day
of ________, 20__
EXELON CORPORATION
By___________________________
Name:________________________
Title:_______________________
Consented to and Accepted this ____ day
of ________, 20__
BANK ONE, NA, as Administrative Agent
By___________________________
Name:________________________
Title:_______________________
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Schedule 1
to
Assignment and Acceptance
Dated ______, 20____
Section 1.
- ----------
Pro Rata Share: __%
Section 2.
- ----------
Assignee's Commitment: $__
Aggregate Outstanding Principal
Amount of Loan
owing to the Assignee: $__
A Note payable to the
order of the Assignee
Dated:_____, 20____
Principal amount: $__
A Note payable to the
order of the Assignor
Dated:_____, 20____
Principal amount: $__
Section 3.
- ----------
Effective Date2: _____, 20____
- -------------------
2 This date should be no earlier than the date of acceptance by the
Administrative Agent.
72
EXHIBIT D
FORM OF OPINION OF BALLARD SPAHR
ANDREWS & INGERSOLL, LLP
_____, 20____
To each of the Agents and the Banks which is a
party to the Term Loan Agreement, dated as of
October 13, 2000, among Exelon Corporation, as
Borrower, the banks named therein, as Banks, Bank
One, NA, as Administrative Agent, Credit Suisse
First Boston, as Documentation Agent, and
Citibank, N.A., as Syndication Agent
Re: Exelon Corporation
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(a)(vii)
of the Term Loan Agreement, dated as of October 13, 2000, among Exelon
Corporation, as Borrower, the banks named therein, as Banks, Bank One, NA,
as Administrative Agent, Credit Suisse First Boston as Documentation Agent,
and Citibank, N.A. as Syndication Agent (as amended, modified or
supplemented from time to time, the "Term Loan Agreement"). Unless
otherwise specified, terms defined in the Term Loan Agreement are used
herein as therein defined.
We have acted as special counsel for the Borrower in connection
with the preparation, execution and delivery of the Term Loan Agreement. In
that capacity we have examined the following:
(i) The Term Loan Agreement and the Notes;
(ii) The documents furnished by the Borrower pursuant to
Section 3.01 of the Term Loan Agreement;
(iii) The Articles of Incorporation of the Borrower and all
amendments thereto (the "Charter");
(iv) The by-laws of the Borrower and all amendments thereto
(the "By-laws"); and
(v) A certificate of the Secretary of State of the
Commonwealth of Pennsylvania, dated ______ __, 2000, attesting to
the continued subsistence of the Borrower in Pennsylvania.
73
We have also examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Borrower, certificates
of public officials and of officers of the Borrower, and agreements,
instruments and documents, as we have deemed necessary as a basis for the
opinions hereinafter expressed. We have assumed the legal capacity and
competence of natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the
conformity to original documents of documents submitted to us as certified,
conformed or photostatic copies. We have assumed that the Agents and the
Banks have duly executed and delivered, with all necessary power and
authority (corporate and otherwise), the Term Loan Agreement.
When an opinion or confirmation is given to our knowledge or with
reference to matters of which we are aware or which are known to us, or
with another similar qualification, the relevant knowledge or awareness is
limited to the actual knowledge or awareness of the lawyer who is the
current primary contact for the Borrower and the individual lawyers in this
firm who have participated in the specific transaction to which this
opinion relates and without any special or additional investigation
undertaken for the purposes of this opinion, except as otherwise noted
herein. Based upon the foregoing and subject to the exceptions, limitations
and qualifications set forth herein, we are of the following opinion:
1. The Borrower is a corporation duly incorporated and
validly subsisting under the laws of the Commonwealth of
Pennsylvania.
2. The execution, delivery and performance by the Borrower
of the Term Loan Agreement and the Notes are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Charter or
the By-laws or (ii) any law of the United States or the
Commonwealth of Pennsylvania (including, without limitation, any
order, rule or regulation of the PPUC (or (iii) to the best of
our knowledge, any agreement or instrument to which the Borrower
is a party or by which it is bound, and do not result in or
require the creation of any lien, security interest or other
charge or encumbrance upon or with respect to any of its
properties.
3. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body of the United States or the Commonwealth of
Pennsylvania is required for the due execution, delivery and
performance by the Borrower of the Term Loan Agreement or the
Notes, except .
4. The Term Loan Agreement and the Notes have been duly
executed and delivered by the Borrower, and the Term Loan
Agreement and the Notes are the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
74
5. The Borrower is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
6. We confirm to you that to our knowledge, after inquiry of
each lawyer who is the current primary contact for the Borrower
or PECO or who has devoted substantive attention to matters on
behalf of the Borrower or PECO during the preceding twelve months
and who is still currently employed by or a member of this firm,
except as disclosed in PECO's Annual Report on Form 10-K for the
year ended December 31, 1999 and PECO's Quarterly Report on Form
10-Q for the quarter ended June 30, 2000, no litigation or
governmental proceeding is pending or threatened in writing
against the Borrower or PECO (i) with respect to the Term Loan
Agreement or the Notes, or (ii) which is likely to have a
material adverse effect upon the financial condition, business,
properties or prospects of the Borrower and its subsidiaries
taken as a whole.
We draw to your attention the existence of the following two
Pennsylvania statutes in connection with the fact that the Advances bear
floating rates of interest:
(vi) Section 911 of the Pennsylvania "Crime Code," 18 Pa.
C.S.A. ss.911, enacted by the Act of December 6, 1972, P.L. 1482.
Section 911 of the Crime Code bears a close resemblance to
certain of the provisions of the Federal Racketeer Influenced and
Corrupt Organizations Act of 1970, 18 U.S.C. ss.ss.19611968,
commonly known as RICO, and is referred to hereinafter as the
"Pennsylvania RICO Act." The Pennsylvania RICO Act provides,
among other things, that it is a criminal offense, punishable as
a felony, to "use or invest, directly or indirectly ... in the
acquisition of any interest in, or the establishment or operation
of, any enterprise" any income collected in full or partial
satisfaction of a loan made "at a rate of interest exceeding 25%
per annum... ."
(vii) The Act of December 29, 1982, P.L. 1671, 18 Pa. C.S.A.
ss.4806.1 et seq. (superseded volume) (the "Criminal Usury
Statute"). The ------ Criminal Usury Statute provides, among
other things, that it is a criminal offense, punishable as a
felony, to engage in, "charging, taking or receiving any money
... on the loan ... of any money ... at a rate exceeding
thirty-six percent per annum... ."
(viii) The Criminal Usury Statute may have been repealed,
but the manner in which the repeal was enacted leaves the matter
subject to uncertainty.
Both the Pennsylvania RICO Act and the Criminal Usury Statute
appear to be intended by the legislature to apply only to racketeering and
loan sharking type activities, and not to the type of commercial loan
transaction evidenced by the Loan Document. Nevertheless, in view of the
plain language of the Pennsylvania courts, we cannot say that the ultimate
resolution of this issue is free from doubt.
75
The foregoing opinions are subject to the following exceptions,
limitations and qualifications:
(a) Our opinion is subject to the effect of applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or similar laws affecting
creditors' rights and remedies generally, general principles of
equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of
whether such enforceability is considered in a proceeding in
equity or at law); and limitations on enforceability of rights to
indemnification by federal or state securities laws or
regulations or by public policy.
(b) We express no opinion as to the application or
requirements of the Pennsylvania Securities Act or federal or
state securities, patent, trademark, copyright, antitrust and
unfair competition, pension or employee benefit, labor,
environmental health and safety or tax laws in respect of the
transactions contemplated by or referred to in the Term Loan
Agreement.
(c) We express no opinion as to the validity or
enforceability of any provision of the Term Loan Agreement or the
Notes which (i) permits the Lenders to increase the rate of
interest in the event of delinquency or default if such increase
would be deemed a penalty under applicable law; (ii) purports to
be a waiver by Borrower of any right or benefit except to the
extent permitted by applicable law; (iii) purports to require
that waivers must be in writing to the extent that an oral
agreement or implied agreement by trade practice or course of
conduct modifying provisions of the Term Loan Agreement or the
Notes has been made; or (iv) purports to exculpate any party from
its own negligent acts.
We express no opinion as to the law of any jurisdiction other
than the law of the Commonwealth of Pennsylvania and the federal law of the
United States.
The foregoing opinion is solely for your benefit in connection
with the consummation of the transaction described herein and may not be
used or relied upon by you or any other Person without our express written
consent for any other purpose other than (i) any Eligible Assignee that may
become a Lender under the Term Loan Agreement after the date hereof and
(ii) Mayer, Brown & Platt, which may rely upon this opinion in rendering
their opinion furnished pursuant to Article III of the Term Loan Agreement.
The opinions given herein are as of the date hereof, and we assume no
obligation to update or supplement this opinion to reflect facts or
circumstances which may hereafter come to our attention or any changes in
laws which may hereafter occur.
Very truly yours,
BALLARD SPAHR
76
ANDREWS & INGERSOLL, LLP
77
EXHIBIT E
FORM OF OPINION OF MAYER, BROWN & PLATT
______, 2000
To each of the Agents and the Banks which is a
party to the Term Loan Agreement dated as of
October 13, 2000 among Exelon Corporation, as
Borrower, the banks named therein, as Banks, Bank
One, NA, as Administrative Agent, Credit Suisse
First Boston, as Documentation Agent,
and Citibank, N.A., as Syndication Agent
Re: Exelon Corporation
Ladies and Gentlemen:
We have acted as counsel to Bank One, NA, individually and as
Administrative Agent, in connection with the preparation, execution and
delivery of the Term Loan Agreement, dated as of October 13, 2000, among
Exelon Corporation, as Borrower, the banks named therein, as Banks, Bank
One, NA, as Administrative Agent, Credit Suisse First Boston as
Documentation Agent, and Citibank, N.A., as Syndication Agent (as amended,
modified or supplemented from time to time, the "Term Loan Agreement"). We
are delivering this opinion pursuant to Section 3.01(a)(viii) of the Term
Loan Agreement. Unless otherwise defined herein, terms defined in the Term
Loan Agreement are used herein as therein defined.
In that connection, we have examined (i) counterparts of the Term
Loan Agreement executed by the Borrower, the Banks and the Agents, (ii) the
Notes executed by the Borrower on the date hereof and (iii) the other
documents listed on Exhibit A hereto, including the opinion of Ballard
Spahr Andrews & Ingersoll, counsel to the Borrower (the "Opinion"),
furnished to the Administrative Agent pursuant to Section 3.01(a) of the
Term Loan Agreement.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as
originals, the genuineness of all signatures, the due authority of the
parties executing such documents and the conformity to the originals of all
such documents submitted to us as copies. We have also assumed that the
Banks and the Agents have duly executed and delivered, with all necessary
power and authority (corporate and otherwise), the Term Loan Agreement. As
to matters of fact, we have relied solely upon the documents we have
examined.
Based upon the foregoing, we are of the opinion that, while we
have not independently considered the matters covered by the Opinion to the
extent necessary to enable us to express the conclusions stated therein,
the Opinion and the other documents listed in Exhibit
78
A hereto are substantially responsive to the corresponding requirements set
forth in Section 3.01 of the Term Loan Agreement pursuant to which the same
have been delivered.
The foregoing opinion is solely for your benefit and may not be
relied upon by any other Person other than any Person that may become a
Lender under the Term Loan Agreement after the date hereof.
Very truly yours,
79
EXHIBIT F
FORM OF ANNUAL AND QUARTERLY COMPLIANCE CERTIFICATE
______________________, 20____
Pursuant to the Term Loan Agreement, dated as of October 13,
2000, among Exelon Corporation, as Borrower, the banks named therein, as
Banks, Bank One, NA, as Administrative Agent, Credit Suisse First Boston,
as Documentation Agent, and Citibank, N.A., as Syndication Agent (as
amended, modified or supplemented from time to time, the "Term Loan
Agreement"), the undersigned, being ______________________ of the Borrower,
hereby certifies on behalf of the Borrower as follows:
1. Delivered herewith are the financial statements prepared
pursuant to Section 5.01(b)(ii) and Section 5.01(b)(iii) of the Term Loan
Agreement, for the fiscal ________ ended ___________, 20__. All such
financial statements comply with the applicable requirements of the Term
Loan Agreement.
2. Schedule I hereto sets forth in reasonable detail the
information and calculations necessary to establish compliance with the
provisions of Section 5.02(c) of the Term Loan Agreement as of the end of
the fiscal period referred to in paragraph 1 above.
3. (Check one and only one:)
__ No Event of Default, or event which with notice or lapse of
time or both would constitute an Event of Default, has occurred and is
continuing or exists.
__ An Event of Default, or event which with notice or lapse of
time or both would constitute an Event of Default, has occurred and is
continuing or exists, and the document(s) attached hereto as Schedule II
specify in detail the nature and period of existence of such Event of
Default or such other event as well as any and all actions with respect
thereto taken or contemplated to be taken by the Borrower.
4. The undersigned has personally reviewed the Term Loan
Agreement, and this certificate was based on an examination made by or
under the supervision of the undersigned sufficient to assure that this
certificate is accurate.
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5. Capitalized terms used in this certificate and not otherwise
defined shall have the meanings given in the Term Loan Agreement.
EXELON CORPORATION
By:___________________________
Name:_________________________
Title:________________________
Date:_____________________
81
Exhibit B
Lehman Documents
(see tabs 1-2, Volume 2)