FIRST AMENDMENT TO FIVE-YEAR LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Exhibit
10(u)-2
FIRST
AMENDMENT TO FIVE-YEAR
THIS
FIRST AMENDMENT
TO FIVE YEAR LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
(this
“Amendment”)
dated
as of December 29, 2006 by and among PPL ENERGY SUPPLY, LLC (the
“Borrower”),
each
of the Lenders party hereto from time to time (the “Lenders”),
and
WACHOVIA FIXED INCOME STRUCTURED TRADING SOLUTIONS, LLC, as Administrative
Agent
and Issuing Lender (the “Administrative
Agent”).
WITNESSETH:
WHEREAS,
the
Borrower, the Lenders and the Administrative Agent have entered into that
certain Five-Year Letter of Credit and Reimbursement Agreement dated as of
December 15, 2005 (as
in
effect immediately prior to the date hereof, the
“Credit
Agreement”,
capitalized terms used and not defined herein shall have the meanings ascribed
to them in the Credit Agreement);
WHEREAS,
the
Borrower, the Lenders and the Administrative Agent desire to amend certain
provisions of the Credit Agreement on the terms and conditions contained herein.
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged by the parties hereto, the parties hereby agree as
follows:
Section 1.
Modifications
to Credit Agreement.
Subject
to satisfaction of the conditions contained in Section 2, the parties
hereto agree that the Credit Agreement is modified as follows:
(a) The
Credit Agreement is amended by adding the definitions of “Fitch”,
“Lower
Mt. Bethel Lease Financing”,
“OFAC”,
“Rating
Agency”,
“Regulation
X”,
“Sanctioned
Entity”
and
“Sanctioned
Person”
to
Section 1.01 thereof in the appropriate alphabetical location:
“‘Fitch’
means
Fitch, Inc. and its successors or, absent any such successor, such nationally
recognized statistical rating organization as the Borrower and the
Administrative Agent may select.”
“‘Lower
Mt. Bethel Lease Financing’
means
the existing lease financing associated with the Lower Mount Bethel
project.”
“‘OFAC’
means
the U.S. Department of the Treasury’s Office of Foreign Assets
Control.”
“‘Rating
Agency’
means
any of S&P, Xxxxx’x or Fitch, and “Rating Agencies” means any two or more of
them collectively.”
“‘Regulation
X’
means
Regulation X of the Board of Governors of the Federal Reserve System, as
amended, or any successor regulation.”
“Sanctioned
Entity”
shall
mean (i) an agency of the government of, (ii) an organization directly or
indirectly controlled by, or (iii) a person resident in a country that is
subject to a sanctions program identified on the list maintained by OFAC and
available at xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxxx/xxxxx.xxxx,
or as otherwise published from time to time as such program may be applicable
to
such agency, organization or person.
“Sanctioned
Person”
shall
mean a person named on the list of Specially Designated Nationals or Blocked
Persons maintained by OFAC available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/xxxxx.xxxx, or as otherwise
published from time to time.
(b) The
definitions of “Borrower’s
Rating”,
“Consolidated
Capitalization”,
and
“Consolidated
Debt”
in
Section 1.01 shall each be deleted in their entirety and respectively replaced
with the following:
“‘Borrower’s
Rating’
means
the senior unsecured long-term debt rating of the Borrower from S&P, Xxxxx’x
or Fitch.”
“‘Consolidated
Capitalization’
shall
mean the sum of, without duplication, (A) the Consolidated Debt of the Borrower,
(B) the consolidated member’s equity (determined in accordance with GAAP) of the
common, preference and preferred equityholders of the Borrower and minority
interests recorded on the Borrower’s consolidated financial statements
(excluding from member’s equity the balance of accumulated other comprehensive
income/loss of the Borrower on any date of determination solely with respect
to
(i) the effect of all unrealized gains and losses reported under Financial
Accounting Standards Board Statement No. 133 in connection with forward
contracts, futures contracts or other derivatives or commodity hedging
agreements for the future delivery of electricity or capacity and (ii) the
effect of any pension and other post-retirement benefit liability adjustment
recorded in accordance with GAAP), (C) up to an aggregate amount of $200,000,000
of Hybrid Preferred Securities and (D) up to an aggregate amount of $200,000,000
of Equity-Linked Securities, except that for purposes of calculating
Consolidated Capitalization of the Borrower, Consolidated Debt of the Borrower
shall exclude Non-Recourse Debt and Consolidated Capitalization of the Borrower
shall exclude that portion of member’s equity attributable to assets securing
Non-Recourse Debt.”
“‘Consolidated
Debt’
means
the consolidated Debt of the Borrower and its Consolidated Subsidiaries
(determined in accordance with GAAP), except that for purposes of this
definition (a) Consolidated Debt shall exclude Non-Recourse Debt of the
Borrower and its Consolidated Subsidiaries, and (b) Consolidated Debt shall
exclude (i) up to an aggregate amount of $200,000,000 of Hybrid Preferred
Securities of the Borrower and its Consolidated Subsidiaries and (ii) up to
an
aggregate amount of $200,000,000 of Equity-Linked Securities of the Borrower
and
its Consolidated Subsidiaries.”
(c) The
Credit Agreement is amended by deleting the definition of “Existing
Synthetic Lease Financing”
in
Section 1.01 thereof.
(d) Section
2.03(a) of the Credit Agreement shall be deleted in its entirety and replaced
with the following:
“(a) Funding
By the Administrative Agent in Anticipation of Amounts Due from the
Lenders.
Unless
the Administrative Agent shall have received notice from a Lender prior to
the
time of any Borrowing (except in the case of a Base Rate Borrowing, in which
case prior to the time of such Borrowing) that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with
Section 2.02(b), and the Administrative Agent may, in reliance upon such
assumption, make available for the purposes of Section 2.02(b) on such date
a
corresponding amount. If and to the extent that such Lender shall not have
so
made such share available to the Administrative Agent, such Lender and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to the Borrower until the date
such
amount is repaid to the Administrative Agent at (i) a rate per annum equal
to
the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.05, in the case of the Borrower, and (ii) the Federal
Funds Rate, in the case of such Lender. Any
payment by the Borrower hereunder shall be without prejudice to any claim the
Borrower may have against a Lender that shall have failed to make its share
of a
Borrowing available to the Administrative Agent. If
such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender’s Loan included in such Borrowing
for purposes of this Agreement.”
(e) Section
2.08(a)(ii) of the Credit Agreement shall be deleted in its entirety and
replaced with the following:
“(ii) If
on any
date the aggregate Outstandings exceed the aggregate amount of the
Commitments
(such
excess, a “Outstandings Excess”),
the
Borrower shall prepay, and there shall become due and payable (together with
accrued interest thereon) on such date, an aggregate principal amount of Loans
equal to such Outstandings
Excess. If, at a time when a Outstandings Excess exists,
(x) no
Loans are outstanding or (y) the Termination Date shall have occurred and,
in
either case, any Letter of Credit Liabilities remain outstanding, then
in
either case, the
Borrower shall cash collateralize any Letter of Credit Liabilities by
depositing into
a cash
collateral account established and maintained (including the investments made
pursuant thereto) by the Administrative Agent pursuant to a cash collateral
agreement in form and substance satisfactory to the Administrative Agent
an
amount
in cash equal to the then outstanding
Letter
of Credit Liabilities.
In
determining Outstandings for purposes of this clause (ii), Letter of Credit
Liabilities shall be reduced to the extent that they are cash collateralized
as
contemplated by this Section 2.08(a)(ii).”
(f) Section
5.04(a) of the Credit Agreement shall be deleted in its entirety and replaced
with the following:
“(a) Audited
Financial Statements.
The
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
as
of December 31, 2004
and the
related consolidated statements of income and cash flows for the fiscal year
then ended, reported on by PricewaterhouseCoopers LLP, copies of which have
been
delivered to each of the Administrative Agent and the Lenders, fairly present,
in conformity with GAAP, the consolidated financial position of the Borrower
and
its
Consolidated Subsidiaries as
of
such date and their
consolidated results of operations and cash flows for such fiscal
year.”
(g) Section
5.04(b) of the Credit Agreement shall be deleted in its entirety and replaced
with the following:
“(b) Interim
Financial Statements.
The
unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of September
30, 2005
and the
related unaudited consolidated statements of income and cash flows for the
three
months then ended fairly present, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower and
its
Consolidated Subsidiaries as
of
such date and their
consolidated results of operations and cash flows for such three-month period
(subject to normal year-end audit adjustments).”
(h) Section
5.11 of the Credit Agreement shall be deleted in its entirety and replaced
with
the following:
“Section
5.11. Reserved.”
(i) Section
5.17 of the Credit Agreement shall be deleted in its entirety and replaced
with
the following:
“Section
5.17. Reserved.”
(j) The
following Section 5.19 shall be added to the end of Article V:
“Section
5.19 OFAC.
None of
the Borrower, any Subsidiary of the Borrower or any Affiliate of the Borrower:
(i) is a Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned
Entities, or (iii) derives more than 10% of its operating income from
investments in, or transactions with Sanctioned Persons or Sanctioned Entities.
The proceeds of any Loan will not be used and have not been used to fund any
operations in, finance any investments or activities in, or make any payments
to, a Sanctioned Person or a Sanctioned Entity.”
(k) Section
6.07 shall be amended by deleting the existing clause (u) and replacing it
with
the following:
“(u) Liens
in
addition to those permitted by clauses (a) through (t) on the property or assets
of a Special Purpose Subsidiary arising in connection with the Lower Mt. Bethel
Lease Financing or the lease of such property or assets through one or more
other lease financings;”
(l) Section
6.08 shall be amended by deleting the existing clause (iv) and replacing it
with
the following:
“(iv)
the
surviving or resulting person, as the case may be, has senior long-term debt
ratings from at least two Rating Agencies that are at least equal to each
Borrower’s Rating at the end of the fiscal quarter immediately preceding the
effective date of such consolidation or merger. ”
(m) Section
6.09 shall be amended by deleting the existing clause (e) and replacing it
with
the following:
“(e)
if,
prior to any such Asset Sale, at least two Rating Agencies confirm the
then-current Borrower’s Rating after giving effect to any such Asset
Sale.”
(n) Section
6.12 shall be amended by deleting the existing clause (c) and replacing it
with
the following:
“(c) any
Debt
incurred in respect of the Lower Mt. Bethel Lease Financing;”
(o) Section
9.01 of the Credit Agreement shall be deleted in its entirety and replaced
with
the following:
“Section
9.01 Notices.
Except
as
otherwise expressly provided herein, all notices and other communications
hereunder shall be in writing (for purposes hereof, the term “writing” shall
include information in electronic format such as electronic mail and internet
web pages) or by telephone subsequently confirmed in writing; provided
that the
foregoing shall not apply to notices to any Lender or Issuing Lender pursuant
to
Article II or Article III, as applicable, if such Lender or Issuing Lender,
as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article in electronic format. Any notice shall
have
been duly given and shall be effective if delivered by hand delivery or sent
via
electronic mail, telecopy, recognized overnight courier service or certified
or
registered mail, return receipt requested, or posting on an internet web page,
and shall be presumed to be received by a party hereto (i) on the date of
delivery if delivered by hand or sent by electronic mail, posting on an internet
web page, or telecopy, (ii) on the Business Day following the day on which
the
same has been delivered prepaid (or on an invoice basis) to a reputable national
overnight air courier service or (iii) on the third Business Day following
the
day on which the same is sent by certified or registered mail, postage prepaid,
in each case to the respective parties at the address or telecopy numbers,
in
the case of the Borrower and the Administrative Agent, set forth below, and,
in
the case of the Lenders, set forth on signature pages hereto, or at such other
address as such party may specify by written notice to the other parties
hereto:
if
to the
Borrower:
PPL
Energy Supply, LLC
Xxx
Xxxxx
Xxxxx Xxxxxx (XXXXX00)
Xxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxxx X. Xxxxxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
with
a
copy to:
Xxx
Xxxxx
Xxxxx Xxxxxx (XXXXX0)
Xxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxx X. Xxxxx, Esq.
Telephone:
000-000-0000
Facsimile:
000-000-0000
if
to the
Administrative Agent:
Wachovia
Fixed Income Structured Trading Solutions, LLC
One
Wachovia Center
000
Xxxxx
Xxxxxxx Xxxxxx - XX0000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention:
Xxxx Xxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
with
a
copy to:
Wachovia
Fixed Income Structured Trading Solutions, LLC
One
Wachovia Center
000
Xxxxx
Xxxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
with
a
copy to:
Xxxxxx
& Bird LLP
000
Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention:
Xxxx X. Xxxxxxx, Esq.
Telephone:
000-000-0000
Facsimile:
000-000-0000”
(p) Section
9.03(b) of the Credit Agreement shall be deleted in its entirety and replaced
with the following:
“(b) Indemnity
in Respect of Loan Documents.
The
Borrower agrees to indemnify the Agents and each Lender, their respective
Affiliates and the respective directors, officers, trustees, agents and
employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs and expenses or disbursements of
any
kind whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel and any civil penalties or fines assessed by OFAC),
which may at any time (including, without limitation, at any time following
the
payment of the obligations of the Borrower hereunder) be imposed on, incurred
by
or asserted against such Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such Indemnitee shall
be
designated a party thereto) brought or threatened relating to or arising out
of
the Loan Documents or any actual or proposed use of proceeds of Loans hereunder;
provided, that no Indemnitee shall have the right to be indemnified hereunder
for such Indemnitee’s own gross negligence or willful misconduct as determined
by a court of competent jurisdiction in a final, non-appealable judgment or
order.”
(q) Section
9.12 of the Credit Agreement shall be deleted in its entirety and replaced
with
the following:
“Section
9.12 Confidentiality.
Each
Lender agrees to hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe
and
sound banking practices; provided, that nothing herein shall prevent any Lender
from disclosing such information (i) to any other Lender or to any Agent, (ii)
to any other Person if reasonably incidental to the administration of the Loans
and Letter of Credit Liabilities, (iii) upon the order of any court or
administrative agency, (iv) to the extent requested by, or required to be
disclosed to, any rating agency or regulatory agency or similar authority
(including any self-regulatory authority, such as the National Association
of
Insurance Commissioners), (v) which had been publicly disclosed other than
as a
result of a disclosure by any Agent or any Lender prohibited by this Agreement,
(vi) in connection with any litigation to which any Agent, any Lender or any
of
their respective Subsidiaries or Affiliates may be party, (vii) to the extent
necessary in connection with the exercise of any remedy hereunder, (viii) to
such Lender’s or Agent’s Affiliates and their respective directors, officers,
employees and agents including legal counsel and independent auditors (it being
understood that the Persons to whom such disclosure is made will be informed
of
the confidential nature of such information and instructed to keep such
information confidential), (ix) with the consent of the Borrower, (x) to Gold
Sheets and other similar bank trade publications, such information to consist
solely of deal terms and other information customarily found in such
publications and (xi) subject to provisions substantially similar to those
contained in this Section, to any actual or proposed Participant or Assignee
or
to any actual or prospective counterparty (or its advisors) to any
securitization, swap or derivative transaction relating to the Borrower’s
Obligations hereunder. Notwithstanding the foregoing, any Agent, any Lender
or
Xxxxxx & Bird LLP may circulate promotional materials and place
advertisements in financial and other newspapers and periodicals or on a home
page or similar place for dissemination of information on the Internet or
worldwide web, in each case, after the closing of the transactions contemplated
by this Agreement in the form of a “tombstone” or other release limited to
describing the names of the Borrower or its Affiliates, or any of them, and
the
amount, type and closing date of such transactions, all at their sole
expense.”
(r) Schedule
5.12 to the Credit Agreement is hereby deleted and replaced with Schedule 5.12
attached hereto.
Section
2. Conditions
Precedent.
The
effectiveness of this Amendment is subject to receipt by the Administrative
Agent of each of the following, each in form and substance satisfactory to
the
Administrative Agent:
(a) A
counterpart of this Amendment duly executed by the Borrower and the Required
Lenders;
(b) Evidence
that all fees and expenses payable to the Administrative Agent in connection
with this Amendment have been paid; and
(c) Such
other documents, instruments and agreements as the Administrative Agent may
reasonably request.
Section 3.
Representations.
The
Borrower represents and warrants to the Administrative Agent and the Lenders
that:
(a) Authorization.
The
Borrower has the right and power, and has taken all necessary action to
authorize it, to execute and deliver this Amendment and to perform its
obligations hereunder and under the Credit Agreement, as amended by this
Amendment, in accordance with their respective terms. This Amendment has been
duly executed and delivered by a duly authorized officer of the Borrower and
each of this Amendment and the Credit Agreement, as amended by this Amendment,
is a legal, valid and binding obligation of the Borrower enforceable against
the
Borrower in accordance with its respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws
affecting creditors rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general
applicability.
(b) Compliance
with Laws, etc.
The
execution and delivery by the Borrower of this Amendment and the performance
by
the Borrower of this Amendment and the Credit Agreement, as amended by this
Amendment, in accordance with their respective terms, do not and will not,
by
the passage of time, the giving of notice or otherwise: (i) require any
Government Action or violate any Applicable Law relating to the Borrower;
(ii) conflict with, result in a breach of or constitute a default under the
organizational documents of the Borrower, or any indenture, agreement or other
instrument to which the Borrower is a party or by which it or any of its
properties may be bound; or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower.
(c) No
Default.
No
Default or Event of Default has occurred and is continuing as of the date hereof
or will exist immediately after giving effect to this Amendment.
Section 4.
Reaffirmation
of Representations by Borrower.
The
Borrower hereby repeats and reaffirms all representations and warranties made
by
the Borrower to the Administrative Agent and the Lenders in the Credit Agreement
and the other Loan Documents on and as of the date hereof with the same force
and effect as if such representations and warranties were set forth in this
Amendment in full.
Section 5.
Certain
References.
Each
reference to the Credit Agreement in any of the Loan Documents shall be deemed
to be a reference to the Credit Agreement as amended by this Amendment.
Section 6.
Expenses.
The
Borrower shall reimburse the Administrative Agent upon demand for all costs
and
expenses (including attorneys’ fees) incurred by the Administrative Agent in
connection with the preparation, negotiation and execution of this Amendment
and
the other agreements and documents executed and delivered in connection
herewith.
Section 7.
Benefits.
This
Amendment shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 8.
GOVERNING
LAW.
THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
Section 9.
Effect;
Ratification.
Except
as expressly herein amended, the terms and conditions of the Credit Agreement
and the other Loan Documents remain unchanged and continue to be in full force
and effect. The amendments contained herein shall be deemed to have prospective
application only, unless otherwise specifically stated herein. The Credit
Agreement is hereby ratified and confirmed in all respects. It is the intention
and understanding of the parties hereto that this Amendment shall act as an
amendment to the Credit Agreement and shall not act as a novation of the
indebtedness evidenced by the Credit Agreement.
Section 10.
Counterparts.
This
Amendment may be executed in any number of counterparts, each of which shall
be
deemed to be an original and shall be binding upon all parties, their successors
and assigns.
Section
11. Successors
and Assigns.
This
Amendment shall be binding upon and inure to the benefit of each of the parties
hereto and its respective successors and assigns. The successor and assigns
of
such entities shall include, without limitation, their respective receivers,
trustees or debtors-in-possession.
[Signatures
on Next Page]
IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to
Five-Year Letter of Credit and Reimbursement Agreement to be executed as of
the
date first above written.
PPL
ENERGY SUPPLY, LLC
By:
______________________________
Name:
____________________________
Title:
______________________________
WACHOVIA
FIXED INCOME STRUCTURED
TRADING
SOLUTIONS, LLC, as Administrative
Agent
By:
______________________________
Name:
____________________________
Title:
______________________________
WACHOVIA
FIXED INCOME STRUCTURED
TRADING
SOLUTIONS, LLC, as Issuing Lender
By:
______________________________
Name:
____________________________
Title:
______________________________
WACHOVIA
FIXED INCOME
STRUCTURED
TRADING
SOLUTIONS, LLC, as
a Lender
By:
______________________________
Name:
____________________________
Title:
______________________________
SCHEDULE
5.12
Restricted
Subsidiaries
|
Restricted
Subsidiary
|
Jurisdiction
of Organization
|
|
PPL
Generation , LLC
|
Delaware
|
|
PPL
Montana Holdings, LLC
|
Delaware
|
|
PPL
Montana, LLC
|
Delaware
|
|
PPL
Martins Creek, LLC
|
Delaware
|
|
PPL
Xxxxxxx Island, LLC
|
Delaware
|
|
PPL
Montour, LLC
|
Delaware
|
|
PPL
Susquehanna, LLC
|
Delaware
|
|
PPL
Wallingford LLC
|
Connecticut
|
|
PPL
Holtwood, LLC
|
Delaware
|
|
PPL
Maine, LLC
|
Delaware
|
|
PPL
EnergyPlus, LLC
|
Pennsylvania
|
|
PPL
Investment Corporation
|
Delaware
|
|
PPL
Shoreham Energy, LLC
|
Delaware
|
|
PPL
Edgewood Energy, LLC
|
Delaware
|
