Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 48 261K
2: EX-3.(1) Unicom Articles of Incorporation 3 16K
3: EX-3.(2) Comed Restated Articles of Incorporation 49 160K
4: EX-3.(3) By-Laws of Unicom 17 58K
5: EX-3.(4) By-Laws of Comed 14 52K
6: EX-4.(16) Supplemental Indenture 11 41K
7: EX-4.(32) Term Loan Agreement 4 19K
8: EX-4.(35) Credit Agreement 153 368K
9: EX-4.(36) Guaranty by Unicom 22 64K
10: EX-4.(37) Lc Guaranty 20 63K
15: EX-10.(14) Director Retirement Plan 9 21K
16: EX-10.(16) Director Stock Award Plan 3 14K
11: EX-10.(6) Long-Term Performance Award 5 24K
12: EX-10.(7) Variable Compensation Award 6 26K
13: EX-10.(8) O'Connor/Skinner Award Plan 2 14K
14: EX-10.(9) Deferred Compensation Plan 5 22K
17: EX-12 Computation of Ratios 2± 13K
18: EX-21.(1) Subsidiaries of Unicom 1 9K
19: EX-21.(2) Subsidiaries of Comed 1 9K
20: EX-23.(1) Unicom Auditor's Consent 1 12K
21: EX-23.(2) Comed Auditor's Consent 1 12K
22: EX-24.(1) Unicom Powers of Attorney 11 36K
23: EX-24.(2) Comed Powers of Attorney 11 35K
24: EX-99.(1) Unicom 8-K 48 252K
25: EX-99.(2) Comed 8-K/A-1 48 246K
EX-4.(36) — Guaranty by Unicom
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Exhibit (4)-36
Unicom Corporation
Form 10-K File No. 1-11375
[EXECUTION COPY]
GUARANTY
GUARANTY, dated as of November 22, 1994, made by UNICOM CORPORATION, a
corporation organized and existing under the laws of the State of Illinois (the
"GUARANTOR"), in favor of the Lenders (the "LENDERS") and the LC Banks parties
to the Credit Agreement (as defined below) and Citibank, N.A., as agent (in such
capacity, the "AGENT") for the Lenders.
PRELIMINARY STATEMENTS
(1) The Lenders and the Agent have entered into a Credit Agreement, dated
as of the date hereof (said Agreement, as it may hereafter be amended or
otherwise modified from time to time, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), with Unicom Enterprises Inc., a corporation organized and existing
under the laws of the State of Illinois (the "BORROWER"). The Guarantor will
derive substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement, the Notes and the other Loan Documents.
(2) The Borrower is a wholly-owned Subsidiary of the Guarantor.
(3) It is a condition precedent to the making of Advances by the Lenders
under the Credit Agreement and the issuance of Letters of Credit by the LC Banks
pursuant to the Credit Agreement that the Guarantor shall have executed and
delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances and each LC Bank to issue Letters of Credit under
the Credit Agreement, the Guarantor hereby agrees as follows:
SECTION 1. CERTAIN DEFINED TERMS. As used in this Guaranty, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"CONSOLIDATED CAPITALIZATION" means, at any date of determination,
the sum of (i) common
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equity of the Guarantor and its Consolidated Subsidiaries, (ii) preferred
and preference stock of the Guarantor and its Consolidated Subsidiaries
and (iii) Consolidated Debt of the Guarantor and its Consolidated
Subsidiaries.
"CONSOLIDATED DEBT" means, at any date of determination, the sum of
Debt of the Guarantor and its Consolidated Subsidiaries and Contingent
Obligations of the Guarantor and its Consolidated Subsidiaries.
"CONSOLIDATED SUBSIDIARY" means, as to any Person, any Subsidiary of
such Person whose accounts are or are required to be consolidated with the
accounts of such Person in accordance with GAAP.
"CONTINGENT OBLIGATION" means, as to any Person, the undrawn face
amount of any letters of credit issued for the account of such Person and
shall also mean any obligation of such Person guaranteeing or in effect
guaranteeing any Debt, leases, dividends, letters of credit, or other
obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities, or services
primarily for the purpose of assuring the obligee under any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) otherwise to assure or hold harmless the
obligee under such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation or, where such
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Contingent Obligation is specifically limited to a portion of any such
primary obligation, that portion to which it is limited or, if not stated
or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith. For purposes of computing the
consolidated Debt of any Person, the amount of any primary obligation of
any Subsidiary of such Person and the amount of any Contingent Obligation
of such Person corresponding to such primary obligation shall only be
counted once (i.e., without duplication).
"TANGIBLE NET WORTH" means, at any time of determination, with
respect to any Person, the excess of such Person's total assets over its
total liabilities, with total assets and total liabilities each to be
determined in accordance with GAAP consistently applied, excluding,
however, from the determination of total assets (i) goodwill,
organizational expenses, research and development expenses, trademarks,
trade names, copyrights, patents, patent applications, licenses and rights
in any thereof, and other similar intangibles, (ii) all prepaid expenses,
deferred charges or unamortized debt discount and expense, (iii) all
reserves carried and not deducted from assets, (iv) securities that are
not readily marketable, (v) cash held in a sinking or other analogous fund
established for the purpose of redemption, retirement or prepayment of
capital stock or Debt, (vi) any write-up in the book value of any asset
resulting from a revaluation thereof subsequent to September 30, 1994, and
(vii) any items not included in clauses (i) through (vi), above, that are
treated as intangibles in conformity with GAAP.
SECTION 2. GUARANTY. The Guarantor hereby absolutely, unconditionally
and irrevocably guaranties the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the Borrower now
or hereafter existing under the Credit Agreement, the Notes and any other Loan
Documents, whether for principal, reimbursement obligations, interest, fees,
expenses or otherwise (all such obligations being the "OBLIGATIONS"), and agrees
to pay any and all expenses (including counsel fees and expenses) incurred by
the Agent, the LC Banks or the
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Lenders in enforcing any rights under this Guaranty. Without limiting the
generality of the foregoing, the Guarantor's liability shall extend to all
amounts that constitute part of the Obligations and would be owed by the
Borrower to the Agent, the LC Banks or the Lenders under the Credit Agreement,
the Notes and the other Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
SECTION 3. GUARANTY ABSOLUTE. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of the Credit
Agreement, the Notes and the other Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Agent, the LC Banks or the Lenders with
respect thereto. The obligations of the Guarantor under this Guaranty are
independent of the Obligations, and a separate action or actions may be brought
and prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of the Guarantor under this
Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Loan Document, any Advance, or any other agreement or
instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of, or any consent to departure from, the Credit Agreement or the
Notes, including, without limitation, any increase in the Obligations
resulting from the extension of additional credit to the Borrower or
otherwise and any extension of the Termination Date;
(iii) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of, any release of or any failure to perfect any lien on or
security interest in any collateral for all or any of the Obligations or
any other assets of the Borrower or any of its
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Subsidiaries, or any release or discharge of any Person liable for any or
all of the Obligations;
(iv) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries or any
bankruptcy, insolvency, liquidation or similar proceeding instituted by or
against the Borrower or any of its Subsidiaries; or
(v) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
As against the Guarantor, this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by the Agent, any LC Bank
or any Lender upon the insolvency, bankruptcy or reorganization of the Borrower
or otherwise, all as though such payment had not been made.
SECTION 4. WAIVER. The Guarantor hereby waives promptness, diligence,
presentment, protest, notice of protest, notice of dishonor, notice of
acceptance and any other notice with respect to any of the Obligations and this
Guaranty and any requirement that the Agent, any LC Bank or any Lender protect,
secure, perfect or insure any security interest or lien on any property subject
thereto or exhaust any right or take any action against the Borrower or any
other person or entity or any collateral.
SECTION 5. WAIVER OF RIGHTS OF SUBROGATION. The Guarantor hereby
expressly and irrevocably waives with respect to the Borrower and its successors
and assigns and any other Person, any and all rights at law or in equity, by
agreement or otherwise, to subrogation, reimbursement, exoneration,
contribution, setoff, share in any collateral or any other rights that could
accrue to a surety against a principal, to a guarantor against a maker or
obligor, to an accommodation party against the party accommodated, or to a
holder or transferee against a maker, and that the Guarantor may have or
hereafter acquire against the Borrower, any of its Affiliates, or any other
Person in connection with or as a result of the Guarantor's execution, delivery
or performance hereunder. In furtherance of the foregoing, the Guarantor agrees
that any payment by the Guarantor to the Agent, the LC Banks or the Lenders
pursuant to this Guaranty shall be deemed a contribution to the capital of the
Borrower, and
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no such payment shall constitute the Guarantor a creditor of the Borrower. The
Guarantor hereby acknowledges and agrees that the foregoing waivers are intended
to benefit the Borrower, the Agent, the LC Banks and the Lenders and shall not
limit or otherwise affect the Guarantor's liability hereunder or the
enforceability hereof. If, notwithstanding the foregoing, any amount shall be
paid to the Guarantor on account of such subrogation rights at any time when all
of the Obligations shall not have been paid in full, such amount shall be held
by the Guarantor in trust for the Agent, the LC Banks and the Lenders,
segregated from other funds of the Guarantor, and shall, forthwith upon receipt
by the Guarantor, be turned over to the Agent in the exact form received by the
Guarantor (duly endorsed by the Guarantor to the Agent), to be applied against
the Obligations, whether matured or unmatured, in such order as the Agent may
determine.
SECTION 6. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants as follows:
(a) CORPORATE EXISTENCE AND POWER. It is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Illinois,
is duly qualified to do business as a foreign corporation in, and is in good
standing under the laws of, each state in which the ownership of its properties
or the conduct of its business makes such qualification necessary, except where
the failure to be so qualified would not have a material adverse effect on its
business, assets, revenues, financial condition, results of operations,
operations or prospects or its ability to perform its obligations under this
Guaranty, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to own or lease its property and
to carry on its business as now conducted.
(b) CORPORATE AUTHORIZATION. The execution, delivery and performance by
it of this Guaranty have been duly authorized by all necessary corporate action
on its part and do not, and will not, require the consent or approval of its
shareholders, or any trustee or holder of any Debt or other obligation of the
Guarantor.
(c) NO VIOLATION, ETC. The execution and delivery by the Guarantor of
this Guaranty, and the performance by the Guarantor of its obligations
hereunder, (i) are within the Guarantor's corporate powers, (ii) have been duly
authorized by all necessary corporate action and (iii) do not and will not (A)
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violate any provision of the charter or by-laws of the Guarantor or of law, (B)
violate any legal restriction binding on or affecting the Guarantor, (C) result
in a breach of, or constitute a default under, any indenture or loan or credit
agreement or any other agreement, lease or instrument to which the Guarantor is
a party or by which it or its properties may be bound or affected, or (D) result
in or require the creation of any lien or security interest upon or with respect
to any of its properties.
(d) GOVERNMENTAL ACTIONS. 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
Guarantor of this Guaranty.
(e) EXECUTION AND DELIVERY. This Guaranty has been duly executed and
delivered by the Guarantor, and is the legal, valid and binding obligation of
the Guarantor enforceable against it in accordance with its terms, subject,
however, to the application by a court of general principles of equity and to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally.
(f) LITIGATION. There is no pending or threatened action or proceeding
(including, without limitation, any proceeding relating to, or arising out of,
any Environmental Laws) affecting it or any of its Subsidiaries before any
court, governmental agency or arbitrator, that may have a material adverse
effect on the business, assets, revenues, financial condition, results of
operations, operations or prospects of the Guarantor or the Guarantor and its
Subsidiaries, taken as a whole, or on the Guarantor's ability to perform its
obligations under this Guaranty, or that questions the validity or
enforceability of this Guaranty or any other Loan Document against the Guarantor
or the Borrower.
(g) FINANCIAL STATEMENTS; MATERIAL ADVERSE CHANGE. The consolidated
balance sheet of the Guarantor and its Consolidated Subsidiaries as at December
31, 1993, and the consolidated balance sheet of the Guarantor and its
Consolidated Subsidiaries as at September 30, 1994 and the related consolidated
statements of income, retained earnings and cash flows for the nine-month period
then ended, together with the report thereon of Arthur Andersen LLP included in
the Guarantor's Quarterly
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Report on Form 10-Q for the quarterly period ended September 30, 1994, copies of
each of which have been furnished to each Lender, fairly present (subject, in
the case of such balance sheet and statements of income, retained earnings and
cash flows for the nine months ended September 30, 1994, to year-end
adjustments) the financial condition of the Guarantor and its Consolidated
Subsidiaries as at such dates and the results of operations of the Guarantor and
its Consolidated Subsidiaries for the periods ended on such dates, all in
accordance with GAAP consistently applied (except for such changes in accounting
methods described in such report of Arthur Andersen LLP). Since September 30,
1994, there has been no material adverse change in the business, assets,
revenues, financial condition, results of operations, operations or prospects of
the Guarantor and its Subsidiaries, taken as a whole, or the Borrower and its
Subsidiaries, taken as a whole (other than operating losses resulting from
start-up operations of Subsidiaries of the Borrower), or in the Guarantor's
ability to perform any of its obligations hereunder.
(h) ERISA. During the preceding twelve-consecutive-month period, no steps
have been taken to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by the Guarantor or any of its Subsidiaries of any material liability, fine, or
penalty. The Guarantor has no contingent liability with respect to any post-
retirement benefit under a Welfare Plan, other than liability for continuation
coverage described in Part 6 of Title I of ERISA.
(i) TAXES. The Guarantor and each of its Subsidiaries have filed all tax
returns (federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties, or provided adequate
reserves for payment thereof other than such taxes that the Guarantor or such
Subsidiary is contesting in good faith by appropriate legal proceedings and in
respect of which the Guarantor or such Subsidiary, as the case may be, has
established adequate reserves in conformity with GAAP.
(j) VIOLATION OF LAW. Neither the Guarantor nor any of its Subsidiaries
is in violation of any law or governmental regulation or court decree or order
which
9
may result in a material adverse effect on the business, assets, revenues,
financial condition, results of operations, operations or prospects of the
Guarantor and its Subsidiaries, taken as a whole, or the Borrower and its
Subsidiaries, taken as a whole, or on the Guarantor's ability to perform any of
its obligations hereunder.
(k) INVESTMENT COMPANY. The Guarantor 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, or an "investment advisor" within
the meaning of the Investment Advisers Act of 1940, as amended.
(l) HOLDING COMPANY. The Guarantor is a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended, but the
Guarantor and its Subsidiaries are exempt from the provisions of that Act,
except Section 9(a)(2) thereof, by virtue of an order issued by the Securities
and Exchange Commission on July 22, 1994. Such exemption is in full force and
effect and the Guarantor is not aware of any existing or proposed proceedings
contemplating the revocation or modification of such exemption.
(m) INFORMATION. All factual information heretofore or contemporaneously
furnished by or on behalf of the Guarantor in writing to the Agent or any Lender
for purposes of or in connection with this Guaranty or any transaction
contemplated hereby is, and all other such factual information hereafter
furnished by or on behalf of the Guarantor to the Agent, any LC Bank or any
Lender will be, true and accurate in every material respect on the date as of
which such information is dated or certified, and not incomplete by omitting to
state any material fact necessary to make such information not misleading.
(n) NO CONDITIONS PRECEDENT. There are no conditions precedent to the
effectiveness of this Guaranty that have not been satisfied or waived.
(o) RELIANCE. The Guarantor has, independently and without reliance upon
the Borrower and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty.
SECTION 7. AFFIRMATIVE COVENANTS. The Guarantor covenants and agrees
that, so long as any part of the
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Obligations shall remain unpaid or any Lender shall have any Commitment, the
Guarantor will:
(a) REPORTING REQUIREMENTS. Furnish to each Lender:
(i) 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
Guarantor, a consolidated balance sheet of the Guarantor and its
Consolidated Subsidiaries as of the end of such quarter and consolidated
statements of income, retained earnings and cash flows of the Guarantor
and its Consolidated Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, all in
reasonable detail and duly certified (subject to year-end audit
adjustments) by the chief financial officer or the Treasurer of the
Guarantor as having been prepared in accordance with GAAP consistently
applied, except for (A) the absence of notes thereto and (B) changes in
accounting principles required by GAAP;
(ii) as soon as available and in any event within 90 days after the
end of each fiscal year of the Guarantor and its Consolidated
Subsidiaries, a copy of the annual report for such year for the Guarantor
and its Consolidated Subsidiaries, containing a consolidated balance sheet
of the Guarantor and its Consolidated Subsidiaries as at the end of such
fiscal year and consolidated statements of income, retained earnings and
cash flows of the Guarantor and its Consolidated Subsidiaries for such
fiscal year, certified in a manner acceptable to the Agent by Arthur
Anderson & Co. or another nationally-recognized independent public
accounting firm selected by the Guarantor and acceptable to the Agent;
(iii) concurrently with the financial statements for each quarterly
accounting period and for each fiscal year of the Guarantor furnished
pursuant to paragraphs (i) and (ii), above, (A) a certificate of the chief
financial officer, any vice president responsible for financial or
accounting matters, or the treasurer of the Guarantor stating that (1) the
Guarantor
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has performed and observed all of, and the Guarantor is not in default in
the performance or observance of any of, the terms, covenants, agreements
and conditions of this Guaranty or, if the Guarantor shall be in default,
specifying all such defaults and the nature thereof, of which the signer
of such certificate may have knowledge, and (2) the signer has obtained no
knowledge of any Unmatured Default or Event of Default except as specified
in such certificate, and (B) an analysis prepared and certified by the
chief financial officer, any vice president responsible for financial or
accounting matters, or the Treasurer of the Guarantor of the covenants
contained in Sections 7(i) and (j), containing all information necessary
for determining compliance by the Guarantor with such covenants;
(iv) as soon as available and in any event within 90 days after the
end of each fiscal year of the Guarantor and concurrently with the
financial statements furnished pursuant to paragraph (ii), above, a
written statement of the independent public accountants that certified
such financial statements stating that, in making the examination
necessary for their certification of such financial statements, they have
obtained no knowledge of any default by the Guarantor in the observance of
any of the covenants contained in Section 7(i) or (j) or, if such
accountants shall have obtained knowledge of any such default, specifying
all such defaults and the nature thereof, it being understood that they
shall not be liable directly or indirectly for any failure to obtain
knowledge of any default;
(v) as soon as possible and in any event within ten days after the
commencement of litigation against the Guarantor, the Borrower, or any of
their respective Subsidiaries that could reasonably be expected to have a
material adverse effect on the business, assets, revenues, financial
condition, results of operations, operations or prospects of the Guarantor
and its Subsidiaries, taken as a whole, or that questions the validity or
enforceability of any of the Loan Documents against the Guarantor or the
Borrower, notice of such litigation describing in reasonable detail the
facts and circumstances concerning such litigation and the Guarantor's,
the Borrower's or
12
such Subsidiary's, as the case may be, proposed actions in connection
therewith;
(vi) promptly after the sending or filing thereof, copies of all
reports which the Guarantor sends to any of its security holders, and
copies of all reports and registration statements (other than registration
statements relating to (A) the offering of debt or preferred/preference
stock equity securities and (B) employee benefit plans) which the
Guarantor or any of its Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;
(vii) promptly after the occurrence of the institution of any steps
by the Guarantor or any other Person to terminate any Pension Plan, or the
failure to make a required contribution to any Pension 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 Pension Plan which
could result in the requirement that the Guarantor or any of its
Subsidiaries furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan
which could result in the incurrence by the Guarantor or any of its
Subsidiaries of any material liability, fine, or penalty, or any material
increase in the contingent liability of the Guarantor or any of its
Subsidiaries with respect to any post-retirement Welfare Plan benefit,
notice of such event and the action the Guarantor proposes to take with
respect thereto;
(viii) as soon as possible and in any event within ten days after
the Guarantor knows or should have reason to know of the occurrence of
each Unmatured Default or Event of Default continuing on the date of such
statement, a statement of the chief financial officer, any vice president
responsible for financial or accounting matters, or the Treasurer of the
Guarantor setting forth details of such Unmatured Default or Event of
Default and the action that the Guarantor or the Borrower has taken and
proposes to take with respect thereto; and
13
(ix) such other information (other than proprietary customer
information) respecting the business, assets, revenues, financial
condition, results of operations, operations or prospects of the
Guarantor, the Borrower, or any of their respective Subsidiaries as the
Agent or any Lender may from time to time reasonably request.
(b) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its legal existence in
the jurisdiction of its organization and qualify and remain qualified as a
foreign organization in each jurisdiction in which such qualification is
reasonably necessary in view of its business and operations or the ownership of
its properties, and preserve, renew and keep in full force and effect the
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except to the extent that the Guarantor's chief financial
officer certifies to the Lenders that the loss of any such right, privilege or
franchise, both individually and together with all other rights, privileges and
franchises lost since the Effective Date, would not have a Material Adverse
Effect.
(c) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its Subsidiaries
to comply, in all material respects with all Applicable Laws, such compliance to
include compliance with ERISA and Environmental Laws.
(d) MAINTENANCE OF INSURANCE, ETC. Maintain, and cause each of its
Subsidiaries to maintain, such insurance as may be required by law and such
other insurance, to the extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated.
(e) INSPECTION RIGHTS. At any reasonable time and from time to time as
the Agent or any Lender may reasonably request, permit the Agent, each Lender or
any agents or representatives thereof to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
the Guarantor and any of its Subsidiaries (except in the case of Commonwealth,
as may be restricted by law), and to discuss the affairs, finances and accounts
of the Guarantor and any of its Subsidiaries with any of their respective
officers or directors.
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(f) MAINTAINING OF BOOKS. Maintain, and cause each of its Subsidiaries to
maintain, complete and accurate books of record and account in which entries
shall be made of all financial transactions and the assets and business of the
Guarantor and each of its Subsidiaries in accordance with GAAP.
(g) MAINTENANCE OF PROPERTIES. Cause all properties used or useful in the
conduct of the business of the Guarantor or any of its Subsidiaries to be
maintained and kept in reasonable condition, repair and working order, and cause
to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Guarantor may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that neither the
Guarantor nor any such Subsidiary shall be prevented from discontinuing the
operation and maintenance of any such properties if the chief financial officer
of the Guarantor certifies that such discontinuance is desirable in the conduct
of the Guarantor's or such Subsidiary's business and such discontinuance,
individually or with all such other discontinuances since the date hereof, would
not have a material adverse effect on the business, assets, revenues, financial
condition, results of operations, operations or prospects of the Guarantor and
its Subsidiaries, taken as a whole.
(h) TAXES AND LIABILITIES. Pay, and cause each of its Subsidiaries to
pay, when due all taxes, assessments, governmental charges and other liabilities
imposed upon it or its property, except to the extent contested in good faith
and by appropriate proceedings and in respect of which adequate reserves for the
payment thereof have been set aside by the Guarantor or such Subsidiary, as the
case may be, in accordance with GAAP.
(i) MAINTENANCE OF MINIMUM TANGIBLE NET WORTH. Maintain at all times an
excess of (i) the Tangible Net Worth of the Guarantor and its Consolidated
Subsidiaries over (ii) the Tangible Net Worth of Commonwealth and its
Consolidated Subsidiaries, of at least $10,000,000.
(j) CONSOLIDATED LEVERAGE RATIO. Maintain, on the last day of each fiscal
quarter, a ratio of (i) Consolidated Debt to (ii) Consolidated Capitalization of
not greater than 0.65 to 1.
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(k) ERISA. Maintain, and cause each of its Consolidated Subsidiaries to
maintain, each of its defined benefit plans in substantial compliance with all
applicable requirements of ERISA and of the Code and with all applicable rulings
and regulations issued under the provisions of ERISA and the Code.
(l) OWNERSHIP OF SUBSIDIARIES. Maintain direct ownership of 100% of the
capital stock of the Borrower and at least 80% of the voting capital stock of
Commonwealth.
SECTION 8. NEGATIVE COVENANTS. The Guarantor covenants and agrees that,
so long as any part of the Obligations shall remain unpaid or any Lender shall
have any Commitment, the Guarantor will not:
(a) LIENS, ETC. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any lien, security interest, or other
charge or encumbrance, or any other type of preferential arrangement, upon or
with respect to any of its properties (including, without limitation, the
capital stock of any of its Subsidiaries), whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, in each case to secure or provide for the payment of any Debt of
any Person (any of the foregoing being referred to herein as a "LIEN"), other
than (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 arising under the Indenture; (iii) "permitted liens", as such term is
defined in the Indenture; and (iv) Liens permitted by Section 6.02(e)(ii) of the
Credit Agreement; provided, however, that, notwithstanding the foregoing, if
both before and after giving effect thereto no Unmatured Default or Event of
Default shall have occurred and be continuing, Commonwealth may sell, pledge or
otherwise dispose of its accounts receivable.
(b) MERGERS, ETC. Merge or consolidate with or into any Person, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions, and whether in a sale/leaseback transaction or
otherwise) more than 10% of its assets (whether now owned or hereafter
acquired), unless, in the case of a merger, immediately after giving effect
thereto, (i) no event shall occur and be continuing that constitutes an
Unmatured Default or an Event of Default, (ii) the
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Guarantor is the surviving corporation, (iii) the Guarantor's Tangible Net Worth
shall be equal to or greater than its Tangible Net Worth immediately prior to
such merger and (iv) the Guarantor shall not be liable with respect to any Debt
or allow its property to be subject to any Lien which it could not become liable
with respect to or allow its property to become subject to under this Guaranty
on the date of such transaction.
(c) DEBT. Create, incur, assume or suffer to exist any Debt, other than
(i) Debt to the Borrower in an amount not to exceed $25,000,000 in the aggregate
at any one time outstanding, (ii) Debt hereunder, (iii) unsecured Contingent
Obligations (other than in respect of this Guaranty) in an aggregate amount at
any one time outstanding not to exceed the excess of (A) $300,000,000 over (B)
the amount of Contingent Obligations incurred by the Borrower and its
Subsidiaries pursuant to Section 6.02(b)(ii) of the Credit Agreement, and (iv)
other unsecured Debt; provided, however, that, notwithstanding the foregoing,
the aggregate amount of Debt of the Guarantor, the Borrower and Subsidiaries of
the Borrower at any one time outstanding shall not exceed $500,000,000.
(d) GUARANTOR AND SUBSIDIARIES' STOCK. Permit any of its Subsidiaries to
purchase or otherwise acquire any shares of capital stock of the Guarantor; or
take any action, or permit any such Subsidiary to take any action, that would
result in a material decrease in the percentage of the outstanding shares of
capital stock of any "Significant Subsidiary" of the Guarantor (within the
meaning of Rule 1-02 of the Regulation S-X of the Securities and Exchange
Commission) owned by the Guarantor and its other Subsidiaries; provided,
however, that the Guarantor or Commonwealth may take any such action with
respect to the capital stock of Commonwealth, provided that, after giving effect
to any such action, the Guarantor is in compliance with Section 7(l) hereof.
(e) OTHER AGREEMENTS. Enter into any agreement containing any provision
that would be violated or breached by the performance of its obligations
hereunder or under any instrument or document delivered or to be delivered by
the Guarantor hereunder or in connection herewith.
(f) TRANSACTIONS WITH AFFILIATES. Enter into, or permit any of its
Subsidiaries to enter into, any transaction with an Affiliate of the Guarantor,
unless
17
such transaction is on terms no less favorable to the Guarantor or such
Subsidiary, as the case may be, than if the transaction had been negotiated in
good faith on an arm's length basis with a Person that was not an Affiliate of
the Guarantor; provided, however, that the foregoing restrictions shall not
apply to any transaction between the Guarantor and any of its Subsidiaries,
between the Guarantor and Commonwealth, or between Commonwealth and any of the
Guarantor's other Subsidiaries.
(g) MAINTENANCE OF OWNERSHIP OF SUBSIDIARIES. Sell, assign, transfer,
pledge, hypothecate, or otherwise dispose of any shares of capital stock of any
of its Subsidiaries or any warrants, rights or options to acquire such capital
stock, or permit any of its Subsidiaries to issue, sell, or otherwise dispose of
any shares of its capital stock or the capital stock of any other of its
Subsidiaries or any warrants, rights, or options to acquire such capital stock,
except (and only to the extent) as may be necessary to give effect to a
transaction permitted by subsections (b) and (d), above, or subsections (e)(ii),
(f) or (g) of Section 6.02 of the Credit Agreement (including, without
limitation, any disposition pursuant to a foreclosure of any Lien permitted by
Section 6.02(e)(ii) of the Credit Agreement, provided that such disposition
would not have a Material Adverse Effect) and except that, subject to Section
6.02(f) of the Credit Agreement, any Subsidiary of the Guarantor may issue and
sell shares of its capital stock, and warrants, rights, or options to acquire
the same, to the Guarantor or such Subsidiary's parent corporation (if not the
Guarantor); provided, however, that Commonwealth may issue shares of its common
stock upon any exercise of its common stock purchase warrants and any conversion
of its $1.425 convertible preferred stock, in each case only with respect to
such warrants and shares of preferred stock outstanding on the date hereof.
(h) DISTRIBUTIONS. Upon the occurrence and during the continuance of an
Event of Default, declare or pay, directly or indirectly, any dividend, payment
or other distribution of assets, properties, cash, rights, obligations or
securities on account of any share of any class of capital stock of the
Guarantor, or purchase, redeem, retire, or otherwise acquire for value, or
permit any of its Subsidiaries to purchase, redeem, retire, or otherwise acquire
for value, any shares of any class of capital stock of the Guarantor or any
warrants, rights, or options to acquire any such shares, now or hereafter
18
outstanding, or make any distribution of assets to any of its shareholders;
provided, however, that, notwithstanding the foregoing, the Guarantor may, to
the extent that it is legally required to do so, pay any such dividend, payment
or other distribution after the Guarantor has declared such dividend, payment or
other distribution.
SECTION 9. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Guaranty, and no consent to any departure by the Guarantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Agent and the Majority Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given, provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all of the Lenders, (i) limit the liability of, or
release, the Guarantor hereunder, (ii) postpone any date fixed for payment
hereunder, or (iii) change the number of Lenders required to take any action
hereunder.
SECTION 10. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
cable communication) and mailed, telecopied, telegraphed, cabled or delivered to
it, (i) if to the Guarantor, at its address at P.O. Box A-3005, 10 South
Dearborn Street, 38th Floor, Chicago, Illinois 60690-3005, Attention: Treasurer,
Telecopy: (312) 394-4082, and (ii) if to the Agent, any LC Bank or any Lender,
at its address specified in the Credit Agreement or, as to any party, at such
other address as shall be designated by such party in a written notice to each
other party. All such notices and other communications shall, when mailed,
telecopied, telegraphed or cabled, be effective when deposited in the mails,
telecopied, delivered to the telegraph company or delivered to the cable
company, respectively.
SECTION 11. NO WAIVER; REMEDIES. No failure on the part of the Agent,
any LC Bank or any Lender to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder 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,
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SECTION 12. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, each Lender and LC Bank 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 of the Guarantor (general or
special, time or demand, provisional or final). Each Lender and LC Bank agrees
promptly to notify the Agent and the Guarantor 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 and LC Bank under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender or LC Bank may have.
SECTION 13. CONTINUING GUARANTY; ASSIGNMENTS UNDER CREDIT AGREEMENT.
This Guaranty is a continuing guaranty and shall (i) subject to the last
sentence of Section 3, remain in full force and effect until the later to occur
of (A) the payment in full of the Obligations and all other amounts payable
under this Guaranty and (B) the expiration or termination of the Commitments,
(ii) be binding upon the Guarantor, its successors and assigns (provided, that
the Guarantor may not assign any of its rights or obligations hereunder without
the prior written consent of the Lenders), and (iii) inure to the benefit of,
and be enforceable by, the Agent, the LC Banks, the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and any Note held by it) to any other person or entity pursuant to Section
9.07 thereof, and such other person or entity shall thereupon become vested with
all the benefits in respect thereof granted to such Lender herein or otherwise,
subject, however, to the provisions of Article VIII (concerning the Agent) of
the Credit Agreement.
SECTION 14. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) The
Guarantor hereby irrevocably (i) submits to the non-exclusive jurisdiction of
any New York State or Federal court sitting in New York City and
20
any appellate court from any thereof in any action or proceeding arising out of
or relating to this Guaranty or any other Loan Document and (ii) agrees that all
claims in respect of such action or proceeding may be heard and determined in
such New York State court or in such Federal court. The Guarantor hereby
irrevocably waives the defense of an inconvenient forum to the maintenance of
such action or proceeding and any objection to venue in connection therewith.
The Guarantor also irrevocably consents to the service of any and all process in
any such action or proceeding by the mailing by certified mail of copies of such
process to the Guarantor at its address specified in Section 10. The Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(B) THE GUARANTOR HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY
OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
THEREUNDER.
SECTION 16. EXECUTION IN COUNTERPARTS. This Guaranty may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
SECTION 17. SEVERABILITY. Any provision of this Guaranty or any other
Loan Document that is prohibited, unenforceable or invalid in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or invalidity without invalidating the remaining
provisions hereof or thereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
SECTION 18. HEADINGS. Article and Section headings used herein are for
convenience of reference only, are not part of this Guaranty and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Guaranty.
SECTION 19. ENTIRE AGREEMENT. This Guaranty constitutes the entire
agreement and understanding among the Guarantor, the Lenders, the LC Banks and
the Agent relative to the subject matter hereof. Any previous
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agreement by or among such parties with respect to the subject matter hereof is
superseded by this Guaranty. Nothing in this Guaranty, expressed or implied, is
intended to confer upon any party other than the Lenders, the LC Banks and the
Agent any rights, remedies, obligations, or liabilities under or by reason of
this Guaranty.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
UNICOM CORPORATION
By Dennis F. O'Brien
---------------------------
Name: Dennis F. O'Brien
Title: Treasurer
Dates Referenced Herein and Documents Incorporated by Reference
9 Subsequent Filings that Reference this Filing
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