EX-99 6 gpu_u9c3-082901exhibitb4.txt EXHIBIT B-4 Exhibit B-4 GPU SERVICE, INC. 300 Madison Avenue Morristown, New Jersey 07962 SERVICES AGREEMENT As of June 12, 2001 TO: GPU Diversified Holdings LLC ("Company") GPU Service, Inc. (hereinafter called "Service Company") is a company engaged in the rendering of services to companies in the GPU, Inc. holding company system. The organization, conduct of business and method of cost allocation of Service Company are designed to meet the requirements of Section 13 under the Public Utility Holding Company Act of 1935 and the rules and regulations promulgated thereunder to the end that services performed by the Service Company for said associate companies will be rendered to them at cost, fairly and equitably allocated. Services will be rendered by Service Company only upon receipt from time to time of specific or general requests therefor. Said request may always be modified or canceled by the serviced company at its discretion. The parties hereto agree as follows: 1. Service Company agrees to furnish the Company and any subsidiaries of the Company including those to be formed or acquired in the future (collectively and individually referred to as "You"), upon the terms and conditions herein set forth, such of the services described in Schedule I hereto as You may from time to time request. Service Company will also furnish, if available, such services which are not described in Schedule I but which are generally related to such services as You may request. 2. If You so request, Service Company will act as Your agent, attorney-in-fact and representative to sign such instruments and do such things as You may from time to time authorize in connection with the services to be furnished hereunder. 3. Service Company has and will maintain a staff trained and experienced in the analysis and evaluation of investment opportunities and their structure and implementation. In addition to the services of its own staff, Service Company will, after consultation with You concerning services to be rendered pursuant to your request, arrange for services of non-affiliated experts and consultants. If You so request, Service Company employees performing Operations Division functions will be leased to You. The lease of such employees will be at the actual cost thereof as provided in Sections 4 and 5. 4. All of the services rendered under this agreement will be at the actual cost thereof, and paid for in accordance with the provisions set forth in paragraph 5 hereof. Direct charges will be made for services where a direct allocation of cost is possible. The methods of determining such costs and the allocation thereof are set forth in Schedule II hereto. These methods are reviewed periodically as deemed appropriate by You and Service Company. Such methods may be modified or changed by Service Company without the necessity of an amendment of this agreement, provided that in each instance all services rendered hereunder will be at actual cost thereof, fairly and equitably allocated, and all in accordance with the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder. You will be advised from time to time of any material changes in such methods. 5. Bills will be rendered as soon as practicable after the close of each month and will be payable within ten days after receipt. This agreement may be terminated at any time by either party giving at least thirty days' written notice to the other of such termination as at the end of any month. 6. Service Company shall arrange for a working capital account ("Working Capital Account") to be established for You, from which Service Company shall make payments for all costs incurred in providing its services and in discharging its responsibilities hereunder. You agree to fund your Working Capital Account by providing or transferring funds promptly on receipt of telephone or other notice or direction from or on behalf of Service Company of your obligation therefor. Upon termination of this agreement, as hereinafter provided, any residual unexpended balance in the Working Capital Account after payment of the costs actually incurred, and reasonable commitments therefor, as set forth in Section 4 hereof shall be credited to You. 7. This agreement will be subject to termination or modification at any time if and to the extent its performance may conflict with any federal or state law or any rule, regulation or order of a federal or state regulatory body having jurisdiction. This agreement will be subject to approval of any federal or state regulatory body whose approval is a legal prerequisite to its execution and delivery of performance. GPU SERVICE, INC. By: ------------------------------ Carole B. Snyder Executive Vice President- Corporate Affairs Accepted: GPU Diversified Holdings LLC By: ------------------------- Bruce L. Levy Vice President 2 SCHEDULE I Description of Services which are available from GPU SERVICE, INC. Accounting and Auditing. ----------------------- The keeping of accounts and collateral activities, including billings, collections and payments, preparation of reports and preservation of records, review of internal controls and audits, preparation of statistical data and reports and analyses. Corporate and Corporate Records. ------------------------------- Cooperation with officers and counsel of associate companies on corporate matters, regulation, contracts, claims, litigation, financial affairs, and investments, including debt and equity securities, leveraged leases and private placements. Services in connection with stockholders' and directors' meetings and keeping of corporate records. Data Processing. --------------- Maintenance and operation of a data processing center and equipment for accounting, engineering, administration and other functions, and development of systems therefor. Executive and Administrative. ---------------------------- Consultation and services in management and administration of all aspects of financial and investment transactions. Financing. --------- Services in connection with interim and permanent financing of associate companies, determination of capital needs, cooperation with officers and counsel of associate companies on financing matters, including registration statements and regulatory applications; cash management; budgeting; preparation of financial and statistical reports. Insurance and Employee Benefit Programs. --------------------------------------- Development, placement and administration of insurance coverage and employee benefit programs, including group insurance, pensions, hospitalization and similar programs; property inspections and valuations for insurance. Investment Operations. --------------------- Receipt, review, evaluation of investment opportunities and ways and means to utilize capital resources, communications with investment, merchant and commercial bankers, broker-dealers, investment advisors, portfolio managers, economists and other representatives of investment and financial institutions and funds; negotiation, structuring and implementation of investment decisions and the preparation and execution and delivery of agreements therefor. 3 Operations Division. ------------------- The operation and maintenance of the transmission and distribution facilities. Personnel. --------- Assistance relating to wage and salary administration, employment procedures and policies, employee training and safety and recruitment. Retail Energy Sales and Services. -------------------------------- Review, evaluation and analysis of opportunities to develop, market and sell energy and energy-related services, including arrangements with and for associate companies. Public Information and Relations. -------------------------------- Services relating to information to and relations with the public, including customers, security holders, employees, financial analysis, rating agencies, investment firms and employees. Purchasing. ---------- Services with respect to purchase of materials, supplies, equipment and fuel reference works. Inventorying same for resale to associate companies. Research. -------- Services relating to research of financial and investment opportunities and ways to utilize capital resources. Taxes. ----- Services relating to federal, state and municipal taxes, preparation of federal returns and handling of federal return audits and claims. Legal. ----- Services related to general corporate legal matters and affairs including supervision of inside and outside counsel legal services. 4 SCHEDULE II Determination of Cost of Service and Allocation Thereof Cost of service will be determined in accordance with the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder, and will include all costs of doing business incurred by Service Company. Records will be maintained by each core business or support process of the Operations Division of Service Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employees welfare expenses. In addition, the Corporate Division of Service Company will maintain records of general administrative expenses, which will include the costs of operating Service Company as a corporate entity. Where appropriate, charges for services rendered or personnel assigned or leased to a particular GPU Energy Company and related expenses and non-personnel expenses (e.g., use of automotive equipment, etc.) relating to a particular GPU Energy Company will be billed directly to the owner of such GPU Energy Company. When a service is rendered for the benefit of two or more companies, the costs will be shared by the receiving companies in proportion to the average of: (1) gross transmission and distribution plant, (2) energy delivered to ultimate consumers in KWH, and (3) operating and maintenance expense excluding purchase power. All other costs will be fairly and equitably allocated in accordance with Rules 90 and 91 of the Public Utility Holding Company Act of 1935. Calculations under these allocation formulae will be reviewed periodically and revised as appropriate to fully allocate all costs by each year-end. All charges for services will be determined from the time records of employees. Records of such related expenses and will be maintained and subjected to periodic review. Out-of-pocket expenses which are incurred for a GPU Energy Company will be billed at cost. Charges for non-personnel expenses, such as for use of automobiles not assigned exclusively to the GPU Energy Companies, will normally be computed on the basis of costs per hour. 5