Exhibit 10.4

 

[EXECUTION COPY]

 

PUBLISHED CUSIP NUMBER 01736DAA8   PUBLISHED CUSIP NUMBER 01736DAB64 PUBLISHED
ISIN NUMBER US01736DAA81   PUBLISHED ISIN NUMBER US01736DAB64

 

$500,000,000

 

TERM C CREDIT AGREEMENT

 

Dated as of March 8, 2004

 

Among

 

ALLEGHENY ENERGY SUPPLY COMPANY, LLC

as Borrower,

 

THE FINANCIAL INSTITUTIONS NAMED HEREIN

as Initial Lenders,

 

and

 

CITICORP NORTH AMERICA, INC.

as Administrative Agent,

 

CITIGROUP GLOBAL

MARKETS INC.,

Joint Lead Arranger and

Joint Book Runner

 

BANC OF AMERICA

SECURITIES LLC,

Joint Lead Arranger and

Joint Book Runner

 

SCOTIA CAPITAL (USA) INC.,

Co-Documentation Agent

BANK OF AMERICA, N.A.,

Syndication Agent

 

J.P. MORGAN

SECURITIES, INC.,

Co-Documentation Agent

 

CREDIT SUISSE

FIRST BOSTON,

Co-Documentation Agent

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T A B L E O F C O N T E N T S

 

Section

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        Page

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     ARTICLE I           DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS     

Section 1.01

   Certain Defined Terms    2

Section 1.02

   Principles of Interpretation    8      ARTICLE II           AMOUNT AND TERMS
OF THE BORROWING     

Section 2.01

   The Borrowing    9

Section 2.02

   Making the Borrowing    9

Section 2.03

   Interest Elections    10

Section 2.04

   Termination or Reduction of Commitments    11

Section 2.05

   Repayment of Advances    11

Section 2.06

   Prepayments    12

Section 2.07

   Interest    12

Section 2.08

   Fees    13

Section 2.09

   Illegality    13

Section 2.10

   Increased Costs    14

Section 2.11

   Taxes    15

Section 2.12

   Payments Generally; Pro Rata Treatment    17

Section 2.13

   Evidence of Debt    20

Section 2.14

   Use of Proceeds    20      ARTICLE III           CONDITIONS TO BORROWING     

Section 3.01

   Conditions Precedent to the Borrowings    20      ARTICLE IV          
REPRESENTATIONS AND WARRANTIES     

Section 4.01

   Representations and Warranties of the Borrower    21

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     ARTICLE V           COVENANTS OF THE BORROWER     

Section 5.01

   Covenants    21      ARTICLE VI           EVENTS OF DEFAULT     

Section 6.01

   Events of Default    21      ARTICLE VII           THE AGENTS     

Section 7.01

   Authorization and Action    21

Section 7.02

   BofA, BAS, CNAI, CGMI, Citibank, CSFB, JPMC, Scotia and Affiliates    21

Section 7.03

   Arranger Parties    22      ARTICLE VIII           MISCELLANEOUS     

Section 8.01

   Amendments, No Waiver    22

Section 8.02

   Notices, Etc.    23

Section 8.03

   No Waiver; Cumulative Remedies    23

Section 8.04

   Indemnity and Expenses    23

Section 8.05

   Right of Set-off    25

Section 8.06

   Binding Effect    25

Section 8.07

   Assignments and Participations    25

Section 8.08

   Execution in Counterparts    28

Section 8.09

   Jurisdiction, Etc.    28

Section 8.10

   Governing Law    29

Section 8.11

   Waiver of Jury Trial    29

Section 8.12

   Confidentiality    29

Section 8.13

   Benefits of Agreement    29

Section 8.14

   Severability    29

Section 8.15

   Limitations    29

Section 8.16

   Survival    30

Section 8.17

   USA Patriot Act Notice    30

SCHEDULES

    

Schedule 1.01

   - Term Commitments; Lending Offices     

 

ii

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EXHIBITS

 

Exhibit A

   -    Form of Assignment and Acceptance

Exhibit B

   -    Form of Notice of Borrowing

Exhibit C

   -    Form of Note

 

iii

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TERM C CREDIT AGREEMENT

 

TERM C CREDIT AGREEMENT, dated as of March 8, 2004 (as amended, modified or
otherwise supplemented from time to time in accordance with its terms, this
“Agreement”), among ALLEGHENY ENERGY SUPPLY COMPANY, LLC, a Delaware limited
liability company (the “Borrower”), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the Initial
Lenders (the “Initial Lenders”), CITIGROUP GLOBAL MARKETS, INC. (“CGMI”), as
Joint Lead Arranger and Joint Book Runner, BANC OF AMERICA SECURITIES LLC
(“BAS”), as Joint Lead Arranger and Joint Book Runner, BANK OF AMERICA, N.A.
(“BofA”), as Syndication Agent, CREDIT SUISSE FIRST BOSTON (“CSFB”), acting
through its Cayman Islands Branch, as Co-Documentation Agent, JP MORGAN
SECURITIES, INC. (“JPMC”), as Co-Documentation Agent, SCOTIA CAPITAL (USA) INC.
(“Scotia”), as Co-Documentation Agent, and CITICORP NORTH AMERICA, INC.
(“CNAI”), not in its individual capacity except as expressly set forth herein
but solely as administrative agent for the Lenders (together with any successor
administrative agent appointed pursuant to Article VIII of the Common Terms
Agreement described below, the “Administrative Agent”).

 

PRELIMINARY STATEMENTS

 

(1) The Borrower is indebted to certain banks and financial institutions
pursuant to (a) that certain Credit Agreement, dated as of February 21, 2003,
among the Borrower, the financial institutions party thereto as lenders and
Citibank, N.A., as agent, in a current outstanding principal amount of
$170,000,000; (b) that certain Credit Agreement, dated as of February 21, 2003,
among the Borrower, the financial institutions party thereto as lenders, Bank
One, NA, as issuing bank and Citibank, N.A., as agent, in a current outstanding
principal amount of $987,657,215.77; and (c) that certain Credit Agreement,
dated as of February 21, 2003 (the “Springdale Credit Agreement”), among the
Borrower, the financial institutions party thereto as lenders (the “Existing
Springdale Lenders”) and The Bank of Nova Scotia, as agent, in a current
outstanding principal amount of $270,122,947.

 

(2) The Springdale Credit Agreement consists of three facilities, (a) a facility
in a current outstanding principal amount of up to $94,334,904.55, (b) a
facility in a current outstanding principal amount of up to $150,000,000 (the
“Springdale Tranche B Facility”) and (c) a facility in a current outstanding
principal amount of $25,788,042.45.

 

(3) The Existing Springdale Lenders and certain other banks and financial
institutions (the “Term B Lenders”) have entered into that certain Master
Assignment and Acceptance Agreement, dated as of the date hereof, pursuant to
which all rights, title, interests, benefits and obligations of the Existing
Springdale Lenders under the Springdale Credit Agreement are to be assigned and
transferred to the Term B Lenders upon the terms and conditions set forth in the
Assignment Agreement.

 

(4) The Borrower has requested that the Term B Lenders agree to amend and
restate the Springdale Credit Agreement (such amended and restated credit
agreement being hereinafter referred to as the “Term B Credit Agreement”) so as
to refinance and continue a

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certain portion of the loans outstanding thereunder and make additional loans
available to the Borrower, all in an aggregate amount not to exceed up to
$750,000,000 on the Closing Date (as hereinafter defined), which shall consist
of (a) a new loan facility in an initial aggregate amount of $650,000,000, the
proceeds of which shall constitute Secured Replacement Senior Debt Obligations
(as hereinafter defined) and which shall be used to refinance the Springdale
Tranche A Facility and certain amounts of the other Existing Secured Lender Debt
(as hereinafter defined) and (b) a continuation of the Springdale Tranche B
Facility in the aggregate amount of $100,000,000, all on the terms and
conditions set forth in the Term B Credit Agreement and the other Financing
Documents (as hereinafter defined).

 

(5) The Borrower has requested that the Initial Lenders establish a loan
facility in the aggregate amount of $500,000,000 (the “Facility”) in favor of
the Borrower to partially refinance the Existing Secured Lender Debt and the
proceeds of which shall constitute Secured Replacement Senior Debt Obligations
(as hereinafter defined).

 

(6) Allegheny Energy, Inc., the parent company of the Borrower (the “Parent”),
intends to enter into an unsecured credit agreement consisting of an unsecured
revolving credit facility in an aggregate amount of up to $200,000,000 and an
unsecured term credit facility in an aggregate amount of up to $100,000,000, the
proceeds of which will be used to (a) refinance certain indebtedness of the
Parent and letters of credit currently outstanding and issued on behalf of the
Parent, the Borrower and certain Subsidiaries (as hereinafter defined) of the
Borrower, (b) pay certain costs associated with or resulting from the
Transactions (as hereinafter defined) and (c) otherwise be available for general
corporate purposes of the Parent, including working capital and posting letters
of credit to support obligations of the Parent, the Borrower and their
respective Subsidiaries incurred in the ordinary course of business.

 

(7) Pursuant to that certain Common Terms Agreement, dated as of the date hereof
(the “Common Terms Agreement”), among the Borrower, the other Loan Parties, the
Term B Lenders, the Lenders, Citibank, N.A., as Collateral Agent and
Intercreditor Agent, and the Administrative Agent, the Borrower and the other
Loan Parties have made certain representations, covenants and undertakings for
the benefit of, among others, the Lenders and the Agents (as hereinafter
defined).

 

(8) The Lenders have indicated their willingness to provide such financing on
the terms and conditions of this Agreement and the other Financing Documents (as
hereinafter defined).

 

2

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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

 

Section 1.01 Certain Defined Terms. Except as otherwise defined in this
Agreement, capitalized terms used in this Agreement but not defined herein shall
have the meanings assigned thereto in the Common Terms Agreement. In addition,
the following terms shall have the following meanings:

 

“Act” has the meaning set forth in Section 8.17.

 

“Administrative Agent” has the meaning set forth in the recital of parties to
this Agreement.

 

“Administrative Agent’s Account” means the account of the Administrative Agent
maintained by the Administrative Agent with Citibank, N.A. at its office at 399
Park Avenue, New York, New York (ABA No. 021000089), Account No. 36852248,
Reference: Allegheny Energy Supply Company, LLC –Term C Facility, or such other
account as the Administrative Agent shall specify in writing to the Lenders.

 

“Advance” has the meaning set forth in Section 2.01.

 

“Agreement” has the meaning set forth in the recital of the parties to this
Agreement.

 

“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.

 

“Applicable Margin” means 3.25% per annum for Base Rate Advances and 4.25% per
annum for Eurodollar Rate Advances.

 

“Approved Fund” means a Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) a Person or an Affiliate of a Person that
administers or manages a Lender.

 

“Arranger Parties” means BAS, as Joint Lead Arranger and Joint Book Runner,
BofA, as Syndication Agent, CGMI, as Joint Lead Arranger and Joint Book Runner,
CSFB, as Co-Documentation Agent, Scotia, as Co-Documentation Agent, and JPMC, as
Co-Documentation Agent.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
accordance with Section 8.07 and in substantially the form of Exhibit A.

 

“BAS” has the meaning set forth in the recital of parties to this Agreement.

 

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the higher of:

 

(a) the rate of interest announced publicly by Citibank in New York, New York,
from time to time, as Citibank’s base rate; and

 

(b) the Federal Funds Rate plus 0.5%.

 

3

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“Base Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(i).

 

“BofA” has the meaning set forth in the recital of parties to this Agreement.

 

“Borrower” has the meaning set forth in the recital of parties to this
Agreement.

 

“Borrowing” has the meaning set forth in Section 2.01.

 

“CGMI” has the meaning set forth in the recital of the parties to this
Agreement.

 

“CNAI” has the meaning set forth in the recital of the parties to this
Agreement.

 

“Commitment” means, with respect to any Lender at any time, the amount set forth
opposite such Lender’s name on Schedule 1.01 under the caption “Commitment” or,
if such Lender has entered into one or more Assignment and Acceptances on or
prior to such time, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(d) as such Lender’s “Commitment”,
as such amount may be reduced at or prior to such time pursuant to Section 2.04
of this Agreement or Section 6.02 of the Common Terms Agreement.

 

“Common Terms Agreement” has the meaning specified Preliminary Statement (7) to
this Agreement.

 

“Continuation”, “Continue” and “Continued” each refer to a continuation of
Eurodollar Rate Advances upon the expiration of the Interest Period therefor as
Eurodollar Rate Advances of the same or a different Interest Period pursuant to
Section 2.03.

 

“Conversion”, “Convert” and “Converted” each refer to a conversion of Advances
of one Type into Advances of the other Type pursuant to Section 2.03, 2.09 or
2.10.

 

“CSFB” has the meaning set forth in the recital of the parties to this
Agreement.

 

“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
1.01 or in the Assignment and Acceptance pursuant to which it became a Lender,
as the case may be, or 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 with respect to any Lender, (i) any other Lender; (ii)
an Affiliate of a Lender; (iii) an Approved Fund; (iv) a commercial bank
organized under the laws of the United States, or any State thereof, and having
a combined capital and surplus of at least $500,000,000; (v) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at least
$500,000,000; (vi) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded

 

4

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special lending arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow or a political subdivision of any such
country, and having a combined capital and surplus of at least $500,000,000, so
long as such bank is acting through a branch or agency located in the country in
which it is organized or another country that is described in this clause (vi);
(vii) the central bank of any country that is a member of the OECD; (viii) a
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus of at least
$500,000,000; or (ix) any other Person approved by the Administrative Agent and,
so long as no Default or Event of Default shall have occurred and be continuing,
the Borrower, such approval, in either case, not to be unreasonably withheld or
delayed; provided that neither the Borrower nor any Affiliate of the Borrower
shall qualify as an Eligible Assignee under this definition.

 

“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 1.01 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 Lender as such Lender may from time to time specify to
the Borrower and the Administrative Agent.

 

“Eurodollar Rate” means, with respect to any Interest Period for any Eurodollar
Rate Advances, the rate per annum obtained by dividing (a) LIBOR for such
Interest Period by (b) a percentage equal to 1.00 minus the Eurodollar Rate
Reserve Percentage.

 

“Eurodollar Rate Advance” means an Advance that bears interest as provided in
Section 2.07(a)(ii).

 

“Eurodollar Rate Reserve Percentage” for any Interest Period for any Eurodollar
Rate Advances means the reserve percentage applicable two Business Days before
the first day of such Interest Period 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 any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.

 

“Existing Springdale Lenders” has the meaning set forth in Preliminary Statement
(1) to this Agreement.

 

“Facility” has the meaning set forth in Preliminary Statement (5) to this
Agreement.

 

5

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“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 that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“Granting Lender” has the meaning set forth in Section 8.07(g).

 

“Indemnified Party” has the meaning set forth in Section 8.04(b).

 

“Initial Lenders” has the meaning set forth in the recital of parties to this
Agreement.

 

“Interest Notice Conversion Date” means the earlier to occur of (a) the 30th day
following the Closing Date and (b) the date on which the Administrative Agent
notifies the Borrower that all initial assignments of the Advances held by the
Initial Lenders necessary to complete the preliminary syndication of the
Facility have been completed.

 

“Interest Period” means, for each Eurodollar Rate Advance, the period commencing
on the date of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance, as the case may be, and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below for such Eurodollar Rate Advance 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 so selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months or, if available at the time of
selection to all Lenders owed any of the relevant Advances, nine or twelve
months, as the Borrower may, upon notice received by the Administrative Agent
not later than 11:00 a.m. (New York City time) on the third Business Day prior
to the first day of such Interest Period, select; provided, however, that:

 

(a) the Borrower may not select any Interest Period with respect to any
Eurodollar Rate Advance that ends after date specified in clause (a) of the
definition of “Maturity Date”;

 

(b) 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, however, 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; and

 

6

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(c) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month.

 

“JPMC” has the meaning set forth in the recital of the parties to this
Agreement.

 

“Lender” means each Initial Lender and each Person that shall become a Lender
hereto pursuant to Section 8.07.

 

“LIBOR” means, for any applicable Interest Period with respect to any Eurodollar
Rate Advance (or portions thereof) with the same Interest Period, the British
Bankers’ Association Interest Settlement Rate per annum for deposits in Dollars
for a period equal to such Interest Period appearing on the display designated
as Page 3750 on the Dow Jones Markets Service (or such other page on that
service or such other service designated by the British Banker’s Association for
the display of such Association’s Interest Settlement Rates for Dollar deposits)
as of 11:00 a.m. (London, England time) on the day that is two Business Days
prior to the first day of the Interest Period or if such Page 3750 is
unavailable for any reason at such time, the rate which appears on the Reuters
Screen ISDA Page as of such date and such time; provided that if the
Administrative Agent determines that the relevant foregoing sources are
unavailable for the relevant Interest Period, “LIBOR” shall mean the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the nearest 1/1000th of 1%) of the rates per annum at
which deposits in Dollars are offered to the Administrative Agent two Business
Days preceding the first day of such Interest Period by leading banks in the
London interbank market as of 10:00 a.m. for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Advance (or portion thereof, as
the case may be) of CNAI (in its capacity as a Lender).

 

“March 2011 Notes” means those certain 7.8% Notes due 2011 issued pursuant to
that certain Indenture dated as of March 15, 2001 by and between the Borrower
and Bank One Trust Company, N.A., as Trustee.

 

“Maturity Date” means the earlier of (a) June 8, 2011 and (b) the date of
acceleration of all outstanding Advances and termination in whole of the
Commitments pursuant to Section 6.02 of the Common Terms Agreement; provided
that in the event that on December 15, 2010 there remains outstanding any Debt
under the March 2011 Notes, “Maturity Date” shall mean March 8, 2011.

 

“Note” means a promissory note of the Borrower payable to the order of any
Lender in substantially the form of Exhibit C, evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from the Advances made by
such Lender hereunder.

 

7

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“Notice of Borrowing” has the meaning set forth in Section 2.02(a).

 

“Notice of Conversion/Continuation” has the meaning set forth in Section
2.03(b).

 

“Other Taxes” has the meaning set forth in Section 2.11(b).

 

“Parent” has the meaning set forth in Preliminary Statement (6) of this
Agreement.

 

“Quarterly Date” means the last Business Day of March, June, September and
December, commencing with March 31, 2004.

 

“Register” has the meaning set forth in Section 8.07(d).

 

“Required Lenders” means, at any time, Lenders owed or holding at least a
majority in interest of the sum of the aggregate principal amount of the
Advances outstanding at such time.

 

“Scotia” has the meaning set forth in the recital of the parties to this
Agreement.

 

“Springdale Credit Agreement” has the meaning set forth in Preliminary Statement
(1) of this Agreement.

 

“Springdale Tranche B Facility” has the meaning set forth in Preliminary
Statement (2) of this Agreement.

 

“SPV” shall have the meaning provided in Section 8.07(g).

 

“Taxes” has the meaning set forth in Section 2.11(a).

 

“Term B Credit Agreement” has the meaning set forth in Preliminary Statement (4)
of this Agreement.

 

“Term B Lender” has the meaning set forth in Preliminary Statement (3) of this
Agreement.

 

“Termination Date” means the earlier of April 15, 2004 and the date of
termination in whole of the Commitments pursuant to Section 2.04 or 6.02 of the
Common Terms Agreement.

 

“Type” refers to the distinction between Advances bearing interest at the Base
Rate and Advances bearing interest at the Eurodollar Rate.

 

Section 1.02 Principles of Interpretation. This Agreement and the Schedules and
Exhibits hereto, except to the extent that the context otherwise requires, shall
be subject to the same principles of interpretation as are set forth in Section
1.02 of the Common Terms Agreement.

 

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ARTICLE II

 

AMOUNT AND TERMS OF THE BORROWING

 

Section 2.01 The Borrowing. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make a single secured loan advance (an
“Advance”) to the Borrower on any Business Day during the period from the date
hereof until the Termination Date in an amount not to exceed such Lender’s
Commitment at such time, all of which Advances shall be Base Rate Advances (the
making of such Advances, being the “Borrowing”). The Borrowing shall consist of
Advances made simultaneously by the Lenders ratably according to their
Commitments. Amounts borrowed under this Section 2.01 and repaid or prepaid may
not be reborrowed.

 

Section 2.02 Making the Borrowing. (a) The Borrowing shall be made
simultaneously on notice, given not later than 10:00 a.m. (New York City time)
on the date of the proposed Borrowing, by the Borrower to the Administrative
Agent, which shall give to each Lender prompt notice thereof by telecopier or
electronic mail. Such notice of the Borrowing (the “Notice of Borrowing”) shall
be by telephone, confirmed immediately in writing, or telecopier or electronic
mail, in substantially the form of Exhibit B, specifying therein the requested
(i) date of the Borrowing (which shall be a Business Day), (ii) confirming that
the Borrowings shall be comprised of Base Rate Advances, and (iii) the aggregate
amount of the Borrowing.

 

(b) With respect to the Borrowing, each Lender shall, before 12:00 p.m. (New
York City time) on the date thereof, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent’s Account, in immediately available funds, an amount equal to such
Lender’s ratable portion of the Borrowing in accordance with the Commitments.
After the Administrative Agent’s receipt of such funds and upon fulfillment of
the applicable conditions set forth in Section 3.01 of the Common Terms
Agreement, the Administrative Agent shall make such funds available to the
Intercreditor Agent for further application to the repayment of the Existing
Secured Lender Debt.

 

(c) The Notice of Borrowing shall be irrevocable and binding on the Borrower.

 

(d) Subject to the Administrative Agent giving prompt notice of the Notice of
Borrowing received by the Administrative Agent to the Lenders, unless the
Administrative Agent shall have received notice from a Lender prior to the date
of the Borrowing requested under the Notice of Borrowing that such Lender will
not make available to the Administrative Agent such Lender’s ratable portion of
the Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the date of the Borrowing
in accordance with subsection (b) of this Section 2.02 and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower 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 agree to repay or pay to the

 

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Administrative Agent forthwith on demand such corresponding amount and to pay
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid or paid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at such
time under Section 2.07 to Advances comprising the Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so paid shall
constitute such Lender’s Advance as part of the Borrowing for all purposes.

 

(e) The failure of any Lender to make the Advance to be made by it as part of
the Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of the Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance required
of such other Lender on the date of the Borrowing.

 

Section 2.03 Interest Elections. (a) The Borrower may on any Business Day
occurring on or after the Interest Notice Conversion Date elect to Convert all
or any portion of the Advances from one Type into Advances of the other Type,
and in the case of Eurodollar Rate Advances, may elect Interest Periods
therefor, all as provided in this Section 2.03; provided that no Advance may be
Converted into or Continued as a Eurodollar Rate Advance having an Interest
Period in excess of one month prior to the date which is 60 days after the date
of the Borrowing. The Borrower may elect different options with respect to
different portions of the Borrowing, in which case each such portion shall be
allocated ratably among the Lenders in accordance with their Commitments. At no
time shall the total number of different Interest Periods for all Eurodollar
Rate Advances outstanding exceed ten.

 

(b) To make an election pursuant to this Section, the Borrower shall give the
Administrative Agent prior written notice (or telephonic notice promptly
confirmed in writing) by telecopier or electronic mail (a “Notice of
Conversion/Continuation”) of the Conversion or Continuation, as the case may be,
(i) by 1:00 p.m. (New York City time) on the requested date of a Conversion into
Base Rate Advances and (ii) by 11:00 a.m. (New York City time) three Business
Days prior to a Continuation of or Conversion into Eurodollar Rate Advances;
provided, however, that any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify (A) if different options are being elected with
respect to different portions of the Borrowing, the portions thereof that are to
be allocated to each resulting election (in which case the information to be
specified pursuant to clauses (C) and (D) shall be specified for each resulting
portion); (B) the effective date of the election made pursuant to such Notice of
Conversion/Continuation, which shall be a Business Day; (C) whether the
resulting Borrowing is to be comprised of Base Rate Advances or Eurodollar Rate
Advances; and (D) if the resulting Borrowing is to be comprised of Eurodollar
Rate Advances, the Interest Period applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of
“Interest Period”. If any such Notice of Conversion/Continuation requests that
the Borrowing be comprised of Eurodollar Rate Advances but does not specify an
Interest Period, the Borrower shall be deemed to have selected an Interest
Period of one month. The principal amount of any portion of the Borrowing to
which a Eurodollar Rate election has been made shall not be less than
$5,000,000. Each Notice of Conversion/Continuation shall be irrevocable and
binding on the Borrower.

 

10

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(c) If, on the expiration of any Interest Period in respect of any Eurodollar
Rate Advances, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such Advances are repaid as provided
herein, the Borrower shall be deemed to have elected to Convert such Advances to
Base Rate Advances. No Advances may be Converted into, or Continued as,
Eurodollar Rate Advances if a Default has occurred and is continuing, unless the
Administrative Agent and the Required Lenders shall have otherwise consented in
writing.

 

(d) Upon receipt of any Notice of Conversion/Continuation with respect to
Advances, the Administrative Agent shall promptly notify each Lender of the
details thereof and of such Lender’s ratable share of each election.

 

(e) Upon the occurrence and during the continuance of any Default, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, 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.

 

(f) If any Advance is converted to a different Type of Advance, the Borrower
shall pay, on the date of such conversion, the interest accrued to such date on
the principal amount so converted.

 

Section 2.04 Termination or Reduction of Commitments. (a) The Borrower may, at
any time upon at least three Business Days’ notice to the Administrative Agent,
terminate in whole or reduce in part the Commitments; provided that (i) each
partial reduction of the Commitments shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) any
such termination or reduction shall be made ratably among the Lenders in
accordance with their Commitments.

 

(b) All unused Commitments shall terminate at 5:00 p.m. (New York City time) on
the Termination Date.

 

Section 2.05 Repayment of Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders the aggregate
outstanding principal amount of the Advances on the following dates in an amount
equal to the product of (a) the percentage set forth below for such date and (b)
the aggregate amount of the Borrowing outstanding at such time:

 

Date

--------------------------------------------------------------------------------

   Percentage

--------------------------------------------------------------------------------

 

June 30, 2004

   0.25 %

September 30, 2004

   0.25 %

December 31, 2004

   0.25 %

March 31, 2005

   0.25 %

June 30, 2005

   0.25 %

 

11

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September 30, 2005

   0.25 %

December 31, 2005

   0.25 %

March 31, 2006

   0.25 %

June 30, 2006

   0.25 %

September 30, 2006

   0.25 %

December 31, 2006

   0.25 %

March 31, 2007

   0.25 %

June 30, 2007

   0.25 %

September 30, 2007

   0.25 %

December 31, 2007

   0.25 %

March 31, 2008

   0.25 %

June 30, 2008

   0.25 %

September 30, 2008

   0.25 %

December 31, 2008

   0.25 %

March 31, 2009

   0.25 %

June 30, 2009

   0.25 %

September 30, 2009

   0.25 %

December 31, 2009

   0.25 %

March 31, 2010

   0.25 %

June 30, 2010

   0.25 %

September 30, 2010

   0.25 %

December 31, 2010

   0.25 %

March 31, 2011

   0.25 %

June 8, 2011

   93.00 %

 

provided that the final principal installment shall be repaid on the Maturity
Date and in any event shall be in an amount equal to the aggregate principal
amount of the Advances outstanding on such date.

 

Section 2.06 Prepayments. (a) Optional. The Borrower may prepay the Advances
from time to time in accordance with Section 2.04(a) of the Common Terms
Agreement.

 

(b) Mandatory. The Borrower shall prepay the Advances in accordance with Section
2.04(b) of the Common Terms Agreement.

 

Section 2.07 Interest. (a) Scheduled Interest. The Borrower shall pay interest
on the unpaid principal amount of each Advance owing to each Lender from the
date of such Advance until such principal amount shall be paid in full, at the
following rates per annum:

 

(i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in
effect from time to time and (B) the Applicable Margin in effect from time to
time, payable in arrears on each Quarterly Date during such periods and on the
date such Base Rate Advance shall be Converted or paid in full.

 

(ii) Eurodollar Rate Advances. During such periods as 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 (A) the Eurodollar Rate for such
Interest Period for such Advance and (B) the Applicable Margin in effect on the
first day of such Interest Period,

 

12

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payable in arrears on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that occurs during
such Interest Period every three months from the date of such Interest Period
and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

 

(b) Default Interest. Upon the occurrence and during the continuance of an Event
of Default, the Borrower shall pay interest on (i) the unpaid principal amount
of each Advance owing to each Lender, payable in arrears on the dates referred
to in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at
all times to 2% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by Applicable Law, the amount of any interest, fee or other
amount payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid, in
the case of interest, on the Type of Advance on which such interest has accrued
pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate
Advances pursuant to clause (a)(i) above.

 

(c) Notice of Interest Period and Interest Rate. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02 or a Notice of
Conversion/Continuation pursuant to Section 2.03(b), the Administrative Agent
shall give notice to the Borrower and each relevant Lender of the applicable
Interest Period and the applicable interest rate determined by the
Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

 

Section 2.08 Fees. The Borrower shall pay to the Administrative Agent for its
own account such fees as may from time to time be agreed between the Borrower
and the Administrative Agent.

 

Section 2.09 Illegality. Notwithstanding any other provision of this Agreement,
if the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance will
automatically, upon such demand, 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 shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided that, before making any such demand, such
Lender agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Eurodollar Lending
Office if the making of such a designation would allow such Lender or its
Eurodollar Lending Office to continue to perform its obligations to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.

 

13

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Section 2.10 Increased Costs. (a) If, due to either (i) the introduction of or
any change (other than any change by way of imposition or increase of reserve
requirements 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), there shall be any increase in the
cost to any Lender of agreeing to make or of making, funding or maintaining
Eurodollar Rate Advances (excluding, for purposes of this Section 2.10, any such
increased costs resulting from (A) Taxes or Other Taxes (as to which Section
2.11 shall govern) and (B) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender is organized or has
its Applicable Lending Office or any political subdivision thereof), 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 sufficient to compensate such
Lender for such increased cost; provided, however, that a Lender claiming
additional amounts under this Section 2.10(a) agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost that may thereafter accrue and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender. A certificate as to
the amount of such increased cost, submitted to the Borrower by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.

 

(b) If any Lender determines that 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) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender’s commitment to lend and other
commitments of such type, then, upon demand by such Lender or such corporation
(with a copy of such demand to the Administrative Agent), the Borrower shall 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 in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender’s commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower by such Lender shall be conclusive and binding for all
purposes, absent manifest error.

 

(c) If, with respect to any Eurodollar Rate Advances, the Required Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, 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 shall notify the Borrower that such Lenders have determined
that the circumstances causing such suspension no longer exist.

 

14

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Section 2.11 Taxes. (a) Any and all payments by the Borrower hereunder or under
the Notes shall be made, in accordance with Section 2.12, free and clear of and
without deduction for any and all present or future withholding taxes, including
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Administrative
Agent, (i) taxes imposed on (or measured by) its overall net income, or any
franchise taxes or other similar taxes imposed for the privilege of carrying on
a business in corporate form (other than taxes imposed as a result of entering
into this Agreement or any other Financing Document and the transactions
contemplated hereby or thereby), or taxes measured by its net worth or
shareholder’s capital, by the United States, or by the jurisdiction under the
laws of which such recipient is organized or in which its Applicable Lending
Office is located, (ii) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which the Applicable
Lending Office of any Lender is located and (iii) withholding taxes excluded
pursuant to clause (e) of this Section 2.11 (all such non-excluded taxes,
including levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes 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, (A) the sum payable by the Borrower shall be increased
as may be necessary so that after the Borrower and the Administrative Agent have
made all required deductions (including deductions applicable to additional sums
payable under this Section 2.11) 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, (B) the Borrower shall make all such deductions and
(C) 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 shall pay any present or future stamp,
documentary, excise, property, intangible, mortgage recording or similar taxes,
charges or levies that arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or any other Financing Document, but
excluding all other U.S. federal taxes other than withholding taxes (hereinafter
referred to as “Other Taxes”). If revised disclosure regulations under Section
6011 of the Internal Revenue Code are issued which modify the definition of a
“reportable transaction” so that it does not include a transaction where the
issuer of a debt instrument provides an indemnity for taxes, in addition to
withholding taxes imposed on interest paid on the debt instrument, for purposes
of subsections (a) and (b) of this Section 2.11, the terms “Taxes” and “Other
Taxes” shall include all such taxes (other than any taxes described in clauses
(i), (ii) and (iii) of Section 2.11(a) above), whether or not collected by way
of withholding.

 

(c) The Borrower shall indemnify each Lender and the Administrative Agent for
and hold them harmless against the full amount of Taxes and Other Taxes, and for
the full amount of taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.11, imposed on or paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and reasonable expenses) arising therefrom
or with respect thereto. 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.

 

15

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(d) As soon as practicable (but in no event later than 90 days) after the date
of any payment of Taxes, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 8.02, the original or a certified copy of
a receipt evidencing such payment. Excluding payments made by the Administrative
Agent, in the case of any payment hereunder or under the Notes by or on behalf
of the Borrower through an account or branch outside the United States or by or
on behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.11, the terms “United States” and
“United States person” shall have the meanings specified in Section 7701 of the
Internal Revenue Code.

 

(e) Each Lender organized under the laws of a jurisdiction outside the United
States shall, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter as requested in writing by the Borrower
(but only so long thereafter as such Lender remains lawfully able to do so),
provide each of the Administrative Agent and the Borrower with two duly
completed copies of (i) Internal Revenue Service Form W-8ECI, or any successor
form thereto, certifying that the payments received from the Borrower hereunder
are effectively connected with such Lender’s conduct of a trade or business in
the United States; or (ii) Internal Revenue Service Form W-8BEN, or any
successor form thereto, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which reduces
the rate of withholding tax on payments of interest; or (iii) Internal Revenue
Service Form W-8BEN or any successor form thereto, together with a certificate
stating that (1) the Lender is not a bank for purposes of Internal Revenue Code
Section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with
respect to such Lender, pursuant to a loan agreement entered into in the
ordinary course of its trade or business, within the meaning of that Section;
(2) the Lender is not a 10% shareholder of the Borrower within the meaning of
Internal Revenue Code Section 871(h)(3) or 881(c)(3)(B); and (3) the Lender is
not a controlled foreign corporation that is related to the Borrower within the
meaning of Internal Revenue Code Section 881(c)(3)(C); or (iv) such other
governmental forms as may be applicable to the Lender, including Forms W-8IMY or
W-8EXP, which will reduce the rate of withholding tax on payments of interest.
Each Lender organized under the laws of the United States that is not a
corporation shall, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time as requested in writing by the Borrower, provide
each of the Administrative Agent and the Borrower with two duly completed copies
of Internal Revenue Service Form W-9. Each Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Lender (but only to the extent such Lender is lawfully able to do so). Each
such Lender shall promptly notify the Borrower at any time that it determines
that it is no longer in a position to provide any previously delivered
certificate to the Borrower (or any other form of certification adopted by the
Internal Revenue Service for such purpose). If the forms provided by a Lender at
the time such Lender first becomes a party to this Agreement indicate a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and

 

16

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until such Lender provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such forms; provided, however, that
if, at the effective date of the Assignment and Acceptance pursuant to which a
Lender becomes a party to this Agreement, the Lender assignor was entitled to
payments under subsection (a) of this Section 2.11 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required by the applicable Internal
Revenue Service form (or related certificate described above), that the
applicable Lender reasonably considers to be confidential, such Lender shall
give notice thereof to the Borrower and shall not be obligated to include in
such form or document such confidential information.

 

(f) Notwithstanding the foregoing, for any period with respect to which a Lender
has failed to provide the Borrower with the appropriate form described in
subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be provided
or if such form otherwise is not required under subsection (e) above), such
Lender shall not be entitled to indemnification under subsection (a) or (c) of
this Section 2.11 with respect to Taxes imposed by the United States by reason
of such failure; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.

 

(g) Any Lender claiming any additional amounts payable pursuant to this Section
2.11 agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Eurodollar
Lending Office or Domestic Lending Office if the making of such a change would
avoid the need for, or reduce the amount of, any such additional amounts that
may thereafter accrue and would not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to such Lender.

 

(h) If any Lender determines, in its sole discretion, that it has actually and
finally realized, by reason of a refund, deduction or credit of any Taxes paid
or reimbursed by the Borrower pursuant to subsection (a) or (c) above in respect
of payments under this Agreement or any Note, a current monetary benefit that it
would otherwise not have obtained, and that would result in the total payments
under this Section 2.11 exceeding the amount needed to make such Lender whole,
such Lender shall pay to the Borrower, with reasonable promptness following the
date on which it actually realizes such benefit, an amount equal to the lesser
of the amount of such benefit or the amount of such excess, in each case net of
all out-of-pocket expenses in securing such refund, deduction or credit.

 

Section 2.12 Payments Generally; Pro Rata Treatment. (a) The Borrower shall make
each payment hereunder and under the Notes, regardless of any right of
counterclaim or setoff, not later than 11:00 a.m. (New York City time) on the
day when due in Dollars to the Administrative Agent at the Administrative
Agent’s Account in immediately available funds, with payments being received by
the Administrative Agent after such time being deemed to have

 

17

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been received on the next succeeding Business Day. The Administrative Agent will
promptly thereafter cause like funds to be distributed (i) if such payment by
(or for the account of) the Borrower is in respect of principal, interest or any
other Obligation then payable hereunder and under the Notes to more than one
Lender, to such Lenders for the account of their respective Applicable Lending
Offices ratably in accordance with the amounts of such respective Obligations
then payable to such Lenders and (ii) if such payment by (or for the account of)
the Borrower is in respect of any Obligation then payable hereunder to one
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 of 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 and each of its Affiliates, if
and to the extent payment owed to such Lender is not made when due hereunder or
under the Note held by such Lender, to charge from time to time, to the fullest
extent permitted by law, against any or all of the Borrower’s accounts (other
than any Pledged Account or the Controlled Accounts) with such Lender or such
Affiliate any amount so due.

 

(c) All computations of interest based on the Base Rate or the Federal Funds
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 and of fees shall be made by the Administrative Agent 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 fees are payable. Each determination by the
Administrative Agent of an interest rate, fee or commission hereunder shall be
conclusive and binding for all purposes, absent manifest error.

 

(d) Whenever any payment hereunder or under any of 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 fees, as the case may be;
provided, however, that, 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 any Lender 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 such Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent the Borrower shall not
have so made such payment in full to the Administrative Agent, each such 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.

 

18

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(f) If the Administrative Agent receives funds for application to the
Obligations owing to the Lenders under the Financing Documents under
circumstances for which the Financing Documents do not specify the manner in
which such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender’s proportionate share of the principal amount of all
outstanding Advances, in repayment or prepayment of such of the outstanding
Advances or other Obligations owed to such Lender, and for application to such
principal installments, as the Administrative Agent shall direct; provided that
the Borrower shall not be liable to any Lender with respect to any such
distribution by the Administrative Agent.

 

(g) If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise), other than pursuant
to Section 2.09, 2.10 or 2.11, as a result of an assignment pursuant to Section
8.07 or any voluntary prepayment made prior to the occurrence of any Default (a)
on account of Obligations due and payable to such Lender hereunder and under the
Notes at such time in excess of its ratable share (according to the proportion
of (i) the amount of such Obligations due and payable to such Lender at such
time to (ii) the aggregate amount of the Obligations due and payable to all
Lenders hereunder and under the Notes at such time) of payments on account of
the Obligations due and payable to all Lenders hereunder and under the Notes at
such time obtained by all the Lenders at such time or (b) on account of
Obligations owing (but not due and payable) to such Lender hereunder and under
the Notes at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Lender at such
time to (ii) the aggregate amount of the Obligations owing (but not due and
payable) to all Lenders hereunder and under the Notes at such time) of payments
on account of the Obligations owing (but not due and payable) to all Lenders
hereunder and under the Notes at such time obtained by all of the Lenders at
such time, such Lender shall forthwith purchase from the other Lenders such
interests or participating interests in the Obligations due and payable or owing
to them, as the case may be, as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each other Lender shall be rescinded and
such other Lender shall repay to the purchasing Lender the purchase price to the
extent of such Lender’s ratable share (according to the proportion of (i) the
purchase price paid to such Lender to (ii) the aggregate purchase price paid to
all Lenders) of such recovery together with an amount equal to such Lender’s
ratable share (according to the proportion of (i) the amount of such other
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 an interest or participating interest from
another Lender pursuant to this Section 2.12 may, to the fullest extent
permitted by Applicable Law, exercise all its rights of payment (including the
right of set-off) with respect to such interest or participating interest, as
the case may be, as fully as if such Lender were the direct creditor of the
Borrower in the amount of such interest or participating interest, as the case
may be.

 

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Section 2.13 Evidence of Debt. (a) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from the Advances owing to such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder. The Borrower agrees that upon notice
by any Lender to the Borrower (with a copy of such notice to the Administrative
Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Lender to evidence (whether for
purposes of pledge, enforcement or otherwise) the Advances owing to, or to be
made by, such Lender, the Borrower shall promptly execute and deliver to such
Lender, with a copy to the Administrative Agent, a Note, in substantially the
form of Exhibit C hereto, payable to the order of such Lender in a principal
amount equal to the Advances owing to, or to be made by, such Lender. All
references to Notes in the Financing Documents shall mean Notes, if any, issued
hereunder.

 

(b) The Register maintained by the Administrative Agent pursuant to Section
8.07(d) shall include a control account, and a subsidiary account for each
Lender, in which accounts (taken together) shall be recorded (i) the date and
amount of each Advance made hereunder (or deemed to be made hereunder), whether
such Advance bears interest at the Base Rate or the Eurodollar Rate, and, if
appropriate, the Interest Period applicable thereto; (ii) the terms of each
Assignment and Assumption delivered to and accepted by it; (iii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender; and (iv) the amount of any sums received by the
Administrative Agent from the Borrower hereunder and each Lender’s share
thereof.

 

(c) Entries made in good faith by the Administrative Agent in the Register
pursuant to subsection (b) above, and by each Lender in its account or accounts
pursuant to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Administrative Agent or such Lender
to make an entry, or any finding that an entry is incorrect, in the Register or
such account or accounts shall not limit or otherwise affect the obligations of
the Borrower under this Agreement.

 

Section 2.14 Use of Proceeds. The proceeds of the Borrowing shall be applied,
and the Borrower agrees that it shall use such proceeds solely, to refinance the
Borrower’s Existing Secured Lender Debt.

 

ARTICLE III

 

CONDITIONS TO BORROWING

 

Section 3.01 Conditions Precedent to the Borrowings. No Lender shall be required
or obligated to make any Advance until all conditions precedent to the Closing
Date set forth in Section 3.01 of the Common Terms Agreement shall have been
satisfied or waived in accordance with the terms thereof.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01 Representations and Warranties of the Borrower. In order to induce
the Lenders to enter into this Agreement and the other Financing Documents to
which they are a party, the Borrower confirms that the representations and
warranties made in Section 4.01 of the Common Terms Agreement are hereby
incorporated by reference herein as if fully set forth in this Agreement.

 

ARTICLE V

 

COVENANTS OF THE BORROWER

 

Section 5.01 Covenants. The Borrower agrees that, so long as any Advance shall
remain unpaid or any Commitment shall remain outstanding, the Borrower shall
observe and perform each of its covenants and undertakings set forth in the
Common Terms Agreement and the other Financing Documents, which covenants and
undertakings are incorporated in this Agreement by reference as if fully set
forth herein, in accordance with their terms.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

Section 6.01 Events of Default. If any Event of Default shall occur and be
continuing, the Lenders shall have (in addition to any and all other available
remedies at law or in equity) each of the remedies to which they are entitled as
provided in the Common Terms Agreement and the Security and Intercreditor
Agreement; provided that each Lender hereby agrees and acknowledges that such
Lender’s claim with respect to any Enforcement Proceeds is subject to the order
of priorities set forth in Section 6.04 of the Common Terms Agreement.

 

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 in accordance with the provisions of Article VIII of the Common
Terms Agreement.

 

Section 7.02 BofA, BAS, CNAI, CGMI, Citibank, CSFB, JPMC, Scotia and Affiliates.
With respect to its Commitment, the Advances made by it and the Notes issued to
it, BofA, BAS, CNAI, CGMI, Citibank, CSFB, JPMC and Scotia shall have the same
rights and powers under the Financing Documents as any other Lender and may
exercise the same as though it were not an Agent or Arranger Party; and the term
“Lender” or “Lenders” shall, unless

 

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otherwise expressly indicated, include BofA, BAS, CNAI, CGMI, Citibank, CSFB,
JPMC and Scotia in its individual capacity. BofA, BAS, CNAI, CGMI, Citibank,
CSFB, JPMC and Scotia and their respective affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, or any of its Subsidiaries, the Parent, any of its Subsidiaries and
any Person that may do business with or own securities of the Borrower or any of
its Subsidiaries, the Parent, or any such Subsidiary, all as if BofA, BAS, CNAI,
CGMI, Citibank, CSFB, JPMC and Scotia were not an Agent or Arranger Party and
without any duty to account therefor to the Lenders.

 

Section 7.03 Arranger Parties. Except as set forth in Section 8.12 and 9.11 of
the Common Terms Agreement, none of the Lenders or other Persons identified on
the facing page or signature pages of this Agreement as a “joint lead arranger”,
“lead arranger”, “joint book runner”, “book runner”, “syndication agent”,
“documentation agent” or “co-documentation agent” shall have any right, power,
obligation, liability, responsibility or duty under this Agreement or any other
Financing Document other than, in the case of such Lenders, those applicable to
all Lenders as such. Without limiting the foregoing, none of the Lenders or
other Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders or other Persons so identified in
deciding to enter into this Agreement or in taking action hereunder.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.01 Amendments, No Waiver. No amendment or waiver of any provision of
this Agreement and 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 Required Lenders and, in the case of an amendment only, the
Borrower, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall, unless in writing and signed by: (a)
all of the Lenders, at any time amend (i) this Section 8.01, (ii) the term
“Required Lenders” or (iii) any other provision or definition of this Agreement
relating to the percentage of consents required for any amendment, waiver or
consent under this Agreement; and (b) all of the Lenders affected thereby, at
any time (i) reduce the principal of, or rate of interest on, the Notes or any
fees or other amounts payable hereunder or extend or postpone any scheduled
dates for payment thereof (including pursuant to Section 2.05, 2.06 or 2.07),
(ii) extend the Maturity Date, (iii) increase any Commitment or subject any
Lender to any additional obligation, (iv) alter any provision of this Agreement
requiring the pro rata sharing of payments among the Lenders, (v) modify any
provision or definition of this Agreement or of Exhibit A relating to the
percentage of consents required in connection with any assignment or
participation of any right or obligation under this Agreement, (vi) limit the
liability of the Borrower hereunder or under any of the Notes and (vii) amend
the definition of “Interest Period” so as to allow the durations of Interest
Periods to be in excess of six months without regard to the availability to all
Lenders of such duration; provided further that that (A) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the

 

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Lenders required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Financing Documents and
(B) Section 8.07(g) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Advances are being
funded by an SPV at the time of such amendment, waiver or other modification.
Each of the parties hereto agrees that none of the Common Terms Agreement, the
Security and Intercreditor Agreement or any other Collateral Document shall be
amended, modified or otherwise supplemented, nor shall any waiver or consent to
departure therefrom be effective unless such amendment, modification, supplement
or consent is effected in accordance with the terms of Section 9.01 of the
Common Terms Agreement and, to the extent applicable, Section 9.02 of the
Security and Intercreditor Agreement.

 

Section 8.02 Notices, Etc. Notices and other communications provided for
hereunder shall be delivered in accordance with Section 9.02 of the Common Terms
Agreement.

 

Section 8.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising
any right, remedy, power or privilege hereunder or under any other Financing
Document shall operate as a waiver thereof nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder or under any other
Financing Document preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided herein and in the other Financing Documents are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 

Section 8.04 Indemnity and Expenses. (a) The Borrower agrees to pay within 30
days (or earlier if, and to the extent, required under Section 3.01 of the
Common Terms Agreement) after the presentation of an invoice all reasonable
third-party costs and expenses of (i) the Administrative Agent in connection
with the administration of this Agreement and the other Financing Documents and
the transactions contemplated hereby and thereby (but without duplication of
such obligation under any other Financing Document) and (ii) the Administrative
Agent in connection with the preparation, negotiation, execution and delivery of
this Agreement, the Notes, the other Financing Documents and the other documents
to be delivered hereunder or thereunder, including (A) all due diligence,
syndication (including printing, distribution and bank meetings),
transportation, computer, duplication, appraisal, consultant, audit expenses
and, where appropriate, registration of all Financing Documents and (B) the
reasonable fees and expenses of counsel for the Administrative Agent. The
Borrower further agrees to pay on demand all costs and expenses of the
Administrative Agent and each Lender, if any (including reasonable counsel fees
and expenses), in connection with (1) the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes, the
other Financing Documents and the other documents to be delivered hereunder or
thereunder, including reasonable fees and expenses of counsel for the
Administrative Agent and each Lender; (2) the custody, preservation, use or
operation of, or the sale of, collection from or other realization upon, any of
the Collateral of any Loan Party, (3) the exercise or enforcement of any of the
rights of the Administrative Agent or any Lender under any Financing Document;
(4) the failure by such Loan Party to perform or observe any of the provisions
hereof; and (5) any amendments, modifications, waivers or consents required or
requested under the Financing Documents.

 

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(b) The Borrower agrees to indemnify and hold harmless the Administrative Agent
and each Lender and each of its Affiliates and their respective officers,
directors, employees, agents, trustees and advisors (each, an “Indemnified
Party”) from and against any and all claims, damages, losses, liabilities and
expenses (including reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including in connection
with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) or relating to (i) execution, amendment or administration
of this Agreement, the other Financing Documents, any of the transactions
contemplated herein or therein or the actual or proposed use of the proceeds of
the Advances, or (ii) the actual or alleged presence of Hazardous Materials
requiring remediation or other response pursuant to Environmental Law on any
property of the Borrower or any of its Subsidiaries or any Environmental Action
relating in any way to the Borrower or any of its Subsidiaries, except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
directly and primarily from such Indemnified Party’s gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 8.04(b) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by the Borrower, its directors, equity holders or creditors or an Indemnified
Party or any other Person, whether or not any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Borrower agrees not to assert any claim against the
Administrative Agent, any Lender or any of their Affiliates, or any of their
respective officers, directors, employees, agents, attorneys and advisors, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Facilities, the actual or
proposed use of the proceeds of the Advances, the Financing Documents or any of
the transactions contemplated by the Financing Documents.

 

(c) The indemnities provided by the Borrower pursuant to this Agreement shall
survive the expiration, cancellation, termination or modification of this
Agreement or the other Financing Documents, the resignation or removal of the
Administrative Agent, and the provision of any subsequent or additional
indemnity by any person.

 

(d) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.03, 2.06, 2.09 or 2.10, acceleration of the
maturity of the Notes or for any other reason, or if the Borrower fails to make
any payment or prepayment of an Advance for which a notice of prepayment has
been given or that is otherwise required to be made, whether pursuant to Section
2.05 or 2.06 or otherwise, the Borrower shall, 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 any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion or such failure to pay or prepay, as
the case may be, including any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Advance.

 

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(e) If any Loan Party fails to pay when due any costs, expenses or other amounts
payable by it under any Financing Document, including fees and expenses of
counsel and indemnities, such amount may be paid on behalf of such Loan Party by
the Administrative Agent or any Lender, in its sole discretion.

 

Section 8.05 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the issuance of an Acceleration
Notice, the Administrative Agent and each Lender and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final), other than
any Pledged Account or the Controlled Accounts, at any time held and other
indebtedness at any time owing by the Administrative Agent, such Lender or such
Affiliate 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 the
Financing Documents, irrespective of whether the Administrative Agent or such
Lender shall have made any demand under this Agreement or such Note or Notes and
although such Obligations may be unmatured. The Administrative Agent and each
Lender agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the
Administrative Agent and each Lender and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
set-off) that the Administrative Agent, such Lender and their respective
Affiliates may have.

 

Section 8.06 Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower and the Administrative Agent and the
Administrative Agent shall have been notified by each Initial Lender that such
Initial Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent 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 assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitments, the Advances
owing to it and the Notes held by it), including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided, however, that (i) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of the Facility, (ii) except in the
case of an assignment to a Person that, immediately prior to such assignment,
was a Lender, an Affiliate of any Lender or an Approved Fund or an assignment of
all of a Lender’s rights and obligations under this Agreement, the aggregate
amount of the Commitments being assigned to such Eligible Assignee pursuant to
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $1,000,000 (or such
lesser amount as shall be approved by the Administrative Agent), and shall be in
increments of $250,000 in excess thereof, (iii) each such assignment shall be to
an Eligible Assignee, (iv) no such assignments shall be permitted without the
consent of the Administrative Agent and, so long as no Default has occurred and
is continuing, the Borrower (in each case, such consent not to be unreasonably
withheld), except assignments to any other Lender, an Affiliate of any Lender,
any Approved Fund or to any Federal Reserve Bank and (v) the parties to each
such

 

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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; provided that only one such fee shall be payable in
the case of contemporaneous assignments to or by two or more Approved Funds.

 

(b) Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (i) 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 (ii) 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 (other than its rights under Sections 2.10, 2.11 and 8.04
to the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

 

(c) By executing and delivering an Assignment and Acceptance, each Lender
assignor thereunder and each assignee thereunder confirm to and agree with each
other and the other parties thereto and 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 any
Financing Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Financing Document or any other instrument or document furnished
pursuant thereto; (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 any Financing Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement and each other Financing Document, together with copies
of the financial statements referred to in Sections 3.01 and 5.04 of the Common
Terms Agreement 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 or any other Financing Document; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Administrative Agent, the Collateral Agent and the Intercreditor
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Financing Documents as are delegated to the Administrative
Agent, the Collateral Agent and the Intercreditor Agent, respectively, by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement and the other Financing Documents are required to be performed
by it as a Lender.

 

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(d) The Administrative Agent shall maintain at its address referred to in
Section 9.02 of the Common Terms Agreement 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 Advances 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 shall 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 the Administrative Agent or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

 

(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an 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 A, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower and each of
the Intercreditor Agent and the Collateral Agent. In the case of any assignment
by a Lender, 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 Commitment assumed by it
pursuant to such Assignment and Acceptance and, if any assigning Lender has
retained a Commitment hereunder, a new Note to the order of such assigning
Lender in an amount equal to the 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.

 

(f) Each Lender may sell participations to one or more Persons (other than any
Loan Party or any Affiliate of any Loan Party) in or to all or a portion of its
rights and obligations under this Agreement in respect of the Facility
(including all or a portion of its Commitments, the Advances owing to it and the
Notes (if any) held by it); provided that any such sale shall be of a uniform
and not varying percentage of all of its rights and obligations under the
Facility; provided, however, that (i) such Lender’s obligations under this
Agreement (including its Commitments) 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) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Financing
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Notes or other amounts payable hereunder, in each case to
the extent subject to such participation, postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation, or
release any material portion of the Collateral.

 

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(g) Notwithstanding anything in this Agreement to the contrary (including any
other provision regarding assignments, participations, transfers or novations),
any Lender (a “Granting Lender”) may, without the consent of any other party
hereto, grant to a special purpose vehicle (whether a corporation, partnership,
limited liability company, trust or otherwise, an “SPV”) sponsored or managed by
the Granting Lender or any Affiliate thereof, a participation in all or any part
of any Advance (including the Commitment therefor) that such Granting Lender has
made or will make pursuant to this Agreement; provided that (i) such Granting
Lender’s obligations under this Agreement (including its Commitment) shall
remain unchanged; (ii) such Granting Lender shall remain the holder of its Note
for all purposes under this Agreement; and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Granting Lender in connection with such Granting Lender’s
rights and obligations under the Financing Documents. Each party hereto hereby
agrees that (A) no SPV will be entitled to any rights or benefits that a Lender
would not otherwise be entitled to under this Agreement or any other Financing
Document; and (B) an SPV may assign its interest in any Advance under this
Agreement to any Person that would constitute a Lender subject to the
satisfaction of all requirements for an assignment by any Lender set forth in
this Section 8.07. Notwithstanding anything in this Agreement to the contrary,
the Granting Lender and any SPV may, without the consent of any other party to
this Agreement, and without limiting any other rights of disclosure of the
Granting Lender under this Agreement, disclose on a confidential basis any
non-public information relating to its funding of its Advances to (1) (in the
case of the Granting Lender) any actual or prospective SPV, (2) (in the case of
an SPV) its lenders, sureties, reinsurers, guarantors or credit liquidity
enhancers, (3) their respective directors, officers, and advisors, and (4) any
rating agency.

 

(h) 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.

 

(i) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement (including the Advances owing to it and the Note
or Notes held by it) to secure the obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

Section 8.08 Execution in Counterparts. 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. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of an original executed counterpart of this Agreement.

 

Section 8.09 Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City,

 

28

--------------------------------------------------------------------------------

and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any of the other Financing Documents to
which it is a party, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in any such New York State court or, to the fullest extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Financing Documents in the courts of any jurisdiction.

 

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Financing
Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

Section 8.10 Governing Law. This Agreement and the Notes shall be governed by,
and construed in accordance with, the laws of the State of New York.

 

Section 8.11 Waiver of Jury Trial. Each of the Borrower, the Administrative
Agent and the Lenders irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Financing Documents, the
Advances or the actions of the Administrative Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.

 

Section 8.12 Confidentiality. The parties hereto agree to comply with Section
9.11 of the Common Terms Agreement in respect of Confidential Information.

 

Section 8.13 Benefits of Agreement. Nothing in this Agreement or any other
Financing Document, express or implied, shall give to any Person, other than the
parties hereto, each Indemnified Party and each of their successors and
permitted assigns under this Agreement or any other Financing Document, any
benefit or any legal or equitable right or remedy under this Agreement; provided
that each Indemnified Party and its successors and assigns shall not have any
benefit or any legal or equitable right or remedy under this Agreement other
than as provided by Section 8.04(b).

 

Section 8.14 Severability. If any provision of this Agreement shall be invalid,
illegal or unenforceable, then to the extent permitted by law, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

Section 8.15 Limitations. (a) The obligations, liabilities or responsibilities
of any party hereunder shall be limited to those obligations, liabilities or
responsibilities expressly set forth and attributed to such party pursuant to
this Agreement or otherwise applicable under Applicable Law.

 

29

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(b) In no event shall any Indemnified Party be liable for, and each Loan Party
hereby agrees not to assert any claim against any Indemnified Party, on any
theory of liability, for consequential, incidental, indirect, punitive or
special damages arising out of or otherwise relating to the Notes, this
Agreement, the other Relevant Documents, any of the transactions contemplated
herein or therein or the actual or proposed use of the proceeds of the Advances.

 

Section 8.16 Survival. Notwithstanding anything in this Agreement to the
contrary, Sections 8.04, 8.09, 8.10, 8.11 and 8.16 shall survive any termination
of this Agreement. In addition, each representation and warranty made or deemed
to be made hereunder shall survive the making of such representation and
warranty, and no Lender shall be deemed to have waived, by reason of making any
Advance or making any payment pursuant thereto, any Default that may arise by
reason of such representation or warranty proving to have been false or
misleading, notwithstanding that such Lender may have had notice or knowledge or
reason to believe that such representation or warranty was false or misleading
at the time such Advance was made.

 

Section 8.17 USA Patriot Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify the
Borrower in accordance with the Act.

 

30

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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

ALLEGHENY ENERGY SUPPLY

COMPANY, LLC, as Borrower

By:

 

/s/    Regis F. Binder

--------------------------------------------------------------------------------

Title:

 

Treasurer

--------------------------------------------------------------------------------

CITICORP NORTH AMERICA, INC.,

as Initial Lender and Administrative Agent

By:

 

/s/    Robert J. Harrity, Jr.

--------------------------------------------------------------------------------

Title:

 

Robert J. Harrity, Jr.

Managing Director

--------------------------------------------------------------------------------

BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arranger and

Joint Book Runner

By:

 

/s/    Authorized Signatory

--------------------------------------------------------------------------------

Title:

 

Vice President

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A.,

as Syndication Agent

By:

 

/s/    Daryl Patterson

--------------------------------------------------------------------------------

Title:

 

Daryl Patterson

Managing Director

--------------------------------------------------------------------------------

CITIGROUP GLOBAL MARKETS INC.,

as Joint Lead Arranger and Joint Book Runner

By:

 

/s/    Authorized Signatory

--------------------------------------------------------------------------------

Title:

 

Director

--------------------------------------------------------------------------------

CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH,

as Co-Documentation Agent

By:

 

/s/    James P. Morgan        

--------------------------------------------------------------------------------

   

James P. Morgan

Title:

 

Director

 

By:

 

/s/    Denise L. Alvarez        

--------------------------------------------------------------------------------

   

Denise L. Alvarez

Title:

 

Associate

--------------------------------------------------------------------------------

J.P. MORGAN SECURITIES, INC.,

as Co-Documentation Agent

By:

 

/s/    Authorized Signatory

--------------------------------------------------------------------------------

Title:

 

Managing Director

--------------------------------------------------------------------------------

SCOTIA CAPITAL (USA) INC.,

as Co-Documentation Agent

By:

 

/s/    Timothy P. Finneran

--------------------------------------------------------------------------------

Title:

 

Timothy P. Finneran

Managing Director

--------------------------------------------------------------------------------

SCHEDULE 1.01

TERM C CREDIT AGREEMENT

 

COMMITMENTS AND APPLICABLE LENDING OFFICES

 

Initial Lenders

--------------------------------------------------------------------------------

 

Commitment

--------------------------------------------------------------------------------

 

Domestic Lending Offices

--------------------------------------------------------------------------------

 

Eurodollar Lending Offices

--------------------------------------------------------------------------------

Citicorp North America, Inc.

 

$500,000,000

 

Citicorp North America, Inc.

c/o Citibank, N.A.

Global Power Group

388 Greenwich Street

21st Floor

New York, NY 10013

Attn: Robert J. Harrity, Jr.

Tel: 212-816-8554

Fax: 212-816-8098

 

Citicorp North America, Inc.

c/o Citibank, N.A.

Global Power Group

388 Greenwich Street

21st Floor

New York, NY 10013

Attn: Robert J. Harrity, Jr.

Tel: 212-816-8554

Fax: 212-816-8098

--------------------------------------------------------------------------------

EXHIBIT A

TERM C CREDIT AGREEMENT

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Term C Credit Agreement, dated as of March 8, 2004 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; the terms defined therein, unless otherwise
defined herein, being used herein as therein defined), among ALLEGHENY ENERGY
SUPPLY COMPANY, LLC, a Delaware limited liability company (the “Borrower”), the
financial institutions referred to therein as Lenders, the arranger parties
party thereto and Citicorp North America, Inc., as Administrative Agent for the
Lenders.

 

[                    ] (the “Assignor”) and [                    ], (the
“Assignee”) each agrees severally with respect to all information relating to it
and its assignment hereunder and on Schedule 1 hereto as follows:

 

1. The Assignor hereby sells and assigns, without recourse except as to the
representations and warranties made by it herein, to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor’s rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, the Assignee’s Commitments and the amount of
the Advances owing to the Assignee will be as set forth on Schedule 1 hereto.

 

2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest or interests being assigned by it hereunder and that such
interest or interests are 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 any
Financing Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Financing Document 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 any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Financing Document or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Note (if any) held by the Assignor and requests
that the Administrative Agent exchange such Note (if any) for a new Note payable
to the order of the Assignee in an amount equal to the Commitments assumed by
the Assignee pursuant hereto or new Notes payable to the order of the Assignee
in an amount equal to the Commitments assumed by the Assignee pursuant hereto
and the Assignor in an amount equal to the Commitments retained by the Assignor
under the Credit Agreement, respectively, as specified on Schedule 1 hereto.

 

3. The Assignee (i) confirms that it has received a copy of the Credit Agreement
and each of the other Financing Documents, together with copies of the financial
statements referred to in Sections 3.01 and 5.04 of the Common Terms Agreement
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, Agent or Arranger Party 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 Credit Agreement or
any other Financing Document; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes the Administrative Agent, the Collateral Agent and
the Intercreditor Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Financing Documents as are
delegated to the Administrative Agent, the Collateral Agent and the
Intercreditor Agent, respectively, by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Financing Documents are required to be performed by it as a Lender;
(vii) attaches any U.S. Internal Revenue Service forms required under Section
2.11 of the Credit Agreement and (viii) acknowledges and agrees that it shall be
bound by Section 6.04 of the Common Terms Agreement in respect of the priority
of any claims it may have in respect of any Enforcement Proceeds.

 

4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.

 

5. Upon such acceptance and recording by the Administrative Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and
the Common Terms 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 Financing
Documents (other than its rights and obligations under the Financing Documents
that are specified under the terms of such Financing Documents to survive the
payment in full of the Obligations of any Loan Party under the Financing
Documents to the extent any claim thereunder relates to an event arising prior
to the Effective Date of this Assignment and Acceptance) and, if this Assignment
and Acceptance covers all of the remaining portion of the rights and obligations
of the Assignor under the Credit Agreement and the Common Terms Agreement, the
Assignor shall cease to be a party thereto.

 

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 Credit Agreement and the Note (if any) in respect of the interest assigned
hereby (including all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes (if
any) for periods prior to the Effective Date directly between themselves.

 

7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so

 

A-2

--------------------------------------------------------------------------------

executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as
delivery of an original executed counterpart of this Assignment and Acceptance.

 

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

A-3

--------------------------------------------------------------------------------

SCHEDULE 1

TO

ASSIGNMENT AND ACCEPTANCE

 

ASSIGNOR:

                                  

Facility

                                  

Percentage interest assigned

     %      %      %      %      %

Commitment assigned

   $             $             $             $             $         

Aggregate outstanding principal amount of Advances assigned

   $      $      $      $      $  

Principal amount of Note (if any) payable to Assignor

   $      $      $      $      $  

 

ASSIGNEE:

                                  

Facility

                                  

Percentage interest assumed

     %      %      %      %      %

Commitment assumed

   $             $             $             $             $         

Aggregate outstanding principal amount of Advances assumed

   $      $      $      $      $  

Principal amount of Note (if any) payable to Assignee

   $      $      $      $      $  

 

Effective Date (if other than date of acceptance by Administrative Agent):

 

*                         ,             

--------------------------------------------------------------------------------

* This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to the Administrative Agent.

 

A-4

--------------------------------------------------------------------------------

Assignor

 

                                                                               
              , as Assignor

[Type or print legal name of Assignor]

By

 

 

--------------------------------------------------------------------------------

Title:    

Dated:

 

                         ,             

 

Assignee

 

                                                                               
              , as Assignee

[Type or print legal name of Assignee]

By

 

 

--------------------------------------------------------------------------------

Title:

   

Dated:

 

                         ,             

Domestic Lending Office:

Eurodollar Lending Office:

 

[Accepted and Approved this             

day of                     ,             

[                     ],

        as Administrative Agent

By

 

 

--------------------------------------------------------------------------------

   

Title:]1

[ALLEGHENY ENERGY SUPPLY COMPANY, LLC,

        as Borrower

By

 

 

--------------------------------------------------------------------------------

   

Title:]2

--------------------------------------------------------------------------------

1 To the extent required.

2 To the extent required.

 

A-5

--------------------------------------------------------------------------------

EXHIBIT B

TERM C CREDIT AGREEMENT

 

FORM OF NOTICE OF BORROWING

 

Citicorp North America, Inc.

        as Administrative Agent

        under the Credit Agreement

        referred to below

 

[Date]

 

Attention:                     

 

Ladies and Gentlemen:

 

The undersigned, ALLEGHENY ENERGY SUPPLY COMPANY, LLC, refers to the Term C
Credit Agreement, dated as of March 8, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
the terms defined therein being used herein as therein defined), among the
undersigned, the Lenders party thereto, the arranger parties party thereto and
Citicorp North America, Inc., as Administrative Agent for the Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests the Borrowing (the “Proposed
Borrowing”), under the Credit Agreement, and in that connection sets forth below
the information relating thereto as required by Section 2.02(a) of the Credit
Agreement:

 

  (a) The Business Day of the Proposed Borrowing is [            ];

 

  (b) The Proposed Borrowing shall be comprised of Base Rate Advances;

 

  (c) The aggregate amount of the Borrowing is $                .

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:

 

(A) The representations and warranties contained in each Financing Document are
correct on and as of the date of the Proposed Borrowing, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a specific date
other than the date of the Proposed Borrowing, in which case, as of such
specific date.

--------------------------------------------------------------------------------

(B) No Default has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom.

 

Delivery of an executed counterpart of this Notice of Borrowing by telecopier
shall be effective as delivery of an original executed counterpart of this
Notice of Borrowing.

 

Very truly yours,

ALLEGHENY ENERGY SUPPLY COMPANY, LLC

By

 

 

--------------------------------------------------------------------------------

   

Title:

 

B-2

--------------------------------------------------------------------------------

EXHIBIT C

TERM C CREDIT AGREEMENT

 

THE LENDER’S CLAIM WITH RESPECT TO ANY ENFORCEMENT PROCEEDS FROM THE COLLATERAL
IS SUBJECT TO THE ORDER OF PRIORITIES SET FORTH IN SECTION 6.04 OF THE COMMON
TERMS AGREEMENT (EACH AS DEFINED IN THE CREDIT AGREEMENT REFERRED TO BELOW)

 

FORM OF NOTE

 

$                    

  Dated:                     ,         

 

FOR VALUE RECEIVED, the undersigned, ALLEGHENY ENERGY SUPPLY COMPANY, LLC, a
Delaware limited liability company (the “Borrower”), HEREBY PROMISES TO PAY
             (the “Lender”) for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below) the aggregate principal
amount of the Advances (as defined below) owing to the Lender by the Borrower
pursuant to the Term C Credit Agreement dated as of March 8, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; terms defined therein, unless otherwise defined herein,
being used herein as therein defined) among the Borrower, the Lender and certain
other lender parties and arranger parties party thereto and Citicorp North
America, Inc., as Administrative Agent for the Lender and such other lender
parties on the Maturity Date and at such other times specified therein.

 

The Borrower promises to pay interest on the unpaid principal amount of each
Advance from the date of such Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.

 

Both principal and interest are payable in lawful money of the United States of
America to Citicorp North America, Inc., as Administrative Agent, at
                        ,                                           in
immediately available funds. Each Advance owing to the Lender by the Borrower,
the scheduled amortization payments thereof and the maturity thereof, and all
payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto, which
is part of this Promissory Note; provided, however, that the failure of the
Lender to make any such recordation or endorsement shall not affect the
Obligations of the Borrower under this Promissory Note.

 

This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things, (i)
provides for the making of advances (variously, the “Advances”) by the Lender to
or for the benefit of the Borrower in an aggregate amount not to exceed at any
time outstanding the Dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance 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 repayments and prepayments
on account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified. The obligations of the Borrower under this
Promissory Note and the other Financing Documents, and the obligations of the
other Loan Parties under the Financing Documents, in each case with respect to
the Advances are secured by the Collateral or a portion thereof as

--------------------------------------------------------------------------------

provided in the Financing Documents; provided that the Common Terms Agreement
contains express provisions relating to the priority of claims in respect of
Enforcement Proceeds (as defined in the Common Terms Agreement).

 

ALLEGHENY ENERGY SUPPLY COMPANY, LLC

By

 

 

--------------------------------------------------------------------------------

   

Title:

 

C-2

--------------------------------------------------------------------------------

ADVANCES AND PAYMENTS OF PRINCIPAL

 

Date

--------------------------------------------------------------------------------

  Amount of
Advance

--------------------------------------------------------------------------------

 

Amount of
Principal
Paid

or Prepaid

--------------------------------------------------------------------------------

  Unpaid
Principal
Balance

--------------------------------------------------------------------------------

  Notation
Made By

--------------------------------------------------------------------------------

 

C-3