Exhibit 10.2

CREDIT AGREEMENT

dated as of

March 29, 2006

among

THE AES CORPORATION,

as Borrower,

MERRILL LYNCH CAPITAL CORPORATION,

as Administrative Agent,

MERRILL LYNCH & CO.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Lead Arranger,

THE FRONTING BANKS LISTED HEREIN,

and

THE BANKS LISTED HEREIN

 

 

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

 

 

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TABLE OF CONTENTS

 

          Page ARTICLE I DEFINITIONS Section 1.01    Definitions    1 Section
1.02    Accounting Terms and Determinations    17 Section 1.03    Currency
Conversions Generally    17 Section 1.04    Interest Rate Determinations    17
ARTICLE II THE CREDITS Section 2.01    Credit-Linked Deposit Accounts    18
Section 2.02    Loans    22 Section 2.03    [Intentionally Omitted]    23
Section 2.04    Requests for Borrowings    23 Section 2.05    Letters of Credit
   24 Section 2.06    [Intentionally Omitted]    28 Section 2.07    Interest
Elections    28 Section 2.08    Termination and Reduction of the Funding Amounts
   29 Section 2.09    Repayment of Loans; Evidence of Debt    30 Section 2.10   
Prepayment of Loans    31 Section 2.11    Fees    31 Section 2.12    Interest   
33 Section 2.13    [Intentionally Omitted]    34 Section 2.14    [Intentionally
Omitted]    34 Section 2.15    Break Funding Payments    34 Section 2.16   
[Intentionally Omitted]    35 Section 2.17    Payments Generally; Pro Rata
Treatment; Sharing of Set-offs    35 Section 2.18    Mitigation Obligations   
37 Section 2.19    Increase in Credit Facility    37 ARTICLE III CONDITIONS
Section 3.01    Closing    39 Section 3.02    Extension of Credit    40

 

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          Page ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.01   
Corporate Existence and Power    41 Section 4.02    Corporate and Governmental
Authorization and Filings; No Contravention    41 Section 4.03    Compliance
with Laws    42 Section 4.04    Binding Effect    42 Section 4.05    Financial
Information    42 Section 4.06    Litigation    42 Section 4.07    Compliance
with ERISA    42 Section 4.08    Environmental Matters    43 Section 4.09   
Taxes    43 Section 4.10    Material AES Entities    44 Section 4.11    Not an
Investment Company    44 Section 4.12    [Intentionally Omitted]    44 Section
4.13    Full Disclosure    44 Section 4.14    [Intentionally Omitted]    45
Section 4.15    Solvency    45 ARTICLE V COVENANTS Section 5.01    Information
   45 Section 5.02    Payment of Obligations    48 Section 5.03    Maintenance
of Property; Insurance    48 Section 5.04    Conduct of Business and Maintenance
of Existence    48 Section 5.05    Compliance with Laws    49 Section 5.06   
Inspection of Property, Books and Records    49 Section 5.07    Limitation on
Secured Debt    49 Section 5.08    Consolidations and Mergers    50 Section 5.09
   Restrictions on Sale Leasebacks    50 Section 5.10    Use of Proceeds    51
Section 5.11    Further Assurances    51 ARTICLE VI DEFAULTS Section 6.01   
Events of Default    51

Section 6.02

   Notice of Default    53

 

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          Page ARTICLE VII THE ADMINISTRATIVE AGENT Section 7.01    Appointment
and Authorization    54 Section 7.02    Administrative Agent and Affiliates   
54 Section 7.03    Consultation with Experts    55 Section 7.04    Liability of
Agent    55 Section 7.05    Indemnification    55 Section 7.06    Credit
Decision    56 Section 7.07    Successor Administrative Agent    56 Section 7.08
   Administrative Agent May File Proofs of Claim    56 Section 7.09    Agents’
Fee    57 Section 7.10    Delivery of Information    57 ARTICLE VIII CHANGE IN
CIRCUMSTANCES Section 8.01    Basis for Determining Interest Rate Inadequate or
Unfair    59 Section 8.02    Illegality    59 Section 8.03    Increased Cost and
Reduced Return    60 Section 8.04    Taxes    61 Section 8.05    Base Rate Loans
Substituted for Affected Eurodollar Loans    64 ARTICLE IX MISCELLANEOUS Section
9.01    Notices    64 Section 9.02    No Waivers    65 Section 9.03    Expenses;
Indemnification    65 Section 9.04    [Reserved]    66 Section 9.05   
Amendments and Waivers    66 Section 9.06    Successors and Assigns    66
Section 9.07    No Margin Stock    69 Section 9.08    Governing Law; Submission
to Jurisdiction    70 Section 9.09    [Reserved]    70 Section 9.10   
Counterparts; Integration; Effectiveness    70 Section 9.11    Confidentiality
   70 Section 9.12    WAIVER OF JURY TRIAL    71 Section 9.13    Severability;
Modification to Conform to Law    71 Section 9.14    Judgment Currency    71
Section 9.15    Fronting Banks    72 Section 9.16    Replacement of Banks    72

 

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Appendix I    —      Funding Amounts Schedule I    —      Excluded AES Entities
Exhibit A    —      Form of Note Exhibit B-1    —      Form of Opinion of the
Assistant General Counsel of Borrower Exhibit B-2    —      Form of Opinion of
Shearman & Sterling, Special Counsel for the Borrower Exhibit C-1    —      Form
of Loan Facility Assignment and Assumption Agreement Exhibit C-2    —      Form
of Fronting Bank Assignment and Assumption Agreement Exhibit D    —      Form of
Fronting Bank Agreement Exhibit E    —      Form of Request for Loan Exhibit F
   —      Form of Interest Election Request

 

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CREDIT AGREEMENT

CREDIT AGREEMENT dated as of March 29, 2006 (this “Agreement”) among THE AES
CORPORATION, a Delaware corporation (the “ Borrower ”), the BANKS listed on the
signature pages hereof, MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, as Lead Arranger, MERRILL LYNCH CAPITAL CORPORATION, as
Administrative Agent for the Banks, and the FRONTING BANKS party hereto.

PRELIMINARY STATEMENT:

The Borrower has requested that the Banks provide Loans to the Borrower and that
the Fronting Banks provide to the Borrower Letters of Credit (and the Banks to
provide funding with respect thereto) to support certain liabilities of the
Borrower and its Subsidiaries, including to finance the construction of a
coal-fired generation plant in Bulgaria, in an aggregate principal or face
amount not exceeding $500,000,000.

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

Section 1.01 Definitions.

The following terms, as used herein, have the following meanings:

“Additional Credit-Linked Deposits” has the meaning set forth in
Section 2.19(d).

“Adjusted LIBO Rate” means, for any Interest Period, a rate per annum equal to
the quotient obtained (rounded upward, if necessary, to the next higher  1/100th
of 1%) by dividing (i) the applicable LIBOR by (ii) 1.00 minus the Reserve
Percentage.

“Administrative Agent” means Merrill Lynch Capital Corporation, in its capacity
as administrative agent for the Banks hereunder, and its successors in such
capacity.

“Administrative Questionnaire” means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.

“AES” means The AES Corporation, a Delaware corporation, and its successors.

“AES Business” means a Power Supply Business or other business owned, operated
or managed (including on a joint basis with others), directly or indirectly, by
the Borrower.

 

 

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“AES BVI II” means AES International Holdings II, Ltd., a company organized
under the laws of the British Virgin Islands.

“AES Management Group” means (i) individuals who are members of the board of
directors or officers of the Borrower or the president of any Material AES
Entity; (ii) their respective spouses, children, grandchildren, siblings and
parents; (iii) trusts established for the sole or principal benefit of Persons
described in clauses (i) and (ii) above; (iv) heirs, executors, administrators
and personal or legal representatives of Persons described in clauses (i) and
(ii) above; and (v) any corporation or other Person that is controlled by, and a
majority of the equity interests in which are directly owned by, Persons
described in clauses (i) and (ii) above.

“Affiliate” means, with respect to any Person, (i) any Person that directly, or
indirectly through one or more intermediaries, controls such Person (a “
Controlling Person ”), or (ii) any Person which is controlled by or is under
common control with a Controlling Person or (iii) as to any Person, any other
Person that, directly or indirectly, controls, is controlled by or is under
common control with such Person or is a director or officer of such Person. As
used herein, the term “control” means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

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

“Applicable Margin” means a rate per annum equal to the sum of (i) the Fixed
Rate Treasury Spread for the applicable Determination Date minus (ii) the Buy
Side Swap Spread for such Determination Date plus (iii) 0.25%. In no event will
the Applicable Margin with respect to Eurodollar Loans be less than 175 basis
points. The Applicable Margin in respect of Base Rate Loans shall be 100 basis
points lower than for the Eurodollar Loans and in no event will be less than 75
basis points.

“Applicable Percentage” means, with respect to any Bank, the percentage of the
total Funding Amounts represented by such Bank’s Funding Amount. If the Funding
Amounts have been reduced to zero, the Applicable Percentages shall be
determined based upon the Funding Amounts most recently in effect, giving effect
to any assignments.

“Applicable Margin Fee” has the meaning set forth in Section 2.11(a).

“Assignee” has the meaning set forth in Section 9.06(c).

“Assignment and Assumption” means an assignment and assumption agreement
substantially in the form of Exhibit C-1 or C-2 hereto, as applicable.

“Assumption Agreement” has the meaning set forth in Section 2.19(d).

 

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“Attributable Debt” means the present value (discounted at the rate of
9.375% per annum compounded monthly) of the obligations for rental payments
required to be paid during the remaining term of any lease of more than 12
months.

“Automatic Acceleration Event” means the occurrence, with respect to the
Borrower, of any of the Events of Default listed in clauses (g) and (h) of
Section 6.01.

“Availability Period” means the period from and including the Closing Date to
but excluding the earlier of the fifth Business Day preceding Maturity Date and
the date of termination of the Funding Amounts.

“Bank” means each lender listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 9.06(c) and their respective
successors.

“Base Rate” means, for any day, a rate per annum equal to the higher of (i) the
rate of interest publicly announced by the Administrative Agent from time to
time as its base rate for such day and (ii) the sum of  1/2 of 1% plus the
Federal Funds Rate for such day.

“Base Rate Borrowing” means a Borrowing consisting of Base Rate Loans.

“Base Rate Loan” means a Loan that bears interest at the Base Rate plus the
Applicable Margin.

“Benefit Arrangement” means, at any time, an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.

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

“Borrowing” means a borrowing hereunder consisting of Loans (i) made to the
Borrower at the same time by the Banks pursuant to Section 2.02(a) or
(ii) deemed made to the Borrower at the same time by the Banks pursuant to
Section 2.02(b) and 2.05(f).

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan or
in calculating the EURIBOR Rate, the term “ Business Day ” shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.

“Buy Side Swap Spread” for any Determination Date means the average of the bid
column swap spreads between United States Treasury securities and London
interbank offered rate borrowings as quoted on page 18 of the Bloomberg Screen
IRSB (or such other page and place as may replace such page on such service for
displaying the information referred to

 

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therein) with respect to each series of Comparable Treasury Securities, as
determined by the Administrative Agent as of 11:00 a.m. (New York City time) on
such Determination Date.

“Capital Commitment” means any contractual commitment or obligation under an
equity contribution or other agreement the primary purpose of which is for the
Borrower to provide to an AES Business a portion of the capital required to
finance construction projects, the acquisition of additional assets or capital
improvements being undertaken by such AES Business.

“Capital Stock” means, with respect to any Person, any and all shares,
interests, participants or other equivalents (however designated, whether voting
or non-voting) of, or interests in (however designated), the equity of such
Person, including, without limitation, all common stock and preferred stock and
partnership and joint venture interests of such Person

“Closing Date” means the date on or after the Effective Date on which the
Administrative Agent shall have received the fees and documents specified in or
pursuant to Section 3.01.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor
statute.

“Commitment Increase” has the meaning set forth in Section 2.19(a).

“Comparison Notes” means, as of any Determination Date, Borrower’s 9.375% Senior
Notes due 2010 issued and outstanding on the date of this Agreement and
Borrower’s 8.875% Senior Notes due 2011 issued and outstanding on the date of
this Agreement; provided that (i) if on such Determination Date, either, but not
both, of such series of notes is no longer outstanding, “Comparison Notes” shall
mean the series of notes still outstanding and (ii) if on such Determination
Date, both such series of notes are no longer outstanding, “Comparison Notes”
shall mean the issued and outstanding notes or debentures of Borrower selected
by Administrative Agent in consultation with the Borrower.

“Comparison Treasury Securities” means, (i) with respect to the Borrower’s
9.375% Senior Notes due 2010, the United States Treasury Security with a 3.875%
coupon maturing September 15, 2010 (CUSIP 912828EG1) and (ii) with respect to
the Borrower’s 8.875% Senior Notes due 2011, the United States Treasury Security
with a 4.500% coupon maturing February 28, 2011 (CUSIP 912828EX4); provided that
if, on any date of determination, neither of such series of notes of the
Borrower is outstanding, “Comparison Treasury Securities” shall mean the United
States Treasury Security with a maturity most nearly equal to that of the
Comparison Notes outstanding at such time, as determined by the Administrative
Agent.

“Conduit Lender” means any special purpose corporation organized and
administered by any Bank for the purpose of funding Credit-Linked Deposits
hereunder otherwise required to be made by such Bank and designated by such Bank
in a written instrument, subject to the consent of the Administrative Agent and
the Borrower (which, in each

 

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case, shall not be unreasonably withheld or delayed); provided that the
designation by any Bank of a Conduit Lender shall not relieve the designating
Bank of any of its obligations to fund a Credit-Linked Deposit under the
Agreement if, for any reason, its Conduit Lender fails to fund any such
Credit-Linked Deposit, and the designating Bank (and not the Conduit Lender)
shall have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its Conduit Lender,
and provided further that no Conduit Lender shall (i) be entitled to receive any
greater amount pursuant to Section 8.03, 8.04 or 9.03 than the designating Bank
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (ii) be deemed to have any Funding Amount hereunder.

“Consolidated Subsidiary” means, at any date with respect to any Person, any
Subsidiary of such Person or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.

“Consolidated Net Assets” means the aggregate amount of assets (less reserves
and other deductible items) after deducting current liabilities, as shown on the
consolidated balance sheet of the Borrower and its Subsidiaries contained in the
latest annual report to the stockholders of the Borrower and prepared in
accordance with GAAP.

“Controlling Person” has the meaning set forth in the definition of “Affiliate”
herein.

“Credit-Linked Deposit” means, with respect to each Bank at any time, amounts
actually on deposit in the Credit-Linked Deposit Account to the credit of such
Bank’s Credit-Linked Sub-Account at such time.

“Credit-Linked Deposit Account” means the “AES Credit-Linked Deposit Account”
established by the Administrative Agent pursuant to Section 2.01(a).

“Credit-Linked Sub-Account” has the meaning set forth in Section 2.01(a).

“Credit Party” has the meaning set forth in Section 8.03(a).

“Debt” of any Person means at any date, without duplication, (i) all Obligations
of such Person for borrowed money; (ii) all Obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments; (iii) all Obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business;
(iv) all Obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles; (v) all Obligations
(whether contingent or non-contingent) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit, surety or
performance bond or similar instrument; (vi) all Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise an obligation of
such Person; (vii) all Debt of others Guaranteed by such Person and (viii) all

 

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Redeemable Stock of such Person valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends. For
purposes hereof, contingent obligations of the type described in clause (v) of
this definition with respect to letters of credit not issued hereunder shall not
be treated as “Debt” hereunder to the extent that such obligations are cash
collateralized or to the extent that the issuer of any such letter of credit is
entitled to draw under a Letter of Credit issued hereunder which by its terms
requires that L/C Drawings under such letter of credit be applied only to
reimburse such issuer for amounts paid by such issuer under such letter of
credit. The obligations of the Borrower under any Capital Commitment or under
any agreement, in the form of indemnity or contingent equity contribution
agreement or otherwise, pursuant to which the Borrower agrees to protect any
Person, in whole or in part, from tax liabilities, environmental liabilities,
political risks, including currency convertibility and transferability risk and
changes in law, or construction cost overruns shall not constitute Debt.

“Default” means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.

“Derivatives Obligations” of any Person means all obligations of such Person in
respect of any rate swap transaction, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, credit derivative transaction,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions; provided that Derivatives Obligations shall not include
any obligations of such Person in relation to an equity forward contract, equity
or equity index swap or equity or equity index option pertaining, linked or
indexed to the common stock of such Person or any affiliate thereof. For
purposes of determining the aggregate amount of Derivative Obligations on any
date, the Derivative Obligations of the applicable Person in respect of any
Hedge Agreement shall be the maximum aggregate amount (after giving effect to
any netting agreements to the extent such netting agreements are with the same
Person to whom any such Derivative Obligations are owed or with Affiliates of
such Person) that the applicable Person would be required to pay if such Hedge
Agreement were terminated at such time.

“Determination Date” means, for any Interest Period, the second Business Day
prior to the first day of such Interest Period.

“Disclosed Matters” means matters disclosed in any SEC Filings made prior to
March 29, 2006 or in written materials sent by or on behalf of the Borrower to
all of the Banks prior to March 29, 2006.

“Dollars” means United States of America dollars.

 

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“Effective Date” means the date this Agreement becomes effective in accordance
with Section 9.10.

“Eligible Assignee” means any commercial bank or financial institution
(including, without limitation, any fund that regularly invests in loans similar
to the Loans or investments similar to the Funding Amounts) as approved (which
approval shall be required only so long as no Event of Default has occurred and
is continuing at the time of an assignment) by the Borrower (such approval not
to be unreasonably withheld or delayed); provided , however , that neither the
Borrower nor any Subsidiary of the Borrower shall qualify as an Eligible
Assignee under this definition.

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment, including, without limitation, ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute.

“ERISA Group” means the Borrower, its Subsidiaries and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

“EURIBOR” means, for any Interest Period, the rate appearing on Page 248 of the
Moneyline Telerate Service (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such Service,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to deposits in Euro by
reference to the Banking Federation of the European Union Settlement Rates for
deposits in Euro) at approximately 10:00 A.M., London time, two Business Days
prior to the commencement of such Interest Period, as the rate for deposits in
Euro with a maturity comparable to such Interest Period or, if for any reason
such rate is not available, the rate at which Euro deposits for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in same day funds to first-class banks in the European
interbank market at approximately 10:00 A.M., London time, two Business Days
prior to the commencement of such Interest Period.

“EURIBOR Differential Rate” has the meaning set forth in Section 2.11(a)(iv).

 

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“Eurodollar Borrowing” means a Borrowing consisting of Eurodollar Loans

“Eurodollar Default Rate” has the meaning set forth in Section 2.12(b).

“Eurodollar Loan” means a Loan which bears interest at the Adjusted LIBO Rate
plus the Applicable Margin.

“Event of Default” has the meaning set forth in Section 6.01.

“Excluded AES Business” means any AES Business located in Brazil or Argentina;
provided that the Borrower may by written notice to the Administrative Agent
make an election not to treat one or more AES Businesses in Brazil or Argentina
as an “Excluded AES Business”. Once the Borrower elects not to treat an AES
Business as an “Excluded AES Business” it may not thereafter change or revoke
such election with respect to such AES Business without the consent of the
Required Banks.

“Excluded AES Entity” means any Person set forth on Schedule I, as such Schedule
I may be updated pursuant to Section 5.01(j) whose assets consist only of any of
the Excluded AES Businesses and direct or indirect investments therein.

“Existing Credit Agreement” means that certain Third Amended and Restated Credit
and Reimbursement Agreement dated as of March 17, 2004, as amended, among the
Borrower, the subsidiary guarantors listed therein, Citicorp USA, Inc., as the
administrative agent, and the banks party thereto, as further amended, modified,
amended and restated, refinanced, replaced or supplemented from time to time. If
the Existing Credit Agreement ceases to exist, all terms defined herein by
reference to the Existing Credit Agreement shall have the meanings set forth in
the Existing Credit Agreement immediately prior to such cessation.

“Extension of Credit” means (i) a Borrowing pursuant to Section 2.02(a) or
(ii) an issuance of a Letter of Credit pursuant to Section 2.05.

“Facilities” means the Loans and Letters of Credit under this Agreement.

“Federal Funds Rate” means, for any day, the rate per annum (rounded upward, if
necessary, to the nearest  1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (i) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (ii) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to Merrill Lynch Bank
USA on such day on such transactions as determined by the Administrative Agent.

“Fee Payment Date” has the meaning set forth in Section 2.11(a)(iii).

 

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“Fixed Rate Treasury Spread” for any Determination Date means the excess, if
any, of (a) the average of the yields to maturity on the Determination Date on
each series of the Comparison Notes received by the Administrative Agent from
the Reference Dealer (based on bid price) over (b) the average of the yields to
maturity on the Determination Date on each series of the Comparable Treasury
Securities, as determined by the Administrative Agent as of 11:00 a.m. (New York
City time) on such Determination Date.

“Fixed Exchange Rate” has the meaning set forth in Section 2.05(a).

“Fronting Bank” means (a) Merrill Lynch Bank USA, in its capacity as an issuer
of Letters of Credit hereunder, (b) any commercial bank designated by the
Administrative Agent (and reasonably acceptable to the Borrower) with a publicly
monitored credit rating of at least A2 issued by Moody’s or at least A issued by
S&P and (c) and any other Person approved by the Administrative Agent and the
Borrower that shall agree to issue Letters of Credit hereunder.

“Fronting Bank Agreement” means an agreement, in substantially the form of
Exhibit D hereto.

“Funded Debt” means indebtedness for borrowed money having a maturity of, or by
its terms extendible or renewable for, a period of more than 12 months after the
determination of the amount thereof.

“Funding Amount” means, with respect to each Bank, the amount that such Bank is
required hereby to maintain as its Credit-Linked Deposit, as such amount may be
(a) reduced or terminated from time to time pursuant to Section 2.08,
(b) reduced or increased from time to time pursuant to assignments by or to such
Bank pursuant to Section 9.06(c) or (c) increased pursuant to Section 2.19. The
initial amount of each Bank’s Funding Amount is set forth on Appendix I, or in
the Assignment and Assumption or the Assumption Agreement pursuant to which such
Bank shall have assumed its Funding Amount, as applicable. The initial aggregate
amount of the Banks’ Funding Amounts is $500,000,000.

“GAAP” has the meaning set forth in Section 1.02.

“Governmental Authority” means the government of the United States of America,
or of any other nation, or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government

“Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership

 

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arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay or to maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of assuring in any other manner
the obligee of such Debt or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business or, for the avoidance of doubt,
obligations of the Borrower to provide capital to an AES Business under a
Capital Commitment. The term “Guarantee” used as a verb has a corresponding
meaning.

“Hazardous Substances” means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.

“Hedge Agreement” means any contract, instrument or agreement in respect of
Derivative Obligations.

“Increase Commitment Date” has the meaning set forth in Section 2.19(b).

“Increase Date” has the meaning set forth in Section 2.19(a).

“Indemnitee” has the meaning set forth in Section 9.03(b).

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.07.

“Interest Period” means: (a) with respect to any Loan or Borrowing, initially,
the period commencing on the date of such Loan or Borrowing and ending on the
numerically corresponding day in the calendar month that is one month thereafter
and (b) with respect to the Credit-Linked Deposits, initially, the period
commencing on the Closing Date and ending on the numerically corresponding day
in the calendar month that is one month thereafter, and, in each case (a) and
(b), thereafter, each period commencing on the last day of the preceding
Interest Period applicable thereto and ending on the numerically corresponding
day in the calendar month that is one month thereafter; provided, that (i) a
single Interest Period shall at all times apply to all the Credit-Linked
Deposits, (ii) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the immediately preceding
Business Day, and (iii) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period.

“L/C Disbursement” means a payment made by a Fronting Bank pursuant to a Letter
of Credit.

 

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“L/C Drawing” means a drawing effected under any Letter of Credit.

“L/C Exposure” means, at any time, the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time plus (b) the aggregate amount
of all L/C Disbursements that have not yet been reimbursed (other than by a
Borrowing) by or on behalf of the Borrower at such time. The L/C Exposure of any
Bank at any time shall be its Applicable Percentage of the total L/C Exposure at
such time.

“Lead Arranger” means Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Lending Office” means, as to each Bank, its office, branch or affiliate located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Lending Office) or such other office,
branch or affiliate of such Bank as it may hereafter designate as its Lending
Office by notice to the Borrower and the Administrative Agent.

“LIBOR” means, with respect to any Eurodollar Loan or Credit-Linked Deposit, for
any Interest Period, the average (rounded upward, if necessary, to the next
higher  1/16th of 1%) of the respective rates per annum at which deposits in
dollars are offered to the Administrative Agent in the London interbank market
at approximately 11:00 A.M. (London time) two business days before the first day
of such Interest Period in an amount approximately equal to the principal amount
of such Eurodollar Loan or Credit-Linked Deposit and for a period of time
comparable to such Interest Period.

“LIBOR Maintenance Fee” has the meaning set forth in Section 2.11(a)(ii).

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement, the Borrower or any
of its Subsidiaries shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.

“Loan” means a loan made or deemed to be made by the Banks to the Borrower in
accordance with Sections 2.02 and 2.05(f).

“Maritza Letters of Credit” means any Letter of Credit issued to support,
directly or indirectly, certain liabilities of Borrower and its Subsidiaries to
finance the construction of an approximately $1.4 billion coal-fired generation
plant in Bulgaria, called “Maritza”.

 

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“Material Adverse Effect” means a material adverse effect on (i) the business,
consolidated results of operations, consolidated financial condition or
prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its material obligations under this Agreement
or (iii) the rights of and remedies available to any Bank or Fronting Bank under
this Agreement.

“Material AES Entity” means any Person in which the Borrower has a direct or
indirect equity Investment if such Person’s contribution to Parent Operating
Cash Flow for the four most recently completed fiscal quarters of the Borrower
constitutes 15% or more of Parent Operating Cash Flow for such period.

“Material Debt” means, with respect to the Borrower, Debt (other than the Loans
and the Reimbursement Obligations) of the Borrower arising in one transaction,
in an aggregate principal amount exceeding $50,000,000.

“Material Hedge Agreement” means, with respect to any Person, a Hedge Agreement
entered into by such Person in respect of which the Derivative Obligations of
such Person exceed $50,000,000.

“Material Obligation” means any obligation or liability in an amount equal to or
in excess of $50,000,000.

“Material Plan” means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $50,000,000.

“Maturity Date” means the fourth anniversary of the Closing Date.

“Moody’s” means Moody’s Investors Services, Inc.

“Multiemployer Plan” means at any time an employee pension benefit plan within
the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.

“Note” means a promissory note of the Borrower to the order of any Bank, in
substantially the form of Exhibit A hereto, evidencing the indebtedness of the
Borrower to such Bank resulting from the Loans made or deemed to have been made
by such Bank hereunder.

“Obligation” means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(g) or
(h). Without

 

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limiting the generality of the foregoing, the Obligations of the Borrower under
this Agreement include (i) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by the Borrower under this Agreement and
(ii) the obligation of the Borrower to reimburse any amount in respect of any of
the foregoing that any Bank, in its sole discretion, may elect to pay or advance
on behalf of the Borrower.

“Other Taxes” has the meaning set forth in Section 8.04(b).

“Parent” means, with respect to any Credit Party, any Person controlling such
Credit Party.

“Parent Operating Cash Flow” has the meaning set forth in the Existing Credit
Agreement.

“Participant” has the meaning set forth in Section 9.06(b).

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

“Permitted Business” means, with respect to any Person (i) a line of business
which is substantially the same line of business as one or more of the principal
businesses of such Person and its Subsidiaries, (ii) a line of business which is
complementary or ancillary to, one or more of the businesses of such Person and
its Subsidiaries, (iii) any infrastructure business, (iv) any public utility
business and (v) the ownership, extraction, processing, transportation,
distribution and sales of fossil fuels and derivatives thereof, but, in each
case, excluding trading activities or hedging transactions, other than (x) such
activities conducted in the ordinary course of business, (y) such activities
conducted in a manner consistent with past practices and (z) such activities or
transactions intended to enhance the performance of physical assets.

“Person” means an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

“Plan” means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.

 

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“Power Supply Business” means an electric power or thermal energy generation or
cogeneration facility or related facilities, or an electric power transmission,
distribution, fuel supply and fuel transportation facilities, or any combination
thereof (all subject to relevant security, if any, under related project
financing arrangements), together with its or their related power supply,
thermal energy and fuel contracts as well as other contractual arrangements with
customers, suppliers and contractors.

“Principal Property” means any building, structure or other facility (together
with the land on which it is erected and fixtures comprising a part thereof)
used primarily for manufacturing, processing, research, warehousing or
distribution, owned or leased by the Borrower and having a net book value in
excess of 2% of Consolidated Net Assets, other than any such building, structure
or other facility or portion thereof which is a pollution control facility
financed by state or local governmental obligations or which the principal
executive officer, president and principal financial officer of the Borrower
determine in good faith is not of material importance to the total business
conducted or assets owned by the Borrower and its Subsidiaries as an entity.

“Quarterly Date” means each March 31, June 30, September 30 and December 31.

“Redeemable Stock” means any class or series of Capital Stock of any Person that
by its terms or otherwise is (i) required to be redeemed prior to the first
anniversary of the Maturity Date, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the first anniversary
of the Maturity Date or (iii) convertible into or exchangeable for (unless
solely at the option of such person) Capital Stock referred to in clause (i) or
(ii) above or Debt having a scheduled maturity prior to the first anniversary of
the Maturity Date; provided that any Capital Stock that would not constitute
Redeemable Stock but for provisions thereof giving holders thereof the right to
require such person to repurchase or redeem such Capital Stock upon the
occurrence of an “asset sale” or a “change of control” occurring prior to the
first anniversary of the Maturity Date shall not constitute Redeemable Stock if
such Capital Stock specifically provides that such person will not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption is permitted under the terms of this Agreement

“Reference Dealer” means the third-party data source agreed to by the
Administrative Agent and the Borrower prior to the date hereof or such other
third-party data source agreed to by the Administrative Agent and the Borrower;
provided that if at any time no such third-party data source is agreed to by the
Administrative Agent and the Borrower, the “Reference Dealer” shall mean Merrill
Lynch, Pierce, Fenner & Smith Inc.

“Register” has the meaning set forth in Section 9.06(f).

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

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“Reimbursement Obligations” means at any date the obligations then outstanding
of the Borrower to reimburse the Banks for L/C Drawings under Letters of Credit.

“Related Fund” means with respect to any Bank that is a fund that invests in
bank loans, any other fund that invests in commercial loans and is managed or
advised by the same investment advisor as such Bank or by an Affiliate of such
investment advisor.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

“Request for Loan” means an executed request for a Loan substantially in the
form of Exhibit E hereto with all blanks completed by the Borrower.

“Required Banks” means at any time the Banks having at least a majority of the
aggregate Total Exposure at such time.

“Reserve Percentage” means for any day that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of “Eurocurrency
liabilities” (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to United States
residents). The Adjusted LIBO Rate shall be adjusted automatically on and as of
the effective date of any change in the Reserve Percentage.

“Responsible Officer” means any duly authorized officer of the Borrower or any
of its Subsidiaries.

“Return on Deposits” has the meaning set forth in Section 2.01(d).

“S&P” means Standard & Poor’s Ratings Services, a Division of The McGraw-Hill
Companies, Inc.

“SEC Filings” means public filings made by the Borrower with the Securities and
Exchange Commission on Form 8-K, Form 10-Q or Form 10-K, and any filed
amendments to any of the foregoing.

“Significant AES Entity” means (i) any Material AES Entity, (ii) AES BVI II and
(iii) any other Person (other than any Excluded AES Entity) in which the
Borrower has a direct or indirect equity Investment if (A) such Person’s
contribution to Parent Operating Cash Flow for the four most recently completed
fiscal quarters of the Borrower constitutes 10% or more of Parent Operating Cash
Flow for such period, or (B) on any date of determination, the Borrower’s direct
or indirect interest in the total assets of such Person if such Person is a

 

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Consolidated Subsidiary or in the net assets of such Person in all other cases
is at least equal to 10% of the consolidated assets of the Borrower and its
Consolidated Subsidiaries, taken as a whole, on such date of determination.

“Solvent” and “Solvency” mean, with respect to any Person on a particular date,
that on such date (i) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay such debts
and liabilities as they mature and (iv) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.

“Taxes” has the meaning set forth in Section 8.04(a).

“Total Exposure” means at any time, as to any Bank, the sum of its Applicable
Percentage of the outstanding principal amount of the Loans and its Applicable
Percentage of the L/C Exposure at such time.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans constituting such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Base Rate

“Unfunded Liabilities” means, with respect to any Plan at any time, the amount
(if any) by which (i) the value of all benefit liabilities under such Plan,
determined on a plan termination basis using the assumptions prescribed by the
PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value
of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.

“United States” means the United States of America, including the States and the
District of Columbia, but excluding its territories and possessions.

 

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Section 1.02 Accounting Terms and Determinations.

Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks (“ GAAP ”); provided that, if the Borrower
notifies the Administrative Agent that the Borrower wishes to amend any covenant
in Article V to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Banks wish to amend
Article V for such purpose), then the Borrower’s compliance with such covenant
shall be determined on the basis of generally accepted accounting principles in
effect immediately before the relevant change in generally accepted accounting
principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Banks.

Section 1.03 Currency Conversions Generally.

In connection with any conversion of Dollars to Euros or from Euros to Dollars
required under this Agreement, the Administrative Agent shall make such
conversion as follows: (i) Euros shall be converted to Dollars based on the rate
of exchange quoted by the Administrative Agent in New York, at 4 P.M. (London
time) on the date of determination, for the Bid-Side EUR/USD exchange rate as
published by the WM Company & Reuters PLC found on Reuters page WMRSPOTO5 and
(ii) Dollars shall be converted to Euros based on the rate of exchange quoted by
the Administrative Agent in New York, at 4 P.M. (London time) on the date of
determination, for the Ask-Side EUR/USD exchange rate as published by the WM
Company & Reuters PLC found on Reuters page WMRSPOTO5 plus $.0010 per Euro.

In calculating the Total Exposure or L/C Exposure, amounts shall be calculated
in Dollars using the exchange rate that was applicable at the time of the
initial conversion from Dollars to Euros in respect of Maritza Letters of Credit
or Loans with respect thereto.

Section 1.04 Interest Rate Determinations.

With respect to each Interest Period, the Administrative Agent shall deliver a
notice to the Borrower within three Business Days following the beginning of
such Interest Period, which notice shall contain the Administrative Agent’s
determination (in accordance with the terms hereof) of LIBOR, the Adjusted LIBO
Rate, the Applicable Margin and, if applicable, the Base Rate and EURIBOR, in
each case with respect to such Interest Period. All such determinations shall be
conclusive absent manifest error.

 

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ARTICLE II

THE CREDITS

Section 2.01 Credit-Linked Deposit Accounts.

(a) Establishment of Credit-Linked Deposit Account and Credit-Linked
Sub-Accounts. On or prior to the Closing Date, the Administrative Agent shall
establish a Credit-Linked Deposit Account in the name of the Administrative
Agent at Merrill Lynch Bank USA with the title “AES Credit-Linked Deposit
Account”. The Administrative Agent shall maintain records enabling it to
determine at any time the amount of the interest of each Bank in the
Credit-Linked Deposit Account (the interest of each Bank in the Credit-Linked
Deposit Account, as evidenced by such records, being referred to as such Bank’s
“ Credit-Linked Sub-Account ”). The Administrative Agent shall establish such
additional Credit-Linked Sub-Accounts for assignee Banks as shall be required
pursuant to Section 9.06(c). No Person (other than the Administrative Agent)
shall have the right to make any withdrawal from the Credit-Linked Deposit
Account or to exercise any other right or power with respect thereto. Without
limiting the generality of the foregoing, each party hereto acknowledges and
agrees that the Credit-Linked Deposits are and (subject to the last paragraph of
Section 6.01) will at all times be solely the property of the Banks, that the
Credit-Linked Deposits shall be used solely in accordance with this Agreement
and that no amount on deposit at any time in the Credit-Linked Deposit Account
shall be the property of the Borrower, constitute collateral for any Obligations
of the Borrower under this Agreement or otherwise be available in any manner to
satisfy any Obligations of the Borrower under this Agreement. Each Bank agrees
that its right, title and interest in and to the Credit-Linked Deposit Account
shall be limited to the right to require amounts in its Credit-Linked
Sub-Account to be applied as provided in paragraph (c) below and that it will
have no right to require the return of its Credit-Linked Deposit other than as
expressly provided in such paragraph (c) (each Bank hereby acknowledging that
its Credit-Linked Deposit constitutes payment for its participations in Loans
made or deemed to be made hereunder and Letters of Credit issued or to be issued
hereunder and that each Fronting Bank will be issuing, amending, renewing and
extending Letters of Credit in reliance on the availability of such Bank’s
Credit-Linked Deposit to discharge such Bank’s obligations in accordance with
Section 2.05(f)). The funding of the Credit-Linked Deposits and the agreements
with respect thereto set forth in this Agreement constitute arrangements solely
among the Administrative Agent, the Fronting Banks and the Banks with respect to
the funding and reimbursement obligations of the Banks under this Agreement, and
do not, except as and when specifically set forth herein, constitute loans,
extensions of credit or other financial accommodations to the Borrower. Except
as specifically set forth herein, the Borrower shall not have any responsibility
or liability to the Banks, the Administrative Agent or any other Person in
respect of the establishment, maintenance, administration or misappropriation of
the Credit-Linked Deposit Account (or any

 

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Credit-Linked Sub-Account) or with respect to the investment of amounts held
therein, including pursuant to paragraph (d) below, or the duties and
responsibilities of the Administrative Agent with respect to the foregoing
contemplated by paragraph (e) below.

(b) Deposits in Credit-Linked Deposit Account. The following amounts will be
deposited in the Credit-Linked Deposit Account at the following times:

(i) On the Closing Date, each Bank shall deposit in the Credit-Linked Deposit
Account an amount in Dollars equal to such Bank’s Funding Amount. Thereafter,
the Credit-Linked Deposits shall be available, on the terms and subject to the
conditions set forth herein, for application pursuant to Section 2.05(f) to
reimburse such Bank’s Applicable Percentage of L/C Disbursements that are not
reimbursed by the Borrower.

(ii) On any date prior to the Maturity Date on which the Administrative Agent or
any Fronting Bank receives any reimbursement payment from the Borrower in
respect of an L/C Disbursement or a Loan, with respect to which amounts were
withdrawn from the Credit-Linked Deposit Account to reimburse or pay such L/C
Disbursement or fund such Loan, subject to clause (iii) below, the
Administrative Agent shall deposit in the Credit-Linked Deposit Account, and
credit to the Credit-Linked Sub-Accounts of the Banks, the portion of such
reimbursement or other payment to be deposited therein, in accordance with
Section 2.05(f) or 2.10(a), as the case may be.

(iii) If, at any time when any amount is required to be deposited in the
Credit-Linked Deposit Account under clause (ii) above, the sum of such amount
and the aggregate amount of the Credit-Linked Deposits at such time would exceed
the higher of the total aggregate Funding Amounts and the Total Exposure, then
such excess shall not be deposited in the Credit-Linked Deposit Account and the
Administrative Agent shall instead pay to each Bank its Applicable Percentage of
such excess.

(iv) Concurrently with the effectiveness of any assignment by any Bank of all or
any portion of its Funding Amount, the Administrative Agent shall transfer into
the Credit-Linked Sub-Account of the assignee the corresponding portion of the
amount on deposit in the assignor’s Credit-Linked Sub-Account in accordance with
Section 9.06(c).

(c) Withdrawals From and Closing of Credit-Linked Deposit Account. Amounts on
deposit in the Credit-Linked Deposit Account shall be withdrawn and distributed
(or transferred, in the case of clause (v) below) as follows:

(i) On each date on which any Fronting Bank is to be reimbursed by the Banks
pursuant to Section 2.05(f) for any L/C Disbursement, the Administrative Agent
shall withdraw from the Credit-Linked Deposit Account the amount of such
unreimbursed L/C Disbursement (and debit the Credit-Linked Sub-Account of each
Bank in the amount of such Bank’s Applicable Percentage of such unreimbursed L/C

 

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Disbursement) and make such amount available to such Fronting Bank in accordance
with Section 2.05(f).

(ii) Concurrently with each voluntary reduction of the Funding Amounts pursuant
to and in accordance with Section 2.08(b), the Administrative Agent shall
withdraw from the Credit-Linked Deposit Account and pay to each Bank such Bank’s
Applicable Percentage of the amount of such reduction (provided that, after
giving effect thereto, the aggregate amount of the Credit-Linked Deposits is not
less than the greater of the Total Exposure or Funding Amounts).

(iii) Concurrently with any reduction of the total aggregate Funding Amounts to
zero pursuant to and in accordance with Section 2.08(b) or Article VI, the
Administrative Agent shall withdraw from the Credit-Linked Deposit Account and
pay to each Bank such Bank’s Applicable Percentage of the excess of the
aggregate amount of the Credit-Linked Deposits at such time over the L/C
Exposure at such time.

(iv) Concurrently with the effectiveness of any assignment by any Bank of all or
any portion of its Funding Amount, the corresponding portion of the assignor’s
Credit-Linked Sub-Account shall be transferred from the assignor’s Credit-Linked
Sub-Account to the assignee’s Credit-Linked Sub-Account in accordance with
Section 9.06(c) and, if required by Section 9.06(c), the Administrative Agent
shall close such assignor’s Credit-Linked Sub-Account.

(v) Upon the reduction in accordance with the terms hereof of each of the
Funding Amounts and the L/C Exposure to zero, the Administrative Agent shall
withdraw from the Credit-Linked Deposit Account and pay to each Bank the entire
remaining amount of such Bank’s Credit-Linked Deposit, and shall close the
Credit-Linked Deposit Account.

(vi) In accordance with 2.02(c) upon the making of a Loan.

Each Bank irrevocably and unconditionally agrees that its Credit-Linked Deposit
may be applied or withdrawn from time to time as set forth in this paragraph
(c).

(d) Deposit Earnings. Each of the Administrative Agent, each Fronting Bank and
each Bank hereby acknowledges and agrees that each Bank is funding its
Credit-Linked Deposit to the Administrative Agent for application in the manner
contemplated by Sections 2.05(f) and that the Administrative Agent and the
Borrower have mutually agreed to invest the Credit-Linked Deposits on deposit in
the Credit-Linked Deposit Account so as to earn a return (the “ Return on
Deposits ”) (subject to Section 8.01) for the Banks equal at any time to (i) for
Dollar denominated Credit-Linked Deposits, (w) the Adjusted LIBO Rate in effect
for the Credit-Linked Deposits at such time minus (x) 15 basis points or
(ii) for Euro denominated deposits, (y) the EURIBOR in effect for the
Credit-Linked Deposits at such time minus (z) 15 basis points; provided that, in
the event that the Borrower shall revoke any notice of prepayment

 

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and termination pursuant to Section 2.10(b), the Administrative Agent shall use
commercially reasonable efforts to invest the Credit-Linked Deposits that are
affected thereby in a manner that is consistent with its policies relating to
such deposits. Such interest will be paid to the Banks by the Administrative
Agent in arrears on each day on which fees are due and payable to the Banks
under Section 2.11(a) (and amounts earned in Euros shall be converted to Dollars
by the Administrative Agent (in accordance with Section 1.03) any time fees are
payable pursuant to Section 2.11(a)). All such interest shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day) and shall be
calculated based on the daily amounts of the Credit-Linked Deposits of the Banks
during the applicable period. The applicable Adjusted LIBO Rate or EURIBOR shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

(e) Sufficiency of Deposits to Provide for Total Exposure. Notwithstanding any
other provision of this Agreement, including Sections 2.01, 2.02 and 2.05(a), no
Loan shall be made pursuant to Section 2.02(a) and no Letter of Credit shall be
issued, if after giving effect thereto the L/C Exposure would exceed the
aggregate amount of the Credit-Linked Deposits.

(f) Satisfaction of Bank Funding Obligations. The Borrower and each Fronting
Bank acknowledge and agree that, notwithstanding any other provision contained
herein (but without limiting the obligations of any Bank under Section 9.03(c)),
the deposit by each Bank in the Credit-Linked Deposit Account on the Closing
Date of funds equal to its Funding Amount will fully discharge the obligation of
such Bank to fund Loans by such Bank pursuant to Section 2.02(a) and to
reimburse such Bank’s Applicable Percentage of L/C Disbursements that are not
reimbursed by the Borrower pursuant to Section 2.05(f), and that no other or
further payments shall be required to be made by any Bank in respect of any such
funding or reimbursement obligations.

(g) Security. Each Bank grants to the Administrative Agent for the benefit of
the Fronting Banks a security interest in such Bank’s Credit-Linked Deposit, its
Credit-Linked Sub-Account and all of its rights, title and interest to and under
the Credit-Linked Deposit Account to secure the obligations of such Bank under
Sections 2.05(f) . The Administrative Agent hereby grants a security interest
for the benefit of the Fronting Banks in all its rights title and interest to
and under the Credit-Linked Deposit Account and confirms the grant by the Banks
made above to secure the obligations of the Banks under Section 2.05(f). To the
extent that there are multiple Fronting Banks, such Fronting banks shall share
ratably in such security interest in proportion to the outstanding Obligations
owed to such Fronting Banks.

(h) Fronting Bank Insecure. If the Administrative Agent or any Fronting Bank is
enjoined from taking any action referred to in paragraph (i) of Section 2.01(c),
or if the Administrative Agent or any Fronting Bank reasonably determines that,
by operation of law, it may reasonably be precluded from taking any such action,
or if the Borrower or any Bank challenges in any legal proceeding any of the
acknowledgements, agreements or characterizations set forth in any of the fifth,
sixth or seventh sentences of Section 2.01(a), then,

 

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in any such case (and so long as such event or condition shall be continuing),
and notwithstanding anything contained herein to the contrary, no Fronting Bank
shall be required to or to issue, renew or extend any Letter of Credit.

Section 2.02 Loans.

(a) Requested Loans. Subject to the terms and conditions set forth herein, the
Banks shall, from time to time during the Availability Period at the request of
the Borrower, make one or more Dollar denominated Loans to the Borrower in an
aggregate principal amount that will not result in (i) the aggregate amount of
the Total Exposures exceeding the aggregate amount of the Funding Amounts or
(ii) the L/C Exposure exceeding the balance of the Credit-Linked Deposit Account
(excluding any portion of the Credit-Linked Deposit Account attributable to
interest). Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Loans. Loans
shall constitute utilization of the Funding Amounts.

(b) Deemed Loans. The Banks shall, from time to time during the Availability
Period, if the Borrower fails to reimburse any L/C Disbursement when required by
the provisions of 2.05(f), be deemed to have made a Dollar denominated Loan to
the Borrower in the aggregate principal amount of the unreimbursed L/C
Disbursement. In the case of a Maritza Letter of Credit, the amount of such
corresponding Loan shall equal the unreimbursed L/C Disbursement measured in
Euros not reimbursed by the Borrower multiplied by the Fixed Exchange Rate.

(c) Withdrawal Authorization. In consideration and in furtherance of the
foregoing, each Bank hereby absolutely and unconditionally authorizes and
directs the Administrative Agent to withdraw from the Credit-Linked Deposit
Account (and debit such Bank’s Credit-Linked Sub-Account in the amount of) such
Bank’s Applicable Percentage of the principal amount of any such Loan pursuant
to clause (a) or (b) above (it being understood and agreed that each Bank’s
obligations in respect of funding Loans shall be payable solely from, and
limited to, such Bank’s Credit-Linked Deposit). In the case of a Borrowing
pursuant to Section 2.02(a), the Administrative Agent will make Loans available
to the Borrower by promptly transferring by wire transfer the amounts so
withdrawn by 3:00 p.m. New York City time, on the requested date of such Loan,
to an account of the Borrower designated by the Borrower in the applicable
Request for Loan.

(d) Type of Loans. Subject to Article VIII, (i) each Borrowing pursuant to
Section 2.02(a) shall be constituted entirely of Base Rate Loans or of
Eurodollar Loans as the Borrower may request in accordance herewith and
(ii) each Borrowing deemed to have been made pursuant to Section 2.02(b) shall
be constituted entirely of Eurodollar Loans. If the provisions of Article VIII
prohibit the making of Eurodollar Loans, each Borrowing made or deemed to be
made hereunder shall be constituted entirely of Base Rate Loans.

 

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(e) Minimum Amounts; Limitation on Number of Borrowings. Each Borrowing shall be
in an aggregate amount of $1,000,000 or a larger multiple of $1,000,000;
provided that a Borrowing deemed to be made pursuant to Section 2.02(b) may be
in an aggregate amount that is required to finance the reimbursement of an L/C
Disbursement as contemplated by Section 2.05(f). Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of five Eurodollar Borrowings outstanding that were
made pursuant to Section 2.02(a).

Section 2.03 [Intentionally Omitted].

Section 2.04 Requests for Borrowings.

(a) Notice by the Borrower. To request a Borrowing pursuant to Section 2.02(a),
the Borrower shall notify the Administrative Agent of such request by telephone
not later than 11:00 a.m., New York City time, on the day of the proposed
Borrowing. Each such telephonic request for a Loan shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a Request for Loan signed by the Borrower. In connection with a deemed
Loan made pursuant to Section 2.02(b), the Borrower shall be deemed to have
furnished a timely, duly completed Request for Loan.

(b) Content of Request for Loans. Each telephonic request for a Loan and written
Request for Loan shall specify the following information in compliance with
Section 2.02:

 

  (i) the aggregate amount of the requested Borrowing;

 

  (ii) the date of such Borrowing, which shall be a Business Day;

 

  (iii) whether such Borrowing is to be an Base Rate Borrowing or a Eurodollar
Borrowing; and

 

  (iv) the location and number of the Borrower’s account to which funds are to
be disbursed.

(c) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of a Request for Loan in accordance with this Section, the
Administrative Agent shall advise each Bank of the details thereof and of the
amount of such Bank’s Loan to be made as part of the requested Borrowing.

(d) Failure to Elect. If no election as to the Type of a Borrowing is specified,
then the requested Borrowing shall be a Base Rate Borrowing.

 

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Section 2.05 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrower
may request any Fronting Bank to issue, and such Fronting Bank shall issue, at
any time and from time to time during the period commencing on the Closing Date
and ending on the date that is five Business Days prior to the Maturity Date,
Letters of Credit for its own account in such form as is acceptable to each of
the Administrative Agent and such Fronting Bank in its reasonable determination
(including, without limitation, “auto-renewal” letters of credit); provided that
such Fronting Bank shall not be under any obligation to issue any Letter of
Credit if the issuance of such Letter of Credit would violate one or more
policies of such Fronting Bank generally applicable to the issuance of letters
of credit. All Letters of Credit shall be denominated in Dollars except for any
Maritza Letter of Credit, which shall be denominated in Euros. All Letters of
Credit issued hereunder by the Fronting Banks shall be issued for the account of
the Borrower as the named account party thereon, provided that Letters of Credit
may, in addition to showing the Borrower as account party, show any Subsidiary
of the Borrower as a favoree under such Letter of Credit. Letters of Credit
issued hereunder shall constitute utilization of the Funding Amounts.
Concurrently with the issuance of a Maritza Letter of Credit, a corresponding
amount equal to the face amount of such Maritza Letter of Credit held in the
Credit-Linked Deposit Account will be converted by the Administrative Agent (in
accordance with Section 1.03) into Euros at the then prevailing exchange rate
(the “ Fixed Exchange Rate ”). To the extent a Maritza Letter of Credit is
reduced or returned by the beneficiary thereunder, or drawn and reimbursed by
the Borrower pursuant to the provisions hereof, a corresponding amount of Euros
in the Credit-Linked Deposit Account will be converted to Dollars by the
Administrative Agent (in accordance with Section 1.03) at the then prevailing
exchange rate. The Administrative Agent shall provide notice to the Borrower,
within two Business Days of such reduction, return or reimbursement, as
applicable, of the Dollar amount resulting from such conversion as well as a
calculation of the product of such amount of Euros multiplied by the Fixed
Exchange Rate. To the extent such Dollar amount is less then the product of such
amount of Euros multiplied by the Fixed Exchange Rate, the Borrower shall
deposit, within two Business Days of such notice from the Administrative Agent,
Dollars into the Credit-Linked Deposit Account equal to such deficit. To the
extent such product is greater than such Dollar amount, within two Business Days
of such reduction, return or reimbursement as applicable, the Administrative
Agent shall withdraw such excess from the Credit-Linked Deposit Account and pay
such excess to the Borrower.

(b) Notice of Issuance, Amendment, Renewal or Extension. To request the issuance
of a Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
applicable Fronting Bank) to the applicable Fronting Bank and the Administrative
Agent (other than the Letters of Credit requested prior to the date hereof, not
later than 11:00 a.m. on the fourth Business Day preceding the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be

 

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a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (d) of this Section), whether or not such Letter of
Credit is to be a Maritza Letter of Credit, the amount of such Letter of Credit
(which shall be denominated in Euros in the case of a Maritza Letter of Credit),
the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the applicable Fronting Bank, the Borrower also shall submit a
letter of credit application on such Fronting Bank’s standard form in connection
with any request for a Letter of Credit. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, any Fronting Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
Each Fronting Bank shall promptly notify the Administrative Agent of any Letters
of Credit issued, amended, renewed or extended by it hereunder and shall deliver
a report (in form and substance reasonably acceptable to the Administrative
Agent) within five Business Days following the end of each month after the
Closing Date detailing its letter of credit activity under this Agreement.

(c) Limitations on Amounts. A Letter of Credit shall be issued, amended, renewed
or extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the
aggregate Total Exposure shall not exceed the total Funding Amounts and (ii) the
L/C Exposure shall not exceed the balance of the Credit-Linked Deposit Account
(excluding any portion of the Credit-Linked Deposit Account attributable to
interest).

(d) Expiration Date. Each Letter of Credit (other than a Maritza Letter of
Credit) shall expire (or provide that the applicable Fronting Bank shall have
the option to refuse to renew such Letter of Credit) at or prior to the close of
business on the earlier of (i) the date twelve months after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, twelve months after the then-current expiration date of such Letter of
Credit, so long as such renewal or extension occurs no earlier than three months
prior to such then-current expiration date) and (ii) the date that is five
Business Days prior to the Maturity Date. Each Maritza Letter of Credit shall
expire at or prior to the close of business on the date that is five Business
Days prior to the Maturity Date.

(e) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) by any Fronting Bank, and
without any further action on the part of such Fronting Bank or the Banks, such
Fronting Bank hereby grants to each Bank, and each Bank hereby acquires from
such Fronting Bank, a participation in such Letter of Credit equal to such
Bank’s Applicable Percentage of the aggregate amount available to be drawn under
such Letter of Credit. Each Bank acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or, subject to
Section 2.01(f), reduction or termination of the Funding Amounts.

 

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In consideration and in furtherance of the foregoing, each Bank hereby
absolutely and unconditionally authorizes and directs the Administrative Agent
to withdraw from the Credit-Linked Deposit Account (and debit such Bank’s
Credit-Linked Sub-Account in the amount of) such Bank’s Applicable Percentage of
each L/C Disbursement made by any Fronting Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (f) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason (it
being understood and agreed that each Bank’s obligations in respect of
participations in Letters of Credit shall be payable solely from, and limited
to, such Bank’s Credit-Linked Deposit).

(f) Reimbursement. (i) If any Fronting Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such Fronting Bank
in respect of such L/C Disbursement by paying to the Administrative Agent an
amount equal to such L/C Disbursement in the currency in which the applicable
Letter of Credit is denominated on the first Business Day (other than with
respect to any Maritza Letter of Credit which shall be governed by the
provisions set forth in clause (ii) of this subsection (f)) after such drawing.
If the Borrower fails to make such payment within a Business Day of when due,
the Administrative Agent shall reimburse the applicable Fronting Bank for such
L/C Disbursement with funds from the Credit-Linked Deposits and the obligations
of the Borrower to reimburse such Fronting Bank shall be converted into a Loan
payable to the Administrative Agent for the account of the Banks in accordance
with Section 2.02.

(ii) Notwithstanding any provision herein to the contrary, if any Fronting Bank
shall receive a demand for payment in accordance with Section 2.05(h) hereof
with respect to any Maritza Letter of Credit, such Fronting Bank shall notify
the Administrative Agent and the Borrower within one Business Day of receipt of
such notice (which notice sets forth the date of payment). The Borrower must
notify the Administrative Agent and such Fronting Bank whether or not it will
reimburse such Fronting Bank within one Business Day after it receives such
notice. If the Borrower elects to reimburse such Fronting Bank, the Borrower
shall be obligated to reimburse such Fronting Bank on the same Business Day that
such Fronting Bank notified the Borrower as the date of payment.

(iii) Promptly following receipt by the Administrative Agent of any payment from
the Borrower pursuant to this subsection (f), the Administrative Agent shall
distribute such payment to the applicable Fronting Bank or, to the extent that
amounts have been withdrawn (and credited to each Bank’s Credit-Linked
Sub-Account in the amount of such Bank’s Applicable Percentage of such deposit)
from the Credit-Linked Deposit Account to make any payment pursuant to this
paragraph to reimburse such Fronting Bank, then such payment shall be deposited
in the Credit-Linked Deposit Account.

If any unreimbursed L/C Disbursement resulting in a withdrawal from the
Credit-Linked Deposits Accounts as provided in the preceding paragraph shall be
subsequently reimbursed or the Loan deemed issued in respect of such
unreimbursed L/C Disbursement is repaid other than on the last day of any
Interest Period for Credit-Linked Deposits, the

 

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Administrative Agent shall invest the amount so reimbursed in overnight or
short-term cash equivalent investments until the end of such Interest Period and
the Borrower shall pay to the Administrative Agent, upon the Administrative
Agent’s request therefor, the amount, if any, by which the interest accrued on a
like amount of the Credit-Linked Deposits at the Adjusted LIBO Rate shall exceed
the interest earned through the investment of the amount so reimbursed for the
period from the date of such reimbursement through the end of such Interest
Period, as determined by the Administrative Agent (such determination to be
conclusive absent manifest error) and set forth in the request for payment
delivered to the Borrower. In the event the Borrower shall fail to pay any
amount due under this paragraph, the interest payable by the Administrative
Agent to the Banks on their Credit-Linked Deposits under Section 2.01(d) shall
be correspondingly reduced and the Banks shall without further act succeed,
ratably in accordance with their Applicable Percentages, to the rights of the
Administrative Agent with respect to such amount.

(g) Obligations Absolute. The Borrower’s obligation to reimburse L/C
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by any Fronting Bank under a Letter of Credit against
presentation of a draft or other document that does not comply strictly with the
terms of such Letter of Credit, and (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of the
Borrower’s obligations hereunder.

Neither the Administrative Agent, the Banks, the Fronting Banks, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit by any
Fronting Bank or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of such Fronting Bank; provided that the foregoing
shall not be construed to excuse such Fronting Bank from liability to the
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
such Fronting Bank’s gross negligence or willful misconduct when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that:

(i) a Fronting Bank may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit without
responsibility for

 

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further investigation, regardless of any notice or information to the contrary,
and may make payment upon presentation of documents that appear on their face to
be in substantial compliance with the terms of such Letter of Credit;

(ii) a Fronting Bank shall have the right, in its sole discretion, to decline to
accept such documents and to make such payment if such documents are not in
strict compliance with the terms of such Letter of Credit; and

(iii) this sentence shall establish the standard of care to be exercised by any
Fronting Bank when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof (and the parties hereto
hereby waive, to the extent permitted by applicable law, any standard of care
inconsistent with the foregoing).

(h) Disbursement Procedures. Each Fronting Bank shall, within a reasonable time
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Each Fronting Bank shall promptly
after such examination notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether such
Fronting Bank has made or will make an L/C Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse such Fronting Bank and the Banks with
respect to any such L/C Disbursement.

(i) Interim Interest. If any Fronting Bank shall make any L/C Disbursement,
then, unless the Borrower shall reimburse (including through a Borrowing or a
deemed Borrowing of Loans) such L/C Disbursement in full on the date such L/C
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such L/C Disbursement is made to but excluding
the date that the Borrower reimburses such L/C Disbursement, as provided in
Section 2.12(c). Interest accrued pursuant to this paragraph shall be for the
account of such Fronting Bank, except that interest accrued on and after the
date of payment from the Credit-Linked Deposit of any Bank to reimburse such
Fronting Bank shall be for the account of such Bank to the extent of such
payment.

Section 2.06 [Intentionally Omitted].

Section 2.07 Interest Elections.

(a) Elections by the Borrower. The Loans constituting each Borrowing initially
shall be (i) of the Type specified in the applicable Request for Loan in the
case of Loans made pursuant to Section 2.02(a) and (ii) Eurodollar Loans in the
case of Loans deemed made pursuant to Section 2.02(b). Thereafter, the Borrower
may elect to convert such Borrowing to a Borrowing of a different Type or to
continue such Borrowing as a Borrowing of the same Type.

 

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(b) Notice of Elections. To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
11:00 a.m., New York City time, on the day of the proposed election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request substantially in the form of Exhibit F hereto and
signed by the Borrower.

(c) Content of Interest Election Requests. Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clause (iii) of this paragraph shall
be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day; and

(iii) whether the resulting Borrowing is to be an Base Rate Borrowing or a
Eurodollar Borrowing.

(d) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of an Interest Election Request, the Administrative Agent shall advise
each Bank of the details thereof and of such Bank’s portion of each resulting
Borrowing.

(e) Failure to Elect; Events of Default. If the Borrower fails to deliver a
timely and complete Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period therefor, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to a Base Rate Borrowing. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Banks, so notifies
the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Borrowing shall be converted to a Base
Rate Borrowing at the end of the applicable Interest Period thereof.

Section 2.08 Termination and Reduction of the Funding Amounts.

(a) Scheduled Termination. Unless previously terminated, the Funding Amounts
shall be reduced to zero on the Maturity Date.

 

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(b) Voluntary Termination or Reduction. The Borrower may at any time terminate,
or from time to time reduce, the Funding Amounts; provided that (i) each
reduction of the Funding Amounts pursuant to this Section shall be in an amount
that is $1,000,000 or a larger multiple of $1,000,000 (or, if less, the entire
remaining aggregate amount of the Funding Amounts) and (ii) the Borrower shall
not terminate or reduce the Funding Amounts if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.10, the Total
Exposure of all of the Banks would exceed the total Funding Amounts.

(c) Notice of Voluntary Termination or Reduction. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Funding Amounts
under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the affected Banks of the contents thereof.
Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Funding Amounts
delivered by the Borrower may state that such notice is conditioned upon the
issuance of securities or the effectiveness of other credit facilities, in which
case such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied.

Section 2.09 Repayment of Loans; Evidence of Debt.

(a) Repayment. The Borrower hereby unconditionally promises to pay the to the
Administrative Agent for account of the Banks the outstanding principal amount
of the Loans on the Maturity Date.

(b) Maintenance of Records by Banks. Each Bank shall maintain in accordance with
its usual practice records evidencing the indebtedness of the Borrower to such
Bank resulting from each Loan made or deemed made by such Bank, including the
amounts of principal and interest payable and paid to such Bank from time to
time hereunder.

(c) Manner of Payment. Prior to any repayment or prepayment of any Borrowings
hereunder (including, without limitation, prepayments pursuant to Section 2.10),
the Borrower shall select the Borrowings to be paid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such selection in
accordance with Section 2.10(b). If the Borrower fails to make a timely
selection of the specific Borrowings to be repaid or prepaid, such payment shall
be applied ratably to all outstanding Loans.

(d) Maintenance of Records by the Administrative Agent. The Administrative Agent
shall maintain records in which it shall record (i) the amount of each Loan made
hereunder and Type thereof, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Bank hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
for account of the Bank’s and each Bank’s share thereof.

 

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(e) Effect of Entries. The entries made in the records maintained pursuant to
paragraph (b) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Bank or the Administrative Agent to maintain such records or any
error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.

(f) Promissory Notes. Any Bank may request that Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Bank a promissory note payable to such Bank (or, if requested by
such Bank, to such Bank and its registered assigns) and in substantially the
same form as Exhibit A.

Section 2.10 Prepayment of Loans.

(a) Optional Prepayments. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part subject to the
requirements of this Section 2.10.

(b) Notices, Etc. The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder, under
Section 2.10(a), not later than 11:00 a.m. New York City time, three Business
Days before the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection with a conditional notice of termination of the Funding Amounts as
contemplated by Section 2.08, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.08. Promptly
following receipt of any such notice relating to a Borrowing, the Administrative
Agent shall advise the relevant Banks of the contents thereof. Each partial
prepayment of any Borrowing shall be in an aggregate amount of $1,000,000 or
multiple of $1,000,000 in excess thereof, except as necessary to fully repay
such Borrowing. Each prepayment of a Borrowing shall be applied ratably to the
Banks included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.12.

Section 2.11 Fees.

(a) (i) The Borrower agrees to pay to the Administrative Agent for the account
of each Bank a fee (the “ Applicable Margin Fee ”) accruing at a rate per annum
equal to the Applicable Margin (subject to the last sentence of clause
(iii) below) on the daily amount of the Credit-Linked Deposit of such Bank
during the period from and including the date hereof to but excluding the date
on which each of the Funding Amounts of all of the Banks and the L/C Exposure
have been reduced to zero.

(ii) In addition, the Borrower agrees to pay to the Administrative Agent for the
account of each Bank an additional fee (the “ LIBOR Maintenance Fee ”), accruing
at the rate of 0.15% per annum, on the daily amount of the Credit-Linked Deposit
of such Bank during

 

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the period from and including the date hereof to but excluding the date on which
each of the Funding Amounts of all of the Banks and the L/C Exposure have been
reduced to zero.

(iii) On each Fee Payment Date (as defined below), any difference between the
Adjusted LIBO Rate and the sum of the Return on Deposits and the LIBOR
Maintenance Fee for the applicable period resulting from Euro denominated
Credit-Linked Deposits which earn a return based on EURIBOR (as determined by
the Administrative Agent and communicated to the Borrower in the invoice
referred to in clause (iv) below) shall be considered the “ EURIBOR Differential
Rate ”. If the sum of the Return of Deposits and the LIBOR Maintenance Fee is
less than the Adjusted LIBO Rate, then the Borrower agrees to pay to the
Administrative Agent for the account of each Bank a fee accruing at a rate per
annum equal to the EURIBOR Differential Rate on the daily amount of the
Credit-Linked Deposit of such Bank during such period. If the sum of the Return
on Deposits and the LIBOR Maintenance Fee is greater than the Adjusted LIBO
Rate, then the Applicable Margin (for purposes of clause (i) above only) shall
be reduced by the amount of the EURIBOR Differential Rate.

(iv) The fees payable under this Section 2.11(a) accrued to but excluding the
last day of each Interest Period for Credit-Linked Deposits shall be invoiced to
the Borrower by the Administrative Agent within three Business Days following
the last day of each such Interest Period and shall be payable on the second
Business Day following the date of such invoice, and on the date on which each
of the Funding Amounts of all of the Banks and the L/C Exposure have been
reduced to zero (each such payment date, a “ Fee Payment Date ”). All such fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). All amounts payable under this Section 2.11(a) with respect to the
daily amount of the Credit-Linked Deposit of a Bank shall be calculated based on
the actual amount of Dollars comprising such Credit-Linked Deposit and the
Dollar-equivalent of the actual amount of Euros comprising such Credit-Linked
Deposit (calculated by the Administrative Agent using the Fixed Exchange Rate
applicable to such Euros).

(b) The Borrower agrees to pay to each Fronting Bank a fronting fee, which shall
accrue at the rate of 0.125% per annum or such other rate or rates per annum
separately agreed upon between the Borrower and the applicable Fronting Bank, on
the average daily amount of the L/C Exposure (excluding any portion thereof
attributable to unreimbursed L/C Disbursements) during the period from and
including the Closing Date to but excluding the date on which each of the
Funding Amounts of all of the Banks and the L/C Exposure have been reduced to
zero, as well as such Fronting Bank’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Fronting fees accrued to but excluding each Quarterly
Date shall be payable on such Quarterly Date; provided that all such accrued
fees shall be payable on the date on which the Funding Amounts of all of the
Banks are reduced to zero and any such fees accruing after the such date shall
be payable on demand. Any other fees payable to any Fronting Bank pursuant to
this

 

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paragraph shall be payable within 10 days after demand. All fronting fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).

(c) The Borrower agrees to pay to the Administrative Agent for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.

(d) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the applicable Fronting
Bank, in the case of fees payable to it) for distribution, in the case of fees
payable under Section 2.11(a), to the Banks entitled thereto. Fees paid shall
not be refundable under any circumstances.

Section 2.12 Interest.

(a) Loans. The Loans constituting each (i) LIBOR Borrowing shall bear interest
at a rate per annum equal to the Adjusted LIBO Rate plus the Applicable Margin
and (ii) Base Rate Borrowing shall bear interest at the Base Rate plus the
Applicable Margin.

(b) Default Interest. Upon the occurrence and during the continuance of an Event
of Default described in Section 6.01(a) or an Event of Default described in
Section 6.01(g) or 6.01(h) with respect to the Borrower, the Borrower shall pay
interest on (x) (i) the outstanding principal amount of each Base Rate Loan
owing to each Bank, payable 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 Base Rate Loan
pursuant to Section 2.12(a) above and (ii) to the fullest extent permitted by
law, the amount of any interest that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, at a rate per annum
equal to 2% per annum above the rate per annum required to be paid on the Base
Rate Loans on which such interest has accrued pursuant to Section 2.12(a) above,
(y)(i) the outstanding principal amount of each Eurodollar Loan owing to each
Bank payable on demand, at a rate per annum equal at all times to a rate per
annum equal to the higher of (i) the sum of 2% plus the Applicable Margin
applicable to such Loan plus the Adjusted LIBO Rate applicable to such
Eurodollar Loan and (ii) the sum of 2% plus the Applicable Margin applicable to
such Loan plus the quotient obtained (rounded upward, if necessary, to the next
higher  1/100th of 1%) by dividing (x) the average (rounded upward, if
necessary, to the next higher  1/ 16th of 1%) of the respective rates per annum
at which one day (or, if such amount due remains unpaid more than three Business
Days, then for such other period of time not longer than three months as the
Administrative Agent may select) deposits in dollars in an amount approximately
equal to such overdue payment due to the Reference Dealers are offered to the
Reference Dealers in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus the Reserve Percentage (or, if
the circumstances described in clause (a) or (b) of Section 8.01 shall exist, at
a rate per annum equal to the sum of 2% plus the relevant rate applicable to
Base Rate Loans) (the “ Eurodollar Default Rate ”) and (ii) to the fullest
extent permitted by law, the amount of any interest that is not paid when due,
from the date such amount shall be due until such amount shall be paid in full,
at a rate per

 

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annum equal to the Eurodollar Default Rate for the Eurodollar Loans on which
such interest has accrued pursuant to Section 2.12(a) above and (z) in the case
of a Credit-Linked Deposit, the rate of fees payable by Borrower shall be
increased by 2% from the date the Required Banks shall so elect until such Event
of Default has been cured or waived by the Required Banks, provided that accrual
at the rate provided for hereunder shall commence automatically upon occurrence
of an Event of Default of the type specified in clauses (a) or (h) of
Section 8.01.

(c) Payment of Interest. Accrued interest on each Loan shall be payable in
arrears on the last day of each Interest Period for such Loan and upon
termination of the Funding Amounts; provided that (i) interest accrued pursuant
to paragraph (b) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of a Loan
prior to the Maturity Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Borrowing prior to the
end of the Interest Period therefor, accrued interest on such Borrowing shall be
payable on the effective date of such conversion.

(d) Computation. All interest hereunder shall be computed on the basis of a year
of 360 days (or 365 or 366 days, as the case may be, in the case of Base Rate
Loans based on the Base Rate) and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Adjusted LIBO Rate or Base Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

Section 2.13 [Intentionally Omitted].

Section 2.14 [Intentionally Omitted].

Section 2.15 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan or the reduction of any Credit-Linked Deposit
other than on the last day of any Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow, convert, continue or prepay any Loan on the date specified in
any notice delivered pursuant hereto, (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 9.16 or (e) the revocation of
any notice of prepayment pursuant to Section 2.10(b), then, in any such event,
the Borrower shall compensate (within 15 days following a demand therefore) each
applicable Bank, each applicable Fronting Bank, or the Administrative Agent, as
applicable, for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan or a Credit-Linked Deposit, such loss, cost or expense
to any applicable Bank, each applicable Fronting Bank or the Administrative
Agent may, at the option of such party, be deemed to include an amount
determined by such Bank, each applicable Fronting Bank or the Administrative
Agent, as the case may be, to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan or on
such

 

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Credit-Linked Deposit had such event not occurred, at the Adjusted LIBO Rate
that would have been applicable to such Loan or such Credit-Linked Deposit, for
the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Loan), over (ii) the amount of interest which would accrue on such principal
amount for such period at the interest rate which such Bank or such Fronting
Bank, as the case may be, would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other banks
in the Eurodollar market. A certificate of any Bank setting forth any amount or
amounts that such Bank is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. In the
event the Borrower shall fail to pay any amount due to any Fronting Bank under
this Section, the interest payable by the Administrative Agent to the Banks on
their Credit-Linked Deposits under Section 2.01(d) shall be correspondingly
reduced and the Banks shall without further act succeed, ratably in accordance
with their Applicable Percentages, to the rights of such Fronting Bank respect
to such amount.

Section 2.16 [Intentionally Omitted].

Section 2.17 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) Payments by the Borrower. The Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest, fees or reimbursement
of L/C Disbursements, or under Section 2.15, 8.03 or 8.04, or otherwise) or
under any Note (except to the extent otherwise provided therein) prior to 12:00
noon, New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices referred to in Section 9.01 except as otherwise expressly provided
in this Agreement or any Note and except payments to be made directly to any
Fronting Bank as expressly provided herein and payments pursuant to Sections
2.15, 8.03, and 8.04, which shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for account of any other Person to the appropriate recipient (or will deposit
such payments in the Credit-Linked Deposit Account, as applicable) promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder or under any other Note (except to the extent otherwise provided
therein) shall be made in Dollars.

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, interest and fees then due hereunder, such funds shall be applied
(i) first, to pay interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of

 

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interest and fees then due to such parties, and (ii) second, to pay principal
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of principal then due to such parties.

(c) Sharing of Payments by Banks. If any Bank shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in L/C Disbursements
resulting in such Bank receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in L/C Disbursements and
accrued interest thereon then due than the proportion received by any other
Bank, then the Bank receiving such greater proportion shall purchase (for cash
at face value) participations in the Loans and participations in L/C
Disbursements of other Banks to the extent necessary so that the benefit of all
such payments shall be shared by the Banks ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in L/C Disbursements; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Bank as consideration for the assignment
of or sale of a participation in any of its Loans or participations in L/C
Disbursements to any assignee or participant, other than to any Subsidiary or
Affiliate of the Borrower (as to which the provisions of this paragraph shall
apply). The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Bank acquiring a participation
pursuant to the foregoing arrangements may exercise against the Borrower rights
of set-off and counterclaim with respect to such participation as fully as if
such Bank were a direct creditor of the Borrower in the amount of such
participation.

(d) Presumptions of Payment. Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for account of the Banks or the Fronting Banks hereunder
that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Banks or
the Fronting Banks, as the case may be (or, to the extent provided herein,
deposit in the Credit-Linked Deposit Account) the amount due. In such event, if
the Borrower has not in fact made such payment, then each of the Banks or the
Fronting Banks, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Bank
or such Fronting Bank (or, if such amount shall have been deposited in the
Credit-Linked Deposit Account, each Bank authorizes the Administrative Agent to
withdraw such amount from the Credit-Linked Deposit Account), and to pay
interest thereon, for each day from and including the date such amount is
distributed to it or deposited in the Credit-Linked Deposit Account and credited
to its Credit-Linked Sub-Account to but excluding the date of payment to or
recovery by the Administrative Agent, at the Federal Funds Rate.

 

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(e) Certain Deductions by the Administrative Agent. If any Bank shall fail to
make any payment required to be made by it pursuant to Section 2.17(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for account of such Bank to satisfy such Bank’s obligations under such
Sections until all such unsatisfied obligations are fully paid.

Section 2.18 Mitigation Obligations.

If any Bank requests compensation under Section 8.03, or if the Borrower is
required to pay any additional amount to any Bank or any Governmental Authority
for account of any Bank pursuant to Section 8.04, then such Bank shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates (or, in the case of
Section 8.04(c), change the composition of the underlying obligations or
securities in which the Credit-Linked Deposits are invested), if, in the
judgment of such Bank, such designation, assignment or change (i) would
eliminate or reduce amounts payable pursuant to Section 8.03 or 8.04, as the
case may be, in the future and (ii) would not subject such Bank to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Bank. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Bank in connection with any such designation or assignment.

Section 2.19 Increase in Credit Facility.

(a) The Borrower may, at any time and from time to time prior to the Maturity
Date, by notice to the Administrative Agent, request one or more increases in
the Funding Amounts (each, a “ Commitment Increase ”) in an aggregate amount up
to $100,000,000, to be effective as of a date that is at least 90 days prior to
the scheduled Maturity Date then in effect (each, a “ Increase Date ”) as
specified in the related notice to the Administrative Agent; provided, however,
that on the date of any request by the Borrower for a Commitment Increase and on
the related Increase Date, the applicable conditions set forth in Section 3.02
and in clause (d) of this Section 2.19 shall be satisfied, provided that no Bank
shall have any obligation to participate in any Commitment Increase.

(b) The Administrative Agent shall promptly notify the Banks of any request by
the Borrower for a Commitment Increase, which notice shall include (i) the
proposed amount of such requested Commitment Increase, (ii) the proposed
Increase Date and (iii) the date by which Banks wishing to participate in the
Commitment Increase must commit to an increase in the amount of their respective
Funding Amounts (the “ Increase Commitment Date ”). Each Bank that desires to
participate in the requested Commitment Increase shall, in its sole discretion,
give written notice to the Administrative Agent on or prior to the applicable
Increase Commitment Date of the amount by which it desires to increase its
Funding Amount.

(c) The Borrower may extend offers to one or more Eligible Assignees to
participate in any portion of the requested Commitment Increase; provided,
however, that the

 

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Funding Amount of each such Eligible Assignee shall be in an amount equal to at
least $1,000,000. Promptly following the applicable Increase Commitment Date,
the Administrative Agent shall notify the Borrower as to the amount, if any, by
which the Banks and any Eligible Assignees are willing to participate in the
requested Commitment Increase. In all cases (including if the aggregate amount
by which the Banks and any Eligible Assignees are willing to participate in the
requested Commitment Increase on any such Increase Date exceeds the amount of
the requested Commitment Increase), the requested Commitment Increase shall be
allocated among the Banks and any Eligible Assignees willing to participate
therein in such amounts as are agreed between the Borrower and the
Administrative Agent.

(d) On the applicable Increase Date, each Eligible Assignee that accepts an
offer to participate in a requested Commitment Increase in accordance with
Section 2.19(c) shall become a Bank party to this Agreement as of the applicable
Increase Date and the Funding Amount of each Bank participating in such
Commitment Increase shall be increased by the amount allocated to such Bank
pursuant to the last sentence of Section 2.19(c)) as of such Increase Date;
provided, however, that the Administrative Agent shall have received on or
before the applicable Increase Date the following, each dated such date:

(i) (A) certified copies of resolutions of the Board of Directors (or a
committee thereof) of the Borrower approving the applicable Commitment Increase
and the corresponding modifications to this Agreement and (B) an opinion of
counsel for Borrower (which may be an opinion of in-house counsel), each in form
and substance reasonably satisfactory to the Administrative Agent;

(ii) an assumption agreement from each Eligible Assignee, if any, in form and
substance satisfactory to the Borrower and the Administrative Agent (each an “
Assumption Agreement ”), duly executed by such Eligible Assignee, the
Administrative Agent and the Borrower; and

(iii) confirmation from each Bank of the increase in the amount of its Funding
Amount in a writing satisfactory to the Borrower and the Administrative Agent.

On the applicable Increase Date, upon fulfillment of the conditions set forth in
the immediately preceding sentence of this Section 2.19(d) and the conditions
set forth in Section 3.02, (x) the Administrative Agent shall notify the
existing Banks and any new Banks participating in such Commitment Increase and
the Borrower, on or before 11:00 A.M. (New York City time), by telecopier or
telex, of the occurrence of the applicable Commitment Increase to be effected on
the related Increase Date, (y) each participating Bank shall remit its
additional Funding Amount (the “ Additional Credit-Linked Deposits ”) to the
Administrative Agent for deposit into the Credit-Linked Deposit Account and
(z) the Administrative Agent shall record in the Register maintained by the
Administrative Agent pursuant to Section 9.06(f) the relevant information with
respect to each existing Bank and each new Bank participating in such Commitment
Increase on such date.

 

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ARTICLE III

CONDITIONS

Section 3.01 Closing.

The closing hereunder shall occur when all the following conditions have been
satisfied:

(a) The Borrower shall have paid all accrued fees of the Administrative Agent,
the Lead Arranger and the Banks and all accrued expenses of the Administrative
Agent (including, without limitation, all fees and expenses of counsel to the
Administrative Agent payable pursuant to Section 9.03);

(b) The Agent shall have received (i) an opinion of the Assistant General
Counsel of the Borrower, substantially in the form of Exhibit B-1 hereto and
(ii) Shearman & Sterling, LLP, special counsel for the Borrower, substantially
in the form of Exhibit B-2, each dated as of the Closing Date and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;

(c) The Administrative Agent shall have received evidence, satisfactory to it,
in the form of pro forma calculations, that the issuance of, and L/C Drawings
under, the Letters of Credit under this Agreement and the making of Borrowings
under this Agreement are permitted under the terms of the Debt of the Borrower
outstanding on the Closing Date;

(d) The Administrative Agent shall have received copies of the resolutions of
the Board of Directors of the Borrower authorizing the execution, delivery and
performance by the Borrower of this Agreement, certified by a duly authorized
officer of the Borrower (which certificate shall state that such resolutions are
in full force and effect on the Closing Date);

(e) The Administrative Agent shall have received certified copies of all
approvals, authorizations or consents of, or notices to or registrations with,
any governmental body or agency required for the Borrower, if necessary, to
enter into this Agreement to which it is a party;

(f) The Administrative Agent shall have received a certificate of a duly
authorized officer of the Borrower certifying the names and true signatures of
the officers of the Borrower authorized to sign this Agreement and the other
documents to be delivered by the Borrower;

(g) The Administrative Agent shall have received a certificate signed by a duly
authorized officer of the Borrower dated the Closing Date, to the effect that:
(i) the representations and warranties contained in Article IV hereof are true
and correct in all material respects (or to the extent qualified by materiality,
true and correct) on and as of the Closing Date

 

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as though made on and as of such date; (ii) no Default has occurred and is
continuing or would result from the issuance of the Letters of Credit requested
by the Borrower to be issued on such date and the Borrowings requested by the
Borrower to be made on such date, and (iii) confirming compliance as to the
matters set forth in Section 4.15;

(h) The Administrative Agent shall have received a certificate signed by a duly
authorized officer of the Borrower to the effect that the execution, delivery
and performance by the Borrower of this Agreement is within the Borrower’s
corporate or other organizational powers, have been duly authorized by all
necessary corporate or other organizational action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation (or certificate of formation,
as applicable) or by-laws (or other organizational documents, as applicable) of
the Borrower or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or any of its Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect or result in the
creation or imposition of any Lien on any asset of the Borrower;

(i) The Administrative Agent shall have received all documents it may reasonably
request relating to the existence of the Borrower, the corporate or other
organizational authority for and the validity of this Agreement, and any other
matters relevant hereto, all in form and substance satisfactory to the
Administrative Agent.

The Administrative Agent shall promptly notify the Borrower and the Banks of the
Closing Date, and such notice shall be conclusive and binding on all parties
hereto.

Section 3.02 Extension of Credit.

The obligation of each Bank to make a Loan on the occasion of each Borrowing
under Section 2.02(a) and the obligation of any Fronting Bank to issue a Letter
of Credit on the occasion of each request therefor by the Borrower shall in each
case be subject to the satisfaction of the following conditions:

(a) the fact that, immediately after such Extension of Credit, after giving
effect to all direct and indirect applications of the proceeds of such Extension
of Credit made substantially simultaneously with the extension thereof, (i) the
aggregate Total Exposure of the Banks will not exceed the total Funding Amounts
and (ii) the L/C Exposure will not exceed the balance of the Credit-Linked
Deposit Account (excluding any portion of the Credit-Linked Deposit Account
attributable to interest);

(b) the fact that the making of such Borrowings or issuance of such Letters of
Credit under this Agreement (as well as any potential L/C Drawings thereunder or
deemed Loans made in respect thereof) are permitted under the terms of the Debt
of the Borrower outstanding as of the date of such Extension of Credit;

 

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(c) the fact that, immediately before and after such Extension of Credit, no
Default or Event of Default shall have occurred and be continuing;

(d) the fact that the representations and warranties of the Borrower contained
in this Agreement shall be true and correct in all material respects (or to the
extent qualified by materiality, true and correct) on and as of the date of such
Extension of Credit;

(e) for each issuance of a Letter of Credit, the Borrower shall have provided
the information required by Section 2.05(b);

(f) for each Borrowing pursuant to Section 2.02(a), the Borrower shall have
provided a duly completed Request for Loan.

Each Extension of Credit hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Extension of Credit as to the facts
specified in clauses (a) through (f) of this Section.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants that:

Section 4.01 Corporate Existence and Power.

Borrower is a corporation (or limited liability company, as applicable) duly
incorporated (or formed, as applicable), validly existing and in good standing
under the laws of the jurisdiction of its incorporation (or formation) and has
all corporate or other organizational powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.

Section 4.02 Corporate and Governmental Authorization and Filings; No
Contravention.

The execution, delivery and performance by the Borrower of this Agreement are
within the Borrower’s corporate or other organizational powers, have been duly
authorized by all necessary corporate or other organizational action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Borrower or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower or any of its Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect or result in the
creation or imposition of any Lien on any asset of the Borrower.

 

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Section 4.03 Compliance with Laws.

The Borrower is and each of its Subsidiaries are in compliance with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except for any non-compliance
that could not reasonably be expected to have a Material Adverse Effect.

Section 4.04 Binding Effect.

This Agreement constitutes a valid and binding agreement of the Borrower
enforceable in accordance with its terms.

Section 4.05 Financial Information.

(a) The consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of December 31, 2004 and the related consolidated statements of
operations and cash flows for the fiscal year then ended, reported on by
Deloitte & Touche and set forth in the Borrower’s Annual Report on Form 10-K, a
copy of which has been delivered to each of the Banks, fairly present in all
material respects, in conformity with generally accepted accounting principles,
the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.

(b) Except for Disclosed Matters, since December 31, 2004 there has been no
material adverse change in the business, financial position, results of
operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.

Section 4.06 Litigation.

Except for Disclosed Matters, there is no action, suit, investigation,
litigation or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could have a
Material Adverse Effect or which in any manner draws into question the legality,
validity or enforceability of this Agreement, and there shall have been no
change in the status of, or in the financial effect on the Borrower or its
Subsidiaries from the actions, suits, investigations, litigations or proceedings
set forth in the Disclosed Matters that could reasonably be expected to have a
Material Adverse Effect.

Section 4.07 Compliance with ERISA.

Each member of the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and is in
compliance in all material respects with the currently applicable provisions of
ERISA and the Code with respect to each Plan. No member of the ERISA Group has
(a) sought a waiver of the

 

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minimum funding standard under Section 412 of the Code in respect of any Plan;
(b) failed to make any contribution or payment to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the Code or
(c) incurred any liability in excess of $100,000 under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA.

Section 4.08 Environmental Matters.

(a) In the ordinary course of its business, each of the Borrower and its
Subsidiaries conducts an ongoing review of the effect of Environmental Laws on
the business, operations and properties of the Borrower or such Subsidiary, in
the course of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required for investigation, to achieve or maintain
compliance with environmental protection standards imposed by Environmental Laws
or as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances by the Borrower or its Subsidiaries, and any
actual or potential liabilities to third parties, including employees, and any
related costs and expenses). On the basis of this review, the Borrower has
reasonably concluded that such associated liabilities and costs, including the
costs of compliance with Environmental Laws, are unlikely to have a Material
Adverse Effect.

(b) There are no facts, circumstances or conditions that are reasonably likely
to result in liabilities arising under Environmental Laws that could have a
material adverse effect on the business, financial conditions, results of
operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.

Section 4.09 Taxes.

United States Federal income tax returns of the Borrower and its Subsidiaries
and any other material tax returns filed by them have been examined and closed
(other than for the limited purposes of net operating loss carry-forwards)
through the fiscal year ended December 31, 1999, there are no ongoing or pending
tax audits or examinations, and no deficiencies or other claims for unpaid taxes
are proposed in respect of any taxes due from the Borrower, its Subsidiaries or
any Material AES Entity that could have a Material Adverse Effect. The Borrower,
its Subsidiaries and all Material AES Entities have filed all United States
Federal income tax returns and the Borrower, its Subsidiaries and all Material
AES Entities have filed all other material tax returns which are required to be
filed by them, all such United States Federal income tax returns and all such
other material returns are true, correct and complete in all material respects
and all taxes due as indicated on such returns or pursuant to any assessment
received by the Borrower or any Subsidiary or any Material AES Entity have been
paid, other

 

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than any such taxes that are being diligently contested in good faith through
appropriate proceedings and for which adequate reserves have been established in
accordance with generally accepted accounting principals. The charges, accruals
and reserves on the books of the Borrower, its Subsidiaries and all Material AES
Entities in respect of taxes or other governmental charges are, in the opinion
of the Borrower, adequate.

Section 4.10 Material AES Entities.

Each Material AES Entity is a corporation (or limited liability company, as
applicable) duly incorporated (or formed, as applicable), validly existing and
(other than any Material AES Entity that is not incorporated under the laws of
the United States or any political subdivision thereof) in good standing under
the laws of its jurisdiction of incorporation (or jurisdiction of formation, as
applicable). Each Material AES Entity has all corporate or other organizational
powers and all material governmental licenses, authorization, consents and
approvals required to carry on its business as proposed to be conducted and has
all governmental licenses, authorizations, consents and approvals required to
have been obtained prior to the date hereof and which are material to the
operation of its business as proposed to be conducted, except to the extent that
the failure to obtain any such license, authorization, consent or approval,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

Section 4.11 Not an Investment Company.

None of the Borrower nor any of its Subsidiaries is an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

Section 4.12 [Intentionally Omitted].

Section 4.13 Full Disclosure.

All information heretofore furnished by the Borrower to the Administrative Agent
or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby or thereby is, and all such information
hereafter furnished by the Borrower to the Administrative Agent or any Bank will
be, true and accurate in all material respects on the date as of which such
information is stated or certified in the light of the circumstances under which
such information was provided (as modified or supplemented by other information
so furnished, when taken together as a whole and with the Disclosed Matters);
provided that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based on
assumptions believed to be reasonable at the time, it being recognized by the
Banks that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. The Borrower has disclosed to
the Banks, in the Disclosed Matters or otherwise in writing, any and all facts
specific to the Borrower and its Subsidiaries and known as of the date hereof to
a Responsible Officer of the Borrower that could reasonably be expected to

 

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result in a Material Adverse Effect, which materially and adversely affect or
may affect (to the extent any Borrower can now reasonably foresee), the
business, operations or financial condition of the Borrower and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Borrower to perform its
obligations under this Agreement.

Section 4.14 [Intentionally Omitted]

Section 4.15 Solvency.

The Borrower is, individually, and together with its Subsidiaries, taken as a
whole, Solvent as of the date hereof.

ARTICLE V

COVENANTS

Until the Funding Amounts have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all L/C
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Banks that:

Section 5.01 Information.

The Borrower will deliver to each of the Banks (it being understood that
delivery to the Administrative Agent and the posting by the Administrative Agent
of each of the following items on an electronic website, in accordance with
Section 7.11, shall constitute delivery to each of the Banks, and the
Administrative Agent hereby agrees to post on an electronic website or otherwise
distribute to the Banks any such item delivered by the Borrower to the
Administrative Agent):

(a) as soon as available and in any event within 15 days after the Borrower
files an annual report on Form 10-K with the Securities and Exchange Commission,
a consolidated and consolidating balance sheet of the Borrower as of the end of
such fiscal year, an unconsolidated balance sheet of the Borrower as of the end
of such fiscal year, the related consolidated, consolidating and unconsolidated
(as applicable) statements of operations for such fiscal year and the related
consolidated and unconsolidated statements of cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, said consolidated financial statements to be reported on, in a
manner acceptable to the Securities and Exchange Commission, by Deloitte &
Touche or other independent public accountants of nationally recognized standing
and such consolidating and unconsolidated financial statements to be certified
as to fairness of presentation, generally accepted accounting principles (other
than failure to consolidate) and consistency by the chief executive officer,
president, chief financial officer or chief accounting officer of the Borrower;

 

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(b) as soon as available and in any event within 15 days after the Borrower
files a quarterly report on Form 10-Q with the Securities and Exchange
Commission, a consolidated balance sheet of the Borrower as of the end of such
quarter and an unconsolidated balance sheet of the Borrower as of the end of
such fiscal quarter and the related consolidated and unconsolidated statements
of operations for such quarter and for the portion of the Borrower’s fiscal year
ended at the end of such quarter and the related consolidated and unconsolidated
statements of cash flows for the portion of the Borrower’s fiscal year ended at
the end of such quarter, setting forth in the case of such consolidated
statements of operations and cash flows, in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower’s previous
fiscal year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, generally accepted accounting principles and
consistency by the chief executive officer, president, chief financial officer
or chief accounting officer of the Borrower;

(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the chief executive
officer, president, chief financial officer or chief accounting officer of the
Borrower (i) stating to the knowledge of the Borrower whether any Default exists
on the date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto and (ii) accompanied by a schedule setting forth in
reasonable detail a description, including, where applicable, the expected and
maximum dollar amounts thereof, of all material contingent liabilities not
disclosed in such financial statements;

(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements whether anything has come to their
attention as a result of their audit (which was not directed primarily toward
obtaining knowledge of noncompliance) to cause them to believe that the Borrower
has failed to comply with the terms, covenants, provisions or conditions as they
relate to accounting of financial matters addressed in Sections 5.07 to 5.09,
inclusive;

(e) within five days after any officer of the Borrower obtains knowledge of any
Default, if such Default is then continuing, a certificate of the chief
executive officer, president, executive vice-president or chief financial
officer of the Borrower setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto;

(f) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;

(g) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the Securities and Exchange Commission;

 

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(h) if and when any member of the ERISA Group (i) gives or is required to give
notice to the PBGC of any “reportable event” (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief executive officer, president, chief
financial officer or chief accounting officer of the Borrower setting forth
details as to such occurrence and the action, if any, which the Borrower or the
applicable member of the ERISA Group is required or proposes to take;

(i) promptly after receipt by the Borrower or any Subsidiary of the Borrower, a
copy of each complaint, order, citation, notice or other written communication
from any Person with respect to the existence or alleged existence of a material
violation of any applicable Environmental Law or the incurrence of any
liability, obligation, loss, damage, cost, expense, fine, penalty or sanction or
the requirement to commence any remedial action resulting from or in connection
with any air emission, water discharge, noise emission, Hazardous Substance or
any other environmental, health or safety matter at, upon, under or within any
of the properties now or previously owned, leased or operated by the Borrower,
any of its Subsidiaries or any Material AES Entity, or due to the operations or
activities of the Borrower, any Subsidiary of the Borrower, any Material AES
Entity or any other Person on or in connection with any such property or any
part thereof;

(j) simultaneously with the delivery of each set of financial statements
referred to in clause (a) and (b) above, a revised Schedule I showing as of the
last day of such quarter all the Subsidiaries of the Borrower whose assets
consist only of any of the Excluded AES Business and direct or indirect
investments therein; and

(k) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Administrative
Agent, at the request of any Bank, may reasonably request.

 

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Section 5.02 Payment of Obligations.

The Borrower will pay and discharge all its material obligations and liabilities
and will cause each Subsidiary Guarantor (as defined in the Existing Credit
Agreement) (other than AES Warrior Run Funding, L.L.C.) and Ipalco Enterprises,
Inc. (in each case, for so long as each Person is a Subsidiary of the Borrower)
to pay and discharge all its Material Obligations, in each case, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary of the Borrower to maintain, in accordance with generally accepted
accounting principles, appropriate reserves for the accrual of any of the same.

Section 5.03 Maintenance of Property; Insurance.

(a) The Borrower will keep, and will cause each of its Subsidiaries to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.

(b) The Borrower will, and will cause each of its Subsidiaries to, maintain
(either in the name of the Borrower or in such Subsidiary’s own name) with
financially sound and responsible insurance companies, insurance of such types,
in at least such amounts and against at least such risks (and with such risk
retention) as are usually insured against in similar circumstances in the same
general area by companies of established repute engaged in the same or a similar
business; and will furnish to each Bank upon request information presented in
reasonable detail as to the insurance so carried.

Section 5.04 Conduct of Business and Maintenance of Existence.

The Borrower (a) will continue, and will cause each Material AES Entity to
continue, to engage in a Permitted Business; (b) will continue, and will cause
each Material AES Entity to continue, to operate their respective businesses on
a basis substantially consistent with the policies and standards of the Borrower
as in effect on the date hereof and (c) will preserve, renew and keep in full
force and effect, and will cause each Material AES Entity to preserve, renew and
keep in full force and effect, its respective corporate existence and its
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section 5.04 shall
prohibit the merger of a Subsidiary into the Borrower or the merger or
consolidation of a Subsidiary with or into another Person if the Person
surviving such consolidation or merger is a Subsidiary and if, in each case,
after giving effect thereto (x) no Default shall have occurred and be
continuing, (y) the Borrower shall not be liable for any Debt of such Subsidiary
except to the extent it was liable for such Debt prior to giving effect to such
merger and (z) the transaction is otherwise permitted by Section 5.08.

 

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Section 5.05 Compliance with Laws.

The Borrower will comply, and cause each of its Subsidiaries to comply, in all
material respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder)
(a) except for such non-compliance as would result solely in the payment of
monetary compensation by the Borrower or such Subsidiary in an amount not to
exceed $15,000,000 in the aggregate and (b) except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings (and
the pendency of such proceedings themselves shall not have a material adverse
effect on the Borrower and its Subsidiaries, taken as a whole).

Section 5.06 Inspection of Property, Books and Records.

The Borrower will keep, and will cause each of its Subsidiaries to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each Significant AES Entity to
permit, representatives of any Bank at such Bank’s expense to visit and inspect
any of their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants, all at such reasonable times and as often as may reasonably
be desired.

Section 5.07 Limitation on Secured Debt.

If the Borrower shall incur, issue, assume or guarantee any indebtedness for
borrowed money represented by notes, bonds, debentures or other similar
evidences of indebtedness, secured by a mortgage, pledge or other lien on any
Principal Property or any capital stock or indebtedness held directly by the
Borrower of any Subsidiary of the Borrower, the Borrower shall secure the
Obligations under this Agreement equally and ratably with (or prior to) such
indebtedness, so long as such indebtedness shall be so secured, unless after
giving effect thereto the aggregate amount of all such indebtedness so secured,
together with all Attributable Debt in respect of sale and leaseback
transactions involving Principal Properties, would not exceed 15% of the
Consolidated Net Assets of the Borrower.

The foregoing restriction shall not apply to, and there shall be excluded in
computing secured indebtedness for the purpose of such restriction, indebtedness
secured by (a) property of any Subsidiary of the Borrower, (b) liens on property
of, or on any shares of stock or debt of, any corporation existing at the time
such corporation becomes a Subsidiary, (c) liens in favor of the Borrower or any
Subsidiary, (d) liens in favor of U.S. or foreign governmental bodies to secure
partial, progress, advance or other payments, (e) liens on property, shares of
stock or debt existing at the time of acquisition thereof (including acquisition
through merger or consolidation), purchase money mortgages and construction cost
mortgages existing at or incurred within 180 days of the time of acquisition
thereof, (f) liens existing as of the Closing

 

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Date, (g) liens under one or more credit facilities for indebtedness in an
aggregate principal amount not to exceed $900,000,000 at any time outstanding,
(h) liens incurred in connection with pollution control, industrial revenue or
similar financings, and (i) any extension, renewal or replacement of any debt
secured by any liens referred to in the foregoing clauses (a) through (h),
inclusive.

Section 5.08 Consolidations and Mergers.

(a) When Borrower May Merge, Etc. The Borrower shall not consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially as
an entirety in one transaction or a series of related transactions) to, any
Person (other than a consolidation with or merger with or into a Subsidiary or a
sale, conveyance, transfer, lease or other disposition to a Subsidiary) or
permit any Person to merge with, or into the Borrower unless either (x) the
Borrower shall be the continuing Person or (y) the Person (if other than the
Borrower) formed by such consolidation or into which the Borrower is merged or
to which properties and assets of the Borrower are contributed shall be a
Solvent corporation organized and validly existing under the laws of the United
States of America or any state thereof or the District of Columbia and shall
expressly assume all of the Obligations of the Borrower under this Agreement and
the Borrower shall have delivered to the Administrative Agent (A) an opinion of
counsel stating that such consolidation, merger or transfer and such assumption
of Obligations complies with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with and
that such assumption constitutes the legal, valid and binding obligation of the
Borrower or such successor enforceable against such entity in accordance with
its terms, subject to customary exceptions and (B) a certificate of a
Responsible Officer to the effect that immediately after giving effect to such
transaction, no Event of Default or Default shall have occurred and be
continuing.

(b) Successor Substituted. Upon any consolidation or merger, or any sale,
conveyance, transfer, lease or other disposition of all or substantially all of
the property and assets of the Borrower in accordance with Section 5.08(a) of
this Agreement, the successor Person formed by such consolidation or into which
the Borrower is merged or to which such sale, conveyance, transfer, lease or
other disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Borrower under this Agreement with the
same effect as if such successor Person had been named as the Borrower herein.

Section 5.09 Restrictions on Sale Leasebacks.

The Borrower shall not enter into any sale and leaseback transaction involving
any Principal Property, the acquisition or completion of construction and
commencement of full operation of which has occurred more than 180 days prior
thereto, unless (a) the Borrower could incur a lien on such property under the
restrictions described in Section 5.07 hereof in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing these Facilities or (b) the Borrower, within 180
days after the sale or

 

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transfer by the Borrower, applies to the retirement of its Funded Debt an amount
equal to the greater of (i) the net proceeds of the sale of the Principal
Property sold and leased pursuant to such arrangement or (ii) the fair market
value of the Principal Property so sold and leased as determined by the board of
directors of the Borrower; provided that the amount to be applied to the
retirement of Funded Debt of the Borrower shall be reduced by (A) cancellation
of any Letter of Credit issued hereunder or prepayment of any Loan under this
Agreement (so long as there is a concurrent permanent reduction of Funding
Amounts), and (B) the principal amount of Funded Debt, other than under this
Agreement, voluntarily prepaid by the Borrower within 180 days after such sale
or transfer; provided further that no retirement referred to in this clause
(b) may be effected by payment at maturity or any mandatory prepayment
provision.

Section 5.10 Use of Proceeds.

The proceeds of the Loans made or deemed made and the Letters of Credit issued
under this Agreement will be used by the Borrower for working capital and other
general corporate purposes. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any “margin stock” within the meaning of Regulation U.

Section 5.11 Further Assurances.

Promptly upon request by the Administrative Agent, or any Bank through the
Administrative Agent, correct, and cause the Borrower promptly to correct, any
material defect or error that may be discovered in this Agreement or any Note or
in the execution or acknowledgment thereof that affect the validity or
enforceability thereof.

ARTICLE VI

DEFAULTS

Section 6.01 Events of Default.

If one or more of the following events (“Events of Default”) shall have occurred
and be continuing:

(a) the Borrower shall fail to pay when due any principal of any Loan, or shall
fail to pay within three days of the date when due any interest, fees or other
amounts payable under this Agreement;

(b) the Borrower shall fail to observe or perform any covenant contained in
Sections 5.07 to 5.09, inclusive;

(c) the Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those covered by clause (a) or
(b) above) for 20 days

 

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after written notice thereof has been given to the Borrower by the
Administrative Agent at the request of any Bank;

(d) any representation, warranty, certification or statement made by the
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been incorrect
in any material respect when made (or deemed made);

(e) the Borrower shall fail to make any payment in respect of any Material Debt
or Material Hedge Agreement when due or within any applicable grace period;

(f) any event or condition shall occur which (i) results in the acceleration of
the maturity of any Material Debt of the Borrower or the early termination of a
Material Hedge Agreement of the Borrower by the Borrower’s counterparty; or
(ii) results in the termination of any commitment to provide financing in an
amount in excess of $50,000,000 to the Borrower;

(g) the Borrower or any Significant AES Entity shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;

(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Significant AES Entity seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Significant AES Entity under
the federal bankruptcy laws as now or hereafter in effect;

(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $15,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default,

 

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within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group to
incur a current payment obligation in excess of $15,000,000;

(j) a judgment or order for the payment of money in excess of $25,000,000 shall
be rendered against the Borrower and such judgment or order shall continue
unsatisfied and unstayed for a period of 10 days; or

(k) any person or group of persons (within the meaning of Section 13 or 14 of
the Securities Exchange Act of 1934, as amended) other than a member of the AES
Management Group shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act)
of 32.5% or more of the outstanding shares of common stock of the Borrower;
during any period of twelve consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period (or who were appointed
or nominated for election as directors of the Borrower by at least a majority of
the individuals who were directors on the first day of such period) shall cease
to constitute a majority of the board of directors of the Borrower,

then, and in every such event, the Administrative Agent shall (i) if requested
by the Required Banks, by notice to the Borrower terminate the Funding Amounts
and they shall thereupon terminate and (ii) if requested by the Required Banks,
by notice to the Borrower declare the Notes, all interest thereon, and all other
amounts payable under this Agreement and the Notes, all such interest thereon
and all such other amounts shall thereupon become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; provided that in the case of any Automatic
Acceleration Event, without any notice to the Borrower or any other act by the
Administrative Agent or the Banks, the Funding Amounts shall thereupon terminate
and the Notes, all interest thereon, and all other amounts payable under this
Agreement shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower.

Section 6.02 Notice of Default.

The Administrative Agent shall give notice to the Borrower under Section 6.01(c)
promptly upon being requested to do so by any Bank and shall thereupon notify
all the Banks thereof.

 

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ARTICLE VII

THE ADMINISTRATIVE AGENT

Section 7.01 Appointment and Authorization.

Each Bank (on behalf of itself and its Affiliates) irrevocably appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the Notes as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with all such powers and discretion as are reasonably incidental
thereto. In addition, each Fronting Bank (on behalf of itself and its
Affiliates) irrevocably appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to the Administrative Agent by the terms
hereof and thereof, together with all such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes) the Administrative Agent shall not be required to exercise any discretion
or to take any action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Banks (or any Fronting Bank, as applicable), and
such instructions shall be binding upon all Banks, the Fronting Banks and all
the holders of Notes; provided, however, that the Administrative Agent shall be
required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to this Agreement or applicable law. Without
limiting any of the foregoing in this Section 7.01, the Administrative Agent
shall not be required to take any action with respect to any Default, except as
expressly provided in Article 6. The Administrative Agent agrees to give each
Bank prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.

Section 7.02 Administrative Agent and Affiliates.

Merrill Lynch Capital Corporation and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Borrower and its Affiliates as
though Merrill Lynch Capital Corporation were not the Administrative Agent
hereunder and without notice to or consent of the Banks. The Banks acknowledge
that, pursuant to such activities, Merrill Lynch Capital Corporation or its
Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the Administrative
Agent shall not be under any obligation to provide such information to them.
With respect to its Loans or any Letters of Credit, Merrill Lynch Capital
Corporation shall have the same rights and powers under this Agreement or any
other instrument as any other Bank and may exercise such rights and powers as
though it were not the Administrative Agent, and the terms “Bank” and “Banks”
include Merrill Lynch Bank USA in its individual capacity.

 

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Section 7.03 Consultation with Experts.

The Administrative Agent may execute any of their respective duties under this
Agreement by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel, independent public accountants and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.

Section 7.04 Liability of Agent.

Neither the Administrative Agent nor any of its Affiliates nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or not taken by it in connection with this Agreement or any Note
(a) with the consent or at the request of the Required Banks, (b) in its
capacity as Administrative Agent for the Fronting Banks, with the consent or at
the request of a Fronting Bank or (c) in the absence of its own gross negligence
or willful misconduct. Neither the Administrative Agent nor any of its
Affiliates nor any of their respective directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made by the Borrower in connection
with this Agreement or any Extension of Credit hereunder, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with this Agreement or any
other instrument; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to be delivered to the
Administrative Agent or (iv) the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other instrument or
writing furnished in connection therewith. The Administrative Agent shall not
incur any liability by acting in reliance upon any notice, consent, certificate,
statement or other writing (which may be a bank wire, telex, facsimile
transmission or similar writing) believed by it to be genuine or to be signed by
the proper party or parties.

Section 7.05 Indemnification.

Each Bank shall, ratably (determined as provided below) indemnify the
Administrative Agent, the Fronting Banks, each of their respective Affiliates
and the respective directors, officers, agents and employees of any of them (to
the extent not reimbursed by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees’ gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees thereunder. For
purposes of this Section 7.05, the Bank’s ratable share of any amount shall be
determined, at any time, according to the sum of (a) the aggregate principal
amount of Loans outstanding at such time and owing to the respective Bank; and
(b) the aggregate L/C Exposure outstanding at such time and owing to the
respective Bank.

 

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Section 7.06 Credit Decision.

Each Bank acknowledges that it has, independently and without reliance upon the
Administrative Agent, any Fronting Bank, or any other Bank and based on the
financial statements referred to in Section 4.05 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent, or any other
Bank, 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
any action under this Agreement.

Section 7.07 Successor Administrative Agent.

The Administrative Agent may resign at any time by giving notice thereof to the
Banks and the Borrower. Upon any such resignation, the Required Banks shall have
the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent, on behalf of the Banks, shall appoint a successor
Administrative Agent which shall be a commercial bank organized or licensed
under the laws of the United States and having a combined capital and surplus of
at least $250,000,000. Upon the acceptance of its appointment as Administrative
Agent hereunder by a successor Administrative Agent, upon the execution and
filing or recording of such financing statements, or amendment, thereto, and
such other instruments or notices, as may be necessary or desirable, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. If within 45 days after written notice is given of the retiring
Administrative Agent’s resignation under this Section 7.07 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under this Agreement and
(iii) the Required Banks shall thereafter perform all duties of the retiring
Administrative Agent until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent.

Section 7.08 Administrative Agent May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Borrower, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Exposure shall then be
due and payable as herein expressed or by declaration or otherwise and

 

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irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, the L/C Exposures and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Banks and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Banks and the Administrative Agent
and their respective agents and counsel and all other amounts due the Banks and
the Administrative Agent under this Agreement) allowed in such judicial
proceeding;

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same; and

(c) any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Bank to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Banks, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its respective agents and counsel, and any other
amounts due the Administrative Agent under this Agreement.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Bank any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Bank or to authorize the Administrative Agent to vote in
respect of the claim of any Bank in any such proceeding.

Section 7.09 Agents’ Fee.

The Borrower shall pay to the Administrative Agent for their own account fees in
the amounts and at the times previously agreed upon between the Borrower and the
Administrative Agent.

Section 7.10 Delivery of Information.

(a) The Borrower hereby agrees that it will provide to the Administrative Agent
all information, documents and other materials that it is obligated to furnish
to the Administrative Agent pursuant to this Agreement, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an
existing, Borrowing or other Extension of Credit (including any election of an
interest rate relating thereto), (ii) relates to the payment of any principal or
other amount due under this Agreement prior to the scheduled date therefor,
(iii) provides notice of any default or

 

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Event of Default under this Agreement or (iv) is required to be delivered
pursuant to Sections 3.01 or 3.02 to satisfy any condition precedent to the
effectiveness of this Agreement and/or any Extension of Credit hereunder (all
such non-excluded communications being referred to herein collectively as “
Communications ”), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to an e-mail address
supplied by the Administrative Agent to the Borrower. In addition, the Borrower
agrees to continue to provide the Communications to the Administrative Agent in
the manner specified in this Agreement but only to the extent requested by the
Administrative Agent.

(b) The Borrower further agrees that the Administrative Agent may make the
Communications available to the other Banks by posting the Communications on
Intralinks or a substantially similar electronic transmission systems (the “
Platform ”).

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE ADMINISTRATIVE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE
ADMINISTRATIVE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE
PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR
ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE
BORROWER, ANY BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND,
INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(c) The Administrative Agent agrees that the receipt of the Communications by
the Administrative Agent at its e-mail address set forth in clause (a) above
shall constitute effective delivery of the Communications to the Administrative
Agent for purposes of this Agreement. Each Bank agrees that notice to it (as
provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Bank for purposes of this Agreement. Each Bank agrees to notify the

 

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Administrative Agent in writing (including by electronic communication) from
time to time of such Bank’s e-mail address to which the foregoing notice may be
sent by electronic transmission and that the foregoing notice may be sent to
such e-mail address. Nothing herein shall prejudice the right of the
Administrative Agent or any Bank to give any notice or other communication
pursuant to this Agreement in any other manner specified in this Agreement.

ARTICLE VIII

CHANGE IN CIRCUMSTANCES

Section 8.01 Basis for Determining Interest Rate Inadequate or Unfair.

If on or prior to the first day of any Interest Period for any Eurodollar
Borrowing or in respect of any Credit-Linked Deposit:

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period, or

(b) the Required Banks advise the Administrative Agent that the Adjusted LIBO
Rate as determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Banks of maintaining their Loans included in such
Borrowing or the Credit-Linked Deposits, as the case may be, for such Interest
Period;

the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Eurodollar Loans, or to continue or convert
outstanding Loans as or into Eurodollar Loans, shall be suspended, (ii) each
outstanding Eurodollar Loan shall be converted into a Base Rate Loan on the last
day of the then current Interest Period applicable thereto and (iii) the
Credit-Linked Deposits shall be invested so as to earn a return equal to the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules and practice on interbank
compensation.

Section 8.02 Illegality.

If, on or after the date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Lending Office) to make, maintain or fund its
Loans to the

 

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Borrower or its Credit-Linked Deposit and such Bank shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank notifies
the Borrower and the Administrative Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank to make Eurodollar
Loans to the Borrower or to convert outstanding Loans into Eurodollar Loans or
continue outstanding Loans as Eurodollar Loans or to make, maintain or fund its
Credit-Linked Deposit, shall be suspended, provided that the making, maintenance
and funding of the Credit-Linked Deposit shall not be suspended to the extent
such Credit-Linked Deposit supports any L/C Exposure. Before giving any notice
to the Administrative Agent pursuant to this Section 8.02, such Bank shall
designate a different Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each Loan of such Bank
then outstanding shall be converted to a Base Rate Loan either (a) on the last
day of the then current Interest Period applicable to such Loan if such Bank may
lawfully continue to maintain and fund such Loan as a Loan to such day or
(b) immediately if such Bank shall determine that it may not lawfully continue
to maintain and fund such Loan as a Loan to such day. Interest and principal on
any such Base Rate Loan shall be payable on the same dates as, and on a pro rata
basis with, the interest and principal payable on the related Loans of the other
Banks.

Section 8.03 Increased Cost and Reduced Return.

(a) If on or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) or any
Fronting Bank (any Bank (or its Applicable Lending Office) and any Fronting Bank
being referred to in this Section 8.03 as a “ Credit Party ”) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall impose, modify or deem applicable any
reserve (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding with respect to
any Loan any such requirement included in an applicable Reserve Percentage),
special deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Credit Party or
shall impose on any of the Administrative Agent, any Fronting Bank, or any
Credit-Linked Deposit, the Credit-Liked Deposit Account or any Credit-Linked Sub
Account or on the London interbank market any other condition affecting its
Loans, its Note or Notes, Letter of Credit or any Credit-Linked Deposit, the
Credit-Linked Deposit Account or any Credit-Linked Sub Account, or its
obligation to make Loans or to issue Letters of Credit or to participate therein
and the result of any of the foregoing is to increase the cost to such Credit
Party of making or maintaining any Loan or issuing any Letter of Credit or
participating therein, or to reduce the amount of any sum received or receivable
by such Credit Party under this Agreement or under its Note or Notes with
respect thereto, by an amount deemed by such Credit Party to be material, then,
within 15 days after demand by such Credit Party (with a copy to the
Administrative

 

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Agent), the Borrower shall pay to such Credit Party such additional amount or
amounts as will compensate such Credit Party for such increased cost or
reduction.

(b) If any Credit Party shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Credit Party (or its Parent) as a consequence of such Credit Party’s
obligations hereunder to a level below that which such Credit Party (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Credit Party to be material, then from time to time,
within 15 days after demand by such Credit Party (with a copy to the
Administrative Agent), the Borrower shall pay to such Credit Party such
additional amount or amounts as will compensate such Credit Party (or its
Parent) for such reduction.

(c) Each Credit Party will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Credit Party to compensation pursuant to this
Section 8.03(c) and will designate a different Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Credit Party, be otherwise disadvantageous
to such Credit Party. A certificate of any Credit Party claiming compensation
under this Section 8.03(c) and setting forth the additional amount or amounts to
be paid to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.

Section 8.04 Taxes.

(a) Any and all payments by the Borrower to or for the account of any Bank
(which for purposes of this Section 8.04, shall include a Fronting Bank and its
Assignees), the Administrative Agent hereunder or under any Note shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank, the
Administrative Agent, taxes imposed on its income (including branch profit
taxes), franchise and similar taxes and other taxes imposed on it that, in any
such case, would not have been imposed but for a material connection between
such Bank, the Administrative Agent and the jurisdiction imposing such taxes
(other than a material connection arising by reason of this Agreement or any
Note or the receipt of payments made hereunder or thereunder or the exercise of
any rights by a Bank, the Administrative Agent hereunder or thereunder) (all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “ Taxes ”). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note to any Bank or the Administrative Agent
(i) the sum

 

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payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 8.04) such Bank, the Administrative Agent receives an amount equal
to the sum it would have received had no such deductions been made; (ii) the
Borrower shall make such deductions; (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt or other satisfactory documentation evidencing
payment thereof.

(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, or charges or similar
levies which arise from any payment made by it hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as “ Other Taxes ”).

(c) The Borrower agrees to indemnify each Bank and the Administrative Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Administrative Agent including
with respect to any and all payments of interest on the Credit-Linked Deposits
to the Banks, any and all payments of fees to the Banks and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 15 days from the date such
Bank or the Administrative Agent makes demand therefor.

(d) Each Bank that is 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 a Bank listed on the signature pages hereof or on
or prior to the date on which it becomes a Bank in the case of each other Bank
and in the case any Bank changes jurisdiction of its Lending Office and from
time to time thereafter as requested in writing by the Borrower (but only so
long thereafter as such Bank remains lawfully able to do so), shall deliver to
the Borrower and the Administrative Agent such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including Internal Revenue Service Form W-8BEN, Form W-8 IMY or Form
W-8ECI and any other certificate or statement of exemption specified by the
Borrower and required by Treasury Regulation Section 1.1441-4(a) or
Section 1.1441-6(c) or any subsequent version thereof, properly completed and
duly executed by such Bank establishing that any payment under this Agreement is
(i) not subject to withholding under the Code because such payment is
effectively connected with the conduct by such Bank of a trade or business in
the United States, or (ii) fully or partially exempt from United States tax
under a provision of an applicable tax treaty, or (iii) not subject to
withholding under the portfolio interest exception under Section 881(c) of the
Code (and, if such Bank delivers a Form W-8BEN claiming the benefits of
exemption from United States withholding tax under Section 881(c), a certificate
representing that such Bank is not a “bank” for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation

 

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related to the Borrower (within the meaning of Section 864(d)(4) of the Code).
Unless the Borrower and the Administrative Agent have received forms or other
documents reasonably satisfactory to them indicating that payments hereunder are
not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Borrower or the Administrative
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Bank organized under the laws of a
jurisdiction outside the United States. If a Bank is unable to deliver one of
these forms or if the forms provided by a Bank at the time such Bank first
becomes a party to this Agreement or at the time a Bank changes its Lending
Office (other than at the request of the Borrower) or designates a Conduit
Lender that indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Bank 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 appropriate forms;
provided, however, that (i) that should a Bank, which is otherwise exempt from
or subject to a reduced rate of withholding tax, becomes subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Bank shall reasonably request to assist such Bank to
recover such Taxes and (ii) if at the effective date of a transfer pursuant to
which a Bank becomes a party to this Agreement, the Bank assignor was entitled
to payments under Section 8.04(a) 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 Bank assignee on such date.

(e) If the Borrower is required to pay additional amounts to or for the account
of any Bank pursuant to this Section 8.04, then such Bank shall use reasonable
effort (consistent with internal policy and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the judgment
of such Bank, is not otherwise disadvantageous to such Bank.

(f) Each Bank and the Administrative Agent agrees that it will promptly (within
30 days) after receiving notice thereof from any taxing authority, notify the
Borrower of the assertion of any liability by such taxing authority with respect
to Taxes or Other Taxes; provided that the failure to give such notice shall not
relieve the Borrower of its obligations under this Section 8.04 except to the
extent that the Borrower has been prejudiced by such failure and except that the
Borrower shall not be liable for penalties, interest or expenses accruing after
such 30 day period until such time as it receives the notice contemplated above,
after which time it shall be liable for interest, penalties and expenses
accruing after such receipt.

(g) If any Bank or the Administrative Agent shall receive a credit or refund
from a taxing authority (as a result of any error in the imposition of Taxes or
Other Taxes by such taxing authority) with respect to and actually resulting
from an amount of such Taxes or Other Taxes paid by the Borrower pursuant to
subsection (a) or (c) above, such Bank or the

 

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Administrative Agent shall promptly pay to the Borrower the amount so received
(without interest thereon, whether or not received).

(h) Without prejudice to the survival of any other agreement contained herein,
the agreements, covenants and obligations contained in this Section 8.04 shall
survive the payment in full of the principal of and interest on all Loans, Notes
and other advances made hereunder.

Section 8.05 Base Rate Loans Substituted for Affected Eurodollar Loans.

If (a) the obligation of any Bank to make, or to continue or to convert
outstanding Loans as or to, Eurodollar Loans to the Borrower has been suspended
pursuant to Section 8.02 or

(b) any Bank has demanded compensation under Section 8.03 or 8.04 with respect
to its Eurodollar Loans to the Borrower and the Borrower shall, by at least five
Business Days’ prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section 8.05 shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, all Loans to
the Borrower which would otherwise be made by such Bank as (or continued or
converted to) Loans shall be made instead as Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related Loans of the
other Banks). If such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, the
principal amount of each such Base Rate Loan shall be converted into a
Eurodollar Loan on the first day of the next succeeding Interest Period
applicable to the related Eurodollar Loans of the other Banks.

ARTICLE IX

MISCELLANEOUS

Section 9.01 Notices.

All notices, requests and other communications to any party hereunder shall be
in writing (including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (a) in the case of the Borrower or
any Fronting Bank, at its address or telex or facsimile transmission number set
forth on the signature pages hereof; (b) (i) in the case of the Administrative
Agent with respect to credit matters, to Merrill Lynch Capital Corporation, 250
Vesey Street, 22nd Floor, New York, New York, 10080, Attention: Carol J.E.
Feeley, Phone: (212) 449-8414, Facsimile (212) 738-1186 and (ii) in the case of
the Administrative Agent with respect to operational matters, to Merrill Lynch
Capital, 222 N. LaSalle, 15th Floor, Chicago, Illinois 60601, Attention:
Jennifer L. Wesner, Phone: (312) 750-6232, Facsimile (312) 499-3336; (c) in the
case of any Bank, at its address or telex or facsimile transmission number set
forth in its Administrative Questionnaire or (d) in the case of any other party,
at such other address or telex or facsimile transmission number as such party
may hereafter specify for the purpose by notice to the Administrative Agent, the
Fronting Banks and the Borrower. Each such notice,

 

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request or other communication shall be effective (x) if given by telex, when
such telex is transmitted to the telex number specified in or pursuant to this
Section 9.01 and the appropriate answerback is received; (y) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (z) if given by any other means, when
delivered at the address specified in or pursuant to this Section 9.01; provided
that notices to the Administrative Agent, or a Fronting Bank under Article 2 or
Article 8 shall not be effective until received.

Section 9.02 No Waivers.

No failure or delay by the Administrative Agent, any Bank or any Fronting Bank
in exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.

Section 9.03 Expenses; Indemnification.

(a) The Borrower shall pay (i) all out-of-pocket expenses of the Administrative
Agent, including, without limitation, reasonable fees and disbursements of
outside counsel for the Administrative Agent in connection with the preparation
and administration of this Agreement, any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder, and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the
Administrative Agent, each Fronting Bank and each Bank, including (without
duplication) the fees and disbursements of outside counsel and the allocated
cost of inside counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency, workout, restructuring and other enforcement proceedings
resulting therefrom.

(b) The Borrower agrees to indemnify the Administrative Agent, each Bank, each
Fronting Bank, their respective Affiliates and the respective directors,
officers, agents and employees of the foregoing (each, an “ Indemnitee ”) and
hold each Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of this Agreement or any actual
or proposed use of proceeds of Loans or the issuance of any Letter of Credit
hereunder; provided that no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee’s own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent or any Fronting Bank under paragraph (a) or
(b) of this Section, each Bank severally agrees to pay to the Administrative
Agent or the applicable Fronting Bank, as the case may be, such Bank’s
Applicable Percentage (determined as of the time that the

 

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applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent or the applicable Fronting Bank in its
capacity as such.

Section 9.04 [Reserved].

Section 9.05 Amendments and Waivers.

Any provision of this Agreement or any Note may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Borrower
and the Required Banks (and, if the rights or duties of the Administrative Agent
are affected thereby, by the Administrative Agent); provided that (a) no such
amendment or waiver shall, unless signed by all the Banks, (i) waive any of the
conditions specified in Section 3.01 or 3.02 (with respect to the Extensions of
Credit made on the Closing Date); (ii) change the number of Banks or the
percentage of (x) the aggregate unpaid principal amount of the Loans or (y) the
aggregate L/C Exposure that, in each case, shall be required for the Banks or
any of them to take any action hereunder; or (iii) amend Section 2.17(c) or this
Section 9.05; (b) no such amendment or waiver shall, unless signed by the
Required Banks and each Bank and Fronting Bank if such Bank or Fronting Bank, as
applicable, is directly adversely affected by such amendment or waiver, (i) in
the case of any Bank, increase the Funding Amount of such Bank; (ii) reduce the
principal of, or interest on, the Notes held by such Bank or Loans outstanding
to such Bank or any fees or other amounts payable to such Bank; (iii) reduce the
principal of or rate of interest on any Loan or Reimbursement Obligation or any
fees hereunder, (iv) change the right of any Bank to pro rata sharing of
payments pursuant to the terms hereof, (v) postpone the date fixed for any
payment of principal of or interest on any Loan or Reimbursement Obligation or
any fees hereunder or (vi) postpone the final maturity of the Loans or the
expiry date for the Letters of Credit; and (c) no such amendment or waiver
shall, unless signed by each of the Fronting Banks and the Required Banks,
amend, waive or delete the provisions of Section 3.02; provided, further, that
consent of the Required Banks shall not be needed for an amendment of this
Agreement made under the terms of Section 2.19; provided, further, that no such
amendment or waiver shall, unless signed by each of the Fronting Banks, affect
the rights and obligations of the Fronting Banks under this Agreement.

Section 9.06 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except the Borrower may not assign or otherwise transfer any of its rights and
obligations under this Agreement without the prior written consent of all of the
Banks.

(b) Any Bank other than a Conduit Lender may, without notice to or consent of
the Borrower and Agent, at any time grant to one or more banks or other
institutions (each, a “ Participant ”) participating interests in its Funding
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participating interests in its L/C Exposure. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice to
the Borrower, the Fronting Banks and the Administrative Agent, such Bank shall
remain responsible for the performance of its obligations hereunder, and the
Borrower, the Fronting Banks and the Administrative Agent shall continue to deal
solely and directly with such Bank in connection with such Bank’s rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clauses
(a) (i), (ii) and (iii) and clause (b) of Section 9.05 without the consent of
the Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).

(c) Any Bank other than a Conduit Lender may at any time assign to one or more
banks or other institutions (each, an “ Assignee ”) all, or a proportionate part
of all, in each case in an amount not less than $1,000,000 (or such lesser
amount as may be agreed to by the Borrower and the Administrative Agent) (except
in the case of an assignment which will result in a group of Banks which are
managed by the same Bank holding a Funding Amount (as the case may be) of not
less than $1,000,000), of its rights and obligations under this Agreement, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption in substantially the form of Exhibit C-1 hereto,
executed by such Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Administrative Agent and the Borrower (which shall not
be unreasonably withheld or delayed but which shall not be required if (1) an
Event of Default shall have occurred and is continuing and (2) in the case of
assignments by a Bank to a Related Fund of such Bank); provided that if an
Assignee is an Affiliate of such transferor Bank, no such consents shall be
required; and provided, further that under no circumstances may the Borrower or
any of its Affiliates be an “Assignee” hereunder. Upon execution and delivery of
such instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank to this Agreement and shall have all the
rights and obligations of a Bank as set forth in such instrument of assumption,
and the transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
Assignee. In connection with any such assignment, the transferor Bank or
Assignee shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $3,500. If the Assignee is not
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state thereof, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from, or reduction in, deduction or withholding of
any United States federal income taxes as required by Section 8.04.
Notwithstanding the foregoing, any Conduit Lender may assign at any time to its
designating Bank hereunder without the consent of the Borrower or the
Administrative Agent any or all of the Loans or Funding Amounts it may have
funded hereunder and pursuant to its designation agreement and without regard to
the limitations set forth in the first sentence of this Section 9.06(c). In
connection with each assignment of Funding Amounts, the Credit-Linked Deposit of
the assignor Bank shall not be released, but shall instead be purchased by the
relevant assignee and continue to be held for application (to the extent not
already applied) in accordance with Article II to satisfy such assignee’s
obligations in respect of L/C Exposure and Loans. Each Bank agrees that
immediately prior to each assignment by a Bank (i) the Administrative Agent
shall establish a new Credit-Linked Sub-Account in the name of the assignee,
(ii) unless otherwise consented to by the Administrative Agent, a corresponding
portion of the Credit-Linked Deposit credited to the Credit-Linked Sub-Account
of the assignor Bank shall be purchased by the assignee and shall be transferred
from the assignor’s Credit-Linked Sub-Account to the assignee’s Credit-Linked
Sub-Account and (iii) if after giving effect to such assignment, the Funding
Amount of the assignor Bank shall be zero, the Administrative Agent shall close
the Credit-Linked Sub-Account of such assignor Bank.

(d) Any Bank may at any time assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder. In the case of any Bank that is
a fund that invests in bank loans, such Bank may, without the consent of the
Borrower or the Administrative Agent, assign or pledge all or any portion of its
rights under this Agreement, including the Loans and Notes or any other
instrument evidencing its rights as a Bank under this Agreement, to any holder
of, trustee for, or any other representative of holders of, obligations owed or
securities issued, by such fund, as security for such obligations or securities;
provided that unless and until such holder, trustee or representative actually
becomes a Bank in compliance with the other provisions of this Section 9.06,
(i) no such pledge shall release the pledging Bank from any of its obligations
under this Agreement and (ii) such holder, trustee or representative shall not
be entitled to exercise any of the rights of a Bank under this Agreement even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.

(e) Each of the Borrower, the Administrative Agent and each Bank hereby confirms
that it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Bank designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.

 

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(f) The Administrative Agent shall maintain at its address referred to in
Section 9.01, a copy of each Assignment and Assumption delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Banks, the Funding Amounts of, the amount of the Letter of Credit issued by, the
principal amount of the Reimbursement Obligations owing to, and the principal
amount of the Loans owing to, each Bank and Fronting Bank 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,
the Fronting Banks and the Banks may treat each Person whose name is recorded in
the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower, any Fronting Bank or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.

(g) Any Fronting Bank may at any time assign to one or more banks or other
institutions (each, a “ Fronting Bank Assignee ”) meeting the definition of a
“Fronting Bank” contained herein, all of its rights and obligations under this
Agreement and such Fronting Bank Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption in substantially the form
of Exhibit C-2 hereto executed by such Fronting Bank Assignee and such
transferor Fronting Bank, with (and subject to) the subscribed consent of the
Administrative Agent and the Borrower (which shall not be unreasonably withheld
or delayed); provided that under no circumstances may the Borrower or any of its
Affiliates be an “Fronting Bank Assignee” hereunder. Upon execution and delivery
of such instrument and a Fronting Bank Agreement and payment by such Fronting
Bank Assignee to such transferor Fronting Bank of an amount equal to the
purchase price agreed between such transferor Fronting Bank and such Fronting
Bank Assignee, such Fronting Bank Assignee shall be a Fronting Bank to this
Agreement and shall have all the rights and obligations of a Fronting Bank as
set forth in such instrument of assumption, and the transferor Fronting Bank
shall be released from its obligations hereunder to a corresponding extent, and
no further consent or action by any party shall be required. In connection with
any such assignment, the transferor Fronting Bank or Fronting Bank Assignee
shall pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,500. If the Fronting Bank Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Administrative Agent certification as
to exemption from, or reduction in, deduction or withholding of any United
States federal income taxes as required by Section 8.04.

Section 9.07 No Margin Stock.

Each of the Banks and the Fronting Banks represents to the Administrative Agent
and each of the other Banks and Fronting Banks that it in good faith is not
relying upon any “margin stock” (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.

 

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Section 9.08 Governing Law; Submission to Jurisdiction.

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.

Section 9.09 [Reserved].

Section 9.10 Counterparts; Integration; Effectiveness.

This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Administrative
Agent of counterparts hereof signed by each of (a) the Borrower, (b) the
Administrative Agent, (c) each Bank with a Funding Amount pursuant to the terms
hereof and (d) the Fronting Bank issuing the Letters of Credit to be issued on
the Closing Date.

Section 9.11 Confidentiality.

The Administrative Agent, each Fronting Bank and each Bank agrees to keep
confidential all non-public information provided to it by the Borrower pursuant
to this Agreement that is designated by the Borrower as confidential; provided
that nothing herein shall prevent the Administrative Agent, any Fronting Bank or
any Bank from disclosing any such information (a) to the Administrative Agent,
any other Fronting Bank, any other Bank or any affiliate of any Bank or any
Fronting Bank; (b) to any (i) actual or prospective transferee or
(ii) Derivatives Obligations counterparty (or such contractual counterparty’s
professional advisor), in each case that agrees to comply with the provisions of
this Section 9.11; (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its affiliates;
(d) upon the request or demand of any governmental authority; (e) in response to
any order of any court or other governmental authority or as may otherwise be
required pursuant to any requirement of law; (f) if required to do so in
connection with any litigation or similar proceeding; (g) that has been publicly
disclosed; (h) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Bank’s or Fronting Bank’s investment portfolio in
connection with ratings issued with respect to such Bank or Fronting Bank, as
applicable; (i) to any direct or indirect contractual counterparty in any swap,
hedge or similar agreement (or to any such contractual counterparty’s
professional advisor), so long as such contractual counterparty

 

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(or such professional advisor) agrees to be bound by the provisions of this
Section 9.11; or, in connection with the exercise of any remedy hereunder.
Notwithstanding any other provision in this Agreement, the Borrower, the
Administrative Agent, each Fronting Bank and each Bank hereby agree that each of
the Borrower, the Administrative Agent, each Fronting Bank and each Bank (and
each of the officers, directors, employees, accountants, attorneys and other
advisors of the Administrative Agent, each Fronting Bank and each Bank) may
disclose to any and all persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the transaction and all materials of any
kind (including opinions and other tax analyses) that are provided to each of
them relating to such U.S. tax treatment and U.S. tax structure.

Section 9.12 WAIVER OF JURY TRIAL.

EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE FRONTING BANKS AND THE BANKS
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

Section 9.13 Severability; Modification to Conform to Law.

It is the intention of the parties that this Agreement be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder hereof. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, this Agreement shall, as to such jurisdiction, be
deemed amended to modify or delete, as necessary, the offending provision or
provisions and to alter the bounds thereof in order to render it or them valid
and enforceable to the maximum extent permitted by applicable law, without in
any manner affecting the validity or enforceability of such provision or
provisions in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

Section 9.14 Judgment Currency.

If for the purposes of enforcing the obligations of the Borrower hereunder it is
necessary to convert a sum due from such Person in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent, the Fronting
Banks and the Banks could purchase Dollars with such currency at or about 11:00
A.M. (New York City time) on the Business Day preceding that on which final
judgment is given. The obligations in respect of any sum due to the
Administrative Agent, the Fronting Banks and the Banks hereunder shall,
notwithstanding any adjudication expressed in a currency other than Dollars, be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent, the Fronting Banks and the Banks of any sum adjudged to be
so due in such other currency the Administrative Agent, the Fronting Banks and
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accordance with normal banking procedures purchase Dollars with such other
currency; if the amount of Dollars so purchased is less than the sum originally
due to the Administrative Agent, the Fronting Banks and the Banks in Dollars,
the Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such adjudication, to indemnify the
Administrative Agent, the Fronting Banks and the Banks against such loss, and if
the amount of Dollars so purchased exceeds the sum originally due to the
Administrative Agent, the Fronting Banks and the Banks, it shall remit such
excess to the Borrower.

Section 9.15 Fronting Banks.

(a) Each Fronting Bank shall execute and deliver to the Administrative Agent a
Fronting Bank Agreement in substantially the form of Exhibit D hereto prior to
issuing any letters of credit at the request or for the benefit of the Borrower.
Upon execution and delivery by a Fronting Bank to the Administrative Agent of a
Fronting Bank Agreement, such Fronting Bank, shall become a party to this
Agreement and shall have all the rights and obligations of a Fronting Bank as
set forth herein. If the Fronting Bank is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Administrative Agent certification as to exemption from, or reduction
in, deduction or withholding of any United States federal income taxes as
required by Section 8.04.

(b) Any Fronting Bank may be released from its obligations hereunder as a
Fronting Bank upon (x) (i) the mutual agreement of such Fronting Bank and the
Borrower and (ii) notice to the Administrative Agent or (y) in accordance with
Section 9.06(g).

Section 9.16 Replacement of Banks. If any Required Lender requests compensation
under Section 8.03, or if the Borrower is required to pay any additional amount
to any Bank or any Governmental Authority for account of any Bank pursuant to
Section 8.04, or if any Bank defaults in its obligation to fund Loans hereunder,
or if any Bank does not consent to a proposed amendment, modification or waiver
of this Agreement or any Note requested by the Borrower which requires the
consent of all of the Banks to become effective, then the Borrower may, at its
sole expense and effort (including with respect to the processing and
recordation fee referred to in Section 9.06(c)), upon notice to such Bank and
the Administrative Agent, require such Bank to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.06), all of its interests, rights and obligations under this Agreement
to an assignee reasonably acceptable to the Borrower, such acceptance not to be
unreasonably withheld or delayed, that shall assume such assigned obligations
(which assignee may be another Bank, if a Bank accepts such assignment);
provided that (i) the Borrower shall have received the prior written consent of
the Administrative Agent (and, if a Funding Amount is being assigned, the
Fronting Bank), which consent or consents, as the case may be, shall not
unreasonably be withheld, (ii) such Bank shall have received payment of an
amount equal to the outstanding principal of its Loans, unreimbursed LC
Disbursements owing to it and its Credit-Linked Deposit, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), (iii) in the case of
any such assignment

 

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resulting from a claim for compensation under Section 8.03 or payments required
to be made pursuant to Section 8.04, such assignment will result in a reduction
in such compensation or payments and (iv) such assignment shall not conflict
with any law, rule, or regulation or order of any court or other Governmental
Authority having jurisdiction. In connection with any such replacement, if the
replaced Bank does not execute and deliver to the Administrative Agent a duly
completed Assignment and Assumption reflecting such replacement within five
Business Days of the date on which the replacement Bank executes and delivers
such Assignment and Acceptance to the replaced Bank, then such replaced Bank
shall be deemed to have executed and delivered such Assignment and Assumption. A
Bank shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Bank or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

[SIGNATURE PAGES IMMEDIATELY FOLLOW]

 

73

 

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

THE AES CORPORATION,

as Borrower

By  

 

Title:

 

Address:

  4300 Wilson Boulevard   Arlington, VA 22203

Fax:

  (703) 528-4510

 

 

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

BANKS:

 

[Please Type or Print Name of Bank]

By

 

 

 

 

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

AGENTS:

MERRILL LYNCH CAPITAL CORPORATION,

as Administrative Agent

By  

 

Title:

 

MERRILL LYNCH BANK USA,

as Fronting Bank

By  

 

Title:

 

Address:

 

Fax:

 

 

 

 

Created by 10KWizard            www.10KWizard.comSource: AES CORP, 8-K,
April 03, 2006

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

Exhibit 10.2.A

Appendix I

Funding Amounts

 

Name of Bank

   Funding Amount

Merrill Lynch Capital Corporation

   $ 471,500,000

Merrill Lynch Capital Services

   $ 75,000,000

Aladdin Investments

   $ 20,000,000

Invesco Limited

   $ 18,500,000

American Express

   $ 15,000,000       

Total

   $ 600,000,000

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

Exhibit 10.2.B

SCHEDULE 1

Excluded AES Entities

BRAZIL

AES South American Holdings, Ltd.

AES Americas Participacoes, Ltda.

AES Brazilian Holdings, Ltd.

AES Bridge I, Ltd.

AES Bridge II, Ltd.

AES Cayman Guaiba, Ltd.

AES Cayman I

AES Cayman II

AES Cayman Pampas, Ltd.

AES Cemig Empreendimentos II, Ltd.

AES Cemig Empreendimentos, Inc.

AES Communications Rio de Janeiro S.A.

AES Com Sul Ltda.

AES Coral Reef, LLC

AES Elpa S.A.

AES Energia, Ltda.

AES Energia I, Ltd.

AES Energia II, Ltd.

AES Florestal Ltda.

AES Forca Ltd.

AES Forca II, Ltd.

AES Forca Empreendimentos Ltda.

AES Guaiba II Empreendimentos Ltda.

AES Holdings Brasil, Ltda.

AES IHB Cayman, Ltd.

AES Infoenergy Ltda.

AES Intercon II, Ltd.

AES Interenergy, Ltd.

AES International Holdings III, Ltd.

AES Minas PCH Ltda.

AES Network

AES Santa Branca I, Ltd.

AES Santa Branca II, Ltd.

AES Sul, SA

AES Tiete Holdings Ltd.

AES Tiete Holdings II, Ltd.

AES Tiete Empreendimentos S.A.

AES Tiete Participacoes S.A.

AES Trade I, Ltd.

AES Trade II, Ltd.

AES Trading Ltda.

AES Transgas Empreendimentos S.A.

AES Transgas I, Ltd.

AES Transgas II, Ltd.

AES Treasure Cove, Ltd.

AES Uruguaiana Empreedimentos S.A.

AES Uruguaiana, Inc.

Asteroid I, Ltd.

Brasiliana Energia S.A.

Cayman Energy Traders

Companhia de Gas de Minas Gerais, S.A.

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

Companhia Energetica de Minas Gerais, S.A.

AES Tiete S.A.

Eletroger Ltda.

Eletropaulo Comercial Exportadora, Ltda.

Eletropaulo Metropolitana Electricidade de Sao Paulo S.A.

Eletropaulo Telecomunicacoes, Ltda.

Energia Paulista Participacoes, S.A.

Metropolitana Overseas II, Ltd.

Pleasantville Participacoes Ltda.

Southern Electric Brazil Participacoes, Ltda.

ARGENTINA

AES Alicura Holdings, S.C.A.

AES Andes Energy, Inc.

AES Argentina Investments, Ltd.

AES Argentina Operations, Ltd.

AES Argentina Inc.

AES Asociados S.A.

AES Caracoles I

AES Caracoles II

AES Caracoles III, L.P.

AES Caracoles S.R.L.

AES Chaparron I, Ltd.

AES Chaparron II, Ltd.

AES Development de Argentina S.A.

AES Energy, Ltd.

AES Ocean Springs, Ltd.

AES Operadora S.A.

AES Parana Gas S.A.

AES Parana Holdings, Ltd.

AES Parana I Limited Partnership

AES Parana II Limited Partnership

AES Parana IHC, Ltd.

AES Parana Generation Holdings, Ltd.

AES Parana Operations S.R.L.

AES Parana Propiedades S.A.

AES Parana S.C.A.

AES Rio Diamate, Inc.

AES San Nicolas Holding Espana, S.L.

AES San Nicolas, Inc.

AES South Point, Ltd.

AESEBA S.A.

Asociados de Electricidad, S.A.

B.A. Services S.R.L.

Camille, Ltd.

Central Dique, S.A.

Central Termica San Nicolas S.A.

CMS Generation San Nicolas Company

Compania de Inversiones en Electricidad, S.A.

Empresa Distribuidora de Energia Norte S.A.

Empresa Distribuidora de Energia Sur S.A.

Empresa Distribuidora La Plata, S.A.

Gasoducto GasAndes Argentina S.A.

Gener Argentina S.A.

AES Alicura, S.A.

Hidroeletrica Rio Juramento, S.A.

 

2

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

Inter Andes, S.A.

Inversora AES Americas Holding Espana Espana, S.L.

Inverorsa de San Nicolas S.A.

Inversora AES Americas, S.A.

La Plata II, Ltd.

La Plata III, Ltd.

La Plata Partners L.P.

Luz del Plata S.A.

AES Panama Energy, S.A.

Shazia S:R.L.

TermoAndes S.A.

Wildwood Funding, Ltd.

Wildwood I, Ltd.

Wildwood II, Ltd.

 

3

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

Exhibit 10.2.C

EXHIBIT A to the

Credit Agreement

FORM OF NOTE

 

New York, New York                , 2006

For value received, The AES Corporation, a Delaware corporation (the
“Borrower”), promises to pay to                      (the “Bank”) or its
registered assigns, for the account of its Lending Office (as defined in the
Credit Agreement referred to below), the unpaid principal amount of each Loan
(as defined in the Credit Agreement referred to below) made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the dates and in
the amounts specified in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each Loan on the dates and at the
rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other same day funds at the place of payment specified in the Credit
Agreement.

All Loans made by the Bank, the respective types thereof and all repayments of
the principal thereof shall be recorded by the Bank and, if the Bank so elects
in connection with any transfer or enforcement hereof, appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding may be endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make (or any error in making) any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement dated as of
March 29, 2006 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”) among the Borrower, the Bank
and certain other banks party thereto and Merrill Lynch Capital Corporation, as
the Administrative Agent for the Banks. Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made to the Credit
Agreement for provisions for, in certain circumstances, the prepayment hereof
and the acceleration of the maturity hereof.

This Note is assignable to one or more Persons as provided in the Credit
Agreement and the Borrower agrees to issue from time to time replacement Notes
in the form hereof to facilitate such assignments.

 

Note

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

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

 

THE AES CORPORATION By:  

 

Name: Title:

 

Note

-2-

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

LOANS AND PAYMENTS OF PRINCIPAL

 

Date

  

Amount of

Loan

  

Type of Loan

  

Amount of

Principal

Repaid

  

Notation

Made By

                                                                                
                                                                                
                                                                 

 

Note

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

Exhibit 10.2.D

LOGO [g41120ex102d_pg01a.jpg]

 

LOGO [g41120ex102d_pg001b.jpg]  

March 29, 2006

 

To the Persons

Listed on Schedule I hereto

 

Ladies and Gentlemen:

 

I am the Vice President and Deputy General Counsel of The AES Corporation (the
“Company”), a corporation organized and existing under the laws of the State of
Delaware, and have acted as counsel for the Company in connection with the
Credit Agreement dated as of March     , 2006 (the “Credit Agreement”;
capitalized terms used herein but not defined shall be used herein as defined in
the Credit Agreement) among the Company, the Banks party thereto and Merrill
Lynch Capital Corporation, as Administrative Agent. This opinion is being
furnished to you pursuant to Section 3.01 (b) (i) of the Credit Agreement.

 

In rendering this opinion, I have examined, and relied on, subject to the
assumptions and qualifications herein, an executed counterpart of the Credit
Agreement and such agreements, instruments and documents and have conducted such
investigations of laws I have deemed necessary or appropriate as a basis for the
opinions hereafter expressed. As to questions of fact material to this opinion,
I have, when relevant facts were not independently established, relied upon
certificates of appropriate public officials and officers and representatives of
the Company and other appropriate persons, and upon the factual representations
or statements made by these persons or in the Credit Agreement. In all such
examinations, I have assumed, without independent verification, the authenticity
and completeness of documents purporting to be originals (whether examined in
original, facsimile or copy form), the conformity to originals of documents
purporting to be photostatic or facsimile copies of originals, and the
genuineness of all signatures.

 

I make no observations and give no opinion in relation to any contract,
instrument or document other than the Credit Agreement (whether or not referred
to in the Credit Agreement) nor have I made any enquiries of any party to the
Credit Agreement, or other person or entity, other than the Company.

 

This opinion is strictly limited to the matters stated in it and is not to be
read as extending by implication to any other matter or any other

 

1300 Wilson Boulevard

Arlington, Virginia 22203

Phone: (703) 522-1315

Fax: (703) 528-4510

 

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

 

contract, instrument or document executed in connection with the Credit
Agreement or the transactions contemplated by it or otherwise.

 

On the basis of the foregoing, and having regard for such legal considerations
as I deem relevant, I am of the opinion that:

 

1. The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of Delaware and has all corporate or other
organizational powers and, to my knowledge, all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

 

2. The execution, delivery and performance by the Company of the Credit
Agreement are within its corporate powers, have been duly authorized by all
necessary corporate action, and require no action by or in respect of, or filing
with, any governmental body, agency or official and do not (a) contravene, or
constitute a default under, any provision of (i) the certificate of
incorporation or by-laws of the Company or (ii) to my knowledge, (A) any law or
regulation applicable to the Company or (B) any judgment, injunction, order or
decree binding upon the Company or (C) any agreement or instrument evidencing or
governing any Debt of the Company in the amount of $25,000,000 or more
(“Specified Debt”) or (b) result in or require the creation or imposition of any
lien on any asset of the Company under any agreement or instrument evidencing or
governing any Specified Debt.

 

3. The Company has duly executed and delivered the Credit Agreement.

 

4. Except for Disclosed Matters, there is no action, suit, investigation of
which the Company has notice, litigation or proceeding pending against, or to my
knowledge threatened against, the Company or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which could have a Material
Adverse Effect, or which in any manner draws into question the legality,
validity or enforceability of the Credit Agreement.

 

I am a member of the Bar of the District of Columbia; however, this opinion
relates solely to the General Corporation Law of the State of Delaware and the
federal laws of the United States as at the date and time of its issue. I have
made no investigation of, and neither express nor imply any opinion with respect
to the laws of any state or jurisdiction other than the General Corporation Law
of the State of Delaware and the federal laws of the United States.

 

2

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

 

This opinion may be relied upon solely by each of the addresses hereto, and may
not be relied upon by any other person, nor used, circulated, quoted or
otherwise referred to for any other purpose, without my prior written consent,
except that any Person that becomes a Bank, Fronting Bank or Administrative
Agent in accordance with the provisions of the Credit Agreement may rely upon
this opinion as if it were specifically addressed and delivered to such Person
on the date hereof.

 

Very truly yours,

/s/ Vincent W. Mathis

Vincent W. Mathis Vice President and Deputy General Counsel

 

3

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

Schedule 1

The Banks party to the Credit Agreement

Merrill Lynch Capital Corporation, as Administrative Agent

4 World Financial Center

250 Vesey Street

New York, NY 10080

 

4

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

Exhibit 10.2.E

SHEARMAN & STERLING LLP

599 LEXINGTON AVENUE | NEW YORK | NY | 10022-6069

WWW.SHEARMAN.COM | T +1.212.848.4000 | F +1.212.848.7179

March 29, 2006

To the Persons listed in Schedule A

The AES Corporation

Ladies and Gentlemen:

We have acted as counsel to The AES Corporation, a Delaware corporation (the
“Company”), in connection with the preparation, execution and delivery of the
Credit Agreement, dated as of March 29, 2006 (the “Agreement”), among the
Company and each of you. This opinion is furnished to you pursuant to
Section 3.01(b)(ii) of the Agreement. Unless otherwise defined herein, terms
defined in the Agreement are used herein as therein defined.

In that connection, we have reviewed an original or copy of the Agreement.

We have also reviewed the following:

(i) The originals or copies of the indentures and credit agreement that are
listed in Schedule B.

(ii) Originals or copies of such other records of the Company, certificates of
public officials and of officers of the Company and agreements and other
documents as we have deemed necessary as a basis for the opinions expressed
below.

In our review of the Agreement and other documents, we have assumed:

(A) The genuineness of all signatures.

(B) The authenticity of the originals of the documents submitted to us.

(C) The conformity to authentic originals of any documents submitted to us as
copies.

(D) As to matters of fact, the truthfulness of the representations made in the
Agreement and in certificates of public officials and officers of the Company.

 

ABU DHABI | BEIJING | BRUSSELS | DÜSSELDORF | FRANKFURT | HONG KONG | LONDON | MANNHEIM | MENLO PARK
MUNICH | NEW YORK | PARIS | ROME | SAN FRANCISCO | SĀO PAULO | SINGAPORE | TOKYO
| TORONTO | WASHINGTON, DC

SHEARMAN & STERLING LLP IS A LIMITED LIABILITY PARTNERSHIP ORGANIZED IN THE
UNITED STATES UNDER THE LAWS OF THE STATE OF DELAWARE, WHICH LAWS LIMIT THE
PERSONAL LIABILITY OF PARTNERS.

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

(E) That the Agreement is the legal, valid and binding obligation of each party
thereto, other than the Company, enforceable against each such party in
accordance with its terms.

(F) That:

(1) The Company is an entity duly organized and validly existing under the laws
of the jurisdiction of its organization.

(2) The Company has full power to execute, deliver and perform, and has duly
executed and delivered, the Agreement.

(3) The execution, delivery and performance by the Company of the Agreement have
been duly authorized by all necessary action (corporate or otherwise) and do
not:

(a) except with respect to Generally Applicable Law, violate any law, rule or
regulation applicable to it; or

(b) result in any conflict with or breach of any agreement or document binding
on it (other than the documents specified in Schedule B) of which any addressee
hereof has knowledge, has received notice or has reason to know.

(4) Except with respect to Generally Applicable Law, no authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body or (to the extent the same is required under any agreement or
document binding on it of which an addressee hereof has knowledge, has received
notice or has reason to know) any other third party is required for the due
execution, delivery or performance by the Company of the Agreement or, if any
such authorization, approval, action, notice or filing is required, it has been
duly obtained, taken, given or made and is in full force and effect.

We have not independently established the validity of the foregoing assumptions.

“Generally Applicable Law” means the federal law of the United States of
America, and the law of the State of New York (including the rules or
regulations promulgated thereunder or pursuant thereto), that a New York lawyer
exercising customary professional diligence would reasonably be expected to
recognize as being applicable to the Company, the Agreement or the transactions
governed by the Agreement and for purposes of assumption paragraph (F) above and
our opinions in paragraph 1 below, the General Corporation Law of the State of
Delaware. Without limiting the generality of the foregoing definition of
Generally Applicable Law, the term “Generally Applicable Law” does not include
any law, rule or regulation that is applicable to the Company, the Agreement or
such transactions solely because such law, rule or regulation is part of a
regulatory regime applicable to any party to any of the Agreement or any of its
affiliates due to the specific assets or business of such party or such
affiliate.

 

2

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

Based upon the foregoing and upon such other investigation as we have deemed
necessary and subject to the qualifications set forth below, we are of the
opinion that:

1. The execution and delivery by the Company of the Agreement do not, and the
performance by the Company of its obligations thereunder and the borrowings and
issuances of letters of credit thereunder will not, (a) result in a violation of
the Company’s certificate of incorporation or by-laws, (b) result in a violation
of Generally Applicable Law or (c) result in a breach of, a default under, or
the acceleration of (or entitle any party to accelerate) the maturity of any
obligation of the Company under, or result in or require the creation of any
lien upon or security interest in any property of the Company pursuant to the
terms of, any agreement or document listed in Schedule B.

2. No authorization, approval or other action by, and no notice to or filing
with, any United States federal or New York governmental authority or regulatory
body, or any third party that is a party to any of the documents listed in
Schedule B, is required for the due execution, delivery or performance by the
Company of the Agreement or the exercise of rights or remedies by the other
parties under the Agreement.

3. The Agreement is the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.

Our opinions expressed above are subject to the following qualifications:

(a) Our opinion in paragraph 3 is subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally (including without limitation all laws relating to
fraudulent transfers).

(b) Our opinion in paragraph 3 is subject to the effect of general principles of
equity, including without limitation concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether considered in a proceeding in
equity or at law).

(c) Our opinions are limited to Generally Applicable Law, and we do not express
any opinion herein concerning any other law.

A copy of this opinion letter may be delivered by any of you to any person that
becomes a Bank, Fronting Bank or Administrative Agent in accordance with the
provisions of the Agreement. Any such person may rely on the opinions expressed
above as if this opinion letter were addressed and delivered to such person on
the date hereof.

This opinion letter is rendered to you in connection with the transactions
contemplated by the Agreement. This opinion letter may not be relied upon by you
or any person entitled to rely on this opinion pursuant to the preceding
paragraph for any other purpose without our prior written consent.

 

3

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

This opinion letter speaks only as of the date hereof. We expressly disclaim any
responsibility to advise you of any development or circumstance of any kind,
including any change of law or fact, that may occur after the date of this
opinion letter that might affect the opinions expressed herein.

 

Very truly yours, LOGO [g41120ex102e_pg004.jpg]

MEO:MLH

WEH

 

4

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

SCHEDULE A

The Banks party to the Agreement

Merrill Lynch Capital Corporation, as Administrative Agent for the Banks

4 World Financial Center

250 Vesey Street

New York, NY 10080

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

SCHEDULE B

 

1. Third Amended and Restated Credit and Reimbursement Agreement dated as of
March 17, 2004, as amended by Amendment No. 1 dated as of August 10, 2004,
Amendment No. 2 dated as of June 23, 2005, Amendment No. 3 dated as of
August 19, 2005, Amendment No. 4 dated as of September 28, 2005, Amendment No. 5
dated as of September 30, 2005 and Amendment No. 6 dated as of October 15, 2005.

 

2. Senior Indenture between the Company and The First National Bank of Chicago
dated as of December 8, 1998.

 

  (a) First Supplemental Indenture dated as of December 8, 1998

 

  (b) Second Supplemental Indenture dated as of June 11, 1999

Re: 9.50% Senior Notes due 2009

 

  (c) Third Supplemental Indenture dated as of September 12, 2000

Re: 9.375% Senior Notes due 2010

 

  (d) Fifth Supplemental Indenture dated as of February 9, 2001

Re: 8.875 % Senior Notes due 2011

 

  (e) Sixth Supplemental Indenture dated as of February 22, 2001

Re: 8.375% Senior Notes due 2011

 

  (f) Seventh Supplemental Indenture dated as of June 5, 2001

Re: 8.750% Senior Notes due 2008

 

  (g) Ninth Supplemental Indenture dated as of April 3, 2003

Re: Amendment to Senior Indenture for all Series of Notes

 

  (h) Tenth Supplemental Indenture dated as of February 13, 2004

Re: 7.750% Senior Notes due 2014

 

3. Senior Subordinated Indenture dated as of October 29, 1997

 

  (a) First Supplemental Indenture dated as of November 21, 1997

Re: Amendment to Indenture

 

  (b) Second Supplemental Indenture dated as of April 3, 2003

 

4. Junior Subordinated Indenture dated as of March 1, 1997

 

  (a) Third Supplemental Indenture dated as of October 14, 1999 Re: 6.75% Junior
Subordinated Convertible Debentures due 2029

  (b) Seventh Supplemental Indenture dated as of May 17, 2000 Re: 6.0% Junior
Subordinated Convertible Debentures due 2008

 

5. Senior Indenture between the Company and Wells Fargo Bank, Minnesota,
National Association dated as of May 8, 2003.

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

     

CAHILL GORDON & REINDEL LLP

EIGHTY PINE STREET

NEW YORK, N.Y. 10005-1702

     

FLOYD ABRAMS

L. HOWARD ADAMS

  

ROBERT M. HALLMAN

WILLIAM M. HARTNETT

  

TELEPHONE: (212) 701-3000

FACSIMILE: (212) 269-5420

  

LUIS R. PENALVER

ROY L. REGOZIN

  

SENIOR COUNSEL

WALTER C. CLIFF

ROBERT A. ALESSI    CRAIG M. HOROWITZ               DEAN RINGEL    DAVID R. HYDE

ROGER ANDRUS

HELENE R. BANKS

MICHAEL A. BECKER

LANDIS C. BEST

GARY A. BROOKS

SUSAN BUCKLEY

KEVIN J. BURKE

JAMES J. CLARK

BENJAMIN J. COHEN

CHRISTOPHER T. COX

W. LESLIE DUFFY

ADAM M. DWORKIN

RICHARD E. FARLEY

  

DAVID G. JANUSZEWSKI

ELAI KATZ

THOMAS J. KAVALER

DAVID N. KELLEY

LAWRENCE A. KOBRIN

EDWARD P. KRUGMAN

JOEL KURTZBERG

GEOFFREY E. LIEBMANN

MICHAEL MACRIS

ANN S. MAKICH

JONATHAN I. MARK

GERARD M. MEISTRELL

ROGER MELTZER

  

 

1990 K STREET, N.W.

WASHINGTON, D.C. 20006-1181

(202) 862-8900

FAX: (202) 862-8958

 

AUGUSTINE HOUSE

6A AUSTIN FRIARS

LONDON, ENGLAND EC2N 2HA

(011) 44.20.7920.9800

FAX: (01l) 44.20.7920.9825

  

JAMES ROBINSON

THORN ROSENTHAL

JONATHAN A. SCHAFFZIN

JOHN SCHUSTER

MICHAEL A. SHERMAN

DARREN SILVER

HOWARD G. SLOANE

LAURENCE T. SORKIN

LEONARD A. SPIVAK

SUSANNA M. SUH GERALD S. TANENBAUM

JONATHAN D. THIER

JOHN A. TRIPODORO

  

IMMANUEL KOHN

WILLIAM T. LIFLAND DONALD J. MULVIHILL

IRWIN SCHNEIDERMAN

JOHN R. VAUGHAN

GARY W. WOLF

 

COUNSEL

 

CORYDON B. DUNHAM

JASON W. KAPLAN

RAND McQUINN*

PATRICIA FARREN    MICHAEL E. MICHETTI               ROBERT USADI    *ADMITTED
IN

JOAN MURTAGH FRANKEL

BART FRIEDMAN

CIRO A. GAMBONI

WILLIAM B. GANNETT

CHARLES A. GILMAN

STEPHEN A. GREENE

  

ATHY A. MOBILIA

NOAH B. NEWITZ

MICHAEL J. OHLER

KENNETH W. ORCE

DAVID R. OWEN

JOHN PAPACHRISTOS

   WRITER’S DIRECT NUMBER   

GEORGE WAILAND

GLENN J. WALDRIP, JR. MICHAEL B. WEISS

S. PENNY WINDLE

DANIEL J. ZUBKOFF

ADAM ZUROFSKY

  

DC, TX, VA ONLY

March 29, 2006

Merrill Lynch Capital Corporation,

    as Administrative Agent

250 Vesey Street, 22nd Floor

New York, New York, 10080

 

  Re: The AES Corporation

Credit Agreement                            

Ladies and Gentlemen:

We have acted as special New York counsel to Merrill Lynch Capital Corporation,
as Administrative Agent (the “Administrative Agent”), in connection with their
execution and delivery of that certain Credit Agreement, dated as of March 29,
2006 among THE AES CORPORATION, a Delaware corporation (the “Borrower”), the
Administrative Agent, the BANKS listed on the signature pages thereof, MERRILL
LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Lead
Arranger, and the FRONTING BANKS party thereto (the “Credit Agreement”).

This opinion is furnished to you at the request of the Merrill Lynch Bank USA,
in its capacity as a Fronting Bank, in connection with the execution and
delivery of the Credit Agreement. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings given to them in the Credit Agreement.
“Deposit Bank” shall mean the bank with which the Credit-Linked Deposit Account
is maintained.

We have examined the Credit Agreement. In rendering this opinion to you, we have
assumed without inquiry:

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

CAHILL GORDON & REINDEL LLP

(a) (i) the genuineness of all signatures on original copies of the Credit
Agreement; (ii) the conformity to the original documents of all documents
submitted to us as copies and the authenticity of all documents submitted to us
as originals; (iii) the due authorization, execution and delivery of the Credit
Agreement by each of the parties thereto; and (iv) the validity and
enforceability of the Credit Agreement against each of the parties thereto;

(b) that (i) the Credit-Linked Deposit Account exists, (ii) the Credit-Linked
Deposit Account is a Deposit Account (as such term is defined in the Uniform
Commercial Code as in effect in the State of New York (the “UCC”)), (iii) the
Banks have rights (within the meaning of Section 9-203(b) of the UCC) in such
Credit-Linked Deposit Account sufficient to grant a security interest in such
Credit-Linked Deposit Account and (iv) value has been given on the date hereof
within the meaning of Section 9-203(b) of the UCC; and

(c) that the Deposit Bank’s jurisdiction is the State of Utah and that the laws
of the State of Utah are the same as the laws of the State of New York.

Based on the foregoing and subject to the qualifications set forth below, we are
of the opinion that:

1. The Credit Agreement creates a valid security interest in the Credit- Linked
Deposit Account in favor of the Administrative Agent for the benefit of the
Fronting Banks. Assuming the Administrative Agent becomes the Deposit Bank’s
customer with respect to the Credit-Linked Deposit Account within the meaning of
Section 9-104(a)(3) of the UCC, the security interest of the Administrative
Agent for the benefit of the Fronting Banks in the Credit-Linked Deposit Account
will be perfected by control.

We point out to you that we are issuing this opinion solely in our capacity as
special New York counsel to the Administrative Agent, and we do not express any
opinion as to the effect on the opinions and statements made herein of the laws
of any jurisdiction other than the laws of the State of New York.

This opinion is rendered solely to, and is intended solely for the benefit of,
the Administrative Agent and its successors in connection with the transactions
contemplated in the Credit Agreement. This opinion may not be relied upon by any
other person, firm or corporation for any purpose without our prior written
consent.

 

Very truly yours, LOGO [g41120ex102e_pg008.jpg]

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Exhibit 10.2.F

EXHIBIT C-1 to the

Credit Agreement

FORM OF LOAN FACILITY ASSIGNMENT AND ASSUMPTION AGREEMENT

AGREEMENT dated as of                      , 200     among [ASSIGNOR] (the
“Assignor”), [ASSIGNEE] (the “Assignee”), THE AES CORPORATION (the “Borrower”),
and MERRILL LYNCH CAPITAL CORPORATION, as Administrative Agent (the
“Administrative Agent”).

W I T N E S S E T H

WHEREAS, this Assignment and Assumption Agreement (the “Agreement”) relates to
the Credit Agreement (the “Credit Agreement”) dated as of March 29, 2006 among
the Borrower, the Banks party thereto and the Administrative Agent; and

WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of
the Assignor under the Credit Agreement in respect of a portion of its Funding
Amount thereunder in an amount equal to $             (the “Assigned Amount”),
together with a corresponding portion of its outstanding Loans and participating
interests in outstanding Letter of Credit Liabilities, and the Assignee proposes
to accept assignment of such rights and assume the corresponding obligations
from the Assignor on such terms;

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

1. Definitions. All capitalized terms not otherwise defined herein shall have
the respective meanings set forth in the Credit Agreement.

2. Assignment. The Assignor hereby assigns and sells to the Assignee all or a
proportionate part of all of the rights of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, in each case in an amount not
less than $1,000,000 (or such lesser amount as may be agreed to by the Borrower
and the Agent) (except in the case of an assignment which will result in a group
of Banks which are managed by the Assignor holding a Funding Amount of not less
than $1,000,000), and the Assignee hereby accepts such assignment from the
Assignor and assumes all of the obligations of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, including the purchase from the
Assignor of the corresponding portion of the principal amount of the Loans made
by the Assignor outstanding at the date hereof and the corresponding portion of
participating interests purchased by the Assignor in Letter of Credit
Liabilities outstanding on the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee and, as required pursuant to the terms of
the Credit Agreement, the Borrower and the Administrative Agent, and the payment
of the amounts specified in Section 3 hereof required to be paid on the date
hereof, (i) the Assignee shall, as of the date hereof, succeed to the rights

 

Loan Facility Assignment and Assumption Agreement

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

and be obligated to perform the obligations of a Bank Party under the Credit
Agreement with a Funding Amount in an amount equal to the Assigned Amount and
(ii) the Funding Amount of the Assignor shall, as of the date hereof, be reduced
by a like amount and the Assignor shall be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee.

3. Payments. As consideration for the assignment and sale contemplated in
Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in
lawful money of the United States of America the amount heretofore agreed
between them.1 It is understood that commitment fees and/or letter of credit
commissions accrued to the date hereof are for the account of the Assignor, and
each of the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such other party to the
extent of such other party’s interest therein and shall promptly pay the same to
such other party.

4. Consent of the Borrower and the Administrative Agent. This Agreement is
conditioned upon the consent of, as required pursuant to the terms of the Credit
Agreement, the Borrower and the Administrative Agent. The execution of this
Agreement by, as required pursuant to the terms of the Credit Agreement, the
Borrower and the Administrative Agent is evidence of this consent.

5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in
connection with, and shall have no responsibility with respect to, the solvency,
financial condition, or statements of the Borrower, or the validity and
enforceability of the Obligations of the Borrower in respect of the Credit
Agreement. The Assignee acknowledges that it has, independently and without
reliance on the Assignor, any other Bank or the Administrative Agent, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and will continue to
be responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.

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

7. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

1 Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.

 

Loan Facility Assignment and Assumption Agreement

-2-

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

IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.

 

[ASSIGNOR] By:  

 

Title:   [ASSIGNEE] By:  

 

Title:   [EACH REVOLVING FRONTING BANK] By:  

 

Title:   [MERRILL LYNCH CAPITAL CORPORATION, as Agent By:  

 

Title:]2   [THE AES CORPORATION, as Borrower By:  

 

Title:]2  

 

2 As required pursuant to the terms of the Credit Agreement.

 

Loan Facility Assignment and Assumption Agreement

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Exhibit 10.2.G

EXHIBIT C-2 to the

Credit Agreement

FORM OF FRONTING BANK ASSIGNMENT

AND ASSUMPTION AGREEMENT

AGREEMENT dated as of                  , 200   among [ASSIGNOR] (the
“Assignor”), [ASSIGNEE] (the “Assignee”), THE AES CORPORATION (the “Borrower”)
and MERRILL LYNCH CAPITAL CORPORATION, as Administrative Agent (the
“Administrative Agent”).

W I T N E S S E T H

WHEREAS, this Assignment and Assumption Agreement (the “Agreement”) relates to
the Credit Agreement (the “Credit Agreement”) dated as of March 29, 2006 among
the Borrower, the Banks party thereto, and the Administrative Agent; and

WHEREAS, the Assignor proposes to assign to the Assignee all (and not less than
all) of the rights and obligations of the Assignor, in its capacity as a
Fronting Bank, under the Credit Agreement (the “Assigned Amount”) and the
Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;

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

1. Definitions. All capitalized terms not otherwise defined herein shall have
the respective meanings set forth in the Credit Agreement.

2. Assignment. The Assignor hereby assigns and sells to the Assignee all but not
less than all of the rights of the Assignor, in its capacity as a Fronting Bank,
under the Credit Agreement and any documents entered into in connection with the
Credit Agreement to the extent of the Assigned Amount, and the Assignee hereby
accepts such assignment from the Assignor and assumes all of the obligations of
the Assignor, in its capacity as a Fronting Bank, under the Credit Agreement and
any documents entered into in connection with the Credit Agreement to the extent
of the Assigned Amount. Upon the execution and delivery hereof by the Assignor,
the Assignee, the Borrower and the Administrative Agent, and the payment of the
amounts specified in Section 3 hereof required to be paid on the date hereof,
(i) the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Fronting Bank under the Credit
Agreement with L/C Exposure in an amount equal to the Assigned Amount and
(ii) L/C Exposure of the Assignor shall, as of the date hereof, be reduced by a
like amount and the Assignor shall be released from its obligations under the
Credit Agreement to the extent such obligations have been assumed by the
Assignee.

3. Payments. As consideration for the assignment and sale contemplated in
Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in
lawful money of

 

Third Party Fronting Bank Assignment and Assumption Agreement

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

the United States of America the amount heretofore agreed between them.1 It is
understood that commitment fees and/or letter of credit commissions accrued to
the date hereof are for the account of the Assignor, and each of the Assignor
and the Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other party’s
interest therein and shall promptly pay the same to such other party.

4. Consent of the Borrower and the Administrative Agent. This Agreement is
conditioned upon the consent of the Borrower and the Administrative Agent. The
execution of this Agreement by the Borrower and the Administrative Agent is
evidence of this consent.

5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in
connection with, and shall have no responsibility with respect to, the solvency,
financial condition, or statements of the Borrower, or the validity and
enforceability of the Obligations of the Borrower in respect of the Credit
Agreement and any documents entered into in connection with the Credit
Agreement. The Assignee acknowledges that it has, independently and without
reliance on the Assignor, any other Bank or the Administrative Agent, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and will continue to
be responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.

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

7. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

[SIGNATURE PAGES IMMEDIATELY FOLLOW]

  

 

1 Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.

 

Third Party Fronting Bank Assignment and Assumption Agreement

-2-

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

IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.

 

[ASSIGNOR] By:  

 

Title: [ASSIGNEE] By:  

 

Title: THE AES CORPORATION, as Borrower By:  

 

Title: MERRILL LYNCH CAPITAL CORPORATION, as Administrative Agent By:  

 

Title:

 

Third Party Fronting Bank Assignment and Assumption Agreement

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

Exhibit 10.2.H

EXHIBIT D to the

Credit Agreement

FORM OF FRONTING BANK AGREEMENT

                    , 200    

Merrill Lynch Capital Corporation

4 World Financial Center

250 Vesey Street

New York, New York 10080

Attention:

Ladies and Gentlemen:

Reference is hereby made to the Credit Agreement dated as of March 29, 2006 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among The AES Corporation, a Delaware corporation
(the “Borrower”), the Banks party thereto and Merrill Lynch Capital Corporation,
as Administrative Agent. The capitalized terms defined in the Credit Agreement
and not otherwise defined herein are used herein as therein defined.

Section 1. Obligations Under the Credit Agreement. The undersigned hereby
agrees, as of the date first above written, to be bound as a Fronting Bank by
all of the terms and conditions of the Credit Agreement to the same extent as
each of the other Fronting Banks thereunder and agrees to issue letters of
credit in an aggregate amount not to exceed $[            ] at any time
outstanding pursuant to and in accordance with Section 2.05 of the Credit
Agreement. The undersigned further agrees, as of the date first above written,
that each reference in the Credit Agreement to a “Fronting Bank” shall also mean
and be a reference to the undersigned.

Section 2. Representations and Warranties. The undersigned hereby represents and
warrants that it (i) is a Bank under the Credit Agreement or (ii) meets the
definition of a “Fronting Bank”, as defined in the Credit Agreement.

Section 3. Delivery by Telecopier. Delivery of an executed counterpart of a
signature page to this Fronting Bank Agreement by telecopier shall be effective
as delivery of an original executed counterpart of this Fronting Bank Agreement.

Section 4. Non-Reliance. The undersigned acknowledges that it has, independently
and without reliance on any Fronting Bank, any other Bank and the Agent, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and will continue
to be responsible for making its own independent appraisal of the business,
affairs and financial condition of the Borrower.

 

Fronting Bank Agreement

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

Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. This Fronting
Bank Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

Very truly yours,

[NAME OF FRONTING BANK]

By:  

 

Name: Title: Address: Fax:

 

Acknowledged on the date hereof by: MERRILL LYNCH CAPITAL CORPORATION, as
Administrative Agent By  

 

Name: Title:

 

Fronting Bank Agreement

-2-

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

Exhibit 10.2.I

EXHIBIT E to the

Credit Agreement

FORM OF REQUEST FOR LOAN

1. This REQUEST FOR LOAN is executed and delivered by The AES Corporation
(“Borrower”) to Merrill Lynch Capital Corporation (“MLCC”), as Administrative
Agent (“Administrative Agent”), pursuant to the Credit Agreement dated as of
March 29, 2006 by and among Borrower, the Banks party thereto and MLCC, as
Administrative Agent and Collateral Agent (as the same may be amended, amended
and restated, renewed, extended or otherwise modified form time to time, the
“Credit Agreement”). Any capitalized terms used herein and not defined herein
shall have the meanings set forth for such terms in the Credit Agreement.

2. The Borrower hereby requests that the Banks make a Loan to it pursuant to the
Credit Agreement as follows:

 

  (a) AMOUNT OF REQUESTED LOAN: $                    

 

  (b) DATE OF REQUESTED LOAN:                     

 

  (c) TYPE OF REQUESTED LOAN:

(Check one box only)

 

  ¨ BASE RATE LOAN

 

  ¨ EURODOLLAR LOAN

 

  (d) WIRED TO THE FOLLOWING ACCOUNT:

[The AES Corporation]

[Bank]

[City, State]

Account No.:

ABA No.:

3. In connection with the request, the Borrower certifies that:

(a) Now and as of the date of the requested Loan, the representations and
warranties of the Borrower and set forth in the Credit Agreement are and will be
true and correct in all material respects on and as of the date of such Loan (or
to the extent qualified by materiality, true and correct);

(b) At the time of and immediately after giving effect to such Loan, no Default
or Event of Default has or will have occurred and be continuing;

(c) At the time of and immediately after such Extension of Credit, after giving
effect to such Loan, after giving effect to all direct and indirect applications
of the proceeds of such Loan made substantially simultaneously with the
extension

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

thereof, (i) the aggregate Total Exposure of the Banks will not exceed the total
Funding Amounts and (ii) the L/C Exposure will not exceed the balance of the
Credit-Linked Deposit Account (excluding any portion of the Credit-Linked
Deposit Account attributable to interest); and

(d) The making of such Loan is permitted under the terms of the Debt of the
Borrower outstanding as of the date of such Loan.

4. This Request for Loan is executed on              by an authorized officer of
the Borrower. The undersigned, solely in such capacity and not in a personal
capacity, hereby certifies each and every matter contained herein to be true and
correct.

 

THE AES CORPORATION By:  

 

Name:   Title:  

 

-2-

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

Exhibit 10.2.J

EXHIBIT F to the

Credit Agreement

FORM OF INTEREST ELECTION REQUEST

1. This INTEREST ELECTION REQUEST is executed and delivered by The AES
Corporation (“Borrower”) to Merrill Lynch Capital Corporation (“MLCC”), as
Administrative Agent (“Administrative Agent”), pursuant to the Credit Agreement
dated as of March 29, 2006 by and among Borrower, the Banks party thereto and
MLCC, as Administrative Agent, and Collateral Agent (as the same may be amended,
amended and restated, renewed, extended or otherwise modified form time to time,
the “Credit Agreement”). Any capitalized terms used herein and not defined
herein shall have the meanings set forth for such terms in the Credit Agreement.

2. The Borrower hereby elects an interest rate in connection with an existing
Loan pursuant to the Credit Agreement as follows:

 

  (a) AMOUNT OF LOAN: $                    

 

  (b) DATE OF MATURITY:                     

 

  (c) CURRENT INTEREST ELECTION:                     

 

  (d) INTEREST ELECTION:

 

  (i) PORTION OF EXISTING LOAN ALLOCATED: $                    

 

  (ii) REQUESTED INTEREST RATE: (Check one box only)

 

  ¨ BASE RATE

 

  ¨ EURODOLLAR

3. In connection with the request, the Borrower certifies that at the time of
and immediately after giving effect to such Loan, no Event of Default has or
will have occurred and be continuing.

4. This Interest Election Request is executed on             ,         , by an
authorized officer of the Borrower. The undersigned, solely in such capacity and
not in a personal capacity, hereby certifies each and every matter contained
herein to be true and correct.

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

THE AES CORPORATION By:  

 

Name:   Title:  

 

-2-