Exhibit 10.1
AMENDMENT NO. 1 – CREDIT AGREEMENT (AESC)
     AMENDMENT NO. 1, dated as of September 11, 2007 (this “Amendment”), in
respect of the Credit Agreement (the “Credit Agreement”), dated as of May 2,
2006, among Allegheny Energy Supply Company, LLC (the “Borrower”), the Initial
Lenders, the Swing Line Bank and the Initial Issuing Bank named therein, and
Citicorp USA, Inc., as Administrative Agent. Capitalized terms not otherwise
defined herein shall have the same meanings as set forth in the Credit
Agreement.
PRELIMINARY STATEMENT
          The Borrower has requested that the Revolving Facility be increased in
the amount of $200 million and the Borrower be permitted to make cash dividends
from time to time to the Parent, including with the proceeds of the Revolving
Facility.
          SECTION 1. Amendment. Subject to the satisfaction of the conditions
precedent set forth in Section 2, the Required Lenders, the Borrower, and all of
the Revolving Lenders listed on the signature pages hereof as Increasing
Revolving Lenders (each, an “Increasing Revolving Lender”) hereby agree as
follows:
     (a) Schedule I to the Credit Agreement is amended and replaced in its
entirety with Exhibit A attached hereto.
     (b) To amend Section 2.15 of the Credit Agreement by inserting the text
that appears below as bolded and underlined:
     The proceeds of the Advances and issuances of any Letter of Credit shall be
available (and the Borrower agrees that it shall use proceeds of Advances made
to it and each Letter of Credit issued at its request) solely (a) in the case of
the Term Borrowing and, to the extent proceeds of such Revolving Borrowing are
not applied in accordance with clause (b) below, each Revolving Borrowing on the
Closing Date, to repay in full the Existing Debt, (b) in the case of each
subsequent Revolving Borrowing (and each Revolving Borrowing comprising the
Initial Borrowing that is not required to pay the Existing Debt) and Letter of
Credit, for working capital for the Borrower and its Subsidiaries and to make
cash dividends from time to time to the Parent to the extent permitted under
Section 5.02(f)(i)(F) and (c) in the case of any additional borrowing made
pursuant to Section 2.16, for general corporate purposes.
     (c) To amend Section 5.02(f)(i) of the Credit Agreement by inserting the
text that appears below as bolded and underlined and deleting the text that
appears below as struck through:
     the Borrower may (A) declare and pay cash dividends and distributions with
respect to the ML Interests to the extent required under the Constituent
Documents of the Borrower as in effect on the Closing Date, (B) make payments to
the Parent in respect of reimbursement obligations under any drawn letter of
credit posted by the Parent on behalf of the Borrower or any of its Subsidiaries
to support Obligations of the Borrower or such
Amendment No.1
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Subsidiary undertaken in the ordinary course of business and not for speculative
purposes, (C) issue and sell shares of its Equity Interests, (D) commencing with
the Fiscal Year ending December 31, 2006, declare and pay cash dividends to the
Parent in an aggregate amount in any Fiscal Year not to exceed the greater of
(1) $25,000,000 or (2) if the Borrower’s Leverage Ratio as of the last day of
the Fiscal Year immediately preceding the Fiscal Year in which such dividend is
paid was less than (I) 4.50:1.00, 25% of the Borrower’s Consolidated Net Income
for the Fiscal Year immediately preceding the Fiscal Year in which such dividend
is paid or (II) 3.50:1.00, 50% of the Borrower’s Consolidated Net Income for the
Fiscal Year immediately preceding the Fiscal Year in which such dividend is
paid, and (E) make any equity Investment in any of its Subsidiaries permitted
under Section 5.02(e), and (F) declare and pay cash dividends from time to time
to the Parent in an aggregate amount not to exceed $300,000,000 to the extent
the Borrower delivers, at the time of each such payment, an Officer’s
Certificate to the Administrative Agent certifying that such dividend shall be
applied directly or indirectly by the Parent to make Investments in a Subsidiary
of the Parent;
          SECTION 2. Conditions to Effectiveness. This Amendment shall become
effective when, and only when, the Administrative Agent shall have received
(a) counterparts of this Amendment executed by the Borrower, the Required
Lenders and all of the Increasing Revolving Lenders or, as to any of such
Lenders, advice satisfactory to the Administrative Agent that such Lender has
executed this Amendment and (b) to the extent requested, a Revolving Note of the
Borrower for the account of each Increasing Revolving Lender that has so
requested, in an amount equal to the Revolving Commitment of such Increasing
Revolving Lender as set forth on Exhibit A hereto. The effectiveness of this
Amendment is further conditioned upon the accuracy of the factual matters
described herein. This Amendment is subject to the provisions of Section 8.01 of
the Credit Agreement.
          SECTION 3. Representations and Warranties of the Borrower. The
Borrower hereby represents and warrants as follows:
     (a) The Borrower is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware.
     (b) Its execution, delivery and performance of this Amendment, are within
its powers, have been duly authorized by all necessary corporate action, and do
not and will not (i) contravene its Constituent Documents, (ii) violate any law,
rule, regulation (including Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any material
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting it or any of its properties or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any of
its Assets, except where, in the cases of clauses (i) through (iv), the
violation of any such Constituent Documents, law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of
Amendment No.1
AESC Credit Agreement

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trust, lease or other instrument, or creation or imposition of such Lien, could
not be reasonably expected to have a Material Adverse Effect.
     (c) No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority is required for the due execution,
delivery or performance by it of this Amendment.
     (d) This Amendment has been duly executed and delivered by it. This
Amendment is its legal, valid and binding obligations, enforceable against it in
accordance with its terms, except to the extent limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
     (e) No Default has occurred and is continuing.
          SECTION 4. Reference to and Effect on the Credit Agreement. (a) On and
after the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Credit Agreement, and each reference in each of the other
Financing Documents to “the Credit Agreement”, “thereunder”, “thereof” or words
of like import referring to the Credit Agreement, shall mean and be a reference
to the Credit Agreement as amended by this Amendment.
          (a) The Credit Agreement, as specifically amended by this Amendment,
is and shall continue to be in full force and effect and is hereby in all
respects ratified and confirmed.
          (b) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender Party or the Administrative Agent under any of the
Financing Documents, nor constitute a waiver of any provision of any of the
Financing Documents.
          SECTION 5. Costs and Expenses. The Borrower agrees to pay on demand
all costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery and administration, modification and amendment
of this Amendment and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent) in accordance with the terms of section
8.04 of the Credit Agreement.
          SECTION 6. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
          SECTION 7.Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
Amendment No.1
AESC Credit Agreement

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                  ALLEGHENY ENERGY SUPPLY COMPANY, LLC,         as Borrower    
 
           
 
  By
Name:   /s/ Barry E. Pakenham
 
Barry E. Pakenham    
 
  Title:   Treasurer    

Amendment No.1
AESC Credit Agreement

 

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                  CITICORP USA, INC.,         as Administrative Agent    
 
           
 
  By
Name:   /s/ Maureen Maroney
 
Maureen Maroney    
 
  Title:   Vice President    

Amendment No.1
AESC Credit Agreement

 

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                  CITICORP USA, INC.,         as Increasing Revolving Lender    
 
           
 
  By
Name:   /s/ Maureen Maroney
 
Maureen Maroney    
 
  Title:   Vice President    

Amendment No.1
AESC Credit Agreement

 

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                  The Bank of Nova Scotia
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Thane Rattew
 
Thane Rattew    
 
  Title:   Managing Director    

Amendment No. 1
AESC Credit Agreement

 

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                  PNC BANK, NATIONAL ASSOCIATION
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Thomas A. Majeski
 
Thomas A. Majeski    
 
  Title:   Vice President    

Amendment No. 1
AESC Credit Agreement

 

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                  Wells Fargo Bank, National Association,
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Patrick McCue
 
Patrick McCue    
 
  Title:   Vice President & Senior Relationship
Manager    

Amendment No. 1
AESC Credit Agreement

 

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                  Sovereign Bank,
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Dexter Freeman
 
Dexter Freeman    
 
  Title:   Senior Vice President    

Amendment No. 1
AESC Credit Agreement

 

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                  GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Mark Walton
 
MARK WALTON    
 
  Title:   AUTHORIZED SIGNATORY    

Amendment No. 1
AESC Credit Agreement

 

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                  JPMorgan Chase Bank, N.A.,
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Michael DeForge
 
Michael DeForge    
 
  Title:   Executive Director    

Amendment No. 1
AESC Credit Agreement

 

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                  CREDIT SUISSE, Cayman Islands Branch
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Thomas Cantello
 
Thomas Cantello    
 
  Title:   Director    
 
           
 
  By
Name:   /s/ Shaheen Malik
 
Shaheen Malik    
 
  Title:   Associate    

Amendment No. 1
AESC Credit Agreement

 

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                  BANK OF AMERICA, N.A.,
as Increasing Revolving Lender
 
           
 
  By
Name:   /s/ Kevin Bertelsen
 
Kevin Bertelsen    
 
  Title:   Senior Vice President    

Amendment No. 1
AESC Credit Agreement

 

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                  BNP PARIBAS,
as Increasing Revolving Lender    
 
           
 
  By
Name:   /s/ Denis O’Meara
 
DENIS O’MEARA    
 
  Title:   Managing Director    
 
           
 
  By
Name:   /s/ Francis J. Delaney
 
FRANCIS J. DELANEY    
 
  Title:   Managing Director    

Amendment No 1
AESC Credit Agreement

 

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                  UNION BANK OF CALIFORNIA, N.A.,
as Increasing Revolving Lender    
 
           
 
  By
Name:   /s/ Susan K. Johnson
 
Susan K. Johnson    
 
  Title:   Vice President    

Amendment No 1
AESC Credit Agreement

 

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                  MORGAN STANLEY BANK,
as Increasing Revolving Lender    
 
           
 
  By
Name:   /s/ Daniel Twenge
 
Daniel Twenge    
 
  Title:   Authorized Signatory    

Amendment No 1
AESC Credit Agreement

 

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                  Bear Steams Corporate Lending Inc
as Lender    
 
           
 
  By
Name:   /s/ Victor Bulzacchelli
 
Victor Bulzacchelli    
 
  Title:   Vice President    

Amendment No 1
AESC Credit Agreement

 

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                  Bayerische Landesbank,
as Lender    
 
           
 
  By   /s/ Christopher Dowd
 
Christopher Dowd    
 
      Vice President    
 
           
 
  By   /s/ Donna M. Quilty
 
Donna M. Quilty    
 
      Vice President    

Amendment No 1
AESC Credit Agreement

 

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                  BARCLAYS BANK PLC,
as Lender    
 
           
 
  By   /s/ Nicholas Bell    
 
                Name: Nicholas Bell         Title: Director    

Amendment No 1
AESC Credit Agreement

 

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                  National City Bank
as Lender    
 
           
 
  By   /s/ Susan J. Dimmick
 
Susan J. Dimmick    
 
      Senior Vice President    

Amendment No 1
AESC Credit Agreement

 

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                  Commerzbank, AG, New York and Grand Cayman Branches.,
as Lender
 
           
 
  By
Name:   /s/ Andrew R. Campbell
 
Andrew R. Campbell    
 
  Title:   Senior Vice President    

/s/ Janet Serry
Janet Serry
Assistant Treasurer
Amendment No 1
AESC Credit Agreement

 

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Exhibit A

Schedule I to the Credit Agreement
Amendment No 1
AESC Credit Agreement