EXECUTION VERSION

___________________________________________________________

COMMON TERMS AGREEMENT

Dated as of February 21, 2003

AMONG

ALLEGHENY ENERGY SUPPLY COMPANY, LLC,

THE OTHER PERSONS REFERRED TO HEREIN AS GRANTORS,

EACH OF THE REFINANCING LENDERS,

EACH OF THE NEW MONEY LENDERS,

EACH OF THE SPRINGDALE LENDERS,

BANK ONE, NA,

as Refinancing Issuing Bank,

CITIBANK, N.A.,

as Refinancing Lender Agent and New Money Lender Agent,

THE BANK OF NOVA SCOTIA,

as Springdale Lender Agent and Documentation Agent,

AND

JPMORGAN CHASE BANK,

as Syndication Agent

______________________________________________________________________________

SALOMON SMITH BARNEY INC.

J.P. MORGAN
SECURITIES INC.

SCOTIA CAPITAL
(USA) INC.

As Joint Lead Arrangers

______________________________________________________________________________

COMMON TERMS AGREEMENT

                   COMMON TERMS AGREEMENT dated as of February 21, 2003 made by
and among:

                   ALLEGHENY ENERGY SUPPLY COMPANY, LLC, a Delaware limited
liability company (the "Borrower");

                   Each of the Persons (as hereinafter defined) (other than the
Borrower) listed on the signature pages hereto as a Grantor (the Borrower and
the Persons so listed being, collectively, the "Grantors");

                   Each of the institutions listed on the signature pages hereto
as a Refinancing Lender (as hereinafter defined) and any additional Refinancing
Lender that becomes a party to the Refinancing Credit Agreement (as hereinafter
defined) in accordance with the terms of the Refinancing Credit Agreement and
this Agreement (as hereinafter defined), in either case for so long as such
institution continues to be a party to the Refinancing Credit Agreement;

                   Each of the institutions listed on the signature pages hereto
as a New Money Lender (as hereinafter defined) and any additional New Money
Lender that becomes a party to the New Money Credit Agreement (as hereinafter
defined) in accordance with the terms of the New Money Credit Agreement and this
Agreement, in either case for so long as such institution continues to be a
party to the New Money Credit Agreement;

                   Each of the institutions listed on the signature pages hereto
as a Springdale Lender (as hereinafter defined) and any additional Springdale
Lender that becomes a party to the Springdale Credit Agreement (as hereinafter
defined) in accordance with the terms of the Springdale Credit Agreement and
this Agreement, in either case for so long as such institution continues to be a
party to the Springdale Credit Agreement;

                   BANK ONE, NA ("Bank One"), as the issuing bank for letters of
credit pursuant to the Refinancing Credit Agreement (in such capacity, the
"Refinancing Issuing Bank");

                   CITIBANK, N.A. ("Citibank"), not in its individual capacity
except as expressly set forth herein but solely as (a) administrative agent for
the Refinancing Lenders and the Refinancing Issuing Bank (in such capacity, the
"Refinancing Lender Agent ") and (b) administrative agent for the New Money
Lenders (in such capacity, "New Money Lender Agent");

                   THE BANK OF NOVA SCOTIA ("Scotia"), not in its individual
capacity except as expressly set forth herein but solely as (a) administrative
agent for the Springdale Lenders (in such capacity, the "Springdale Lender
Agent") and (b) documentation agent for the Lenders (as hereinafter defined) (in
such capacity, the "Documentation Agent"); and

                   JPMORGAN CHASE BANK ("JPMC"), not in its individual capacity
except as expressly set forth herein but solely as syndication agent on behalf
and for the benefit of the Lenders (in such capacity, the "Syndication Agent").

PRELIMINARY STATEMENTS

                   (1)     As of the date hereof, the Borrower is indebted to
certain banks and institutions (the "Existing Lenders") pursuant to one or more
of the agreements listed in Part A of Schedule I (collectively, the "Existing
Lender Debt Documents"), and the aggregate principal amount owed as of the date
hereof to each Existing Lender under the Existing Lender Debt Documents is set
forth in Part B of Schedule I opposite the name of such Existing Lender (all
such amounts, collectively, the "Existing Lender Debt").

                   (2)     As of the date hereof, one or more letters of credit,
as listed in Part C of Schedule I (collectively, the "Existing Letters of
Credit") have been issued for the account of the Borrower, and the amount as of
the date hereof available for drawing(s) under each Existing Letter of Credit is
set forth in Part D of Schedule I opposite such Existing Letter of Credit.

                   (3)     As of the date hereof, (a) Power Trust 2000-A is
indebted to certain banks and institutions (the "Existing Springdale Lenders")
pursuant to one or more of the agreements listed in Part E-1 of Schedule I
(collectively, the "Existing Springdale Debt Documents"), and the aggregate
principal amount owed as of the date hereof to each Existing Springdale Lender
under the Existing Springdale Debt Documents is set forth in Part F-1 of
Schedule I opposite the name of such Existing Springdale Lender (all such
amounts, collectively, the "Existing Springdale Debt") and (b) certain banks and
institutions are the owners of equity in Power Trust 2000-A (the "Springdale
Equity Participants") pursuant to one or more of the agreements listed in Part
E-2 of Schedule I (collectively, the "Existing Springdale Equity Documents", and
together with the Existing Springdale Debt Documents, the "Existing Springdale
Documents"), and the aggregate principal amount owed as of the date hereof to
each Springdale Equity Participant under the Existing Springdale Equity
Documents is set forth in Part F-2 of Schedule I opposite the name of such
Springdale Equity Participant (all such amounts, collectively, the "Existing
Springdale Equity Participations", and together with the Existing Springdale
Debt, the "Existing Springdale Lease Participations").

                   (4)     The Borrower has given notice to Power Trust 2000-A
of the exercise by the Borrower of its Purchase Option (as defined in the
Springdale Participation Agreement (as hereinafter defined)) for the purpose of
recognizing the Springdale Plant (as hereinafter defined) as its owned capital
assets for all purposes, and in accordance therewith, record title for the
Springdale Plant will be in the name of the Borrower, and the original intent of
the Springdale Lease Documents (as hereinafter defined) will continue as
follows: the Borrower will be recognized as the owner of the Springdale Plant
for federal and state income tax purposes and bankruptcy purposes, and this
Agreement and the other Financing Documents (as hereinafter defined) will
continue the lien on the Borrower's interest in the Springdale Plant for the
benefit of the Springdale Lenders.

                   (5)     Pursuant to the Refinancing Credit Agreement, the
Refinancing Lenders and the Refinancing Issuing Bank have established a loan
facility (consisting of a secured and an unsecured tranche) in the aggregate
amount of up to $987,657,215.77 in favor of the Borrower, with up to
$200,000,000 thereof to be made available in the form of Refinancing Letters of
Credit (as hereinafter defined), to refinance the Existing Lender Debt, to
refinance up to $10,000,000 of existing indebtedness of the Parent (as
hereinafter defined) and to issue Refinancing Letters of Credit from time to
time (including to assume the Existing Letters of Credit), in each case, subject
to the terms and conditions contained herein and in the other Financing
Documents (as hereinafter defined).

                   (6)     Pursuant to the Springdale Credit Agreement, the
Springdale Lenders have established a loan facility (consisting of a secured and
an unsecured tranche) in the aggregate amount of up to $270,122,947 in favor of
the Borrower, to reconstitute the existing financial obligations of the Borrower
under the Operative Documents (as defined in the Springdale Participation
Agreement), including those arising on the exercise of the Purchase Option (as
defined in the Springdale Participation Agreement), subject to the terms and
conditions contained herein and in the other Financing Documents.

                   (7)     Pursuant to the New Money Credit Agreement, the New
Money Lenders have established a secured loan facility in the aggregate amount
of up to $470,000,000 in favor of the Borrower, for the purposes specified
therein, subject to the terms and conditions contained herein and in the other
Financing Documents.

                   NOW, THEREFORE, in consideration of (a) the execution by each
of the Refinancing Lender Parties of the Refinancing Credit Agreement, this
Agreement and each other Financing Document to which it is a party, (b) the
execution by each of the Springdale Lenders of the Springdale Credit Agreement,
this Agreement and each other Financing Document to which it is a party and
(c) the execution by each of the New Money Lenders of the New Money Credit
Agreement, this Agreement and each other Financing Document to which it is a
party, each of the Grantors hereby agrees with each of the Bank Lender Parties
and, to the extent set forth herein, the Bank Lender Parties agree with each
other, as follows:

ARTICLE I
DEFINITIONS AND INTERPRETATION

                   Section 1.01     Definitions.  (a)  Defined terms used in
this Agreement and the Schedules and Exhibits to this Agreement have the
meanings assigned to them in Appendix A.

                   (b)     Terms defined in Article 8 or 9 of the UCC and/or in
the Federal Book Entry Regulations are used in the Financing Documents as such
terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations.

                   Section 1.02     Principles of Interpretation.  (a)  Except
to the extent expressly provided to the contrary in this Agreement or to the
extent that the context otherwise requires, in this Agreement and the other
Financing Documents:

                   (i)     the table of contents and Article and Section
headings are for convenience only and shall not affect the interpretation of any
Financing Document;

                   (ii)     references to any document, instrument or agreement,
including any Financing Document, shall include (i) all exhibits, annexes,
schedules, appendices or other attachments thereto and (ii) all documents,
instruments or agreements issued or executed in replacement thereof;

                   (iii)     references to a document or agreement, including
any Financing Document, shall be deemed to include any amendment, restatement,
modification, supplement or replacement thereto entered into in accordance with
the terms thereof and the terms of the Financing Documents;

                   (iv)     the words "include," "includes" and "including" are
not limiting;

                   (v)     references to any Person shall include such Person's
successors and permitted assigns (and in the case of any Governmental Authority,
any Person succeeding to such Governmental Authority's functions and
capacities);

                   (vi)     the words "hereof," "herein" and "hereunder" and
words of similar import when used in any Financing Document shall refer to such
Financing Document as a whole and not to any particular provision of such
Financing Document;

                   (vii)     references to "days" shall mean calendar days;

                   (viii)     the singular includes the plural and the plural
includes the singular;

                   (ix)     references to Applicable Law, generally, shall mean
Applicable Law as in effect from time to time, and references to any specific
Applicable Law shall mean such Applicable Law, as amended, modified or
supplemented from time to time, and any Applicable Law successor thereto;

                   (x)     in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding"; and

                   (xi)     any reference in a Financing Document to an Article,
Section, Schedule, Appendix or Exhibit is to the article or section of, or a
schedule, appendix or exhibit to, such Financing Document unless otherwise
indicated, and Schedules, Appendices and Exhibits to each Financing Document
shall be deemed incorporated by reference in such Financing Document.

                   (b)     The Financing Documents are the result of
negotiations among the parties thereto and their respective counsel.
Accordingly, each Financing Document shall be deemed the product of all parties
thereto, and no ambiguity in any Financing Document shall be construed in favor
of or against any Loan Party or any Bank Lender Party that is a party thereto.

                   (c)     All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements of
the Borrower from time to time ("GAAP").

ARTICLE II
PAYMENTS

                   Section 2.01     Availability of Advances and Letters of
Credits.  Each Lender and the Refinancing Issuing Bank shall severally, and on
the terms and conditions set forth herein and in the relevant Credit Agreement
(including the satisfaction or waiver of each of the applicable conditions
precedent set forth in Article III, in each Collateral Document and in such
Credit Agreement), make Advances (in the case of the Lenders and the Refinancing
Issuing Bank) and assume the Existing Letters of Credit and/or issue Refinancing
Letters of Credit (in the case of the Refinancing Issuing Bank) to, or for the
account of, the Borrower in an amount not exceeding the Commitment of such
Lender or the Refinancing Issuing Bank, as applicable.

                   Section 2.02     Lenders' and Refinancing Issuing Bank's
Obligations Several.  (a)  The failure of any Lender to make an Advance to the
Borrower in accordance with any Credit Agreement shall not relieve (i) any other
Lender of its obligations under any Credit Agreement to make its Advance
thereunder or (ii) the Refinancing Issuing Bank of its obligations under the
Refinancing Credit Agreement to assume any Existing Letter of Credit or issue
any Refinancing Letter of Credit thereunder, but no Lender shall be responsible
for the failure of any other Lender, and the Refinancing Issuing Bank shall not
be responsible for the failure of any Lender, to make an Advance under any
Credit Agreement.

                   (b)     The failure of the Refinancing Issuing Bank to assume
any Existing Letter of Credit or issue any Refinancing Letter of Credit for the
account of the Borrower in accordance with the Refinancing Credit Agreement
shall not relieve any Lender of its obligations under any Credit Agreement to
make its Advance thereunder, but no Lender shall be responsible for the failure
of the Refinancing Issuing Bank to assume any Existing Letter of Credit or issue
any Refinancing Letter of Credit under the Refinancing Credit Agreement.

                   Section 2.03     No Reborrowing.  The Borrower may not
reborrow the principal amount of any Advance which is prepaid (whether the
prepayment is an optional prepayment, a mandatory prepayment, a prepayment upon
acceleration or otherwise); provided that any payment by the Borrower to the
Refinancing Issuing Bank or the Refinancing Lender Agent for the account of the
Refinancing Lenders, in each case, pursuant to Section 2.03 of the Refinancing
Credit Agreement with respect to an Exchange (as defined therein) shall not be
considered a prepayment or repayment of any Advance under the Refinancing Credit
Agreement.

                   Section 2.04     Payments.  (a)  Place and Manner. All
payments to be made to any Bank Lender Party by the Borrower under this
Agreement or any other Financing Document to which the Borrower is a party
(unless specifically provided otherwise in such Financing Document) shall be
paid in full, and without condition or deduction for any counterclaim, defense,
recoupment or setoff, in Dollars and in immediately available funds not later
than 11:00 a.m. (New York City time) on the due date thereof at the place and in
the manner designated in the relevant Financing Document. Whenever any payment
hereunder or under any Credit Agreement or any Bank Note shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided that, if such extension would cause payment of interest on
or principal of Advances to be made in the next succeeding calendar month, such
payment shall be made on the next preceding Business Day.

                   (b)     Payments.  All payments under this Agreement and the
other Financing Documents to (i) any Agent (whether for its own account or for
the account of any Bank Lender Party for which such Agent is the Representative
Agent) or the Depository Bank shall be made to such Agent or the Depository
Bank, respectively, and (ii) any Lender or the Refinancing Issuing Bank, shall
be made to the Representative Agent for such Lender or the Refinancing Issuing
Bank (as the case may be).

                   (c)     Insufficient Funds.  If at any time Bank Obligations
are payable to Bank Lender Parties and insufficient funds are available to the
Borrower to satisfy in full all such Bank Obligations pursuant to this Agreement
or any other Financing Document, the funds shall be allocated by the Borrower
for purposes of computations under this Agreement and the other Financing
Documents and applied in the order of priority set forth in Section 2.06(c), or,
following the issuance of a Remedies Notice (as defined in the Security
Agreement), Section 6.11, of the Security Agreement (in each case to the extent
applicable to the Bank Obligations).

ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT

                   Section 3.01     Conditions Precedent to Closing Date.  No
Lender shall be required or obligated to make any Advance, and the Refinancing
Issuing Bank shall not be required or obligated to assume any Existing Letter of
Credit or issue any Refinancing Letter of Credit, in each case, until the first
Business Day on which the following conditions precedent have been satisfied (or
waived, as evidenced by an "effective date" notice to the Borrower from the
Refinancing Issuing Bank and the Lenders), as determined by each Lender and the
Refinancing Issuing Bank:

                   (a)     Certain Financing Documents. This Agreement, each of
the Credit Agreements, the Intercreditor Agreement and the Fee Letters shall
have been duly authorized, executed and delivered by each of the parties thereto
and shall be in full force and effect.

                   (b)     Bank Notes. Each Representative Agent shall have
received a Bank Note payable to the order of each of its Related Lenders, duly
authorized, executed and delivered by the Borrower.

                   (c)     Collateral Documents and Related Documents. The
Collateral Agent shall have received the following:

                   (i)     the Security Agreement duly authorized, executed and
delivered by each party thereto and in full force and effect in accordance with
its terms, and the following in connection with the Security Agreement:

                             (A)     certificates representing the Initial
Pledged Equity accompanied by undated stock powers executed in blank to the
extent that such Initial Pledged Equity is certificated,

                             (B)     proper financing statements, duly completed
for filing under the Uniform Commercial Code of all jurisdictions that any
Representative Agent may deem necessary or desirable in order to perfect and
protect the liens and security interests created under the Collateral Documents,
covering the Collateral described in the Collateral Documents,

                             (C)     results of lien searches, dated on or no
earlier than 45 days before the Closing Date, for existing financing statements
filed in the jurisdictions referred to in Schedule 4.01(r) and Schedules III and
VII to the Security Agreement as the current or previous jurisdiction of
organization, current or previous location of chief executive office, current or
previous place where agreements are maintained and location of real property, in
each case, of each Loan Party that name any Loan Party as debtor, together with
copies of all such financing statements (which schedules do not include with
respect to each of Allegheny Energy Supply Lincoln Generating Facility, LLC,
Allegheny Energy Supply Wheatland Generating Facility, LLC, Allegheny Energy
Supply Gleason Generating Facility, LLC, Energy Financing Company, LLC and Lake
Acquisition Company, LLC, previous locations of chief executive offices, and
those previous places where agreements of such Persons were maintained that
existed prior to the acquisition of the Borrower of such Persons and of which
the Borrower is not aware),

                             (D)     a Consent, duly executed by each party
thereto, with respect to each Affiliate Energy Contract, each Operating
Agreement and the Tax Allocation Agreement, and

                             (E)     evidence that all other action that any
Representative Agent may deem necessary or desirable in order to perfect and
protect the liens and security interests created under the Security Agreement
and the Account Control Agreements, other than the Other Perfection
Requirements, has been taken; and

                   (ii)     with respect to each Initial Controlled Account, an
Account Control Agreement with respect thereto, duly authorized, executed and
delivered by each of the parties thereto and in full force and effect.

                   (d)     Corporate Documents. Each Representative Agent shall
have received the following:

                   (i)     certified copies of the resolutions of the Board of
Directors of each Loan Party authorizing the execution, delivery and performance
of each Financing Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and governmental and other
third party approvals and consents, if any, with respect to each such Financing
Document;

                   (ii)     a copy of a certificate of the Secretary of State of
the jurisdiction of formation of each Loan Party, dated reasonably near the
Closing Date, certifying (A) as to a true and correct copy of the certificate of
incorporation or formation of such Loan Party and each amendment thereto on file
in such Secretary's office and (B) that (1) such amendments are the only
amendments to such certificate on file in such Secretary's office, (2) such Loan
Party has paid all franchise taxes to the date of such certificate and (3) such
Loan Party is duly formed and in good standing or presently subsisting under the
laws of the State of the jurisdiction of its formation;

                   (iii)     a copy of a certificate of the Secretary of State
of each jurisdiction (other than the jurisdiction of its formation) in which
each Loan Party is doing business, dated reasonably near the Closing Date,
stating that such Loan Party is duly qualified to do business and in good
standing as a foreign corporation in such State and has filed all annual reports
required to be filed to the date of such certificate, as applicable;

                   (iv)     a certificate signed on behalf of each Loan Party by
its Secretary or any Assistant Secretary, dated the Closing Date (the statements
made in which certificate shall be true on and as of the Closing Date),
certifying (A) as to a true and correct copy of the Constituent Documents of
such Loan Party as of the Closing Date and each amendment to its Constituent
Documents, if any, from the date on which the resolutions referred to in
Section 3.01(d)(i) were adopted, (B) the due incorporation or formation and good
standing or valid existence of such Loan Party under the laws of the
jurisdiction of its formation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party; and (C) the names and true
signatures of the officers of such Loan Party authorized to sign each Financing
Document to which it is or is to be a party and the other documents to be
delivered hereunder and thereunder.

                   (e)     Financial Statements. Each Representative Agent shall
have received a copy of each of the audited Consolidated annual financial
statements of the Borrower and its Subsidiaries dated December 31, 2001 and
interim Consolidated financial statements (consolidated balance sheets and
income statements) of the Borrower and its Subsidiaries dated as of
September 30, 2002, accompanied by (i) in the case of such audited financial
statements, a copy of the letter of PriceWaterhouseCoopers or other the
independent public accountants of recognized standing acceptable to the Required
Lenders included in such audited financial statements and (ii) in the case of
the audited and unaudited financial statements, an Officer's Certificate of the
Borrower, dated as of the Closing Date, certifying that, subject to Accounting
Review Adjustments, the copies of such financial statements fairly present the
financial condition of the Borrower and its Subsidiaries as of the date of such
financial statements and the results of operations of the Borrower and its
Subsidiaries for the period indicated in such financial statements, all in
accordance with GAAP and subject, in the case of the interim Consolidated
financial statements dated as of September 30, 2002, to normal year-end audit
adjustments and the absence of footnotes.

                   (f)     Insurance. Each Representative Agent shall have
received evidence that the Collateral Agent has been named as additional insured
with respect to all insurance required under Section 5.01(e) and, except for
liability insurance, as loss payee with respect to all insurance required under
Section 5.01(e).

                   (g)     Market Consultant Report. Each Representative Agent
shall have received a copy of a report by the Market Consultant in form and
substance satisfactory to the Lenders, together with a certificate from the
Market Consultant in the form of Exhibit C.

                   (h)     Business Plan. Each Representative Agent shall have
received a copy of the Business Plan, in form and substance satisfactory to FTI
and the Lenders.

                   (i)     Legal Opinions. Each Representative Agent and the
Collateral Agent shall have received the following legal opinions, each dated
the Closing Date:

                   (i)     opinion(s) of appropriate counsel for the Loan
Parties, as to such matters as any Bank Lender Party may reasonably request; and

                   (ii)     an opinion of Shearman & Sterling, counsel for each
of the New Money Lender Agent and the Refinancing Lender Agent, in form and
substance satisfactory to the Refinancing Lender Parties and the New Money
Lenders.

                   (j)     Litigation and other Proceedings. There shall exist
(i) no action, suit, investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries or any such Person's properties pending or
threatened, before any court, before or by any Governmental Authority or before
any arbitrator and (ii) no default by any such Person under any applicable
order, writ, injunction or decree of any court, Governmental Authority or
arbitrator, in each case which (A) could reasonably be expected to have a
Material Adverse Effect other than the matters described on Schedule 4.01(f)
(the "Disclosed Litigation") or (B) purports to affect the legality, validity or
enforceability of any Financing Document or the consummation of the Transaction,
and there shall have been no material adverse change, with respect to the
Borrower or any of its Subsidiaries, in respect of the Disclosed Litigation
described on Schedule 4.01(f).

                   (k)     Governmental Approvals. All Governmental Approvals
shall have been obtained (without the imposition of any conditions that are not
acceptable to the Lenders), are in full force and effect and are final, except
as provided in Section 20 of PUHCA, and non-appealable, except in the case of
the Securities and Exchange Commission's Order dated February 21, 2003, as
provided in Section 24 of PUHCA, and do not contain any restrictions, conditions
or requirements which are then required to be satisfied and have not been
satisfied, and each Representative Agent shall have received copies of the
Material Governmental Approvals, accompanied by an Officer's Certificate of the
Borrower attaching copies of all Material Governmental Approvals, and certifying
that (i) the copies of each of the Material Governmental Approvals delivered
pursuant to this Section 3.01(k) are true, correct and complete copies of such
Material Governmental Approval, (ii) each Governmental Approval is in full force
and effect, and is not subject to any pending appeal, intervention or similar
proceeding or any unsatisfied condition that may result in modification or
revocation thereof, (iii) any and all conditions set forth in all Governmental
Approvals that are then required to be satisfied have been satisfied and (iv) to
the best knowledge of the Responsible Officer providing such Officer's
Certificate, no event has occurred that could reasonably be expected to result
in the modification, cancellation or revocation of any Governmental Approval;
all applicable waiting periods in connection with the Transaction shall have
expired without any action being taken by any competent authority, and no law or
regulation shall be applicable in the judgment of the Lenders, in each case that
restrains, prevents or imposes materially adverse conditions upon the
Transaction or the rights of the Borrower or its Subsidiaries to create any Lien
on, any properties now owned or hereafter acquired by any of them.

                   (l)     Funds Flow Memorandum. Each Representative Agent and
the Collateral Agent shall have received a memorandum prepared by the Borrower
(the "Funds Flow Memorandum") specifying the use of the proceeds of the Advances
under each Credit Agreement including applicable wire transfer instructions in
form and substance satisfactory to the Lenders which shall provide for, among
other things, repayment of the Existing Lender Debt, partial repayment of the
Existing Springdale Lease Participations and the payment of all accrued fees of
the Bank Lender Parties and all accrued expenses of the Agents and the
Depository Bank (including the accrued fees and expenses of counsel to the
Agents, the Depository Bank and local counsel to the Bank Lender Parties).

                   (m)     Advisory Services. Each Representative Agent shall
have received evidence reasonably satisfactory to the Lenders as to the
provision of services by the Financial Advisor to the Borrower until the date
specified in clause (a) of the definition of "Final Maturity Date".

                   (n)     Material Contract. Each Representative Agent and the
Collateral Agent shall have received copies of each Material Contract,
accompanied by an Officer's Certificate of the Borrower, dated the Closing Date,
certifying that: (i) the copies of the Material Contracts delivered pursuant to
this Section 3.01(n) are true, correct and complete copies of such Material
Contract; (ii) no term or condition of any Material Contract has been amended
from the form thereof delivered pursuant to this Section 3.01(n) (other than in
connection with any amendments or supplements so delivered); and (iii) other
than as set forth in the Disclosed Litigation, (A) each Material Contract
delivered pursuant to this Section 3.01(n) is in full force and effect,
enforceable against each Borrower Group Member which is a party thereto in
accordance with its terms and, to the Borrower's best knowledge, enforceable
against each other party thereto in accordance with its terms; (B) neither any
Borrower Group Member nor, to the best knowledge of the Borrower, any other
party to any Material Contract delivered pursuant to this Section 3.01(n) is in
default thereunder, except as otherwise set forth in Schedule 4.01(u); and
(C) each Borrower Group Member and, to the Borrower's best knowledge, each other
party to any Material Contract delivered pursuant to this Section 3.01(n) has
complied with all conditions precedent to its obligations under such Material
Contract required to be performed or complied with by any such Person.

                   (o)     Closing Certificates. The following statements shall
be true and each Representative Agent and the Collateral Agent shall have
received a certificate signed by an Authorized Signatory of each Loan Party,
each dated the Closing Date, stating that:

                   (i)     the representations and warranties by such Loan Party
contained in each Financing Document to which it is a party are correct on and
as of the Closing Date, before and after giving effect to the Advances and
Refinancing Letters of Credit on the Closing Date and to the application of the
proceeds therefrom, as though made on and as of the Closing Date, other than any
such representations or warranties that, by their terms, refer to a specific
date other than the Closing Date in which case such representations and
warranties shall be correct as of such specific date; and

                   (ii)     no Default has occurred and is continuing, or would
result from the Advances, assumption of the Existing Letters of Credit or
issuance of Refinancing Letters of Credit on the Closing Date or from the
application of the proceeds therefrom.

                   (p)     AYE Loan Documents. Each of the AYE Credit Agreement
and the Hagerstown Credit Agreement shall have been entered into by the AYE
Borrowers and the other parties thereto, shall be in full force and effect and
shall provide financing in an aggregate amount of at least $330,000,000 in
accordance with the terms thereof, and all conditions precedent to the "Closing
Date" under, and as defined in, each of the AYE Credit Agreement and the
Hagerstown Credit Agreement shall have been satisfied.

                   (q)     CapEx Budget. Each Representative Agent shall have
received a statement, prepared by the Borrower, of (i) projected Capital
Expenditures (including Scheduled Capital Expenditure and, to the extent
budgeted by the Borrower Group Members, Mandatory Capital Expenditure) for
Fiscal Years 2003 and 2004 and (ii) the aggregate Dollar amount projected to be
incurred for Capital Expenditures in 2005, in each case, with respect to the
Parent and its Subsidiaries (collectively, the "CapEx Budget").

                   (r)     Application to Extend and Increase Secured Borrowing
Approval. Each Representative Agent shall have received evidence reasonably
satisfactory to it of all applications filed by the Borrower to obtain all
necessary Governmental Approvals (including by way of amendment to existing
Governmental Approvals) so as to secure Debt in an aggregate amount equal to or
in excess of the aggregate of all Commitments of the Lenders and the Amended
Notes, through the date specified in clause (a) of the definition of "Final
Maturity Date", together with an Officer's Certificate of the Borrower, dated
the Closing Date, attaching true, correct and complete copies of all such
applications.

                   (s)     Other Documents. Each Lender and the Refinancing
Issuing Bank shall have received such other approvals, opinions or documents as
such Bank Lender Party through its Representative Agent may reasonably request.

                   Section 3.02     Conditions Precedent to New Money
Closing.  The obligation of each New Money Lender to make an Advance and the
right of the Borrower to request Advances from the New Money Lenders, shall be
subject to the following additional conditions precedent (provided that the New
Money Closing shall occur, if at all, on the Closing Date):

                   (a)     New Money Collateral. The Collateral Agent shall have
received:

                   (i)     confirmation from the title insurance company
recording the Mortgages that duly executed counterparts of the New Money
Mortgages sufficient for recording in all filing or recording offices that the
New Money Lender Agent may deem necessary or desirable in order to create valid
and subsisting Liens on the property described therein in favor of the
Collateral Agent for the benefit of the Collateral Agent, the New Money Lenders
and the New Money Lender Agent have been recorded, and evidence reasonably
satisfactory to the Representative Agents that all filing and recording taxes
and fees have been paid;

                   (ii)     fully paid American Land Title Association Lender's
Extended Coverage title insurance policies in form and substance, with
endorsements and in amounts acceptable to the Representative Agents, issued by
title insurers acceptable to the Representative Agents, insuring the New Money
Mortgages for the Material Properties and the Relevant Properties to be valid
and subsisting Liens on the properties described therein, free and clear of all
defects (including mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Liens, and providing for such other affirmative
insurance (including endorsements for future advances under the Financing
Documents and for mechanics' and materialmen's Liens) as the Representative
Agents may deem necessary or desirable;

                   (iii)     Mortgage/Loan Inspection Surveys (for which all
necessary fees (where applicable) have been paid) of the Material Properties and
the Springdale Plant, dated no more than 60 days before the Closing Date, each
certified to the Collateral Agent and the issuer of the Mortgage Policies in a
manner satisfactory to the Representative Agents by a land surveyor duly
registered and licensed in the State in which the property described in such
survey is located and acceptable to the Representative Agents;

                   (iv)     confirmation from the title insurance company
recording the New Money Mortgages with respect to the validity and (subject to
the exceptions and encumbrances permitted therein) the priority of the New Money
Mortgages; and

                   (v)     evidence that all actions (including payment by the
Borrower to the title insurance company recording the New Money Mortgages of the
amount previously notified by such title insurance company to the Borrower as
necessary for it to record the New Money Mortgages) that the New Money Lender
Agent may deem necessary or desirable in order to perfect and protect the liens
and security interests created under the Collateral Documents (other than the
Other Perfection Requirements) securing the New Money Obligations have been
taken.

                   (b)     New Money Legal Opinions. Each of the Representative
Agents shall have received legal opinions, each dated the Closing Date, from
each of (i) McGuire Woods LLP, (ii) Steptoe & Johnson LLP, (iii) Kozloff Stoudt,
(iv) Baker, Donelson Bearman & Caldwell, (v) Steptoe & Johnson, PLLC and
(vi) Tabbert Hahn Earnest & Weddle LLP, local counsel to Citibank, in its
individual capacities as Refinancing Lender Agent and New Money Lender Agent,
and to JPMC, as Syndication Agent, in each of Illinois, Maryland and Arizona,
Pennsylvania, Tennessee, West Virginia and Indiana, respectively, as to such
matters as any Lender may reasonably request.

                   (c)     [Intentionally Omitted]

                   (d)     Taxes. All Taxes (i) due and payable on or prior to
the Closing Date in connection with the execution, delivery, filing, recording
or admissibility in evidence of the Relevant Documents (other than the Mortgages
and the UCC financing statements) or to ensure the legality, validity,
enforceability, perfection or admissibility in evidence of the Relevant
Documents (other than the Mortgages and the UCC financing statements) and
(ii) due and payable on or prior to the Closing Date by any Borrower Group
Member in connection with the consummation of the transactions contemplated by,
and the performance of, the Relevant Documents (other than the Mortgages and the
UCC financing statements), shall, in the case of clauses (i) and (ii) above,
have been duly paid in full.

                   (e)     Stamp Duties, Etc. All required stamp duties,
registration fees, filing costs and other charges in connection with the
execution, delivery, filing, recording, perfection, priority or admissibility in
evidence of the Relevant Documents (other than the Mortgages and the UCC
financing statements), and the security interests purported to be granted by the
Collateral Documents (other than the Mortgages and the UCC financing
statements), required to be paid on or prior to the New Money Closing shall have
been paid in full or an appropriate exemption therefrom shall have been
obtained.

                   (f)     Consolidated Assets. The aggregate principal amount
of all Advances under the New Money Credit Agreement to be made upon the New
Money Closing does not exceed an amount equal to 30% of the consolidated assets
(as determined for purposes of the Bond Lien Basket Provisions) of the Borrower,
as determined in accordance with GAAP on the Closing Date immediately before the
occurrence of the New Money Closing, and each Representative Agent shall have
received an Officer's Certificate of the Borrower with respect to the foregoing,
dated as of the Closing Date, in form and substance satisfactory to the
Representative Agents.

                   (g)     Springdale Assets. Each Representative Agent and the
Collateral Agent shall have received the following:

                   (i)     confirmation from the title insurance company
recording the Springdale Mortgages (Springdale Lenders) that duly executed
counterparts of the Springdale Mortgages (Springdale Lenders), sufficient for
recording in all filing or recording offices that any Representative Agent may
deem necessary or desirable in order to create valid and subsisting Liens on the
property described therein in favor of the Collateral Agent for the benefit of
the Collateral Agent, the Springdale Lenders, the Springdale Lender Agent and
the Springdale Special Draw Agent have been recorded, and evidence reasonably
satisfactory to the Representative Agents that all filing and recording taxes
and fees have been paid;

                   (ii)     fully paid American Land Title Association Lender's
Extended Coverage title insurance policy, in form and substance, with
endorsements and in amounts acceptable to the Representative Agents, issued by
title insurers acceptable to the Representative Agents, insuring the Springdale
Mortgages (Springdale Lenders) to be a valid and subsisting Lien on the property
described therein, free and clear of all defects (including mechanics' and
materialmen's Liens) and encumbrances, excepting only Permitted Liens, and
providing for such other affirmative insurance (including endorsements for
future advances under the Financing Documents and for mechanics' and
materialmen's Liens) as the Springdale Lender Agent may deem necessary or
desirable;

                   (iii)     a legal opinion, dated the Closing Date, from
Buchanan Ingersoll, PC, local counsel to the Springdale Lender Agent in
Pennsylvania, as to such matters as any Springdale Lender may reasonably
request; and

                   (iv)     a consent, duly executed by each of Siemens
Westinghouse Power Corporation (a Delaware corporation), Black & Veatch
Construction, Inc. (a Missouri corporation) and WPPC, each in form and substance
satisfactory to the Representative Agents (collectively, the "Springdale
Consents").

                   Section 3.03     Conditions Precedent to Refinancing
Closing.  The obligation of each Refinancing Lender and each Springdale Lender
to make an Advance and of the Refinancing Issuing Bank to issue any Refinancing
Letter of Credit (or assume any Existing Letter of Credit) and the right of the
Borrower to request Advances from the Refinancing Lenders and the Springdale
Lenders and the issuance of Refinancing Letters of Credit (or assumption of any
Existing Letter of Credit), shall be subject to the following additional
conditions precedent (provided that the Refinancing Closing shall occur, if at
all, on the Closing Date):

                   (a)     New Money Closing. The New Money Closing has
occurred.

                   (b)     Collateral. The Collateral Agent shall have received:

                   (i)     confirmation from the title insurance company
recording the Mortgages that duly executed counterparts of the Refinancing
Mortgages sufficient for recording in all filing or recording offices that the
Refinancing Lender Agent may deem necessary or desirable in order to create
valid and subsisting Liens on the property described therein in favor of the
Collateral Agent for the benefit of the Secured Parties (other than the New
Money Lenders and the New Money Lender Agent) have been recorded, and evidence
reasonably satisfactory to the Representative Agents that all filing and
recording taxes and fees have been paid;

                   (ii)     fully paid American Land Title Association Lender's
Extended Coverage title insurance policies in form and substance, with
endorsements and in amounts acceptable to the Representative Agents, issued by
title insurers acceptable to the Representative Agents, insuring the Refinancing
Mortgages for the Material Properties and the Relevant Properties to be valid
and subsisting Liens on the property described therein, free and clear of all
defects (including mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Liens, and providing for such other affirmative
insurance (including endorsements for future advances under the Financing
Documents and for mechanics' and materialmen's Liens) as the Representative
Agents may deem necessary or desirable;

                   (iii)     confirmation from the title insurance company
recording the Refinancing Mortgages with respect to the validity and (subject to
the exceptions and encumbrances permitted therein) the priority of the
Refinancing Mortgages; and

                   (iv)     evidence that all actions (including payment by the
Borrower to the title insurance company recording the Refinancing Mortgages of
the amount previously notified by such title insurance company to the Borrower
as necessary for it to record the Refinancing Mortgages) that the Refinancing
Lender Agent may deem necessary or desirable in order to perfect and protect the
liens and security interests created under the Collateral Documents (other than
the Other Perfection Requirements) securing the Refinancing Obligations and the
Springdale Obligations have been taken.

                   (c)     Legal Opinions. Each of the Representative Agents
shall have received legal opinions, each dated the Closing Date, from each of
(i) McGuire Woods LLP, (ii) Steptoe & Johnson LLP, (iii) Kozloff Stoudt,
(iv) Baker, Donelson Bearman & Caldwell, (v) Steptoe & Johnson PLLC and
(vi) Tabbert Hahn Earnest & Weddle LLP, local counsel to Citibank, in its
individual capacities as Refinancing Lender Agent and the New Money Lender
Agent, and to JPMC, as Syndication Agent, in each of Illinois, Maryland and
Arizona, Pennsylvania, Tennessee, West Virginia and Indiana, respectively, as to
such matters as any Lender may reasonably request.

                   (d)     Existing Debt. The Lenders shall be satisfied that
the following has occurred (in each case, in form and substance satisfactory to
the Lenders): (i) the St. Joseph Lease has been, or upon the Refinancing Closing
will be, terminated and the St. Joseph Plant is, or upon the Refinancing Closing
will be, owned by the Borrower and will appear as such on the books and records
of the Borrower, and all Existing A Notes have been, or simultaneously with the
Refinancing Closing will be, assumed by the Borrower pursuant to the Assumption
Documents, (ii) all Existing Letters of Credit have been, or simultaneously with
the Refinancing Closing will be, assumed by the Refinancing Issuing Bank and the
Borrower has no Obligations with respect to any Existing Letters of Credit or
the cancellation thereof (except under the Financing Documents), (iii) all
Existing Lender Debt has been, or simultaneously with the Refinancing Closing
will be, repaid in full or otherwise satisfied and extinguished and (iv) all
Existing Springdale Lease Participations have been, or simultaneously with the
Refinancing Closing will be, repaid or reconstituted pursuant to the Springdale
Credit Agreement.

                   (e)     Consolidated Assets. The aggregate of (i) the
principal amount of all outstanding Advances under the New Money Credit
Agreement, (ii) the Secured Refinancing Commitment (as defined in the
Refinancing Credit Agreement) of all Refinancing Lenders, (iii) the Available
Amount of all Refinancing Letters of Credit, (iv) the principal amount of all
Amended A Notes (as defined in the Security Agreement) and (v) the aggregate
principal amount of the Springdale Tranche A Facility (as defined in the
Security Agreement), in each case, as of the Closing Date and upon the
Refinancing Closing, does not exceed an amount equal to 30% of the consolidated
assets (as determined for purposes of the Bond Lien Basket Provisions) of the
Borrower, as determined in accordance with GAAP on the Closing Date after the
occurrence of the New Money Closing but immediately before the occurrence of the
Refinancing Closing, and each Representative Agent shall have received an
Officer's Certificate of the Borrower with respect to the foregoing, dated as of
the Closing Date, in form and substance satisfactory to the Representative
Agents.

                   (f)     Existing Springdale Lease Participations. The Lenders
shall be satisfied that (i) prior to the Refinancing Closing, the Springdale
Plant is owned by the Borrower and shall be reflected as being on the books and
records of the Borrower effective as of the Closing Date, (ii) upon the
Refinancing Closing, the Borrower shall pay to the Existing Springdale Lenders
and the Existing Springdale Equity Participants an aggregate amount equal to
$12,890,388.53 and (iii) the existing financial obligations of the Borrower
under the Operative Documents (as defined in the Springdale Participation
Agreement), including those arising on the exercise of the Purchase Option (as
defined in the Springdale Participation Agreement), after taking into account
the payment referred to in clause (ii) above, shall be reconstituted in
accordance with the Springdale Credit Agreement and the other Financing
Documents and the Funds Flow Memorandum.

                   Section 3.04     Second New Money Borrowing.  The obligation
of each New Money Lender to make any Advance after the New Money Closing and the
right of the Borrower to request Advances from the New Money Lenders after the
New Money Closing (the date on which such Advances are to be made being the
"Second New Money Borrowing Date"), shall be subject to the following conditions
precedent; provided that the Second New Money Borrowing Date may not occur after
July 31, 2003:

                   (a)     Material Adverse Change, Etc. Since the Closing Date,
there shall not have occurred any material adverse change in the business,
conditions (financial or otherwise), operations, assets, liabilities (actual or
contingent), results of operations, condition (financial or otherwise) of the
Borrower or the Borrower Group Members, taken as a whole.

                   (b)     Financial Statements. Each Representative Agent shall
have received a copy of the audited Consolidated annual financial statements of
the Borrower and its Subsidiaries dated December 31, 2002 and interim
Consolidated financial statements (consolidated balance sheets and income
statements) of the Borrower and its Subsidiaries dated as of March 31, 2003,
copies of which shall have been duly filed with the Securities and Exchange
Commission and accompanied by (i) in the case of the audited financial
statements, a copy of the letter of PriceWaterhouseCoopers or other the
independent public accountants of recognized standing acceptable to the Required
Lenders included in such audited financial statements and (ii) in the case of
the audited and unaudited financial statements, an Officer's Certificate of the
Borrower, dated as of the Second New Money Borrowing Date, certifying that the
copies of such financial statements fairly present the financial condition of
the Borrower and its Subsidiaries as of the date of such financial statements
and the results of operations of the Borrower and its Subsidiaries for the
period indicated in such financial statements, all in accordance with GAAP and,
subject, in the case of the interim Consolidated financial statements dated as
of March 31, 2003, to normal year-end audit adjustments and the absence of
footnotes.

                   (c)     Consolidated Assets. The aggregate of (i) the
principal amount of all outstanding Advances under the New Money Credit
Agreement, (ii) the principal amount of all Secured Loan Advances (as defined in
the Refinancing Credit Agreement), (iii) the Available Amount of all Refinancing
Letters of Credit, (iv) the principal amount of all outstanding Amended A Notes
(as defined in the Security Agreement), (v) the aggregate principal amount of
all outstanding Advances under the Springdale Tranche A Facility (as defined in
the Security Agreement) and (vi) the principal amount of all Advances requested
by the Borrower to be made on the Second New Money Borrowing Date, in the case
of clauses (i) through (v) above, as of the Second New Money Borrowing Date and
immediately before the making of the Advances under the New Money Credit
Agreement on such date, does not exceed an amount equal to 30% of the
consolidated assets (as determined for purposes of the Bond Lien Basket
Provisions) of the Borrower, as determined in accordance with GAAP on such date
immediately before the making of the Advances under the New Money Credit
Agreement on such date, and each Representative Agent shall have received an
Officer's Certificate of the Borrower with respect to the foregoing, dated as of
the date of the Second New Money Borrowing Date, in form and substance
satisfactory to the Representative Agents.

                   (d)     Perfection. The Collateral Agent and each
Representative Agent shall have received (i) certified copies of the resolutions
of the Board of Directors of each Loan Party authorizing the execution, delivery
and performance of any Collateral Documents to which it is a party and which are
necessary to create, perfect and protect a valid lien and security interest,
subject to the PCB Liens, in the Collateral securing the Advances to be made on
the Second New Money Borrowing Date and (ii) such other evidence (including
legal opinions of appropriate counsel) that all actions (including payment by
the Borrower to the title insurance company recording the Second New Money
Mortgages of the amount previously notified by such title insurance company to
the Borrower as necessary for it to record the Second New Money Mortgages) that
any Representative Agent may deem necessary or desirable in order to create,
perfect and protect a valid lien and security interest, subject to the PCB
Liens, in the Collateral, other than the Other Perfection Requirements, have
been taken.

                   (e)     Litigation. There shall exist (i) no action, suit,
investigation, litigation or proceeding, other than the Disclosed Litigation,
affecting the Borrower or any of its Subsidiaries or any such Person's
properties pending or threatened, before any court, before or by any
Governmental Authority or before any arbitrator and (ii) no default by any such
Person under any applicable order, writ, injunction or decree of any court,
Governmental Authority or arbitrator, in each case which (A) could reasonably be
expected to have a Material Adverse Effect or (B) purports to affect the
legality, validity or enforceability of any Financing Document or the making of
the Advances by the New Money Lenders on the Second New Money Borrowing Date,
and, except as otherwise acceptable to the New Money Lenders, there shall have
been no material adverse change, with respect to the Borrower or any of its
Subsidiaries, in respect of the Disclosed Litigation described on
Schedule 4.01(f).

                   (f)     Governmental Approvals. All Governmental Approvals
related to the making of the Advances by the New Money Lenders on the Second New
Money Borrowing Date shall have been obtained (without the imposition of any
conditions that are not acceptable to the New Money Lenders), are in full force
and effect and are final, except as provided in Section 20 of PUHCA, and
non-appealable, except in the case of the Securities and Exchange Commission's
Order dated February 21, 2003, as provided in Section 24 of PUHCA, and except
with respect to the Governmental Approval being sought pursuant to Section
5.01(aa), do not contain any restrictions, conditions or requirements which are
then required to be satisfied and have not been satisfied, and each
Representative Agent shall have received copies of all such Governmental
Approvals accompanied by an Officer's Certificate of the Borrower attaching
copies of all such Governmental Approvals, and certifying that (i) the copies of
each Governmental Approval delivered pursuant to this Section 3.04(f) are true,
correct and complete copies of such Governmental Approval, (ii) each
Governmental Approval (whether or not delivered pursuant to this Section
3.04(f)) is in full force and effect, and is not subject to any pending appeal,
intervention or similar proceeding or any unsatisfied condition that may result
in modification or revocation thereof, (iii) any and all conditions set forth in
all Governmental Approvals (whether or not delivered pursuant to this Section
3.04(f)) that are then required to be satisfied have been satisfied and (iv) to
the best knowledge of the Responsible Officer providing such Officer's
Certificate, no event has occurred that could reasonably be expected to result
in the modification, cancellation or revocation of any Governmental Approval;
all applicable waiting periods in connection with all Governmental Approvals
shall have expired without any action being taken by any competent authority,
and no law or regulation shall be applicable in the judgment of the Lenders, in
each case that restrains, prevents or imposes materially adverse conditions upon
the making of the Advances by the New Money Lenders on the Second New Money
Borrowing Date or the rights of the Borrower or its Subsidiaries to create any
Lien on, any properties now owned or hereafter acquired by any of them.

                   (g)     Borrowing Certificates. The following statements
shall be true and each Representative Agent and the Collateral Agent shall have
received a certificate signed by an Authorized Signatory of each Loan Party,
each dated the New Money Second Borrowing Date, stating that:

                   (i)     the representations and warranties by such Loan Party
contained in each Financing Document to which it is a party are correct on and
as of the Second New Money Borrowing Date, before and after giving effect to the
Advances on the Second New Money Borrowing Date and to the application of the
proceeds therefrom, as though made on and as of the Second New Money Borrowing
Date, other than any such representations or warranties that, by their terms,
refer to a specific date other than the Second New Money Borrowing Date in which
case such representations and warranties shall be correct as of such specific
date; and

                   (ii)     no Default has occurred and is continuing, or would
result from the Advances on the Second New Money Borrowing Date or from the
application of the proceeds therefrom.

                   (h)     Taxes. All Taxes (i) due and payable on or prior to
the Second New Borrowing Date in connection with the execution, delivery,
filing, recording or admissibility in evidence of the Relevant Documents (other
than the Mortgages and the UCC financing statements) or to ensure the legality,
validity, enforceability, perfection or admissibility in evidence of the
Relevant Documents (other than the Mortgages and the UCC financing statements)
and (ii) due and payable on or prior to the Second Borrowing Date by any
Borrower Group Member in connection with the consummation of the transactions
contemplated by, and the performance of, the Relevant Documents (other than the
Mortgages and the UCC financing statements), shall, in the case of clauses (i)
and (ii) above, have been duly paid in full.

                   (i)     Stamp Duties, Etc. All required stamp duties,
registration fees, filing costs and other charges in connection with the
execution, delivery, filing, recording, perfection, priority or admissibility in
evidence of the Relevant Documents (other than the Mortgages and the UCC
financing statements), and the security interests purported to be granted by the
Collateral Documents (other than the Mortgages and the UCC financing
statements), required to be paid on or prior to the Second Borrowing Date shall
have been paid in full or an appropriate exemption therefrom shall have been
obtained.

                   (j)     Fees Etc. The Borrower shall have paid all accrued
fees and reasonable expenses of the Agents and the Lenders (including the
accrued fees and reasonable expenses of counsel to the Agents) for which it has,
with respect to such expenses, received an invoice.

                   (k)     Mortgages and Other Real Estate Documents. The
Collateral Agent shall have received, no later than the date indicated below, if
any (notwithstanding any later date that may be indicated in Section 5.01(t)):

                   (i)     30 days prior to the Second New Money Borrowing Date,
an amended Schedule 4.01(r) (the "Amended Schedule"), such Amended Schedule
clearly identifying (A) the real properties owned by each Loan Party as of the
Closing Date, (B) any real properties or portions thereof disposed of, or
reasonably likely to be disposed of, by sale or otherwise by any Loan Party
during the period between the Closing Date and the Second New Money Borrowing
Date, (C) any real properties or portions thereof acquired, or reasonably likely
to be acquired, by any Loan Party during the period between the Closing Date and
the Second New Money Borrowing Date (the "New Real Property"), and (D) any real
properties currently the subject of purchase or sale negotiations by any Loan
Party. The Amended Schedule shall include a list and description (including the
street address, county or other relevant jurisdiction, state, record owner and,
except with respect to the Springdale Plant, book value thereof) of the
aforementioned properties, and a description of such other changes in the
information included in the Amended Schedule as may be necessary for the Amended
Schedule to be accurate and complete so as to reflect all real property
currently owned or reasonably likely to be owned by the Loan Parties as of the
Second New Money Borrowing Date;

                   (ii)     ten days prior to the Second New Money Borrowing
Date, duly executed corrective deeds from the Loan Parties (and the Borrower
shall use commercially reasonable efforts to obtain the same from any third
parties) or any other documents with respect to any of the properties listed on
the Amended Schedule required to correct the real estate records in the
respective counties in which such properties are located, in form and substance
satisfactory to the Representative Agents;

                   (iii)     on the Second New Money Borrowing Date,
confirmation from the title insurance company recording the Second New Money
Mortgages that duly executed counterparts of the Second New Money Mortgages
sufficient for recording in all filing or recording offices that the New Money
Lender Agent may deem necessary or desirable in order to create valid and
subsisting Liens on the property described therein in favor of the Collateral
Agent for the benefit of the Collateral Agent, the New Money Lenders and the New
Money Lender Agent, have been recorded, and evidence reasonably satisfactory to
the Representative Agents that all filing and recording taxes and fees have been
paid;

                   (iv)     on the Second New Money Borrowing Date, (A) as to
each of the Material Properties, the Relevant Properties and the Springdale
Plant, fully paid American Land Title Association Lender's Extended Coverage
title insurance policies in form and substance, with endorsements and in amounts
acceptable to the Representative Agents, issued by title insurers acceptable to
the Representative Agents, insuring the Second New Money Mortgages with respect
to the Material Properties, the Relevant Properties and the Springdale Plant, to
be valid and subsisting Liens on the properties described therein, free and
clear of all defects (including mechanics' and materialmen's Liens) and
encumbrances, excepting only Permitted Liens, and providing for such other
affirmative insurance (including endorsements for future advances under the
Financing Documents and for mechanics' and materialmen's Liens) as the
Representative Agents may deem necessary or desirable, and (B) as to the New
Real Property, at the sole and absolute discretion of the Representative Agents,
either (1) title reports, prepared by title companies acceptable to the
Representative Agents, showing the New Real Property to be free and clear of all
defects (including mechanic's and materialmen's Liens) and encumbrances,
excepting only Permitted Liens, or (2) fully paid American Land Title
Association Lender's Extended Coverage title insurance policies in form and
substance, with endorsements and in amounts acceptable to the Representative
Agents, issued by title insurers acceptable to the Representative Agents,
insuring the Second New Money Mortgages with respect to the New Real Property to
be valid and subsisting Liens on the property described therein, free and clear
of all defects (including mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Liens, and providing for such other affirmative
insurance (including endorsements for future advances under the Financing
Documents and for mechanics' and materialmen's Liens) as the Representative
Agents may deem necessary or desirable;

                   (v)     if the Amended Schedule reflects additions or
dispositions of any real property contiguous to any of the Material Properties,
the Relevant Properties or the Springdale Plant, then within 10 days of the
Second New Money Borrowing Date, updated American Land Title
Association/American Congress on Surveying and Mapping form surveys, for which
all necessary fees (where applicable) have been paid, of such Material Property,
Relevant Property or Springdale Plant (as the case may be), dated within said 30
days of the Second New Money Borrowing Date, certified to the Collateral Agent
and the issuer of the Mortgage Policies for such properties by a land surveyor
duly registered and licensed in the States in which the property described in
such surveys is located, together with any updates required to be made to such
Mortgage Policies in order to read the aforementioned surveys into such Mortgage
Policies with no further defects or encumbrances which are not Permitted Liens
(unless otherwise consented to by the Required Lenders); and

                   (vi)     confirmation from the title insurance company
recording the Second New Money Mortgages with respect to the validity and
(subject to the exceptions and encumbrances permitted therein) the priority of
the Second New Money Mortgages.

                   Section 3.05     Determinations Under Sections 3.01, 3.02,
3.03 and 3.04.  (a)  For purposes of determining compliance with the conditions
specified in Section 3.01, each Lender and the Refinancing Issuing Bank shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to it unless an officer of its Representative
Agent responsible for the transactions contemplated by the applicable Financing
Documents shall have received notice from such Bank Lender Party prior to the
making by such Lender of its Advance or, in the case of the Refinancing Issuing
Bank, its assumption of any Existing Letter of Credit, specifying its objection
thereto.

                   (b)     For purposes of determining compliance with the
conditions specified in Section 3.02, each New Money Lender and each Springdale
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to it unless an officer of the
New Money Lender Agent or the Springdale Lender Agent, in each case responsible
for the transactions contemplated by the applicable Financing Documents shall
have received notice from such New Money Lender or Springdale Lender,
respectively, prior to the making of its Advance specifying its objection
thereto.

                   (c)     For purposes of determining compliance with the
conditions specified in Section 3.03, each of the Refinancing Lenders, the
Springdale Lenders and the Refinancing Issuing Bank shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to it unless an officer of the Refinancing Lender Agent (in the
case of the Refinancing Lender Parties) or the Springdale Lender Agent (in the
case of the Springdale Lenders), in each case, responsible for the transactions
contemplated by the applicable Financing Documents shall have received notice
from such Bank Lender Party prior to the making by such Lender of its Advance,
or, in the case of the Refinancing Issuing Bank, its assumption of any Existing
Letter of Credit, specifying its objection thereto.

                   (d)     For purposes of determining compliance with the
conditions specified in Section 3.04, each New Money Lender (and in the case of
Section 3.04(d) only, each other Lender) shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to it unless an officer of the New Money Lender Agent responsible
for the transactions contemplated by the applicable Financing Documents shall
have received notice from such New Money Lender (or such other Lender (given
through its Representative Agent)) prior to the making of its Advance (in the
case of a New Money Lender) or the making of the Advances by the New Money
Lenders (in the case of any other Lender) specifying its objection thereto.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

                   Section 4.01     Representations and Warranties of the
Borrower.  The Borrower represents and warrants to each Bank Lender Party that:

                   (a)     Each of the Borrower and its Subsidiaries (i) is a
limited liability company or corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation, (ii) is duly
qualified to do business and in good standing in each other jurisdiction in
which it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed and (iii) has all requisite corporate
or limited liability company (as applicable) power and authority (including all
governmental licenses, permits and other approvals) to own or lease and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, except, in the case of clauses (ii) and (iii) only, where the
failure to so qualify or be so licensed, or to have such power and authority,
could not reasonably be expected to have a Material Adverse Effect. All of the
outstanding Equity Interests in the Borrower have been validly issued, are fully
paid and non-assessable and, except for the ML Interest, are owned by the Parent
free and clear of all Liens, other than Liens for taxes, assessments and
governmental charges or levies.

                   (b)     Set forth on Schedule 4.01(b) is a complete and
accurate list of all Subsidiaries of the Borrower, showing as of the date hereof
(as to each such Subsidiary) the jurisdiction of its formation, the number of
shares of each class of its Equity Interests authorized, and the number
outstanding, on the date hereof and the percentage of each such class of its
Equity Interests, the identity of each owner thereof and the number of shares
covered by all outstanding options, warrants, rights of conversion or purchase
and similar rights at the date hereof. All of the outstanding Equity Interests
in (i) the Borrower's Subsidiaries (other than AGC) have been validly issued,
are fully paid and non-assessable and are owned by the Borrower or one or more
of its Subsidiaries free and clear of all Liens, except those created under the
Collateral Documents and (ii) AGC have been validly issued, are fully paid and
non-assessable and are owned by the Borrower (as to 77.03%), free and clear of
all Liens, or by MPC (as to 22.97%).

                   (c)     The execution, delivery and performance by each Loan
Party of each Relevant Document to which it is or is to be a party, and the
consummation of the Transaction, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and do not and will
not (i) contravene such Loan Party's 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 contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party or any of its properties (including any
limitations on the granting of Liens contained in the Bond Instruments) or
(iv) except for the Liens created under the Collateral Documents, result in or
require the creation or imposition of any Lien upon or with respect to any of
the Assets of any Loan Party. No Loan Party is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument, the violation or breach of which could
be reasonably expected to have a Material Adverse Effect.

                   (d)     No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or any other third party
is required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party of any Relevant Document to which it is or is to
be a party, or for the consummation of the Transaction, (ii) the grant by any
Loan Party of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created under the Collateral
Documents (including the priority nature thereof (as stated in the relevant
Collateral Document and in Section 2.02(d) of the Security Agreement), other
than (A) filing of the financing statements duly completed for filing under the
Uniform Commercial Code covering the Collateral described in the Collateral
Documents (and upon the filing of such financing statements in the relevant
jurisdictions, all authorizations, approvals, actions by, and notices to or
filings with, any Governmental Authority required for the perfection of the
Liens created by the Collateral Documents (including the required priority
nature thereof), other than the Other Perfection Requirements, shall have been
duly obtained, taken and filed) and (B) the Other Perfection Requirements or
(iv) the exercise by any Secured Party of its rights under the Financing
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for (1) the authorizations, approvals, actions,
notices and filings listed on Schedule 4.01(d) (the "Governmental Approvals"),
all of which have been duly obtained, taken, given or made, are in full force
and effect, are held in the name of a Loan Party, are not subject to appeal
(except in the case of the Securities and Exchange Commission Order dated
February 21, 2003, as provided in Section 24 of PUHCA), intervention, rehearing,
reconsideration, or similar proceeding and are free from any conditions or
requirements that have not been satisfied, and are required to be satisfied, on
or prior to the dates as of which this representation and warranty is made or
reaffirmed, (2) the filing of the financing statements duly completed for filing
under the Uniform Commercial Code covering the Collateral described in the
Collateral Documents, (3) the Other Perfection Requirements and (4) all other
authorizations, approvals, actions, notices and filings required under
Applicable Law for any exercise of possessory remedies with respect to the
Collateral (including with respect to foreclosure proceedings). All applicable
waiting periods in connection with the Transaction have expired without any
action having been taken by any competent authority restraining, preventing or
imposing materially adverse conditions upon the Transaction or the rights of the
Loan Parties to create any Lien on any properties now owned or hereafter
acquired by any of them.

                   (e)     This Agreement has been, and each other Relevant
Document when delivered hereunder will have been, duly executed and delivered by
each Loan Party party thereto. This Agreement is, and each other Relevant
Document when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan Party
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.

                   (f)     There is no action, suit, investigation, litigation
or proceeding affecting any Borrower Group Member, including any Environmental
Action, pending or threatened before any Governmental Authority that (i) could
reasonably be expected to have a Material Adverse Effect (other than the
Disclosed Litigation) or (ii) affects or purports to affect the legality,
validity or enforceability of any Financing Document or the consummation of the
Transaction, and there has been no material adverse change, with respect to any
Borrower Group Member, in respect of the Disclosed Litigation described on
Schedule 4.01(f).

                   (g)  (i)  Subject to Accounting Review Adjustments, each of
the financial statements of the Borrower delivered by it to the Representative
Agents pursuant to Sections 3.01(e) and 5.04(b) and (c) is true, complete and
correct in all respects as of the date of such statement, has been prepared in
accordance with GAAP (subject, in the case of interim financial statements, to
normal year-end audit adjustments and the absence of footnotes), and fairly
presents the Borrower's financial condition and results of operations as of the
date thereof. Except as (i) previously disclosed publicly by the Parent or any
of its Subsidiaries or (ii) set forth in Schedule 4.01(g), there are no
liabilities or obligations of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due, but not including any
liabilities or obligations that would not be required to be disclosed in a
financial statement, including the footnotes thereto, pursuant to GAAP, for the
period to which such financial statements relate) that could reasonably be
expected to have a Material Adverse Effect. Except as (i) previously disclosed
publicly by the Parent or any of its Subsidiaries or (ii) set forth in Schedule
4.01(g), since the date of its most recent financial statements delivered under
this Agreement, no event, condition, occurrence or circumstance has existed or
has occurred and is continuing which could reasonably be expected to have a
Material Adverse Effect. Except as (i) previously disclosed publicly by the
Parent or any of its Subsidiaries or (ii) set forth in Schedule 4.01(g), the
Borrower does not know of any reasonable basis for the assertion against it or
any of its property or assets of any liability or obligation of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) that is not fully reflected in such financial statements which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

                   (ii)     The Consolidated forecasted balance sheet, statement
of income, statement of cash flows and cash receipts and cash disbursements
statement set forth in the Business Plan were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were fair in light of
the conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, a reasonable good faith estimate of future
financial performance by the Borrower and its Subsidiaries.

                   (h)     Neither the Information Memorandum nor any other
information, exhibit or report furnished by or on behalf of any Loan Party to
any Agent or any other Bank Lender Party in connection with the negotiation and
syndication of the Facilities or pursuant to the terms of the Financing
Documents contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements made therein not misleading.

                   (i)     The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawings under any Refinancing Letter of Credit will
be used to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock.

                   (j)     Neither the Borrower nor any of its Subsidiaries is
an "investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended. Neither the making of any
Advances, nor the issuance of any Refinancing Letters of Credit (or assumption
by the Refinancing Issuing Bank of the Existing Letters of Credit), nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Financing Documents,
will violate any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.

                   (k)     All filings and other actions necessary or desirable
to perfect and protect the security interest in the Collateral created under the
Collateral Documents have been duly made or taken and are in full force and
effect, and the Collateral Documents create in favor of the Collateral Agent for
the benefit of the Secured Parties a valid and, together with such filings and
other actions, perfected security interest in the Collateral, with the
respective priorities of the New Money Liens, the Refinancing Liens and the
Springdale Liens as set forth in Section 2.02(d) of the Security Agreement
(other than (i) the filing of the financing statements duly completed for filing
under the Uniform Commercial Code covering the Collateral described in the
Collateral Documents, (ii) the recording of the Mortgages referred to in
Section 3.02(a)(i), 3.02(g)(i) and 3.03(b)(i), and (iii) the Other Perfection
Requirements), securing the payment of the Secured Obligations, and all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly taken. The Loan Parties are the legal and beneficial
owners of the Collateral free and clear of any Lien, except for the liens and
security interests created or permitted under the Financing Documents.

                   (l)     Each Loan Party is, individually and together with
its respective Subsidiaries, Solvent.

                   (m)     No ERISA Event has occurred with respect to any Plan
that has resulted in a material liability which could be reasonably likely to
have a Material Adverse Effect. Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) for each Plan, copies of which have been
filed with the Internal Revenue Service and furnished to the Representative
Agents in sufficient copies for each of its Related Lenders, is complete and
accurate, and since the date of such Schedule B there has been no material
adverse change which could reasonably be expected to have a Material Adverse
Effect on such funding status. Neither the Loan Parties nor any ERISA Affiliate
has incurred any Withdrawal Liability to any Multiemployer Plan, or has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or has been terminated, within the meaning of Title IV of
ERISA, that, in any such case, could reasonably be expected to have a Material
Adverse Effect.

                   (n)  (i)  Except as disclosed on Schedule 4.01(n) or in the
Parent's filings with the Securities and Exchange Commission or as could not
reasonably be expected to have a Material Adverse Effect, the operations and
properties of the Borrower and each of its Subsidiaries comply in all respects
with all applicable Environmental Laws and Environmental Permits. All past
non-compliance with such Environmental Laws and Environmental Permits has been
resolved without material ongoing obligations or costs, and no circumstances
exist that could reasonably be expected to (A) form the basis of an
Environmental Action against the Borrower or any of its Subsidiaries or any of
their properties that could reasonably be expected to have a Material Adverse
Effect or (B) cause any such property to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law, except
as could not reasonably be expected to have a Material Adverse Effect.

                   (ii)     Except as could not reasonably be expected to have a
Material Adverse Effect, none of the properties currently or formerly owned or
operated by the Borrower or any of its Subsidiaries is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state or local
list; there are no and never have been any unlawful underground or aboveground
storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons
in which Hazardous Materials are being or have been treated, stored or disposed
on any property currently owned or operated by the Borrower or any of its
Subsidiaries or on any property formerly owned or operated by the Borrower or
any of its Subsidiaries; and Hazardous Materials have not been released,
discharged or disposed of on any property currently or formerly owned or
operated by the Borrower or any of its Subsidiaries in any manner which could
reasonably be expected to have a Material Adverse Effect.

                   (iii)     Neither the Borrower nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or remedial or
response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory authority
or the requirements of any Environmental Law; and all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from, any
property currently or formerly owned or operated by the Borrower or any of its
Subsidiaries have been used, sold or disposed of in a manner not reasonably
expected to result in material liability to the Borrower or any of its
Subsidiaries, except in each case in this clause (iii) as could not reasonably
be expected to have a Material Adverse Effect.

                   (o)  (i)  Neither the Borrower nor any of its Subsidiaries is
party to any tax sharing agreement other than the Tax Allocation Agreement. All
amounts due and payable by the Borrower or any of its Subsidiaries under any tax
sharing agreement have been paid, and all amounts due and payable to the
Borrower or any of its Subsidiaries under any tax sharing agreement have been
received (including amounts by way of compensation for the use of tax benefits).

                   (i)  The Borrower and each of its Subsidiaries and Affiliates
has filed, has caused to be filed or has been included in all tax returns
(federal, state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties, except
as could not reasonably be expected to have a Material Adverse Effect.

                   (p)     Since September 30, 2002, neither the business nor
the properties of the Borrower or any of its Subsidiaries have been affected by
any fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of
God or of the public enemy or other casualty (whether or not covered by
insurance) that could reasonably be expected to have a Material Adverse Effect.

                   (q)     Set forth on Schedule 4.01(q) is a complete and
accurate list of all Liens (other than the New Money Liens, the Refinancing
Liens, the Noteholder Liens, the Springdale Liens and Permitted Liens) on the
Assets of the Borrower or any of its Subsidiaries, showing as of the date hereof
the lienholder thereof and the Assets of the Borrower or such Subsidiary subject
thereto.

                   (r)     Set forth on Schedule 4.01(r) is a complete and
accurate list of all real property owned by the Borrower or any of its
Subsidiaries, showing as of the date hereof the street address, county or other
relevant jurisdiction, state, record owner and, except with respect to the
Springdale Plant, the book value thereof. The Borrower or such Subsidiary has
good, marketable and insurable fee simple title to all real property on such
Schedule (except to the extent that title will transfer only as a result of the
Transaction), free and clear of all Liens, other than Liens created or permitted
by the Financing Documents.

                   (s)     Set forth on Schedule 4.01(s) is a complete and
accurate list of all leases of real property under which the Borrower or any of
its Subsidiaries is the lessee, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable in accordance
with its terms.

                   (t)     Set forth on Schedule 4.01(t) is a complete and
accurate list of all Investments held by the Borrower or any of its
Subsidiaries, showing as of the date of the most recent fiscal quarter of the
Borrower for when such information is available the amount, obligor or issuer
and maturity, if any, thereof.

                   (u)     Each Material Contract has been duly authorized,
executed and delivered by all parties thereto, has not been amended or otherwise
modified, is in full force and effect and is binding upon and enforceable
against all parties thereto in accordance with its terms, and, except as
described in Schedule 4.01(u), there exists no default under any Material
Contract by any party thereto.

                   (v)     Set forth on Schedule 4.01(v) is a complete and
accurate list of all Existing Debt (other than the Existing Lender Debt, the
Existing Springdale Debt and Debt under the Existing Hedge Agreements) of the
Borrower and its Subsidiaries as of the date hereof, showing as of the date
hereof the amount, obligor or issuer, creditor and maturity thereof.

                   (w)     The Borrower is a "registered holding company", as
such term is defined in PUHCA. Each Borrower Group Member has all authorizations
and approvals from the Federal Energy Regulatory Commission or other
Governmental Authority required to provide the services and goods (including
electric capacity, energy and ancillary services) it sells, including all
necessary rate schedules on file and effective with the Federal Energy
Regulatory Commission for the Borrower Group Members to sell power at wholesale.

                   (x)     No Default (other than with respect to the Existing
Hedge Agreements in default as of the Closing Date and as described in Schedule
4.01(x)) has occurred and is continuing and no Casualty Event has occurred since
September 30, 2002.

                   (y)     The execution, delivery and performance by each
Borrower Group Member of the Relevant Documents to which it is a party are
private and commercial acts performed for private and commercial purposes.

                   (z)     Neither the Borrower nor any of its Subsidiaries has
any bank or securities accounts other than the Pledged Accounts, the Controlled
Accounts and the Operating Accounts. Set forth on Schedule 4.01(z) is a complete
and accurate list of all Initial Controlled Accounts and Operating Accounts,
showing as of the date hereof, with respect to each Operating Account, the name
and address of the bank or other financial institution with whom such Operating
Account is maintained, the name of the accountholder and the account number
thereof.

                   (aa)     There are no strikes, lockouts or other material
labor disputes or grievances against the Borrower or any of its Subsidiaries,
or, to the Borrower's knowledge, threatened against or affecting the Borrower or
any of its Subsidiaries, and no significant unfair labor practice, charges or
grievances are pending against the Borrower or any of its Subsidiaries, or to
the Borrower's knowledge, threatened against any of them before any Governmental
Authority that could reasonably be expected to have a Material Adverse Effect.
All payments due from the Borrower or any of its Subsidiaries pursuant to the
provisions of any collective bargaining agreement have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

                   (bb)     Each Borrower Group Member has all necessary
property rights (including easements or other rights of ingress or egress)
required for the design, development, construction, supply, start-up,
commissioning, testing, operation or maintenance of each electric generating
power station owned, partially or wholly, or being developed by such Borrower
Group Member (including the Springdale Plant, but not the St. Joseph Plant), and
all services, electric and other interconnections, transmission facilities,
utilities, water supply and water discharge facilities and materials for each
Borrower Group Member to develop, construct, operate and maintain each electric
power generating plant of such Borrower Group Member are owned or leased by such
Borrower Group Member, or are required to be made available to such Borrower
Group Member under the Assigned Agreements, except for those which are otherwise
available to such Borrower Group Member at commercially reasonable rates or the
absence of which could not reasonably be expected to have a Material Adverse
Effect.

                   (cc)     Bond Lien Basket Debt. As of (i) the Closing Date
and immediately prior to (A) the New Money Closing, there exists no Bond Lien
Basket Debt and (B) the Refinancing Closing, there is no existing Bond Lien
Basket Debt, other than the New Money Obligations and (ii) the Second New Money
Borrowing Date and immediately prior to the making of the Advances by the New
Money Lenders on such date, there is no existing Bond Lien Basket Debt other
than the Advances under the New Money Credit Agreement, the Secured Loan
Advances (as defined in the Refinancing Credit Agreement), the Available Amount
of all Refinancing Letters of Credit, the Advances under the Springdale
Tranche A Facility (as defined in the Security Agreement) and the Amended A
Notes (as defined in the Security Agreement), in each case, as of such date.

                   Section 4.02     Representations and Warranties of the Other
Grantors.  Each Grantor other than the Borrower represents and warrants to each
Bank Lender Party that:

                    (a)     It (i) is a limited liability company or corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (ii) is duly qualified and in good standing in
each other jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed and (iii) has
all requisite corporate or limited liability company power and authority
(including all governmental licenses, permits and other approvals) to own or
lease and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, except, in the case of clauses (ii) and (iii)
only, where the failure to so qualify or be so licensed, or to have such power
and authority, could not reasonably be expected to have a Material Adverse
Effect. All of the outstanding Equity Interests in such Grantor have been
validly issued, are fully paid and non-assessable and are owned by another Loan
Party free and clear of all Liens (other than, with respect to the Loan Parties
other than the Borrower, Liens under the Collateral Documents).

                   (b)     Its execution, delivery and performance of each
Relevant Document to which it is or is to be a party are within its corporate
powers, have been duly authorized by all necessary corporate action, and do not
(i) contravene its Constituent Documents, (ii) violate any law, rule,
regulation, 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 contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting it or
any of its properties or (iv) except for the Liens created under the Collateral
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any of its Assets. It is not in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
in breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which could be
reasonably expected to have a Material Adverse Effect.

                   (c)     All Governmental Approvals required by it for (i) its
due execution, delivery, recordation, filing or performance of any Relevant
Document to which it is or is to be a party, (ii) its grant of the Liens granted
by it pursuant to the Collateral Documents, (iii) the perfection or maintenance
of the Liens created by it under the Collateral Documents (including the
priority nature thereof (as stated in the relevant Collateral Document and in
Section 2.02(d) of the Security Agreement)), other than (A) filing of the
financing statements duly completed for filing under the Uniform Commercial Code
covering the Collateral described in the Collateral Documents (and upon the
filing of such financing statements in the relevant jurisdictions, all
authorizations, approvals, actions by, and notices to or filings with, any
Governmental Authority required for the perfection of the Liens created by the
Collateral Documents (including the required priority nature thereof), other
than the Other Perfection Requirements, shall have been duly obtained, taken and
filed) and (B) the Other Perfection Requirements, and (iv) the exercise by any
Secured Party of its rights under the Financing Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents have been duly
obtained, taken, given or made, are in full force and effect, are held in its
name, are not subject to appeal, intervention, rehearing, reconsideration, or
similar proceeding and are free from any conditions or requirements that have
not been satisfied, and are required to be satisfied, on or prior to the dates
as of which this representation and warranty is made or reaffirmed, except, in
the case of this clause (iv), for (1) the Governmental Approvals, all of which
have been duly obtained, taken, given or made, are in full force and effect, are
held in the name of a Loan Party, are not subject to appeal (except in the case
of the Securities and Exchange Commission Order dated February 21, 2003, as
provided in Section 24 of PUHCA), intervention, rehearing, reconsideration, or
similar proceeding and are free from any conditions or requirements that have
not been satisfied, and are required to be satisfied, on or prior to the dates
as of which this representation and warranty is made or reaffirmed, (2) the
filing of the financing statements duly completed for filing under the Uniform
Commercial Code covering the Collateral described in the Collateral Documents,
(3) the Other Perfection Requirements and (4) all other authorizations,
approvals, actions, notices and filings required under Applicable Law for any
exercise of possessory remedies with respect to the Collateral (including with
respect to foreclosure proceedings).

                   (d)     This Agreement has been, and each other Relevant
Document to which it is or is to be a party when delivered hereunder will have
been, duly executed and delivered by it. This Agreement is, and each other
Relevant Document to which it is or is to be a party when delivered hereunder
will be, its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

                   (e)     There is no action, suit, investigation, litigation
or proceeding affecting it, including any Environmental Action, pending or
threatened before any court, governmental agency or arbitrator that (i) could
reasonably be expected to have a Material Adverse Effect (other than the
Disclosed Litigation) or (ii) affects or purports to affect the legality,
validity or enforceability of any Financing Document, and there has been no
adverse change in the status, or financial effect on it, in respect of the
Disclosed Litigation described on Schedule 4.01(f).

                   (f)     Its execution, delivery and performance of the
Relevant Documents to which it is a party are private and commercial acts
performed for private and commercial purposes.

                   (g)     It does not have any bank or securities accounts
other than the Controlled Accounts and the Operating Accounts listed on
Schedule 4.01(z) opposite its name.

ARTICLE V
COVENANTS

                   Section 5.01     Affirmative Covenants of the Borrower.  The
Borrower covenants and agrees that on and after the date hereof and until the
Bank Notes, together with all accrued interest thereon, fees and all other Bank
Obligations are paid in full and all Commitments and Refinancing Letters of
Credit shall have terminated, the Borrower will:

                   (a)     Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply in all respects with all Applicable Laws, except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

                   (b)     Compliance with Environmental Laws. Comply, and cause
each of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and renew, and
cause each of its Subsidiaries to obtain and renew, all Environmental Permits
necessary for its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any required investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action necessary
to remove and clean up all Hazardous Materials from any of its properties
required under any Environmental Law, except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

                   (c)     Governmental Approvals. Obtain and maintain, and
cause each of its Subsidiaries to obtain and maintain, all Governmental
Approvals (including the Material Governmental Approvals) that are required of
it for the validity or enforceability of the Financing Documents and the
Material Contracts and the ongoing operations of their respective businesses,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

                   (d)     Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if unpaid,
might by law become a Lien upon its property; provided that neither the Borrower
nor any of its Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is the subject of a Contest.

                   (e)     Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by regulated electric utility companies engaged in similar businesses
and owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates; provided that such insurance shall be in accordance
with the terms and provisions set forth in Section 5.10(a) of the Security
Agreement and such insurance shall satisfy such other requirements as may be
provided pursuant to the terms of each Material Contract.

                   (f)     Preservation of Corporate Existence, Etc. Preserve
and maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, rights, franchises and privileges in the
jurisdiction of its formation, and qualify and remain qualified in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify, except where the failure to so preserve,
maintain, qualify and remain qualified could not reasonably be expected to have
a Material Adverse Effect.

                   (g)     Visitation Rights. At any reasonable time and from
time to time at the cost and expense of the Borrower, permit any of the Agents
or any of the other Bank Lender Parties, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants.

                   (h)     Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets with
respect to all material transactions and business of the Borrower and each such
Subsidiary in accordance with GAAP in effect from time to time.

                   (i)     Maintenance of Properties, Etc. Operate, maintain and
preserve, and cause each of its Subsidiaries to operate, maintain and preserve,
all of its properties that are used or useful in the conduct of its business in
good working order and condition (ordinary wear and tear excepted) in accordance
with prudent practices then being utilized in the merchant, non-regulated power
generation industry and in accordance with Applicable Laws (including
Environmental Laws), except where noncompliance could not reasonably be expected
to have a Material Adverse Effect.

                   (j)     Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, (i) all transactions otherwise permitted under
the Financing Documents with any of the Affiliates of the Borrower on terms that
are fair and reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate of the Borrower and (ii) all transactions with a Person other than
an Affiliate of the Borrower on terms that are without regard to any benefit or
detriment to any Affiliate of the Borrower (other than any of its Subsidiaries).
Without prejudice to the foregoing, and to the extent not otherwise prohibited
by any other provision of the Financing Documents, the following transactions
shall be deemed to be in compliance with the first sentence of this clause (j):
(A) any transaction executed in accordance with the requirements of PUHCA,
(B) any agreements by the Borrower and its Subsidiaries with a utility to
provide provider of last resort requirements, as such agreements are amended
from time to time, so long as such provider of last resort agreements are with
an Affiliate of the Borrower and approved by all applicable Governmental
Authorities and (C) any transaction authorized under a tariff which has been
approved by the Federal Energy Regulatory Commission. For the avoidance of
doubt, any contracts existing on the date hereof to which the Borrower or any of
its Subsidiaries is a party and copies of which have been delivered to the
Lenders pursuant to Section 3.01 (and any renewals or replacements thereof on
substantially the same terms) and the Financing Documents shall be deemed to
comply with this Section 5.01(j) except to the extent any Governmental Authority
determines that any such contract is not in conformance with Applicable Law and
such non-conforming contract is not on terms described in clauses (i) or (ii) of
this Section 5.01(j).

                   (k)     Further Assurances. Promptly upon request by any Bank
Lender Party, correct, and cause each of its Subsidiaries promptly to correct,
any material defect or error that may be discovered in any Financing Document or
in the execution, acknowledgment, filing or recordation thereof.

                   (l)     Preparation of Environmental Reports. If any Agent
shall reasonably believe that a material environmental event has occurred on any
parcel of real property owned or leased by any Borrower Group Member after the
date hereof, at the request of such Agent describing in reasonable details the
basis of such belief, provide to each Agent within 90 days after such request,
at the expense of the Borrower, a Phase I environmental site assessment report
for the properties described in such request prepared by an environmental
consulting firm acceptable to the Representative Agents, indicating the presence
or absence of Hazardous Materials and the estimated cost of any legally required
compliance, removal or remedial action in connection with any Hazardous
Materials on such properties. Without limiting the generality of the foregoing,
if any Agent determines at any time that a material risk exists that any such
report will not be provided within the time referred to above, any
Representative Agent may, at the time following the forty-fifth day after the
request of such Agent, retain an environmental consulting firm to prepare such
report at the expense of the Borrower, and the Borrower hereby grants and agrees
to cause any Subsidiary that owns any property described in such request to
grant at the time of such request to each Agent, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to the
rights of tenants, to enter onto their respective properties to undertake such
an assessment.

                   (m)     Compliance with Terms of Leaseholds. Make all
payments and otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party, keep such
leases in full force and effect and not allow such leases to lapse or be
terminated or any rights to renew such leases to be forfeited or cancelled,
notify each Representative Agent of any default by any party with respect to
such leases and cooperate with each Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so, except, in any case, where
the failure to do so either individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.

                   (n)     Performance of Material Contracts. Subject to Section
5.01(x), perform and observe, and cause each of its Subsidiaries to perform and
observe, all the terms and provisions of each Material Contract to be performed
or observed by it, maintain each such Material Contract in full force and
effect, enforce each such Material Contract in accordance with its terms, take
all such action to such end as may be from time to time requested by any
Representative Agent and, upon request of any Representative Agent, make to each
other party to each such Material Contract such demands and requests for
information and reports or for action as the Borrower or any of its Subsidiaries
is entitled to make under such Material Contract except, in any case, where the
failure to do so, either individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.

                   (o)     Maintenance of Ownership of Subsidiaries. Except as
permitted under Section 5.02(d) or (e), maintain ownership and control of all
Equity Interests that the Borrower holds in all of its Subsidiaries, directly or
indirectly, free and clear of all Liens except as permitted by the Financing
Documents.

                   (p)     Use of Proceeds. Use the proceeds of (i) Advances
under the Refinancing Credit Agreement to refinance the Existing Lender Debt and
to refinance up to $10,000,000 of existing indebtedness of the Parent,
(ii) Advances under the Springdale Credit Agreement to reconstitute the Existing
Springdale Lease Participations (to the extent the Existing Springdale Lease
Participations are not repaid as contemplated in clause (iii) below), and
(iii) Advances under the New Money Credit Agreement to partially repay the
Existing Springdale Lease Participations in accordance with the Funds Flow
Memorandum upon the Refinancing Closing, pay St. Joseph Costs and Springdale
Costs, for the Borrower's general corporate purposes and to provide working
capital to the Borrower.

                   (q)     Dividend Requirements. Subject to Applicable Law,
cause each of its Subsidiaries to distribute to the Borrower as dividends
(i) all available cash from operations, net of Capital Expenditures (as
contemplated under the CapEx Budget) to the extent financing therefor has not
been consummated of such Subsidiary, to the extent necessary to enable the
Borrower to satisfy its obligations under Section 2.03 of the Security Agreement
and (ii) all Net Cash Proceeds relating to any Asset Sale or Debt/Equity
Issuance (to the extent permitted pursuant to Section 5.02 (including
Section 5.02(b) and (s)) by such Subsidiary, to the extent necessary to enable
the Borrower to satisfy its obligations under Section 2.03 of the Security
Agreement.

                   (r)     Business Plan. At all times act reasonably in
accordance with the Business Plan; provided that, for the avoidance of doubt,
any Sale of Assets or Debt/Equity Issuance which is otherwise permitted under
the Financing Documents shall not be prohibited pursuant to this Section 5.01(r)
notwithstanding that such Sale or Debt/Equity Issuance is not expressly included
in the Business Plan.

                   (s)     Ranking. Ensure that the Bank Lender Obligations at
all times shall have the ranking they purport to have under Section 2.02(d) of
the Security Agreement.

                   (t)     Post Closing Deliveries. No later than the date
indicated below, deliver to the Collateral Agent and each Representative Agent:

                   (i)     within 30 days after a reasonable request therefor by
any Representative Agent (but in any event no earlier than 120 days after the
Closing Date), duly executed corrective deeds from the Borrower (or the Borrower
shall use commercially reasonable efforts to obtain the same from any third
parties) or any other documents with respect to any of the properties listed on
Schedule 4.01(r) required to correct the real estate records in the respective
counties in which such properties are located, in form and substance
satisfactory to the Representative Agents;

                   (ii)     within 60 days after a reasonable request therefor
by any Representative Agent (but in any event no earlier than 120 days after the
Closing Date), American Land Title Association Lender's Extended Coverage title
insurance policies in form and substance, with endorsements and in amount
acceptable to the Representative Agents, issued by title insurers acceptable to
the Representative Agents, insuring the Mortgages with respect to the properties
listed on Schedule 4.01(r), other than the Material Properties and the Relevant
Properties, to be valid and subsisting Liens on the property described therein,
free and clear of all defects (including mechanics' and materialmen's Liens) and
encumbrances, excepting only Permitted Liens, and providing for such other
affirmative insurance (including endorsements for future advances under the
Financing Documents and for mechanics' and materialmen's Liens) as the
Representative Agents may deem necessary or desirable;

                   (iii)     within 120 days after a reasonable request therefor
by any Representative Agent, American Land Title Association/American Congress
on Surveying and Mapping form surveys, for which all necessary fees (where
applicable) have been paid, of the properties listed on Schedule 4.01(r), other
than the Material Properties, the Relevant Properties and the Springdale Plant,
dated a recent date acceptable to the Representative Agents, certified to the
Collateral Agent in a manner satisfactory to the Representative Agents by a land
surveyor duly registered and licensed in the State in which the property
described in such surveys is located and acceptable to the Representative
Agents;

                   (iv)     within 120 days after the Closing Date, American
Land Title Association/American Congress on Surveying and Mapping form surveys,
for which all necessary fees (where applicable) have been paid, of the Material
Properties, the Relevant Properties and the Springdale Plant, dated within said
120 day period, certified to the Collateral Agent and the issuer of the Mortgage
Policies for such properties by a land surveyor duly registered and licensed in
the States in which the property described in such surveys is located, together
with any updates required to be made to such Mortgage Policies in order to read
the aforementioned surveys into such Mortgage Policies with no further defects
or encumbrances which are not Permitted Liens (unless otherwise consented to by
the Required Lenders);

                   (v)     as soon as reasonably available after the end of each
fiscal quarter, a report supplementing Schedule 4.01(r), including an
identification of all owned real property acquired by any Loan Party during such
fiscal quarter (the "Acquired Real Property") including a list and description
(including the street address, county or other relevant jurisdiction, state,
record owner and book value thereof) and a description of such other changes in
the information included in such Schedule as may be necessary for such Schedule
to be accurate and complete;

                   (vi)     within 30 days of a request therefor by any
Representative Agent (but in any event no earlier than 120 days after the
Closing Date), fully executed counterparts of mortgages with respect to Acquired
Real Property substantially in the form of Exhibit D-1, D-2, E-1 and E-2, as
applicable (in each case with such changes as may be required to account for
local law matters and otherwise in form and substance satisfactory to the
Representative Agents), and sufficient for recording in all filing offices that
any Representative Agent may deem necessary or desirable in order to create
valid and subsisting Liens on the Acquired Real Property in favor of the
Collateral Agent for the benefit of the Collateral Agent and the Secured
Parties, and evidence that all filing and recording taxes and fees have been
paid;

                   (vii)     within 120 days of request therefor by any
Representative Agent, Mortgage Policies in form and substance, with endorsements
and in amount acceptable to the Representative Agents, issued, coinsured and
reinsured by title insurers acceptable to the Representative Agents, insuring
the Acquired Real Property with respect to the properties listed therein to be
valid and subsisting Liens on the property described therein, free and clear of
all defects (including mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Liens, and providing for such other affirmative
insurance (including endorsements for future advances under the Financing
Documents and for mechanics' and materialmen's Liens) and such coinsurance and
direct access reinsurance as any Representative Agent may deem necessary or
desirable; and

                   (viii)     within 120 days of request therefor by any
Representative Agent, American Land Title Association/American Congress on
Surveying and Mapping form surveys, for which all necessary fees (where
applicable) have been paid, of the Acquired Real Property, dated a recent date
acceptable to the Representative Agents, certified to the Collateral Agent and
the issuer of the Mortgage Policies relating to the Mortgages for the Acquired
Real Property in a manner satisfactory to the Representative Agents by a land
surveyor duly registered and licensed in the States in which the property
described in such surveys is located and acceptable to the Representative
Agents, together with any updates required to be made to such Mortgage Policies
in order to read the aforementioned surveys into such Mortgage Policies.

                   (u)     Springdale Plant. Use all reasonable commercial
efforts to complete the construction, and cause the commencement of commercial
operation, of the Springdale Plant as soon as practicable.

                   (v)     FTI Reports. Provide to FTI such information relating
to the business or properties, or the condition or operations, financial or
otherwise, of the Borrower or any of its Subsidiaries as FTI may from time to
time reasonably request, and otherwise cooperate and assist FTI to the extent
necessary to enable FTI to deliver reports to the Bank Lender Parties from time
to time (including permitting FTI to operate from the offices of the Borrower
not less than once each month during the initial six months after the Closing
Date and not less than once each calendar quarter thereafter, in each case, for
such duration as may be necessary in connection with the issuance of such
reports).

                   (w)     Insurance Summary.  (i)  No later than 120 days after
the Closing Date, deliver to the Collateral Agent and each Representative Agent
a summary of all insurances then in effect for the Borrower Group Members,
together with evidence of the payment in full of all premiums for such
insurances and, if reasonably requested by any Representative Agent, provide to
the Collateral Agent and each Representative Agent within 60 days after such
request by any Representative Agent, evidence of such additional or replacement
insurances maintained with such responsible and reputable insurance companies or
associations, and in such amounts and covering such risks, as are reasonably
satisfactory to the Required Lenders (including business interruption
insurance); provided that such additional or replacement insurance need not be
obtained for any coverage (or amount) to the extent such coverage (or amount) is
not available at commercially reasonable rates or on reasonable commercial terms
if the Insurance Consultant confirms such unavailability.

                   (ii)     Within 30 days after the Closing Date, deliver
evidence to each Representative Agent that the Collateral Agent has been named
as an additional insured and as a loss payee with respect to all insurance
required under Section 5.01(e), except that with respect to liability insurance
the Collateral Agent shall be named as an additional insured only.

                   (x)     Tax Allocation Agreement. Use all reasonable
commercial efforts to deliver to the Collateral Agent and each Representative
Agent an amendment to the Tax Allocation Agreement, or an amended and restated
Tax Allocation Agreement, substantially in the form attached hereto as Exhibit
G.

                   (y)     Taxes. Pay in full when due (or obtain an appropriate
exemption therefrom) all Taxes (i) due and payable after the Closing Date in
connection with the execution, delivery, filing, recording or admissibility in
evidence of the Relevant Documents (other than the Mortgages and the UCC
financing statements) or to ensure the legality, validity, enforceability,
perfection or admissibility in evidence of the Relevant Documents (other than
the Mortgages and the UCC financing statements) and (ii) due and payable after
the Closing Date by any Borrower Group Member in connection with the
consummation of the transactions contemplated by, and the performance of, the
Relevant Documents (other than the Mortgages and the UCC financing statements).

                   (z)     Stamp Duties, Etc. Pay in full when due (or obtain an
appropriate exemption therefrom) all required stamp duties, registration fees,
filing costs and other charges in connection with the execution, delivery,
filing, recording, perfection, priority or admissibility in evidence of the
Relevant Documents (and the security interests purported to be grated thereby),
other than the Mortgages and the UCC financing statements, required to be paid
after the Closing Date.

                   (aa)     Application to Extend and Increase Secured Borrowing
Approval. Use all commercially reasonable efforts (taking into account any
benefit or detriment to the Parent and all of its Subsidiaries, taken as a
whole, as a result thereof) to obtain, as soon as possible after the Closing
Date, all necessary Governmental Approvals (including by way of amendment to
existing Governmental Approvals) so as to secure, up to and including the date
specified in clause (a) of the definition of "Final Maturity Date", Debt in an
amount equal to or in excess of the aggregate of all Commitments of the Lenders
as of the Closing Date and the Amended Notes (as defined in the Security
Agreement) as of the Closing Date.

                   (bb)     Springdale Subdivision. Procure that WPPC (and any
other necessary Person) shall (i) consent to and cooperate in the preparation,
approval and recording of a plan of subdivision in respect of the Springdale
Premises (as such term is defined in the Springdale Credit Agreement) consistent
with the plan already drafted and approved by the relevant consent authorities,
which evidences the Springdale Premises (as such term is defined in the
Springdale Credit Agreement) as a parcel of land separate from all its
contiguous land, and (ii) grant to the Borrower within 120 days of the date
hereof, all easements required by the Borrower (in consultation with the
Springdale Lender Agent) to provide unobstructed and sufficient vehicular and
pedestrian access, ingress and egress from the Springdale Premises (as such term
is defined in the Springdale Credit Agreement) to an open and dedicated public
road, including but not limited to, Butler Street, and to provide sufficient
utility service to the Springdale Premises (as such term is defined in the
Springdale Credit Agreement), including, but not limited to, water, sewer,
electricity and telecommunications. In connection with the foregoing, the
Borrower shall procure that each relevant Grantor, within 30 days after written
request by the Springdale Lender Agent, without any charge therefor, and at the
Borrower's sole cost and expense, shall execute and deliver to the Springdale
Lender Agent, in form sufficient for recording in the land records of Allegheny
County, Pennsylvania and any other government office in which such recording or
filing may be necessary, any and all documentation reasonably required by the
Springdale Lender Agent to evidence the foregoing plan of subdivision and
easements. The expiration of the 30-day period following any such written
request by the Springdale Lender Agent in respect of the easements only, may not
be earlier than the expiration of the above-mentioned 120 day period.

                   Section 5.02     Negative Covenants of the Borrower.  The
Borrower covenants and agrees that on and after the date hereof and until the
Bank Notes, together with all accrued interest thereon, fees and all other Bank
Obligations are paid in full and all Commitments and Refinancing Letters of
Credit shall have terminated, the Borrower will not, at any time:

                   (a)     Liens, Etc. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien on or with respect to any of its properties of any character (including
accounts) whether now owned or hereafter acquired, or sign or file or suffer to
exist, or permit any of its Subsidiaries to sign or file or suffer to exist,
under the Uniform Commercial Code of any jurisdiction, a financing statement
that names the Borrower or any of its Subsidiaries as debtor, or sign or suffer
to exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, except:

                   (i)     the Refinancing Liens;

                   (ii)     the New Money Liens;

                   (iii)     the Springdale Liens;

                   (iv)     the Noteholder Liens;

                   (v)     Permitted Liens;

                   (vi)     Liens existing on the date hereof and described on
Schedule 4.01(q);

                   (vii)     purchase money Liens upon or in physical Assets
acquired or held by the Borrower or any of its Subsidiaries in the ordinary
course of business to secure the purchase price of such Asset or to secure Debt
incurred solely for the purpose of financing the acquisition, construction or
improvement of any such Asset to be subject to such Liens, or Liens existing on
any such Asset at the time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount; provided that (A) the aggregate principal amount of all such Debt
shall not exceed $60,000,000 at any time, excluding Debt secured by a Lien
otherwise permitted pursuant to another provision of this Section 5.02(a); and
(B) no such Lien shall extend to or cover any property other than the Asset
being acquired, constructed or improved, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore subject to the
Lien being extended, renewed or replaced;

                   (viii)     Liens arising in connection with Capitalized
Leases permitted under Section 5.02(i); provided that no such Lien shall extend
to or cover any Collateral or assets other than the assets subject to such
Capitalized Leases;

                   (ix)     Liens securing Debt in respect of Hedge Agreements
and Obligations with respect to contracts (including contracts relating to the
purchase or sale of energy, capacity or ancillary services, or fuel
transportation or storage), in each case, on cash or other deposits not to
exceed, in the aggregate for such cash, other deposits and all reimbursement
obligations for surety bonds and letters of credit issued on account of any
Borrower Group Member to secure its Obligations under Hedge Agreements and other
contracts referred to in this clause (ix), $315,000,000 (during Fiscal Year
2003) and $265,000,000 (at any time after Fiscal Year 2003); provided that no
such Lien shall extend to or cover any Collateral;

                   (x)     Liens on any commodity which is the subject of any
commodity purchase agreement, which Liens are granted to secure only performance
of Obligations under such commodity purchase agreement; and

                   (xi)     the replacement, extension or renewal of any Lien
permitted by clauses (v) through (x) above upon or in the same property
theretofore subject thereto upon the replacement, extension or renewal (without
increase in the amount or change in any direct or contingent obligor) of the
Debt secured thereby.

                   (b)     Debt. Without prejudice to Section 5.02(v), create,
incur, assume or suffer to exist, or permit any of its Subsidiaries to create,
incur, assume or suffer to exist, any Debt, except:

                   (i)     the Refinancing Obligations;

                   (ii)     the New Money Obligations;

                   (iii)     the Springdale Obligations;

                   (iv)     the Noteholder Obligations and the Amended C Note
Obligations;

                   (v)     Debt outstanding as of the Closing Date under the
Bond Instruments;

                   (vi)     with respect to the Borrower only, Debt in respect
of (A) Existing Hedge Agreements and (B) any other Hedge Agreement designed to
hedge against fluctuations in interest rates or prices of capacity or energy (or
of any fuel required for the generation thereof) incurred in the ordinary course
of business and consistent with prudent business practice with the aggregate
Agreement Value of all Hedge Agreements under this clause (B), net of cash
collateral and the undrawn amount of all letters of credit securing the
Borrower's obligations under such Hedge Agreements, not to exceed $100,000,000
(during Fiscal Year 2003) and $200,000,000 (at any time after Fiscal Year 2003);

                   (vii)    unsecured Debt owed to a Grantor, which Debt shall
constitute Pledged Debt;

                   (viii)     any other unsecured Debt (including pursuant to
any Debt/Equity Issuance) created or incurred by the Borrower (other than Debt
the proceeds of which are applied upon its receipt to the concurrent
refinancing, repayment, prepayment, defeasance or redemption of other Debt of
the Borrower or any of its Subsidiaries) with a scheduled maturity date falling
no earlier than the date occurring six months after the date specified in clause
(a) of the definition of "Final Maturity Date", and with no amortization or
mandatory prepayments thereof prior to such date; provided that no later than 30
days prior to the entry by the Borrower into any agreement or contract relating
thereto, the Borrower shall have delivered to each Representative Agent pro
forma financial projections, in form and substance reasonably satisfactory to
the Representative Agents, demonstrating compliance with the covenants in
Section 5.03 up to and including the date specified in clause (a) of the
definition of "Final Maturity Date" following the incurrence of such Debt;

                   (ix)     any Existing Debt which is set forth in
Schedule 4.01(v);

                   (x)     Debt that is secured by a Lien permitted under
Section 5.02(a)(vii) or (viii);

                   (xi)     reimbursement obligations for amounts paid on behalf
of any Borrower Group Member by the Parent or any of its Subsidiaries in
accordance with applicable requirements under PUHCA with respect to the
provision of goods or services to such Borrower Group Member and the Parent or
one or more Subsidiaries of the Parent; and

                   (xii)     any other unsecured Debt extending the maturity of,
or refunding or refinancing, in whole or in part, any Debt referred to in
clauses (vii) and (x); provided that the terms of any such extending, refunding
or refinancing Debt, and of any agreement entered into and of any instrument
issued in connection therewith, are otherwise permitted by the Financing
Documents, provided further that (A) the principal amount of any such Debt shall
not be increased above the aggregate of (1) the principal amount thereof
outstanding immediately prior to such extension, refunding or refinancing and
(2) accrued and unpaid interest, fees and customary transaction costs and
expenses directly related to such extension, refunding or refinancing, (B) any
such Debt matures no earlier than the date occurring six months after the date
specified in clause (a) of the definition of "Final Maturity Date" and has no
required amortization or mandatory prepayment prior to such date and (C) the
direct and contingent obligors therefor shall not be changed, in each case, as a
result of or in connection with such extension, refunding or refinancing.

                   (c)     Change in Nature of Business. Make, or permit any of
its Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof; or engage in, or permit any of its Subsidiaries
to engage in, any business other than electric power generation and/or energy
trading or any other business in which the Borrower or any of its Subsidiaries
is engaged on the Closing Date, as described in Schedule 5.02(c).

                   (d)     Mergers, Etc. Merge into or consolidate with any
Person or permit any Person to merge into it, or permit any of its Subsidiaries
to do so, except that:

                   (i)     any Subsidiary of the Borrower may merge into or
consolidate with any other Subsidiary of the Borrower, provided that, in the
case of any such merger or consolidation, the Person formed by such merger or
consolidation shall be a wholly owned Subsidiary of the Borrower; and

                   (ii)     any Subsidiary of the Borrower may merge into or
consolidate with any other Person or permit any other Person to merge into or
consolidate with it so as to effectuate any Asset Sale through the Sale of all
of the Equity Interests in the Person resulting from such merger or
consolidation permitted under Section 5.02(e);

provided

that in each case, immediately after giving effect thereto, no event shall occur
and be continuing that constitutes a Default.

                   (e)     Sales, Etc., of Assets. Sell (including by way of
sale/leaseback), lease, assign, transfer or otherwise dispose of, or permit any
of its Subsidiaries to sell (including by way of sale/leaseback), lease, assign,
transfer or otherwise dispose of, directly or indirectly, (i) the DWR Contract
or Equity Interests in ATF, without the prior written consent of the Required
Lenders, (ii) any other Asset of any Borrower Group Member, or grant any option
or other right to purchase, lease or otherwise acquire any such Asset, except,
with respect to clause (ii) only, (A) for cash consideration, and, in the case
of any Asset Sale, if the Net Cash Proceeds resulting therefrom are applied in
accordance with Section 2.03 of the Security Agreement; provided that (1) no
Sale of (I) the Springdale Assets shall be permitted if the Net Cash Proceeds
resulting therefrom are less than the lesser of (xx) $150,000,000 and (yy) the
aggregate principal amount outstanding under the Springdale Tranche B Facility
(as defined in the Security Agreement) unless the prior written consent of the
Springdale Lenders, the Refinancing Lenders and the Noteholders has been
obtained and (II) any Material Property, any Equity Interests in AGC, the Bath
County Plant or any OVEC Interest shall be permitted unless the prior written
consent of the Required Lenders has been obtained, (2) on or prior to such Sale,
all amounts outstanding under the Pollution Control Bond Indentures with respect
to Pollution Control Bonds secured by PCB Liens on such Asset are paid in full
in accordance with the terms of the relevant Pollution Control Bond Indentures
and (3) no Partial Sales may be made pursuant to this clause (A) unless
otherwise agreed to by the Required Lenders; (B) sales of inventory in the
ordinary course of business and on reasonable terms, (C) sales of worn out,
surplus, or obsolete equipment in the ordinary course of business;
(D) replacement of equipment undertaken in the ordinary course of business with
other equipment if no Default exists at the time of such replacement and a Lien
in favor of the Lenders exists in such other equipment at the time of such
replacement, (E) Sales of other immaterial property (other than Equity Interests
in, or Debt or other obligations of, any Subsidiary) in the ordinary course of
business and on reasonable terms, if no Default exists at the time of such Sale;
provided that Assets may not be sold pursuant to this clause (E) to the extent
that the aggregate fair market value of all property sold pursuant to this
clause (E) exceeds $10,000,000, (F) dissolution or other Sale of NYC Energy, LLC
(as long as the lesser of the book value of the Equity Interests in NYC Energy,
LLC and the net proceeds resulting from such dissolution or Sale does not exceed
$20,000), (G) sales or other dispositions of electric energy, capacity,
ancillary services or emissions credits under any Environmental Laws, in each
case, for cash (and on customary market payment terms) and in the ordinary
course of business and (H) dissolution or other Sale of Mon Synfuel, LLC (as
long as the lesser of the book value of the Equity Interests in Mon Synfuel, LLC
and the net proceeds resulting from such dissolution or Sale does not exceed
$60,000) or (iii) any Asset (other than the DWR Contract and Equity Interests in
ATF) of any Borrower Group Member (A) unless such Sale is to a Borrower Group
Member and is made in order to protect the value of an Asset of a Borrower Group
Member and (1) no Debt for Borrowed Money is incurred in connection therewith,
(2) no Lien (other than any Lien in favor of the Collateral Agent) is created,
granted, incurred or assumed in connection therewith, (3) if such Asset (or
Equity Interest in the Person Selling such Asset) was, or was intended to be,
subject to any Lien in favor of the Collateral Agent prior to such Sale, such
Asset and the Equity Interests in the Person acquiring such Asset, shall,
following such Sale, be subject to an equivalent Lien in favor of the Collateral
Agent and (4) on or prior to such Sale, each of the Collateral Agent and the
Representative Agents shall have received such Officer's Certificates and legal
opinions relating thereto as any one or more of them may reasonably request and
(B) provided that no Partial Sales may be made pursuant to this clause (iii)
unless otherwise agreed to by the Required Lenders.

                   (f)     Investments in Other Persons. Make or hold, or permit
any of its Subsidiaries to make or hold, any Investment in any Person, except:

                   (i)     equity Investments by the Borrower Group Members in
(A) their Subsidiaries outstanding on the date hereof or (B) any Subsidiary
established after the Closing Date in order to: (1) effectuate any Asset Sale
permitted under Section 5.02(e) or (2) enhance the tax efficiency of the
Borrower and its Subsidiaries, taken as a whole; provided that (I) no Debt for
Borrowed Money is incurred in connection therewith, (II) no Lien (other than any
Lien in favor of the Collateral Agent) is created, granted, incurred or assumed
in connection therewith, (III) in the case of clause (2) only, (aa) at the time
such equity Investment is made, such equity Investment is pledged in favor of
the Collateral Agent and (bb) on or prior to the making of such equity
Investment, each of the Collateral Agent and the Representative Agents shall
have received such Officer's Certificates and legal opinions relating thereto as
any one or more of them may reasonably request and (IV) immediately after the
making of such equity Investment, the direct or indirect ownership interest of
the Borrower in any Asset which is transferred to such Subsidiary is not less
than the direct or indirect ownership interest of the Borrower in such Asset
immediately prior to the transfer of such Asset to such Subsidiary;

                   (ii)     loans and advances to employees in the ordinary
course of the business of the Borrower Group Members as presently conducted in
an aggregate principal amount not to exceed $2,000,000 at any time outstanding;

                   (iii)     Investments in Cash Equivalents;

                   (iv)     Investments existing on the date hereof and
described on Schedule 4.01(t); and

                   (v)     Investments consisting of intercompany Debt permitted
under Section 5.02(b)(vi), (vii), (ix) or (xii).

                   (g)     Restricted Payments. Declare or pay any Restricted
Payments, or permit any of its Subsidiaries to purchase, redeem, retire, defease
or otherwise acquire for value any Equity Interests in the Borrower or to issue
or sell any Equity Interests, other than, in the case of the Borrower, to
distribute to the Parent (i) with proceeds of the initial Advances under the
Refinancing Credit Agreement only, an amount not to exceed $10,000,000, (ii) an
amount equal to the Prepayment Amount (AYE Lenders), if any, with respect to any
Debt/Equity Issuances by a Borrower Group Member which is not in violation of
any provision of any Financing Document (including Section 5.02(b) and (s)) and
(iii) payments with respect to the ML Interests in existence as of the Closing
Date which are required pursuant to the Constituent Documents of the Borrower
(as of the Closing Date) as a result of the payments referred to in clause (ii)
or (iii) above.

                   (h)     Payment Restrictions Affecting Subsidiaries. Directly
or indirectly enter into or suffer to exist, or permit any of its Subsidiaries
to enter into or suffer to exist (i) any agreement or arrangement limiting the
ability of any of its Subsidiaries to declare or pay dividends or other
distributions in respect of its Equity Interests or repay or prepay any Debt
owed to, make loans or advances to, or otherwise invest in, any Borrower Group
Member or (ii) any agreements limiting the ability of any of the Borrower's
Subsidiaries to transfer assets to any Borrower Group Member (in each case,
whether through a covenant restricting dividends, loans, asset transfers or
investments, a financial covenant or otherwise), except the Financing Documents,
the Bond Instruments and any agreements entered into with respect to Debt
permitted to be incurred pursuant to Section 5.02(b)(viii), (ix), (x) or (xii).

                   (i)     Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
rental or hire of other real or personal property of any kind under leases or
agreements to lease (including Capitalized Leases) having an original term of
one year or more that would cause the direct and contingent liabilities of the
Loan Parties, on a Consolidated basis, in respect of all such obligations to
exceed $22,000,000, in the aggregate, in payment obligations (without double
counting) that are in the nature of a rental payment obligation or are otherwise
not avoidable at the option of the lessee without incurring other costs or risks
(including for this purpose purchase rights for which the failure to exercise
results in other payment obligations and guarantees of value) in any period of
12 consecutive months.

                   (j)     Amendments of Constituent Documents. Amend, or permit
any of its Subsidiaries to amend, its certificate of incorporation or formation.

                   (k)     Accounting Changes. Make or permit, or permit any of
its Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by GAAP or if its Board of Directors
otherwise decides, or (ii) Fiscal Year.

                   (l)     Prepayments, Etc., of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, or permit any of its Subsidiaries to do any of the foregoing (other than
to prepay any Debt payable to the Borrower), or amend, modify or change in any
manner any material term or condition of any Debt (including the Bond
Instruments), except, in the case of the Borrower only, the prepayment of
(i) the Refinancing Obligations, the New Money Obligations, the Noteholder
Obligations and the Springdale Obligations in accordance with the terms of this
Agreement and the other Financing Documents (as applicable), (ii) Obligations in
respect of Hedge Agreements in accordance with the Business Plan, (iii) Debt
which is refinanced and prepaid concurrently with Debt which is incurred in
accordance with Section 5.02(b) and the aggregate principal amount of which does
not exceed the aggregate principal amount of the Debt being refinanced and
prepaid, together with all accrued interest, fees and customary transaction
costs and expenses or (iv) to the extent required to effectuate any Asset Sale
which is permitted under Section 5.02(e).

                   (m)     Amendment, Etc., of Material Contracts. Cancel or
terminate any Material Contract or consent to or accept any cancellation or
termination thereof, or amend, amend or restate, supplement or otherwise modify
any Material Contract (other than, with respect to the Tax Allocation Agreement,
to the extent permitted under Section 5.01(x) or to add or remove Subsidiaries
party thereto, to the extent the Sale of or the Investment in, such Subsidiary
is permitted under Section 5.02(e) and (f) respectively), or give any consent,
waiver or approval thereunder, waive any default under or breach of any Material
Contract, in each case, without the prior written consent of the Required
Lenders.

                   (n)     Negative Pledge. Enter into or suffer to exist, or
permit any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any of
its property or assets except (i) in favor of the Bank Lender Parties pursuant
to the Financing Documents and the Noteholders pursuant to the Refinancing
Indenture, (ii) pursuant to the Bond Instruments, (iii) in connection with any
Capitalized Lease permitted by Section 5.02(i) solely to the extent that such
Capitalized Lease prohibits a Lien on the property subject thereto or (iv) in
favor of a Subsidiary or special-purpose vehicle established in connection with
any Asset Sale permitted under the Financing Documents.

                   (o)     Partnerships, Etc. Become a general partner in any
general or limited partnership or joint venture, or enter into any
profit-sharing or royalty agreement or other similar arrangement or commit to a
trust whereby the Borrower's income or profits are, or might be, shared with any
other Person, or enter into any management contract or similar arrangement
whereby its business or operations are managed by any other Person, other than
the Tax Allocation Agreement, or permit any of its Subsidiaries to do so, except
in order to enhance the tax efficiency of the Borrower and its Subsidiaries,
taken as a whole; provided that (i) no Debt for Borrowed Money is incurred in
connection therewith, (ii) no Lien (other than any Lien in favor of the
Collateral Agent) is created, granted, incurred or assumed in connection
therewith and (iii) such other Person is a Loan Party.

                   (p)     Speculative Transactions. Engage, or permit any of
its Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions (including take-or-pay
contracts, long term fixed price off-take contracts and contracts for the sale
of power for which physical delivery is not available) unless the same (i) is
consistent with the policy on Corporate Energy Risk Policy (as amended from time
to time) approved by the Borrower's board of directors or (ii) has been approved
in writing by the Required Lenders.

                   (q)     Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures, except (i) Mandatory Capital
Expenditures and (ii) any Scheduled Capital Expenditure, to the extent such
Scheduled Capital Expenditure is provided for in the CapEx Budget.

                   (r)    Formation of Subsidiaries. Organize or invest, or
permit any Subsidiary to organize or invest, in any new Subsidiary, except in
order to: (i) effectuate any Asset Sale permitted under Section 5.02(e) through
the Sale of all of the Equity Interests in such Subsidiary or enhance the tax
efficiency of the Borrower and its Subsidiaries, taken as a whole, if, in each
case, the equity Investment in such Subsidiary is permitted pursuant to
Section 5.02(f)(i) or (ii) to protect the value of any Asset by the Sale of such
Asset to such Subsidiary; provided that such Sale is permitted under
Section 5.02(e)(iii).

                   (s)     Equity Interests. Issue, or permit any of its
Subsidiaries to issue, any Equity Interests to any Person unless, in the case of
a Subsidiary only, any such issuance of Equity Interests is made pro rata to
holders of Equity Interests in such Subsidiary as of the Closing Date, except in
order to: (i) enhance the tax efficiency of the Borrower and its Subsidiaries,
taken as a whole; provided that such Equity Interests are issued to a Loan Party
and such equity Investment by such Loan Party is permitted under
Section 5.02(f)(i), or (ii) to effectuate the formation of Subsidiaries
permitted under Section 5.02(r).

                   (t)     Compliance with ERISA. (i) Terminate, or permit any
ERISA Affiliate of the Borrower to terminate, any Plan so as to result in any
material liability of the Borrower or any ERISA Affiliate of the Borrower, if
such material liability to the PBGC could reasonably be expected to have a
Material Adverse Effect, or (ii) permit to exist any Termination Event with
respect to a Plan which would have a Material Adverse Effect to the extent such
Termination Event is within the control of the Borrower.

                   (u)     Amendment Fees. Offer or pay, whether directly or
indirectly through any Agent or other Person, to any Bank Lender Party or
Noteholder any fee in consideration for such Person's waiver of, or agreement to
amend or modify any provision of, any Financing Document, any Assumption
Document, any Amended Note, any Amended C Note (as defined in the Security
Agreement) or the Refinancing Indenture unless an equivalent fee is also offered
on the same terms to each other Bank Lender Party and Noteholder for any related
waiver of, or agreement to amend or modify any provision of, any Financing
Document, any Assumption Document, any Amended Note or the Refinancing
Indenture, as the case may be.

                   (v)     Bond Lien Basket Debt. Create, incur, assume or
suffer to exist any Bond Lien Basket Debt, except (i) prior to the Refinancing
Closing, the New Money Obligations and (ii) after the Refinancing Closing,
Advances under the New Money Credit Agreement, the Secured Loan Advances (as
defined in the Refinancing Credit Agreement), the Available Amount of all
Refinancing Letters of Credit, the Advances under the Springdale Tranche A
Facility (as defined in the Security Agreement) and the Amended A Notes (as
defined in the Security Agreement).

                   (w)     Partial Sales. (i) Directly or indirectly effect or
undertake, or permit any of the other Loan Parties to effect or undertake, any
Partial Sale or (ii) enter into, or permit any of the Loan Parties to enter
into, any agreement or arrangement for a Partial Sale, in the case of clauses
(i) and (ii) of this subsection (w), unless otherwise agreed to by the Required
Lenders.

                   Section 5.03     Financial Covenants of the Borrower.  The
Borrower covenants and agrees that on and after the date hereof and until the
Bank Notes, together with all accrued interest thereon, fees and all other Bank
Obligations are paid in full and all Commitments and Refinancing Letters of
Credit shall have terminated, the Borrower will:

                   (a)     Interest Coverage Ratio. Maintain at the end of each
period referred to below an Interest Coverage Ratio of not less than the amount
set forth for such period below:

Period

Amount

Six months ending June 30, 2003

0.75:1.00

Nine months ending September 30, 2003

1.00:1.00

Twelve months ending December 31, 2003

1.10:1.00

Twelve months ending March 31, 2004

1.20:1.00

Twelve months ending June 30, 2004

1.30:1.00

Twelve months ending September 30, 2004

1.40:1.00

Twelve months ending December 31, 2004

1.50:1.00

Twelve months ending March 31, 2005

1.50:1.00

                   (b)     Net Worth. Maintain at the end of each fiscal quarter
of the Borrower an excess of Consolidated Total Tangible Assets over
Consolidated Total Liabilities, in each case, of the Borrower and its
Subsidiaries, of not less than $800,000,000; provided that such amount will be
decreased by the amount of (i) any after-tax losses on Sales of Assets and (ii)
any settlement with the California Department of Water Resources regarding the
DWR Contract approved by the Required Lenders pursuant to Section 5.02(m) or
5.05(f) that results in a negative adjustment to the value of the DWR Contract
on an after-tax basis with respect to the Borrower or any of its Subsidiaries.

                   (c)     Minimum EBITDA. Maintain with respect to each period
referred to below EBITDA of not less than the amount set forth for such period
below:

Period

Amount

Six months ending June 30, 2003

$100,000,000

Nine months ending September 30, 2003

$218,000,000

Twelve months ending December 31, 2003

$304,000,000

Twelve months ending March 31, 2004

$387,000,000

Twelve months ending June 30, 2004

$399,000,000

Twelve months ending September 30, 2004

$420,000,000

Twelve months ending December 31, 2004

$429,000,000

Twelve months ending March 31, 2005

$430,000,000

                   Section 5.04     Reporting Covenants of the Borrower.  The
Borrower covenants and agrees that on and after the date hereof and until the
Bank Notes, together with all accrued interest thereon, fees and all other Bank
Obligations are paid in full and all Commitments and Refinancing Letters of
Credit shall have terminated, the Borrower will furnish to each Representative
Agent in sufficient copies for its Related Lenders:

                   (a)     Default Notices. As soon as possible and in any event
within five Business Days after any Responsible Officer of the Borrower becomes
aware of the occurrence of each Default or any event, development or occurrence
reasonably likely to have a Material Adverse Effect, in each case, continuing on
the date of such statement, a statement of a Responsible Officer of the Borrower
setting forth the details of such Default or event, development or occurrence
and, in each case, the actions, if any, which the Borrower has taken and
proposes to take with respect thereto.

                   (b)     Annual Financials. As soon as available and in any
event within 105 days after the end of each Fiscal Year (or, in the case of
Fiscal Year 2002, within 180 days thereafter), a copy of the annual audit report
for such year for the Borrower and its Subsidiaries including therein a
Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such Fiscal Year and Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for such Fiscal
Year, in each case accompanied by a report acceptable to the Required Lenders of
Price WaterhouseCoopers or other independent public accountants of recognized
standing acceptable to the Required Lenders, together with (i) a certificate of
such accounting firm to the Bank Lender Parties stating that in the course of
the regular audit of the business of the Borrower and its Subsidiaries, which
audit was conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no knowledge that
a Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement as to the
nature thereof, (ii) (A) a schedule in form satisfactory to the Required Lenders
of the computations prepared by the Borrower and used by such accounting firm in
determining, as of the end of such Fiscal Year, compliance with the covenants
contained in Section 5.03, provided that in the event of any change in GAAP used
in the preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with Section 5.03, a
statement of reconciliation conforming such financial statements to GAAP (as in
effect on the Closing Date) and (B) a copy of any management letter from such
accounting firm to any Borrower Group Member issued in connection with such
audit and (iii) a certificate of the Chief Financial Officer of the Borrower
stating that no Default has occurred and is continuing or, if a default has
occurred and is continuing, a statement as to the nature thereof and the action
that the Borrower has taken and proposes to take with respect thereto.

                   (c)     Quarterly Financials. As soon as available and in any
event within 60 days after the end of each of the first three quarters of each
Fiscal Year (or, in the case of the first fiscal quarter of Fiscal Year 2003,
within 90 days thereafter), a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and a Consolidated statement of
income and a Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal quarter
and ending with the end of such fiscal quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or period
of the preceding Fiscal Year, all in reasonable detail and duly certified
(subject to normal year-end audit adjustments) by the Chief Financial Officer of
the Borrower as having been prepared in accordance with GAAP, together with
(i) a certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has taken and proposes to
take with respect thereto and (ii) a schedule in form satisfactory to the
Required Lenders of the computations used by the Borrower in determining
compliance with the covenants contained in Section 5.03, provided that in the
event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the determination
of compliance with Section 5.03, a statement of reconciliation conforming such
financial statements to GAAP.

                   (d)     Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings before
any Governmental Authority, domestic or foreign, affecting the Borrower or any
of its Subsidiaries of the type described in Section 4.01(f), and promptly after
the occurrence thereof, notice of any material adverse change in the status or
the financial effect on the Borrower or any of its Subsidiaries in respect of
the Disclosed Litigation described on Schedule 4.01(f).

                   (e)     Springdale Plant Reports. Reports regarding the
status of the construction and commissioning of, and expenditure at, the
Springdale Plant, including reports from an independent engineer, in each case
substantially of the type, format and frequency as those hitherto provided by
the Borrower to the Participants (as defined in the Springdale Participation
Agreement).

                   (f)     Material Contract Notices. Promptly upon receipt
thereof, copies of all notices, requests and other documents received by the
Borrower or any of its Subsidiaries under or pursuant to any Material Contract
or instrument, indenture, loan or credit or similar agreement regarding or
related to any breach or default by any party thereto or any other event that
could materially impair the value of the interests or the rights of any Borrower
Group Member or otherwise have a Material Adverse Effect and copies of any
amendment, modification or waiver of any provision of any Material Contract or
instrument, indenture, loan or credit or similar agreement and, from time to
time upon request by any Bank Lender Party, such information and reports
regarding the Material Contracts and such instruments, indentures and loan and
credit and similar agreements as such Bank Lender Party may reasonably request;
provided that the Borrower may satisfy its obligations under this clause (f) by
delivering the relevant documents to counsel to the Representative Agents to be
made available for inspection by the Bank Lender Parties.

                   (g)     ERISA.  (i)  ERISA Events and ERISA Reports. Promptly
and in any event within 20 days after (A) any Borrower Group Member or any ERISA
Affiliate knows that any ERISA Event has occurred, a statement of the Borrower
describing such ERISA Event and (B) the date of any material correspondence
between any Borrower Group Member or any ERISA Affiliate and the PBGC, a copy of
such material correspondence.

                   (ii)     Plan Terminations. Promptly and in any event within
three Business Days after receipt thereof by any Borrower Group Member or any
ERISA Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan.

                   (iii)     Plan Annual Reports. Promptly and in any event
within 30 days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.

                   (iv)     Multiemployer Plan Notices. Promptly and in any
event within 30 days after receipt thereof by any Borrower Group Member or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (A) the imposition of Withdrawal Liability by any such Multiemployer
Plan, (B) the reorganization or termination, within the meaning of Title IV of
ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred,
or that may be incurred, by such Borrower Group Member or any ERISA Affiliate in
connection with any event described in clause (A) or (B).

                   (h)     Environmental Conditions. Promptly after the
assertion or occurrence thereof, notice of any Environmental Action against or
of any noncompliance by the Borrower or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be expected
to have a Material Adverse Effect or (ii) cause any property described in the
Mortgages to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.

                   (i)     Real Property. As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report supplementing
Schedules 4.01(r) and 4.01(s), including an identification of all owned and
leased real property disposed of by the Borrower or any of its Subsidiaries
during such Fiscal Year, a list and description (including the street address,
county or other relevant jurisdiction, state, record owner, book value thereof
and, in the case of leases of property, lessor, lessee, expiration date and
annual rental cost thereof) of all real property acquired or leased during such
Fiscal Year and a description of such other changes in the information included
in such Schedules as may be necessary for such Schedules to be accurate and
complete.

                   (j)     Insurance. As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for each
Borrower Group Member and containing such additional information as any Bank
Lender Party may reasonably specify.

                   (k)     Write-down Notices. As soon as possible and in any
event within five Business Days after the Board of Directors of the Borrower or
any of its Subsidiaries approves any material write-down of an Asset of a
Borrower Group Member, a statement of a Responsible Officer of the Borrower
setting forth the details of such write-down, and the actions, if any, which the
Borrower has taken and proposes to take with respect thereto.

                   (l)     Debt/Equity Issuance. As soon as possible and in any
event no later than 30 days prior to the occurrence of any Debt/Equity Issuance
by a Borrower Group Member, the following with respect to such Debt/Equity
Issuance: (i) the identity of the issuer, (ii) the expected date of such
Debt/Equity Issuance and (iii) the amount of the Net Cash Proceeds expected to
result therefrom.

                   (m)     Monthly Cash Statements. (i) Within 120 days after
the Closing Date, deliver to the Representative Agents, as a supplement to the
Business Plan delivered on the Closing Date, a cash receipts and cash
disbursements statement on a monthly basis for the period commencing on March 1,
2003 until the date specified in clause (a) of the definition of "Final Maturity
Date" with respect to the Borrower and its Subsidiaries and the Parent and its
Subsidiaries, respectively and (ii) within ten Business Days after the end of
each calendar month, (A) after delivery of the cash receipts and cash
disbursements statement referred to in clause (i) above, a report, consistent in
format with such cash receipts and cash disbursements statement, comparing the
actual cash receipts and cash disbursements for such month to the projected cash
receipts and cash disbursements detailed in the Business Plan, together with
explanations of material variances and (B) a report comparing the actual cash
balance as of the end of such month to the projected cash balance for such month
in the Business Plan.

                   (n)     Asset Sales and Debt/Equity Issuances. Within ten
Business Days after the end of each calendar quarter, a report (i) describing,
with respect to each Asset Sale by any Borrower Group Member that was
consummated during such quarter, the Asset that was sold, the date such Sale was
consummated and the aggregate Net Cash Proceeds arising from such Sale, (ii)
describing, with respect to each Debt/Equity Issuance by the Parent or any of
its Subsidiaries that was consummated during such quarter, the identity of the
issuer, the date of such Debt/Equity Issuance and the aggregate Net Cash
Proceeds arising from such Debt/Equity Issuance and (iii) describing, to the
extent permitted under Applicable Law, (A) the marketing efforts, if any, with
respect to any Asset Sales which are contemplated by the Borrower Group Members
and (B) any Debt/Equity Issuance contemplated by the Parent or any of its
Subsidiaries to be consummated in the next succeeding calendar quarter and, with
respect to each such Asset Sale and Debt/Equity Issuance, (1) the identity of
the seller or issuer, as applicable (2) the expected date of such Asset Sale or
Debt/Equity Issuance, as applicable and (3) the amount of the Net Cash Proceeds
expected to result therefrom.

                   (o)     Other Information. Such other information respecting
the business or properties, or the condition or operations, financial or
otherwise, of the Borrower or any of its Subsidiaries as any Bank Lender Party
may from time to time reasonably request.

                   Section 5.05     Covenants of the Other Grantors.  Each of
the Grantors (other than the Borrower) covenants and agrees that on and after
the date hereof and until the Bank Notes, together with all accrued interest
thereon, fees and all other Bank Obligations are paid in full and all
Commitments and Refinancing Letters of Credit shall have terminated, such
Grantor will:

                   (a)     Compliance with Laws. Comply in all respects with all
Applicable Laws, except where failure to do so could not reasonably be expected
to have a Material Adverse Effect.

                   (b)     Governmental Approvals. Obtain and maintain all
Governmental Approvals (including the Material Governmental Approvals), if any,
that are required of it for the validity or enforceability of the Financing
Documents and the Material Contracts to which it is a party and the ongoing
operations of its businesses, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

                   (c)     Preservation of Corporate Existence, Etc. Preserve
and maintain its existence, legal structure, rights, franchises and privileges
in the jurisdiction of its formation, and qualify and remain qualified in each
other jurisdiction in which it owns or leases property or in which the conduct
of its business requires it to so qualify, except where the failure to so
preserve, maintain, qualify and remain qualified could not reasonably be
expected to have a Material Adverse Effect.

                   (d)     Performance of Material Contracts. Perform and
observe all the terms and provisions of each Material Contract to be performed
or observed by it, maintain each such Material Contract in full force and
effect, enforce each such Material Contract in accordance with its terms, take
all such action to such end as may be from time to time requested by any
Representative Agent and, upon request of any Representative Agent, make to each
other party to each such Material Contract such demands and requests for
information and reports or for action as such Grantor is entitled to make under
such Material Contract except, in any case, where the failure to do so, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

                   (e)     No Merger, Consolidation, Etc. Other than as may be
provided in Section 5.02(d) or (e), not (i) merge into or consolidate with any
other Person, (ii) convey, transfer, lease or otherwise dispose of (whether in
one transaction or a series of related transactions) all or substantially all of
its Assets, or (iii) change its legal form.

                   (f)     Amendment, Etc., of Material Contracts. Not cancel or
terminate any Material Contract or consent to or accept any cancellation or
termination thereof, or amend, amend or restate, or otherwise modify any such
Material Contract (other than, with respect to the Tax Allocation Agreement to
the extent permitted under Section 5.01(x), or to add or remove it or any of its
Subsidiaries party thereto to the extent the Sale of, or Investment in, such
Subsidiary is permitted under Section 5.02(e) and (f), respectively), or give
any consent, waiver or approval thereunder, waive any default under or breach of
any such Material Contract, in each case, without the prior written consent of
the Required Lenders.

ARTICLE VI
EVENTS OF DEFAULT

                   Section 6.01     Events of Default.  Each of the following
events, conditions or occurrences shall be an "Event of Default":

                   (a)  (i)  the Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) the Borrower shall
fail to pay any interest on any Advance, or any Loan Party shall fail to make
any other payment under any Financing Document, in each case under this clause
(ii), within three Business Days after the same becomes due and payable; or

                   (b)     any representation or warranty made by any Loan Party
(or any of its officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made or shall be
breached in any material respect; or

                   (c)     the Borrower shall (i) fail to deliver any financial
statements with respect to Fiscal Year 2002 or the first quarter of Fiscal Year
2003 required to be delivered by it pursuant to Section 5.04(b) or (c),
respectively, on or before the respective dates required for such delivery
thereunder, and such failure shall remain unremedied for 30 days thereafter, or
(ii) fail to perform or observe any term, covenant or agreement contained in
Section 5.01(f), (p), (r), (s), (v) or (w), 5.02 or 5.03, or (iii) fail to
perform or observe any other term, covenant or agreement contained in any
Financing Document on its part to be performed or observed if such failure shall
remain unremedied for 60 days after the earlier of the date on which (A) a
Responsible Officer of the Borrower becomes aware of such failure or (B) written
notice thereof shall have been given to the Borrower by any Representative
Agent; or

                   (d)     any Loan Party (other than the Borrower) shall fail
to perform or observe any term, covenant or agreement contained in any Financing
Document on its part to be performed or observed if such failure shall remain
unremedied for 60 days after the earlier of the date on which (i) a Responsible
Officer of such Loan Party or the Borrower becomes aware of such failure or
(ii) written notice thereof shall have been given to such Loan Party or the
Borrower by any Representative Agent; or

                   (e)     the Parent, any Regulated Subsidiary or any Borrower
Group Member shall fail to pay any principal of, premium or interest on or any
other amount payable in respect of any Debt of such Person that is outstanding
in a principal amount (or, in the case of any Hedge Agreement, an Agreement
Value) of at least $25,000,000 either individually or in the aggregate, (but
excluding Debt outstanding under the Existing Hedge Agreements) when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate or to
permit the acceleration of the maturity of such Debt or otherwise to cause, or
to permit the holder thereof to cause, such Debt to mature; or any such Debt
shall be declared to be due and payable, or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the scheduled maturity
thereof; or

                   (f)     any Insolvency Proceeding shall occur with respect to
the Borrower, any of its Subsidiaries, the Parent or any Regulated Subsidiary;
or

                   (g)  (i)  any judgments or orders, either individually or in
the aggregate, for the payment of money in excess of $25,000,000 shall be
rendered against the Borrower, any of its Subsidiaries, the Parent or any
Regulated Subsidiary and either (A) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (B) there shall be any
period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or (ii) any agreement is made by any Loan Party or any of its Affiliates
to settle any proceeding by or before any Governmental Authority whereby any
Loan Party or any of its Affiliates agrees to pay (or otherwise provide
consideration), in the aggregate pursuant to any single such agreement or series
of related agreements, an amount in excess of $25,000,000 (excluding amounts
which are paid by Persons other than the Parent or any of its Subsidiaries
before enforcement proceedings shall have been commenced by any creditor upon
such agreement against any Loan Party) to resolve the related proceeding; or

                   (h)     any non-monetary judgment or order shall be rendered
against the Borrower, any of its Subsidiaries, the Parent or any Regulated
Subsidiary that could reasonably be likely to have a Material Adverse Effect,
and there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

                   (i)     any Collateral Document after delivery thereof shall
for any reason (other than pursuant to the terms thereof) cease to create solely
for the benefit of the Secured Parties (i) with respect to any portion of the
Group Assets, a valid and, but for the giving of notices of Liens thereunder to
Persons other than Affiliates of the Borrower, perfected Lien on and security
interest in such Collateral with the applicable priority set forth in
Section 2.02(d) of the Security Agreement and (ii) with respect to the
Springdale Assets, a valid and perfected Lien on the Springdale Assets with the
applicable priority set forth in Section 2.02(d) of the Security Agreement, and,
in the case of clause (i) and (ii) above relating to any invalidity or
non-perfection of any such Lien with respect to an immaterial portion of the
Collateral as a result of administrative or ministerial errors, such occurrence
shall remain unremedied for 60 days after the earlier of the date on which (A) a
Responsible Officer of the Borrower becomes aware of such failure or (B) written
notice thereof shall have been given to the Borrower by any Bank Lender Party;
or

                   (j)     any material provision of any of the Financing
Documents shall be canceled, terminated, declared to be null and void or shall
otherwise cease to be valid and binding on any Loan Party party thereto, in each
case, as determined in a final, non-appealable judgment of a court of competent
jurisdiction, or any Loan Party shall deny in writing any further liability or
obligation under any provision of any Financing Document; or

                   (k)     a Change of Control shall occur; or

                   (l)     any ERISA Event shall have occurred with respect to a
Plan and the sum (determined as of the date of occurrence of such ERISA Event)
of the Insufficiency of such Plan and the Insufficiency of any and all other
Plans with respect to which an ERISA Event shall have occurred and then exist
(or the liability of the Borrower Group Members and the ERISA Affiliates related
to such ERISA Event) exceeds, in the aggregate with any amounts applicable under
clauses (m) and (n) of this Section 6.01, $25,000,000; or

                   (m)     any Borrower Group Member or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as
of the date of such notification), exceeds, in the aggregate with any amounts
applicable under clauses (l) and (n) of this Section 6.01, $25,000,000, or
requires payments exceeding $25,000,000 per annum; or

                   (n)     any Borrower Group Member or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or being
terminated have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans immediately
preceding the plan year in which such reorganization or termination occurs by an
amount exceeding, in the aggregate with any amounts applicable under clauses (l)
and (m) of this Section 6.01, $25,000,000; or

                   (o)     any Grantor shall at any time deliver or cause to be
delivered to the Collateral Agent without prior written consent of the
Collateral Agent (at the written direction of the Intercreditor Agent) a notice
pursuant to 42 Pa. C.S.A. Section 8143 electing to limit the indebtedness
secured by any Mortgage to which such Grantor is a party; or

                   (p)     any Material Governmental Approval shall be revoked,
terminated, withdrawn, suspended, modified in any material respect or shall
otherwise cease to be in full force and effect (other than, with respect to any
such Material Governmental Approval which is no longer relevant or necessary to
the business, properties, assets or operations of any Borrower Group Member,
expiration or termination thereof in accordance with its terms or Applicable
Law) and is not remedied within 60 Business Days of such revocation,
termination, withdrawal, suspension, modification or other action; provided that
such revocation, termination, withdrawal, suspension, modification or cessation
(each, an "Action") shall not be an Event of Default if within 60 days of such
Action, the Borrower remedies such Action so long as (i) such Action, in the
reasonable opinion of the Required Lenders is capable of remedy in such 60-day
period, (ii) the Borrower is diligently pursuing such remedy and (iii) the
occurrence of such Action cannot reasonably be expected to have a Material
Adverse Effect; or

                   (q)     either (i) any Material Contract, except as
contemplated thereby upon the end of its regularly scheduled term, shall cease
to be in full force and effect (except in accordance with any Asset Sale
undertaken in accordance with Section 5.02(e)); provided that such cessation
shall not be an Event of Default under this clause (q) if, within 60 days from
the occurrence of such cessation, the Borrower (A) causes the other party to
resume performance and acknowledge that such contract is in full force and
effect or (B) enters into a replacement agreement or agreements pursuant to
which it will realize substantially the same benefits with a counterparty
acceptable to the Required Lenders, which consent shall not be unreasonably
withheld or delayed or (ii) the Borrower shall deny any further liability or
obligation under any Material Contract unless the Borrower is disputing such
liability or obligation in good faith, in which case such denial shall not be an
Event of Default if the Borrower, within 60 days from the occurrence of such
cessation (A) resumes performance under such Material Contract and acknowledges
that such contract is in full force and effect or (B) enters into a replacement
agreement or agreements pursuant to which it will realize substantially the same
benefits with a counterparty acceptable to the Required Lenders, which consent
shall not be unreasonably withheld or delayed; or

                   (r)     the Borrower shall cease, for any period of 30
consecutive days, to have a Financial Advisor providing financial advice to it;
or

                   (s)     the New Money Closing, but not the Refinancing
Closing, has occurred on the Closing Date.

                   Section 6.02     Actions Following an Event of
Default.  (a)  Upon the occurrence of any Event of Default (other than a Limited
Payment Default) and the issuance of an Acceleration Notice, each Representative
Agent shall, by notice to the Borrower, given in accordance with Section
7.01(h), (i) declare the Commitments of its Related Lenders and the obligation
of its Related Lenders to make Advances (other than Advances by the Refinancing
Issuing Bank or a Refinancing Lender pursuant to the Refinancing Credit
Agreement relating to a drawing under any Refinancing Letter of Credit) or, in
the case of the Refinancing Issuing Bank, to issue Refinancing Letters of Credit
(or assume any Existing Letter of Credit), to be terminated, whereupon the same
shall forthwith terminate, and (ii) declare the Bank Notes of such Related
Lenders, all interest thereon and all other amounts payable under this Agreement
and the other Financing Documents owing to such Related Lenders to be forthwith
due and payable, whereupon such Bank Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that upon the occurrence of any Event of
Default described in Section 6.01(f) with respect to the Borrower, (A) the
Commitments of each Lender and Refinancing Issuing Bank and the obligation of
any Lender or Refinancing Issuing Bank to make Advances (other than Advances by
the Refinancing Issuing Bank or a Refinancing Lender relating to a drawing under
any Refinancing Letter of Credit) or to issue Refinancing Letters of Credit (or
assume any Existing Letter of Credit) shall automatically be terminated and
(B) all Bank Notes, all interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower.

                   (b)     Without prejudice to clause (a) above with respect to
an Event of Default described in Section 6.01(f), upon the occurrence of a
Limited Payment Default under any Facility, the Representative Agent for such
Facility (i) shall at the request, or may with the consent, of the Required New
Money Lenders (if such Facility is the New Money Facility), the Required
Refinancing Lenders (if such Facility is the Refinancing Facility) or the
Required Springdale Lenders (if such Facility is the Springdale Facility), as
the case may be, by notice to the Borrower and the other Representative Agents,
declare the Commitments of its Related Lenders and the obligation of its Related
Lenders to make Advances (other than, if such Facility is the Refinancing
Facility, Advances by the Refinancing Issuing Bank or a Refinancing Lender
pursuant to the Refinancing Credit Agreement relating to a drawing under any
Refinancing Letter of Credit) or, if such Facility is the Refinancing Facility,
of the Refinancing Issuing Bank to issue Refinancing Letters of Credit (or
assume any Existing Letter of Credit) to be terminated, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may with the consent, of
the Required New Money Lenders (if such Facility is the New Money Facility), the
Required Refinancing Lenders (if such Facility is the Refinancing Facility) or
the Required Springdale Lenders (if such Facility is the Springdale Facility),
as the case may be, by notice to the Borrower and the other Representative
Agents, declare the Bank Notes of its Related Lenders, all interest thereon and
all other amounts payable under this Agreement and the other Financing Documents
owing to its Related Lenders to be forthwith due and payable, whereupon such
Bank Notes, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower (any such notice
given by a Representative Agent pursuant to clauses (i) or (ii) above, a
"Facility Only Acceleration Notice").

                   Section 6.03     Actions in Respect of the Refinancing
Letters of Credit upon Default.  If any Event of Default (other than a Limited
Payment Default under the New Money Facility and/or the Springdale Facility)
shall have occurred and be continuing, the Refinancing Lender Agent may, or
shall at the request of the Required Refinancing Lenders, irrespective of
whether it is taking any of the actions described in Section 6.02 or otherwise,
make demand upon the Borrower to, and forthwith upon such demand the Borrower
will, pay to the Collateral Agent on behalf of the Refinancing Lenders in
immediately available funds at the Collateral Agent's office designated in such
demand, for deposit in the Enforcement Proceeds Account, an amount equal to the
aggregate Available Amount of all Refinancing Letters of Credit then
outstanding, less the aggregate amount then on deposit in, or credited to, the
Cash Collateral Account (Refinancing Lenders). If at any time the Refinancing
Lender Agent determines that any funds held in the Enforcement Proceeds Account
are subject to any right or claim of any Person other than the Secured Parties
or that the total amount of such funds is less than the aggregate Available
Amount of all Refinancing Letters of Credit, less the aggregate amount then on
deposit in, or credited to, the Cash Collateral Account (Refinancing Lenders),
the Borrower will, forthwith upon demand by the Refinancing Lender Agent or the
Collateral Agent, pay to the Collateral Agent, as additional funds to be
deposited and held in the Enforcement Proceeds Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the Enforcement Proceeds Account and the Cash
Collateral Account (Refinancing Lenders) that the Refinancing Lender Agent or
the Collateral Agent, as the case may be, determines to be free and clear of any
such right and claim. Upon the drawing of any Refinancing Letter of Credit for
which funds are on deposit in the Enforcement Proceeds Account or the Cash
Collateral Account (Refinancing Lenders), such funds shall be applied to
reimburse the Refinancing Issuing Bank or Refinancing Lenders, as applicable, to
the extent permitted by Applicable Law.

ARTICLE VII
REMEDIES AND ENFORCEMENT

                   Section 7.01     Procedures Following an Event of
Default.  (a)  At any time after the occurrence and during the continuance of an
Event of Default (including a Limited Payment Default) of which it is aware,
each Representative Agent may, and promptly after it receives written notice
from any of its Related Lenders to serve a notice on each other Related Lender
of such Representative Agent with respect to such Event of Default, such
Representative Agent shall, serve a notice on each of its Related Lenders
describing such Event of Default. Promptly after the New Money Lender Agent or
the Springdale Lender Agent becomes aware of the occurrence of any Event of
Default (other than by receipt of written notice thereof from another
Representative Agent), such Representative Agent shall promptly notify the
Refinancing Lender Agent in writing thereof.

                   (b)     At any time after the Refinancing Lender Agent has
(i) received written notice from any other Representative Agent of the
occurrence of an Event of Default (including a Limited Payment Default), (ii)
received a Facility Only Acceleration Notice from any other Representative Agent
pursuant to Section 6.02(b), or (iii) issued a Facility Only Acceleration Notice
with respect to the Refinancing Facility, the Refinancing Lender Agent shall,
promptly thereafter, serve a notice thereof on each of the New Money Lender
Agent and the Springdale Lender Agent.

                   (c)     With respect to any Event of Default other than a
Limited Payment Default, the notice issued by the Refinancing Lender Agent to
each of the New Money Lender Agent and the Springdale Lender Agent pursuant to
clause (b) above shall (i) specify the Decision Period within which instructions
referred to in clause (iii) below are to be provided to it, (ii) describe the
Event of Default, and (iii) request instructions from the Required Lenders
within such Decision Period as to (A) whether or not such Event of Default
should be waived or (B) whether any amendment should be made to one or more of
the Financing Documents in order to cure or effectively waive such Event of
Default, in which case:

                   (1)     subject to Section 9.02, if the Required Lenders vote
to waive such Event of Default or enter into such an amendment, no Bank Lender
Party shall be entitled (I) to accelerate any of the Senior Debt Obligations
owed to it or to terminate its Commitment as a consequence of the occurrence and
continuance of such Event of Default or (II) to exercise or enforce, or to
instruct the Collateral Agent to exercise or enforce, any right or remedy under
the Financing Documents or under Applicable Law in connection with such Event of
Default; provided that nothing herein shall bar the exercise of rights or
enforcement of remedies in accordance with the Financing Documents in respect of
any other Event of Default which is not expressly waived by the Required Lenders
pursuant to this Section 7.01; or

                   (2)     if the Required Lenders decide not to waive such
Event of Default or not to enter into such amendment, as the case may be, and
decide to declare that such Event of Default has occurred for purposes of taking
action under the Security Agreement, the Required Lenders shall, acting through
their respective Representative Agents, provide (I) written notice to the
Refinancing Lender Agent authorizing it to deliver a notice of default (a
"Notice of Bank Facility Default") with respect to such Event of Default to the
Collateral Agent in accordance with Section 6.02(a) of the Security Agreement
and (II) to the extent that the Required Lenders have decided to accelerate the
Advances and terminate the Commitments as a consequence of the occurrence of
such Event of Default, a written notice to the Collateral Agent and the Borrower
indicating that the outstanding amount of the Advances has been so accelerated
and the Commitments terminated (an "Acceleration Notice"), or

                   (3)     if, prior to the termination of the Decision Period,
the Required Lenders neither vote to waive such Event of Default or enter into
such an amendment nor decide to enforce such rights and remedies, the
Refinancing Lender Agent shall promptly provide written notice (a "Deadlock
Notice") of such event to each other Representative Agent, and shall seek
instructions from the Required Lenders as to whether it should deliver a Notice
of Bank Facility Default or Acceleration Notice with respect to the occurrence
of such Event of Default.

                   (d)     If, prior to the termination of the Decision Period,
the Required Lenders neither vote to waive any Event of Default or enter into
amendments of one or more of the Financing Documents nor decide to enforce such
rights and remedies, then during the period (the "Waiting Period") from the date
of delivery pursuant to Section 7.01(c)(3) of any Deadlock Notice with respect
to such Event of Default to the date of receipt by the Refinancing Lender Agent
of instructions from the Required Lenders (acting through their respective
Representative Agents) to deliver a Notice of Bank Facility Default, no Bank
Lender Party shall be entitled to (i) exercise or enforce any right or remedy in
connection with such Event of Default (including (A) any acceleration of the
Senior Debt Obligations owed to it or the termination of its Commitment and (B)
the remedies specified in Article VI of the Security Agreement); or (ii)
instruct the Collateral Agent to exercise or enforce any right or remedy against
or in respect of the Collateral or otherwise in connection with such Event of
Default); provided that nothing contained herein shall limit the rights of the
Required Lenders to instruct in writing the Collateral Agent to make, or to
immediately cease making, any applications from any Pledged Accounts (as defined
in the Security Agreement), or the obligation of the Collateral Agent to comply
with such instructions, in each case to the extent consistent with the Financing
Documents.

                   (e)     With respect to any applicable Event of Default, the
Waiting Period shall automatically end, and a Notice of Bank Facility Default
shall be effective, upon the agreement of the Required Lenders.

                   (f)     Nothing in Section 7.01(d) shall be construed to
restrict the right of the Required Lenders, at any time prior to the end of the
Waiting Period or thereafter, to elect to waive any Event of Default or, subject
to Section 9.02, agree to any amendment of one or more of the Financing
Documents in order to cure such Event of Default in accordance with Section
7.01(c) and the terms of the Security Agreement.

                   (g)     Each Remedies Notice shall specify the particular
action that the Collateral Agent is directed thereunder to take, and shall be
effective on the date set forth in such notice (the "Remedies Effective Date").

                   (h)     In the event that an Acceleration Notice has been
authorized by the Required Lenders, each Bank Lender Party shall terminate its
Commitments and accelerate its Advances at any time on or after the Business Day
following delivery of such Acceleration Notice to the Collateral Agent.

                   Section 7.02     Default Interest

. At such time as any Event of Default has occurred and is continuing, each
Lender and the Refinancing Issuing Bank shall apply the applicable post-default
interest rate provided in Section 2.09(b) of the Refinancing Credit Agreement,
Section 2.08(b) of the New Money Credit Agreement or Section 2.08(b) of the
Springdale Credit Agreement, as applicable, to any amount due (whether in
accordance with the original amortization schedule, as a result of acceleration
or otherwise).

ARTICLE VIII
THE AGENTS

                   Section 8.01     Reliance.  Neither any Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Financing
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each Agent: (a) may
consult with legal counsel (including counsel for any Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (b) makes no warranty or
representation to any other Bank Lender Party and shall not be responsible to
any other Bank Lender Party for any statements, warranties or representations
(whether written or oral) made in or in connection with the Financing Documents;
(c) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any Financing
Document on the part of any Loan Party or to inspect the property (including the
books and records) of any Loan Party; (d) shall not be responsible to any other
Bank Lender Party for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Financing Document or any other instrument or document furnished
pursuant thereto; and (e) shall incur no liability under or in respect of any
Financing Document by acting upon any notice, consent, certificate or other
instrument or writing believed by it to be genuine and signed or sent by the
proper party or parties.

                   Section 8.02     Citibank, Scotia and JPMC and
Affiliates.  With respect to its Commitment (if any), the Advances made by it
(if any), any Bank Obligations owed to it (if any) and the Bank Notes issued to
it (if any), each of Citibank, Scotia and JPMC shall have the same rights and
powers under the Financing Documents as any other Secured Party and may exercise
the same as though it were not an Agent; and the term "Secured Party", "Secured
Parties", "Bank Lender Party", "Bank Lender Parties" shall, unless otherwise
expressly indicated, include Citibank, Scotia and JPMC in their respective
individual, and agency capacities. Each of Citibank, Scotia and JPMC and their
respective Affiliates may accept deposits from, lend money to, act as trustee
under indentures of, accept investment banking engagements from and generally
engage in any kind of business with, the Borrower, the Parent, any Affiliate
thereof, any of their respective Subsidiaries and any Person that may do
business with or own securities of the Borrower, the Parent, any Affiliate
thereof or any such Subsidiary, all as if Citibank, Scotia and JPMC were not an
Agent, and without any duty to account therefor to the other Bank Lender
Parties.

                   Section 8.03     Liability.  No Agent shall be liable for any
error of judgment or for any act done or omitted to be done by it in good faith
or for any mistake of fact or law, or for anything it may do or refrain from
doing, except to the extent that any such liability is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
directly and primarily from its gross negligence or willful misconduct.

                   Section 8.04     Compensation of Agents.  Each Agent shall be
entitled to reasonable compensation as may be agreed from time to time between
the Borrower and such Agent, for all services rendered under this Agreement and
the other Financing Documents to which it is a party and such compensation,
together with reimbursement of such Agent in its individual capacity (and its
agency capacity) for its advances, disbursements and reasonable expenses in
connection with the performance of the trust and activities provided for herein
(including the reasonable fees and expenses of its agents and of counsel,
accountants and other experts), shall be paid in full by the Borrower promptly
following demand from such Agent, from time to time as services are rendered and
expenses are incurred. All such payments made by the Borrower to any Agent,
shall be made free and clear of all present and future income, stamp or other
taxes, levies and withholdings imposed, assessed, levied or collected by the
government of the United States of America or any political subdivision or
taxing authority thereof. Except as otherwise expressly provided herein, no Bank
Lender Party shall have any liability for any fees, expenses or disbursements of
any Agent. Upon its resignation or removal, each Agent shall be entitled to the
prompt payment by the Borrower of its compensation and indemnification for the
services rendered under this Agreement and the other Financing Documents to
which it is a party, and to reimbursement of all reasonable out-of-pocket
expenses up to the date of resignation or removal (including the reasonable fees
and expenses of counsel, if any) incurred in connection with the performance of
such services. The agreements in this Section 8.04 shall survive any resignation
or removal of any Agent and the termination of the other provisions of this
Agreement.

                   Section 8.05     Exculpatory Provisions.  No Agent makes any
representation as to the value or condition of the security interests created
under the Collateral Documents or any part thereof, or as to the title of any
Grantor or as to the rights and interests granted or the security afforded by
this Agreement or any other Financing Document, or as to the validity, execution
(except by itself), enforceability, legality or sufficiency of this Agreement,
any other Financing Document or the Bank Obligations secured under the
Collateral Documents, and no Agent (in its individual and agency capacities)
shall incur any liability or responsibility in respect of any such matters.

                   Section 8.06     Treatment of Lenders and Refinancing Issuing
Bank.  Each of the Agents may treat the Lenders and the Refinancing Issuing Bank
as the holders of Bank Obligations and as the absolute owners thereof for all
purposes under this Agreement and the other Financing Documents unless such
Agent shall receive notice to the contrary from such Lender or the Refinancing
Issuing Bank (in the case of the Representative Agent for such Lender or the
Refinancing Issuing Bank) or the Representative Agent for such Lender or the
Refinancing Issuing Bank (in the case of any other Agent).

                   Section 8.07     Miscellaneous.  (a)  Instructions. Each
Representative Agent shall have the right at any time to seek instructions
concerning the administration of its duties and obligations hereunder or any
other Financing Documents from its Related Lenders or any court of competent
jurisdiction. In the event there is any disagreement between the other parties
to this Agreement and the terms of this Agreement or any other applicable Credit
Agreement do not unambiguously mandate the action any Agent is to take or not to
take in connection therewith under the circumstances then existing, or any Agent
is in doubt as to what action it is required to take or not to take, (i) such
Agent (if it is not a Representative Agent) shall be entitled to refrain from
taking any action until directed otherwise in writing by a request signed
jointly by the Required Lenders or by order of a court of competent
jurisdiction, and (ii) if such Agent is a Representative Agent (other than, in
the case of the Refinancing Lender Agent, with respect to Section 7.01), it
shall be entitled to refrain from taking any action until directed otherwise in
writing by a request signed jointly by its Related Lenders (in accordance with
the applicable Credit Agreement) or, in each such case, by order of a court of
competent jurisdiction.

                   (b)     No Obligation. None of the provisions of this
Agreement or the other Financing Documents shall be construed to require any
Agent to expend or risk its own funds or otherwise to incur any personal
financial liability in the performance of any of its duties hereunder or
thereunder. No Agent shall be under any obligation to exercise any of the rights
or powers vested in it by this Agreement or the other Financing Documents, at
the request or direction of the Borrower, any other Loan Party or any Bank
Lender Party, (i) if any action it has been requested or directed to take would
be contrary to Applicable Law, or (ii) unless such Agent shall have been offered
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction (including interest thereon from the time incurred until reimbursed).

                   Section 8.08     Bank Lender Parties
Action.  (a)  Representative Agent. For all purposes of this Agreement and the
other Financing Documents, action by any Representative Agent in accordance with
the terms of this Agreement and the applicable Credit Agreement shall constitute
action by its Related Lenders (other than, in the case of the Refinancing Lender
Agent, with respect to Section 7.01).

                   (b)     Delivery of Notices, Etc.  (i)  For all purposes of
this Agreement and the other Financing Documents, each Representative Agent
shall act as agent for its Related Lenders, in each case including for the
following purposes: (A) to give or receive any notice, certificate, request,
demand or other communication permitted or required to be given or received
hereunder or thereunder to or from any Agent or any Grantor, (B) to vote the
Bank Obligations outstanding under the applicable Credit Agreement (in the
manner authorized or directed by the relevant requisite Related Lenders in
accordance with such Credit Agreement) at any meeting of Lenders and Refinancing
Issuing Bank hereunder and (C) otherwise to take any action required or
permitted to be taken by its Related Lenders hereunder or thereunder. None of
the Lenders or the Refinancing Issuing Bank shall by itself or in its own name
be entitled to give or receive any notice, certificate, request, demand or other
communication permitted or required to be given or received under this Agreement
or any Financing Document to or by the Grantors or their respective Affiliates.
To the extent that any of such parties shall be entitled to grant any consent or
approval, or cast any vote whatsoever, all of such notices, certificates,
requests, demands or other communications in respect of any such parties only
shall be given or received (as the case may be), any such votes shall be cast
and all of such actions shall be taken by its Representative Agent.

                   Section 8.09     Indemnity.  Each of the Lenders agrees to
indemnify each of the Syndication Agent, the Documentation Agent and the
Arrangers (in each case, to the extent not promptly reimbursed by the Borrower),
ratably according to the respective amounts of the Senior Debt Obligations owed
to such Lender from time to time, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Syndication Agent, the Documentation
Agent or the relevant Arranger, as the case may be, in any way relating to or
arising out of this Agreement or any other Financing Document (collectively, the
"Indemnified Costs"); provided that no such Lender shall be liable for any
portion of the Indemnified Costs found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted directly and primarily from the
gross negligence or willful misconduct of the Syndication Agent, the
Documentation Agent or such Arranger, respectively. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 8.09 shall apply.

                   Section 8.10     Sharing of Payments.  If on any day any
Lender or the Refinancing Issuing Bank (as the case may be) shall obtain any
amount, whether (a) by way of voluntary or involuntary payment, (b) by virtue of
an exercise of any right of set-off, banker's lien or counterclaim, (c) as
proceeds of any insurance policy covering any properties or assets of the
Borrower Group Members, (d) from proceeds of the liquidation or dissolution of
the Borrower Group Members or distribution of their respective assets among
their respective creditors (however such liquidation, dissolution or
distribution may occur), (e) as payment of any of the Senior Debt Obligations,
or (f) as consideration for the agreement of such Lender or the Refinancing
Issuing Bank (as the case may be), or as part of any transaction or series of
related transactions in which such Lender or the Refinancing Issuing Bank (as
the case may be) shall have agreed, to waive or amend any provision of any
Financing Documents to which it is a party, in excess of such Lender's or the
Refinancing Issuing Bank's (as applicable) ratable share of payments due to all
of the Bank Lender Parties on such day by the Borrower in accordance with the
Financing Documents, such Lender or the Refinancing Issuing Bank (as the case
may be) shall forthwith notify its Representative Agent thereof and shall
promptly, and in any event within ten Business Days of its so obtaining the
same, pay such amount or excess amount (less any reasonable costs and expenses
incurred by such Lender or the Refinancing Issuing Bank (as the case may be) in
obtaining or preserving such payment) to the Refinancing Lender Agent (through
its Representative Agent, if such Lender is not a Refinancing Lender Party), to
be distributed among the Lenders and the Refinancing Issuing Bank in accordance
with the applicable provisions of the Financing Documents. If, after any payment
is received by a Lender and paid over to the Refinancing Lender Agent pursuant
to the first sentence of this Section 8.10, such payment is rescinded or must
otherwise be restored by the Bank Lender Party that first obtained it, each
other Bank Lender Party that obtained the benefit of such payment (whether
pursuant to a distribution hereunder, or otherwise) shall return to such Bank
Lender Party its portion of the payment so rescinded or required to be restored
upon demand therefor, together with its pro rata portion of any interest or
other amount paid or payable in connection with the rescission or the
restoration of such payment by the Bank Lender Party that first obtained it.

ARTICLE IX
MISCELLANEOUS

                   Section 9.01     Indemnity and Expenses.  (a)  Each of the
Grantors agrees to indemnify and hold harmless each Bank Lender Party and each
of its Affiliates (including the Arrangers) and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including in connection with any
investigation, litigation or proceeding or preparation of a defense in
connection therewith) or relating to (i) execution, amendment or administration
of this Agreement, the other Financing Documents, any of the transactions
contemplated herein or therein or the actual or proposed use of the proceeds of
the Advances or Refinancing Letters of Credit, or (ii) the actual or alleged
presence of Hazardous Materials requiring remediation or other response pursuant
to Environmental Law on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted directly and primarily from such Indemnified
Party's gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.01(a)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
equityholders or creditors or an Indemnified Party or any other Person, whether
or not any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated.

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

                   (c)     The Borrower shall reimburse each of the Market
Consultant, the Independent Engineer (if any) and Insurance Consultant (if any)
for the reasonable fees and documented expenses of such consultant retained on
behalf of the Bank Lender Parties.

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

                   Section 9.02     Amendments; No Waiver.  No amendment or
waiver of any provision hereof, nor consent to any departure by any Grantor from
the terms hereof, shall in any event be effective unless the same shall be in
writing and signed by, or on behalf of, the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given provided that (a) any amendment, waiver or
consent with respect to a Unanimous Approval Matter shall only be effective if
in writing and signed by all of the Lenders and the Refinancing Issuing Bank,
(b) no amendment, waiver or consent shall, unless in writing and signed by (i)
any Agent in addition to the Lenders required above to take such action, affect
the rights or duties of such Agent under any Financing Document to which such
Agent is a party, (ii) the Refinancing Issuing Bank in addition to the Lenders
required above to take such action, affect the rights or duties of the
Refinancing Issuing Bank under any Financing Document to which the Refinancing
Issuing Bank is a party, (c) with respect to any amendment, amendment and
restatement, supplement, waiver or modification which would be advantageous or
disadvantageous to Lenders under any one or more, but not all, of the Facilities
(or which would result in Lenders under one or more, but not all, of the
Facilities having rights and obligations, relative to the Lenders under the
other Facilities, immediately after such amendment, amendment and restatement,
supplement, waiver or modification, which are different from the rights and
obligations of such Lenders, relative to the other Lenders, immediately prior
thereto), and which is not in respect of any Unanimous Approval Matter, such
amendment, amendment and restatement, supplement, waiver or modification shall
not be effective unless the same shall be in writing and signed by, or on behalf
of, the Required Refinancing Lenders (if the disadvantaged Lenders are the
Refinancing Lenders), the Required New Money Lenders (if the disadvantaged
Lenders are the New Money Lenders) and/or the Required Springdale Lenders (if
the disadvantaged Lenders are the Springdale Lenders), as the case may be, (d)
with respect to any amendment, supplement, waiver or modification of Section
5.01(bb), 5.01(u) and, to the extent applicable to the Springdale Assets,
5.02(a), such amendment, supplement, waiver or modification shall not be
effective unless the same shall be in writing and signed by, or on behalf of,
the Required Springdale Lenders and (e) with respect to any amendment,
supplement, waiver or modification of Section 5.02(e)(ii)(A)(1)(I), such
amendment, supplement, waiver or modification shall not be effective unless the
same shall be in writing and signed by, or on behalf of, all Lenders. No failure
on the part of any Bank Lender Party to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.

                   Section 9.03     Notices; Etc.  All notices and other
communications provided for hereunder shall be in writing (including telecopier
communication) and mailed, telecopied or otherwise delivered, in the case of any
Grantor or any Agent, addressed to it at its address specified on the signature
pages hereto; or, as to any party, at such other address as shall be designated
by such party in a written notice to the other parties. All such notices and
other communications shall, when mailed, telecopied or otherwise delivered, be
effective when deposited in the mails, telecopied or otherwise delivered (or
confirmed by a signed receipt), respectively, addressed as aforesaid. Delivery
by telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or Schedule hereto shall be effective as delivery of
an original executed counterpart thereof.

                   Section 9.04     Execution in Counterparts.  This Agreement
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
an original executed counterpart of this Agreement.

                   Section 9.05     Benefits of Agreement.  Nothing in this
Agreement or any other Financing Document, express or implied, shall give to any
Person, other than the parties hereto, and each of their successors and
permitted assigns under this Agreement or any other Financing Document, any
benefit or any legal or equitable right or remedy under this Agreement.

                   Section 9.06     Severability.  If any provision of this
Agreement shall be invalid, illegal or unenforceable, then to the extent
permitted by law, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                   Section 9.07     Remedies.  (a)  Other than as stated
expressly herein, no remedy herein or in any other Financing Document conferred
upon any Bank Lender Party is intended to be exclusive of any other remedy and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or the other Financing Documents, or now
or hereafter existing at law or in equity or by statute or otherwise.

                   (b)     As between the Grantors and each Bank Lender Party,
it is agreed that the amounts payable by the Borrower at any time under each
Credit Agreement shall be a separate and independent debt and each Bank Lender
Party shall be entitled to protect and enforce its rights arising out of this
Agreement or the other Financing Documents and its right, pursuant to any Credit
Agreement to which it is a party, to cancel or suspend its commitment to make
Advances and to accelerate the maturity of amounts due under such Credit
Agreement, as the case may be, and, except as aforesaid, it shall not be
necessary for any other Bank Lender Party to consent to, or be joined as an
additional party in, any proceedings for such purposes.

                   (c)     In case any Bank Lender Party shall have proceeded to
enforce any right, remedy or power under this Agreement or any other Financing
Document and the proceeding for the enforcement thereof shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to such Bank Lender Party, then and in every such case the Grantors and the Bank
Lender Parties shall, subject to any effect of or determination in such
proceeding, severally and respectively be restored to their former positions and
rights under this Agreement or any other Financing Document and thereafter all
rights, remedies and powers of the Bank Lender Parties shall continue as though
no such proceeding had been taken.

                   (d)     Without limiting the rights and remedies of any Bank
Lender Party under this Agreement or any other Financing Document and
notwithstanding anything to the contrary contained herein, except as otherwise
expressly provided in this Agreement or any other Financing Document, upon the
occurrence of a Limited Payment Default in respect of any amounts owing to a
Bank Lender Party, such Bank Lender Party shall have all rights and remedies
available to it under Applicable Law in respect of such Limited Payment Default.
Without limiting the generality of the foregoing, upon the failure by any
Grantor to pay when due (whether by acceleration or otherwise) to a Bank Lender
Party an amount payable to such Bank Lender Party by such Grantor under this
Agreement or any other Financing Document, such Bank Lender Party may commence
and pursue legal proceedings (including a case against such Grantor under the
Bankruptcy Code) to collect such unpaid amount, but any recourse by such Bank
Lender Party to the Collateral shall be subject to the terms of this Agreement
and the Security Agreement.

                   Section 9.08     Set-off.  In addition to any rights and
remedies of the Bank Lender Parties provided by Applicable Law or otherwise,
each Bank Lender Party shall have the right, upon the occurrence and during the
continuance of any Event of Default, without prior presentment, demand, protest
or notice to any Grantor, any such presentment, demand, protest or notice being
expressly waived by each Grantor to the extent permitted by Applicable Law, upon
any amount becoming due and payable by the Borrower hereunder or under any other
Financing Document to which it is a party (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, other than the Pledged Accounts and the Controlled
Accounts or any funds on deposit in, or credited to, any such Pledged Account or
Controlled Account, or any other credits, indebtedness or claims, in any
currency, other than the Pledged Accounts and the Controlled Accounts or any
funds on deposit in, or credited to, any such Pledged Account or Controlled
Account, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Bank Lender Party or any
branch or agency thereof to or for the credit or the account of such Grantor.
Each Bank Lender Party (other than the Collateral Agent, the Depository Bank and
Intercreditor Agent) agrees promptly to notify the relevant Grantor and the
Collateral Agent and Intercreditor Agent after any such set-off and application
made by such Bank Lender Party, provided that the failure to give such notice
shall not affect the validity of such set-off and application.

                   Section 9.09     Limitations.  (a)  The obligations,
liabilities or responsibilities of any party hereunder shall be limited to those
obligations, liabilities or responsibilities expressly set forth and attributed
to such party pursuant to this Agreement or otherwise applicable under
Applicable Law.

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

                   Section 9.10     Survival.  Notwithstanding anything in this
Agreement to the contrary, Sections 8.04, 8.09, 8.10, 9.01, 9.10, 9.11, 9.12 and
9.13 shall survive any termination of this Agreement. In addition, each
representation and warranty made or deemed to be made hereunder shall survive
the making of such representation and warranty, and no Bank Lender Party shall
be deemed to have waived, by reason of making any Advance or issuance of any
Refinancing Letter of Credit or making any payment pursuant thereto, any Default
that may arise by reason of such representation or warranty proving to have been
false or misleading, notwithstanding that such Lender or the Refinancing Issuing
Bank (as applicable) may have had notice or knowledge or reason to believe that
such representation or warranty was false or misleading at the time such Advance
was made or Refinancing Letter of Credit was issued (as the case may be).

                   Section 9.11     Governing Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.

                   Section 9.12     Jurisdiction, Etc.  (a)  Each of the parties
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Financing Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the fullest extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Financing Documents in
the courts of any jurisdiction.

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

                   Section 9.13     Waiver of Jury Trial.  Each of the parties
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or any of the other Financing Documents or the
actions of any Grantor in the negotiation, administration, performance or
enforcement thereof.

                   Section 9.14     Disclosure to Other Agents and AYE Lender
Agent.  In connection with determining amounts payable by any AYE Borrower under
the AYE Loan Documents or by the Borrower under the Financing Documents
(including, by way of cash collateralization), each of the Grantors hereby
consents to each Agent disclosing to the other Agents, the AYE/AESC
Intercreditor Agent and the AYE Lender Agent any information relating to the
Senior Debt Obligations and or to such Grantor or its Subsidiaries furnished to
such Agent by or on behalf of such Grantor.

                   Section 9.15     Survival of Existing Indemnities.  Without
prejudice to any agreement of the Borrower or any other Grantor hereunder or
under any other Financing Document, the indemnification and expense
reimbursement obligations of the Borrower contained in the Existing Lender Debt
Documents and the Existing Springdale Documents shall survive the Refinancing
Closing and the payment in full of principal, interest and all other amounts
payable thereunder.

                   Section 9.16     Confidentiality.  (a)  The Borrower and each
Bank Lender Party hereby agree that the Borrower and each Bank Lender Party (and
each of their respective, and their respective Affiliates', directors, officers,
employees, agents and advisors) is, and has been from the commencement of
discussions with respect to the Transaction, permitted to disclose to any and
all Persons, without limitation of any kind, the structure and tax aspects
(within the meaning of Sections 6011 and 6111 of the Internal Revenue Code and
the regulations promulgated thereunder) of the Transaction, and all materials of
any kind (including opinions or other tax analyses) that are or have been
delivered to the Borrower or any Bank Lender Party related to such structure and
tax aspects. In this regard, the Borrower and each Bank Lender Party acknowledge
and agree that its disclosure of the structure or tax aspects of the Transaction
is not limited in any way by an express or implied understanding or agreement,
oral or written (whether or not such understanding or agreement is legally
binding). Furthermore, each of the Borrower and the Bank Lender Parties
acknowledge and agree that it does not know or have reason to know that its use
or disclosure of information relating to the structure or tax aspects of the
Transaction is limited in any other manner (such as where the Transaction is
claimed to be proprietary or exclusive) for the benefit of any other Person. To
the extent that disclosure of the structure or tax aspects of the Transaction by
the Borrower or the Bank Lender Parties is limited by any existing agreement
between the Borrower and any one or more of the Bank Lender Parties or the
Arrangers, such limitation is agreed to be void ab initio and such agreement is
hereby amended to permit disclosure of the structure and tax aspects of the
Transaction as provided in this paragraph (a).

                   (b)     Subject to paragraph (a) of this Section 9.16, no
Bank Lender Party may disclose to any Person any confidential, proprietary or
non-public information of the Borrower (such information being referred to
collectively herein as the "Borrower Information"), except that each of the Bank
Lender Parties may disclose Borrower Information (i) to its and its Affiliates'
employees, officers, directors, agents, swap counterparties and advisors (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Borrower Information and instructed
to keep such Borrower Information confidential on substantially the same terms
as provided herein), (ii) to the extent requested by any regulatory authority,
(iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (iv) to any other party to this Agreement,
(v) in connection with the exercise of any remedies hereunder or under any other
Financing Document or any suit, action or proceeding relating to this Agreement
or any other Financing Document or the enforcement of rights hereunder or
thereunder, (vi) subject to an agreement containing provisions substantially the
same as those of this Section 9.16, to any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement, including, in the case of any securitization or
collateralization of, or other similar transaction relating to, its Commitments
or Senior Debt Obligations by any Bank Lender Party, disclosure to any necessary
Person in connection with such securitization, collateralization or other
transaction (including any funding vehicle organized to undertake or effectuate
such securitization, collateralization or other transaction, its lenders,
sureties, reinsurers, swap counterparties, guarantors or credit liquidity
enhancers, their respective directors, officers, and advisors, and any rating
agency), (vii) to the extent such Borrower Information (A) is or becomes
generally available to the public on a non-confidential basis other than as a
result of a breach of this Section 9.16 by such Bank Lender Party, or (B) is or
becomes available to such Bank Lender Party on a nonconfidential basis from a
source other than the Borrower and (viii) with the consent of the Borrower.

                   (c)     Subject to paragraph (a) of this Section 9.16, the
Borrower may not disclose to any Person the amount or terms of any fees payable
to any Arranger or any Bank Lender Party (such information being collectively
referred to herein as the "Facility Information"), except that the Borrower may
disclose the Facility Information (i) to its and its Affiliates' employees,
officers, directors, agents and advisors who have a need to know the Facility
Information in connection with this Agreement and the transactions contemplated
hereby or (ii) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process.

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

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        COMPANY, LLC, as
Borrower and as Grantor
Hagerstown, MD 21740-1766
Attn: Keith L. Warchol
Tel: 301-665-2714
Fax: 301-665-2751
email: kwarcho@alleghenyenergy.com

                                                                              By  /s/ REGIS
F. BINDER
                                                                              Name:  Regis
F. Binder
                                                                              Title:  Treasurer

Address for Notices:

                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        CAPITAL, LLC, as
Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                              By  /s/ REGIS
F. BINDER
                                                                              Name:  Regis
F. Binder
                                                                              Title:  President

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        CAPITAL MIDWEST,
LLC, as Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  President

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        CONEMAUGH, LLC, as
Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDERR
                                                                               Name:  Regis
F. Binder
                                                                               Title:  Treasurer

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        DEVELOPMENT
SERVICES, LLC, as Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  Treasurer

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                       GLEASON GENERATING
FACILITY, LLC,
Hagerstown, MD 21740-1766                             as Grantor
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  Treasurer

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        LINCOLN GENERATING
FACILITY, LLC,
Hagerstown, MD 21740-1766                              as Grantor
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  Treasurer

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        WHEATLAND
GENERATING FACILITY,
Hagerstown, MD 21740-1766                              LLC, as Grantor
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                                Name:  Regis
F. Binder
                                                                                Title:  Treasurer

 

Address for Notices

:                                            ACADIA BAY ENERGY COMPANY,
10435 Downsville Pike                                       LLC, as Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDEER
                                                                                Name:  Regis
F. Binder
                                                                                Title:  Treasurer

 

Address for Notices

:                                            BUCHANAN ENERGY COMPANY OF
10435 Downsville Pike                                       VIRGINIA, LLC, as
Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                                Name:  Regis
F. Binder
                                                                                Title:  Treasurer

 

Address for Notices

:                                            ENERGY FINANCING COMPANY,
10435 Downsville Pike                                        LLC, as Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  President

 

Address for Notices

:                                            LAKE ACQUISITION COMPANY,
10435 Downsville Pike                                       LLC, as Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  Treasurer

 

Address for Notices

:                                            ALLEGHENY TRADING FINANCE
10435 Downsville Pike                                        COMPANY, as Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  Treasurer

 

Address for Notices

:                                            ALLEGHENY ENERGY SUPPLY
10435 Downsville Pike                                        CONEMAUGH FUELS,
LLC, as Grantor
Hagerstown, MD 21740-1766
Attn: Regis Binder
Tel: 301-665-2715
Fax: 301-665-2751
e-mail: rbinder@alleghenyenergy.com

                                                                               By  /s/ REGIS
F. BINDER
                                                                               Name:  Regis
F. Binder
                                                                               Title:  Treasurer

 

                                                                               CITICORP
USA, INC.,
                                                                               as
Refinancing Lender, as New Money Lender
                                                                               and
as Springdale Lender

                                                                               By  /s/ ROBERT
J. HARRITY, JR.
                                                                               Name:  Robert
J. Harrity, Jr.
                                                                               Title:

 

                                                                   BANK OF
AMERICA, N.A.,
                                                                   as
Refinancing Lender, as New Money Lender
                                                                   and as
Springdale Lender

                                                                   By  /s/ JOHN
F. REGISTER
                                                                   Name:  John
F. Register
                                                                   Title:  Principal

 

                                                               BAYERISCHE HYPO-
UND
                                                               VEREINSBANK AG,
NEW YORK BRANCH
                                                               OR GRAND CAYMAN
BRANCH,
                                                               as Refinancing
Lender and as New Money
                                                               Lender

                                                               By  /s/ WILLIAM
W. HUNTER
                                                               Name:  William W.
Hunter
                                                               Title:  Director

                                                                By  /s/ SHANNON
BATCHMAN
                                                                 Name:  Shannon
Batchman
                                                                 Title:  Director

 

Address for Notices

:                               BANK ONE, NA,
1 Bank One Plaza                                    as Refinancing Lender, as
New Money Lender and as
Mail Suite IL1-0363                                Refinancing Issuing Bank
Chicago, IL 06070-0363
Attn: Dawn Lawler
Tel:
Fax: 312-732-7455                                  By  /s/ HAL E. FUDGE
                                                                  Name:  Hal. E.
Fudge
                                                                  Title:  First
Vice President

with a copy to

:
300 Riverside Plaza
7th Floor
Mail Suite IL1-0236
Chicago, IL 06070-0236
Attn: George Cagadas
Tel:
Fax: 312-354-0203

 

                                                                WACHOVIA BANK,
NATIONAL
                                                                ASSOCIATION
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ JILL W.
AKRE
                                                                 Name:  Jill W.
Akre
                                                                 Title:  Director

 

                                                                UNION BANK OF
CALIFORNIA,
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ KAREN
ELLIOTT
                                                                 Name:  Karen
Elliott
                                                                 Title:  Assistant
Vice President

 

                                                                CREDIT LYONNAIS,
NEW YORK
                                                                BRANCH,
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ OLIVIER
AUDERNARD
                                                                Name:  Olivier
Audernard
                                                                Title:  Senior
Vice President

 

                                                                CIBC INC.,
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ CHARLES
D. MULKEEN
                                                                 Name:  Charles
D. Mulkeen
                                                                 Title:  Executive
Director

 

                                                                NATIONAL CITY
BANK OF
                                                                PENNSYLVANIA,
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ SUSAN J.
DIMMICK
                                                                 Name:  Susan J.
Dimmick
                                                                 Title:  Vice
President

 

                                                                CREDIT SUISSE
FIRST BOSTON,
                                                                ACTING THROUGH
ITS CAYMAN
                                                                ISLANDS BRANCH,
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ PETER A.
RYAN
                                                                Name:  Peter A.
Ryan
                                                                Title:  Vice
President

                                                                By  /s/ S.
WILLIAM FOX
                                                                 Name:  S.
William Fox
                                                                 Title:  Director

 

                                                                ABN AMRO BANK
N.V.,
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ NEIL J.
BIVONA
                                                                 Name:  Neil J.
Bivona
                                                                 Title:  Group
Vice President

                                                                By:  /s/ PARKER
H. DOUGLAS
                                                                 Name  Parker H.
Douglas
                                                                 Title:  Group
Vice President

 

                                                                FIRST
COMMONWEALTH BANK,
                                                                as Refinancing
Lender and as New Money
                                                                Lender

                                                                By  /s/ PAUL J.
ORIS
                                                                 Name:  Paul J.
Oris
                                                                 Title:  Vice
President

 

                                                                PNC BANK,
NATIONAL
                                                                ASSOCIATION,
                                                                as New Money
Lender and as Springdale
                                                                Lender

                                                                By   /s/ THOMAS
A. MAJESKI
                                                                 Name:  Thomas
A. Majeski
                                                                 Title:  Vice
President

 

                                                                PNC COMMERCIAL,
LLC,
                                                                as New Money
Lender and as Springdale
                                                                Lender

                                                                By  /s/ JAMES G.
KLOCEK
                                                              Name:  James G.
Klocek
                                                              Title:  Vice
President

 

                                                                MELLON BANK,
N.A.,
                                                                as New Money
Lender and as Springdale
                                                                Lender

                                                                By  /s/ ALAN J.
KOPOLOW
                                                                Name:  Alan J.
Kopolow
                                                                Title:  First
Vice President

 

                                                                SUNTRUST BANK,
                                                                as New Money
Lender and as Springdale
                                                                Lender

                                                                By  /s/ STEVEN
J. NEWBY
                                                                Name:  Steven J.
Newby
                                                                Title:  Director

 

                                                                BANK HAPOALIM
B.M.,
                                                                as New Money
Lender and as Springdale
                                                                Lender

                                                                By  /s/ JAMES P.
SURLISS
                                                                Name:  James P.
Surliss
                                                                Title:  Vice
President

                                                                By  /s/ LAURA
ANNE RAFFA
                                                                Name:  Laura
Anne Raffa
                                                                Title:  Senior
Vice President Corporate Manage

 

                                                                AIG SUNAMERICA
LIFE
                                                                ASSURANCE
COMPANY,
                                                                as New Money
Lender

                                                                By  /s/ STEVEN
S. OH
                                                                 Name:  Steven
S. Oh
                                                                 Title:  Authorized
Agent

 

                                                                FIRST SUNAMERICA
LIFE
                                                                INSURANCE
COMPANY,
                                                                as New Money
Lender

                                                                By  /s/ STEVEN
S. OH
                                                                Name:  Steven S.
Oh
                                                                Title:  Authorized
Agent

 

                                                                SUNAMERICA LIFE
INSURANCE
                                                                COMPANY,
                                                                as New Money
Lender

                                                                By  /s/ STEVEN
S. OH
                                                                Name:  Steven S.
Oh
                                                                Title:  Authorized
Agent

 

                                                                GALAXY CLO
1999-1, LTD.,
                                                                as New Money
Lender

                                                                By  /s/ THOMAS
G. BRANDT
                                                                 Name:  Thomas
G. Brandt
                                                                 Title:  Managing
Director

 

                                                                KZH SOLEIL LLC,
                                                                as New Money
Lender

                                                                By  /s/ SUSAN
LEE
                                                                Name:  Susan Lee
                                                                Title:  Authorized
Agent

 

                                                                KZH RIVERSIDE
LLC,
                                                                as New Money
Lender

                                                                By  /s/ SUSAN
LEE
                                                                 Name:  Susan
Lee
                                                                 Title:  Authorized
Agent

 

                                                                KZH SOLEIL-2
LLC,
                                                                as New Money
Lender

                                                                By  SUSAN LEE
                                                                Name:  Susan Lee
                                                                Title:  Authorized
Agent

 

Address for Notices

:                                            CITIBANK, N.A.,
Two Penns Way - Suite 200                                as Refinancing Lender
Agent and as New Money
Castle, DE 19720                                                 Lender Agent
Attn: Kimberly Eidam-Melendez
Tel: 302-894-6012
Fax: 212-944-0961
e-mail:
kimberly.a.eidammelendez@citigroup.com

                                                                               By  /s/  ROBERT
J. HARRITY, JR.
                                                                               Name:  Robert
J. Harrity, Jr.
                                                                               Title:

 

Address for Notices

:                                            THE BANK OF NOVA SCOTIA,
1 Liberty Plaza                                                     as
Refinancing Lender, as New Money Lender,
New York, NY 10006                                          as Springdale
Lender, as Springdale Lender
Attn: Juliet K. M. Eck                                          Agent and as
Documentation Agent
Tel: 212-225-5484
Fax: 212-225-5480
e-mail: juliet_eck@scotiacapital.com

                                                                               By  /s/ JULIET
K. M. ECK
                                                                               Name:  Juliet
K. M. Eck
                                                                               Title:  Director

 

Address for Notices

:                                       JPMORGAN CHASE BANK,
270 Park Avenue                                            as Refinancing
Lender, as New Money Lender, and as
New York, NY 10017                                    Syndication Agent
Attn: Peter Ling
Tel: 212-270-4676
Fax: 212-270-3089
e-mail: peter.ling@jpmorgan.com

                                                                               By  /s/ WILLIAM
A. AUSTIN
                                                                               Name:  William
A. Austin
                                                                               Title:  Vice
President

Appendix A

 

DEFINITIONS

                   In this Agreement and the Schedules and Exhibits hereto, the
following terms shall have the following meanings:

                   "Acceleration Notice" has the meaning set forth in Section
7.01(c).

                   "Account Control Agreement" has the meaning set forth in the
Security Agreement.

                   "Accounting Review Adjustment" means adjustments resulting
from the Borrower's comprehensive review of accounting records, as disclosed in
a press release issued by the Parent on November 4, 2002.

                   "Acquired Real Property" has the meaning specified in Section
5.01(t)(v).

                   "Action" has the meaning specified in Section 6.01(p).

                   "Additional Provisions" has the meaning set forth in the
definition of "Federal Book Entry Regulations".

                   "Advance" means each of the loans made to the Borrower by
(a) the Refinancing Lender Parties pursuant to the Refinancing Credit Agreement,
(b) the New Money Lenders pursuant to the New Money Credit Agreement or (c) the
Springdale Lenders pursuant to the Springdale Credit Agreement.

                   "Affiliate" means, 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. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the Voting
Interests of such Person or to direct or cause the direction of the management
and policies of such Person, whether through the ownership of Voting Interests,
by contract or otherwise.

                   "Affiliate Energy Contracts" means, collectively, (a) the
Power Sales Agreement between PEC and the Borrower dated January 1, 2001, as
supplemented by the Memorandum of the Operating Committee dated October 1, 2001,
and Amendment No. 1 to the Memorandum of the Operating Committee effective
January 1, 2002; (b) the Power Sales Agreement between PEC and the Borrower for
Virginia dated January 1, 2001, as supplemented by the Memorandum of the
Operating Committee dated October 1, 2001, and Amendment No. 1 to the Memorandum
of the Operating Committee effective January 1, 2002; (c) the Facilities Lease
Agreement between PEC and the Borrower dated August 1, 2000, and the Service
Agreement between PEC and the Borrower for West Virginia dated August 1, 2000;
(d) the Power Sales Agreement between WPPC and the Borrower dated January 1,
2001, as supplemented by the Memorandum of the Operating Committee dated
August 1, 2001, and Amendment No. 1 to the Memorandum of the Operating Committee
effective January 1, 2002; and (e) the Power Sales Agreement between MPC and the
Borrower dated June 1, 2001, as supplemented by the Memorandum of the Operating
Committee dated August 1, 2001, and Amendment No. 1 to the Memorandum of the
Operating Committee effective January 1, 2002.

                   "AGC" means Allegheny Generating Company, a Virginia
corporation.

                   "Agents" means the Refinancing Lender Agent, the New Money
Lender Agent, the Springdale Lender Agent, the Springdale Special Draw Agent,
the Intercreditor Agent, the Collateral Agent, the Documentation Agent and the
Syndication Agent.

                   "Agreement" means this Common Terms Agreement.

                   "Agreement Value" means, for each Hedge Agreement, on any
date of determination, an amount determined by the Borrower in good faith equal
to: (a) in the case of a Hedge Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc. (the "Master Agreement"), the amount, if any, that
would be payable by the Borrower or any of its Subsidiaries to its counterparty
to such Hedge Agreement pursuant to the terms of such Hedge Agreement, as if
(i) such Hedge Agreement was being terminated early on such date of
determination, (ii) such Borrower Group Member was the sole "Affected Party",
and (iii) the Borrower was the sole party determining such payment amount (with
the Borrower making such determination pursuant to the provisions of the Master
Agreement or the Hedge Agreement (whichever is applicable)); or (b) in the case
of a Hedge Agreement traded on an exchange, the mark-to-market value of such
Hedge Agreement, which will be the unrealized loss on such Hedge Agreement
(after any netting permitted pursuant to the terms of such Hedge Agreement
(including any netting across different Hedge Agreements and Master Agreements
to the extent permitted by contract)) to the Borrower Group Member party to such
Hedge Agreement, if any, determined by the Borrower in good faith based on the
settlement price of such Hedge Agreement on such date of determination, or (c)
in all other cases, the mark-to-market value of such Hedge Agreement, which will
be the unrealized loss on such Hedge Agreement (after any netting permitted
pursuant to the terms of such Hedge Agreement (including any netting across
different Hedge Agreements and Master Agreements to the extent permitted by
contract)) to the Borrower Group Member party to such Hedge Agreement, if any,
as determined by the Borrower in good faith in accordance with the terms of such
Hedge Agreement or, if such Hedge Agreement does not provide a methodology for
such determination, the amount, if any, by which (i) the present value of the
future cash flows to be paid by such Borrower Group Member exceeds (ii) the
present value of the future cash flows to be received by such Borrower Group
Member pursuant to such Hedge Agreement; capitalized terms used and not
otherwise defined in this definition shall have the respective meanings set
forth in the above described Master Agreement.

                   "Amended C Note Obligations" means all Obligations owing by
the Borrower to the holders of the Amended C Notes under, and as defined in, the
Security Agreement, under the Assumption Documents, the Refinancing Indenture
and the Amended C Notes.

                   "Amended Notes" means the Amended A Notes and the Amended B
Notes, each as defined in the Security Agreement.

                   "Amended Schedule" has the meaning specified in Section
3.04(k)(i).

                   "Applicable Law" means, with respect to any Person, any and
all laws, statutes, regulations, rules, orders, injunctions, decrees, writs,
determinations, awards and judgments issued by any Governmental Authority
applicable to such Person, including all Environmental Laws.

                   "Approved Fund" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank loans and
is advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

                   "Arrangers" means each of Salomon Smith Barney, Inc., J.P.
Morgan Securities Inc. and Scotia Capital (USA) Inc.

                   "Asset Sale" means any Sale of any Asset by any Borrower
Group Member to a third party which is not a Borrower Group Member, other than
any Sale of an Asset in accordance with Section 5.02(e)(ii)(B), (C), (D), (E),
(F), (G) or (H) or (iii).

                   "Assets" means, with respect to any Person, all or any part
of its business, property, rights, interests and assets, both tangible and
intangible (including Equity Interests in any Person), wherever situated.

                   "Assigned Agreements" has the meaning set forth in the
Security Agreement.

                   "Assumption Documents" has the meaning set forth in the
Security Agreement.

                   "ATF" means Allegheny Trading Finance Company, a Delaware
corporation.

                   "Authorized Signatory" means, with respect to any Agent or
Grantor, the individual, or any of the individuals, authorized to sign any
Financing Document, as well as any other agreements and give written
instructions on behalf of such Agent or Loan Party with regard to any matters
pertaining to any Financing Document to which such Agent or Loan Party is a
party (as identified on an incumbency certificate submitted to the Collateral
Agent, substantially in the form of Exhibit B, from time to time prior to the
receipt of any instructions from such Authorized Person).

                   "Available Amount" of any Refinancing Letter of Credit or any
AYE Letter of Credit means, at any time, the maximum amount available to be
drawn under such Refinancing Letter of Credit or AYE Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).

                  "AYE Borrowers" means the Parent, MPC and WPPC, in each case,
in their respective capacities as borrowers under the AYE Loan Documents.

                   "AYE Credit Agreement" means the Credit Agreement dated as of
the date hereof, among the AYE Borrowers as borrowers, the AYE Lenders, the AYE
Issuing Bank and the AYE Lender Agent.

                   "AYE Issuing Bank" means the "AYE Issuing Bank" under, and as
defined in, the AYE Credit Agreement.

                   "AYE Lender Agent" means Citibank, in its capacity as
administrative agent for the AYE Lenders and the AYE Issuing Bank under the AYE
Loan Documents.

                   "AYE Lenders" means the "AYE Lenders" under, and as defined
in, the AYE Credit Agreement.

                   "AYE Letters of Credit" means letters of credit issued by the
AYE Issuing Bank pursuant to the AYE Credit Agreement.

                   "AYE Loan Documents" means the AYE Credit Agreement, the
Hagerstown Credit Agreement, the promissory notes issued by each AYE Borrower in
connection therewith, the fee letters, if any, between one or more of the AYE
Borrowers and one or more Arrangers or the AYE Lender Agent, in each case,
relating to the AYE Credit Agreement or the Hagerstown Credit Agreement, all
letter of credit documentation relating to AYE Letters of Credit and the
Intercreditor Agreement.

                   "AYE/AESC Intercreditor Agent" means Citibank, not in its
individual capacity but solely as intercreditor agent under the Intercreditor
Agreement.

                   "Bank Lender Parties" means the Lenders, the Refinancing
Issuing Bank, the Agents and the Depository Bank.

                   "Bank Note" means each promissory note of the Borrower
payable to the order of a Lender, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Advances made by such Lender.

                   "Bank Obligations" means, collectively, the Refinancing
Obligations, the Springdale Obligations and the New Money Obligations.

                   "Bank One" has the meaning specified in the preamble to this
Agreement.

                   "Bath County Plant" means the 960MW electric generating plant
partially owned by AGC located in Warm Springs, Virginia.

                   "Bond Debt" means all Debt under the Bond Instruments.

                   "Bond Instruments" means (a) the Existing Indentures, (b) the
Indenture dated as of December 1, 1986 between AGC, as issuer, and U.S. Bank
Trust, National Association (successor trustee to Morgan Guaranty Trust Company
of New York), as trustee and (c) the Pollution Control Bond Indentures.

                   "Bond Lien Basket Debt" means all Debt which (a) is secured
by Liens over Assets of the Borrower or its Subsidiaries and (b) has been or may
be so secured without violating (i) an Existing Indenture in reliance upon the
Bond Lien Basket Provisions or (ii) Applicable Law.

                   "Bond Lien Basket Provision" means Section 1008(ix) of each
Existing Indenture.

                   "Borrower" has the meaning specified in the preamble to this
Agreement.

                   "Borrower Group Members" means the Borrower and all of its
Subsidiaries.

                   "Borrower Information" has the meaning set forth in Section
9.15(b).

                   "Buchanan Plant" means the 440MW gas-fired electric
generation plant which is wholly owned by Buchanan Generation, LLC (a Virginia
limited liability company) and located in Oakwood, Virginia.

                   "Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances (as defined in any Credit
Agreement), on which dealings are carried on in the London interbank market.

                   "Business Plan" means a business operating and financial
plan, prepared by the Borrower and the Parent, respectively, and setting forth
financial projections and pro forma balance sheets, income statements, cash flow
statements and a cash receipts and cash disbursements statement on a monthly
basis for the period commencing on January 1, 2003 until the date specified in
clause (a) of the definition of "Final Maturity Date" with respect to the
Borrower and its Subsidiaries and the Parent and its Subsidiaries, respectively;
provided that the Business Plan delivered as of the Closing Date shall not set
forth a cash receipts and disbursements statement.

                   "CapEx Budget" has the meaning set forth in Section 3.01(q).

                   "Capital Expenditures" means, for any Person for any period,
the sum of, without duplication, all expenditures made, directly or indirectly,
by such Person or any of its Subsidiaries during such period (whether financed
by cash or by Debt (including Obligations under Capitalized Leases) assumed or
incurred to fund, directly or indirectly, such expenditures) for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant or equipment on
a Consolidated balance sheet of such Person or have a useful life of more than
one year. For purposes of this definition, the purchase price of equipment that
is purchased simultaneously with the trade-in of existing equipment or with
insurance proceeds shall be included in Capital Expenditures only to the extent
of the gross amount of such purchase price less the credit granted by the seller
of such equipment for the equipment being traded in at such time or the amount
of such proceeds, as the case may be.

                   "Capitalized Leases" means all leases that have been or
should be, in accordance with GAAP, recorded as capitalized leases.

                   "Cash Collateral Account (Refinancing Lenders)" has the
meaning set forth in the Security Agreement.

                   "Cash Equivalents" has the meaning set forth in the Security
Agreement

                   "Casualty Event" has the meaning set forth in the Security
Agreement.

                   "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.

                   "CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.

                   "Change of Control" means the occurrence of any of the
following: (a) the Parent shall cease to own 100% of all issued and outstanding
Equity Interests in the Borrower (other than the ML Interests); (b) any Person
or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly,
of Voting Interests of the Parent (or other securities convertible into such
Voting Interests) representing 20% or more of the combined voting power of all
Voting Interests of the Parent; (c) during any period of up to 24 consecutive
months, commencing before or after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of the Parent (the
"Original Directors") shall cease for any reason to constitute a majority of the
board of directors of the Parent (unless replaced by individuals nominated or
proposed by the Original Directors); or (d) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of the Parent.

                   "Citibank" has the meaning specified in the preamble to this
Agreement.

                   "Closing Date" means the date on which all conditions
precedent in Section 3.01 have been satisfied (or waived as provided therein).

                   "Collateral" means all Assets of the Loan Parties that are or
are intended to be subject to any Lien in favor of the Collateral Agent for the
benefit of the Secured Parties under any Collateral Document.

                   "Collateral Agent" means Citibank, N.A., not in its
individual capacity except as otherwise expressly provided in any Financing
Document, but solely as collateral agent on behalf of the Secured Parties.

                   "Collateral Documents" means the Security Agreement, the
Mortgages, the Consents, the Springdale Consents and any other agreement that
creates or purports to create a Lien in favor of the Collateral Agent for the
benefit of the Secured Parties (including each mortgage executed pursuant to
Section 2.01 of the Security Agreement), or that acknowledges the creation of
such a Lien.

                   "Commitment" means, with respect to (a) any Lender, the
aggregate principal amount that such Lender is committed to lend to the Borrower
under the relevant Credit Agreement to which such Lender is a party, as such
commitment may be reduced from time to time pursuant to such Credit Agreement
and (b) the Refinancing Issuing Bank, the aggregate Available Amount of all
Refinancing Letters of Credit that the Refinancing Issuing Bank is committed to
issue or assume for the account of the Borrower under the Refinancing Credit
Agreement, as such commitment may be reduced from time to time pursuant to such
Credit Agreement.

                   "Consents" means each of the consent and agreements from each
Regulated Subsidiary with respect to the Material Contracts to which such
Regulated Subsidiary is a party, in each case, in the form or substantially in
the applicable form attached hereto as Exhibit A-1 or A-2, as applicable, or
such other form as may be mutually acceptable to the Representative Agents, the
Collateral Agent and the Borrower.

                   "Consolidated" refers to the consolidation of accounts in
accordance with GAAP.

                   "Consolidated Total Liabilities" means Consolidated total
liabilities, determined in accordance with GAAP, minus minority interest.

                   "Consolidated Total Tangible Assets" means Consolidated total
assets, determined in accordance with GAAP, minus goodwill.

                   "Constituent Documents" means, with respect to any Person,
(a) the articles or certificate of incorporation or other similar organizational
document of such Person, (b) the by-laws or other similar document of such
Person, (c) any certificate of designation or instrument relating to the rights
of holders (including preferred shareholders) of Equity Interests in such Person
and (d) any shareholder rights agreement or other similar agreement.

                   "Contest" means, with respect to the payment of Taxes or any
other claims or liabilities by any Person, to contest the validity or amount
thereof in good faith by appropriate proceedings timely instituted and
diligently pursued within the applicable statutory period and in accordance with
Applicable Law; provided that the following conditions are satisfied: (a) such
Person has posted a bond or other security in accordance with Applicable Law (if
required) or has established adequate reserves with respect to the contested
items in accordance with, and to the extent required by, GAAP; (b) during the
period of such contest, the enforcement of any contested item is effectively
stayed; (c) neither such Person nor any of its officers, directors or employees
nor any Secured Party or its respective officers, directors or employees is, or
could reasonably be expected to become, subject to any criminal liability or
sanction in connection with such contested items; and (d) no Lien relating to
such contest attaches to any Assets of such Person and becomes enforceable
against other creditors of such Person.

                   "Contingent Obligation" means, with respect to any Person,
any Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

                   "Controlled Account" has the meaning set forth in the
Security Agreement.

                   "Credit Agreements" means the Refinancing Credit Agreement,
the New Money Credit Agreement and the Springdale Credit Agreement.

                   "Current Liabilities" of any Person means all liabilities or
items of such Person that would, in accordance with GAAP, be classified as
current liabilities of a company conducting a business the same as or similar to
that of such Person.

                   "Deadlock Notice" has the meaning set forth in Section
7.01(c).

                   "Debt" of any Person (the "obligor") means, without
duplication, (a) all obligations of such Person for or in respect of moneys
borrowed or raised (whether or not for cash) by whatever means (including
acceptances, deposits, discounting, letters of credit, factoring (other than on
a non-recourse basis), and any other form of financing which is recognized in
accordance with GAAP in the obligor's financial statements as being in the
nature of a borrowing or is treated as "off-balance" sheet financing (including
all amounts financed under any Synthetic Lease or other synthetic financing
transaction)); (b) all Obligations of the obligor evidenced by notes, bonds,
debentures or other similar instruments other than any such instruments issued
in connection with accounts payable excluded pursuant to the parenthetical in
clause (c) below; (c) all Obligations of the obligor for the deferred purchase
price of property or services (other than accounts payable within 90 days of
being incurred arising in the ordinary course of such Person's business and not
more than 90 days past due and not subject to a Contest); (d) all obligations of
the obligor created or arising under any Finance Leases with respect to property
acquired by the obligor (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property); (e) all Obligations of the obligor as lessee under
Capitalized Leases; (f) all obligations, contingent or otherwise, of the obligor
under acceptance, letter of credit or similar facilities other than as issued
(i) in connection with Obligations excluded pursuant to clause (b) above or the
parenthetical in clause (c) above; or (ii) as credit support for leases which
are not Capitalized Leases or Finance Leases; (g) all Obligations of the obligor
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by the obligor (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property); (h) all Obligations of
the obligor to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Equity Interests in the obligor or any other Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of Redeemable Preferred Interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; (i) all
Obligations of the obligor in respect of Hedge Agreements; (j) all Contingent
Obligations of the obligor with respect to Debt; and (k) all indebtedness and
other payment Obligations referred to in clauses (a) through (j) above of
another Person secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by the obligor, even though the
obligor has not assumed or become liable for the payment of such indebtedness or
other payment Obligations.

                   "Debt/Equity Issuance" means any sale or issuance of Equity
Interests by the Parent or any of its Subsidiaries in the Parent or such
Subsidiary, respectively, or any incurrence or issuance of Debt for Borrowed
Money by the Parent or any of its Subsidiaries, other than (a) Debt under the
AYE Loan Documents, (b) Debt under the Financing Documents, (c) Permitted
Regulated Subsidiary Debt, (d) Debt owed to Affiliates to the extent such Debt
is permitted pursuant to Section 5.02(b)(vii) or (xi) of this Agreement, (e)
reimbursement obligations for amounts paid on behalf of the Parent or any of its
Subsidiaries in accordance with applicable requirements under the Public Utility
Holding Company Act of 1935 with respect to the provision of goods or services
to the Parent and one or more Subsidiaries of the Parent or to two or more
Subsidiaries of the Parent, (f) Debt under the BB&T Loan Documents (as defined
in the AYE Credit Agreement), (g) Debt under Capitalized Leases and purchase
money obligations permitted by Section 5.02(b)(x) or the AYE Credit Agreement,
(h) Debt incurred by the Parent or any of its Subsidiaries (other than an AESC
Company) pursuant to financial arrangements among the Parent and certain of its
Subsidiaries with respect to inter-company loans pursuant to the authorization
and restrictions of the Securities and Exchange Commission and (i) Equity
Interests issued after the date hereof by any Subsidiary of the Parent which is
made pro rata to holders of Equity Interests in such Subsidiary as of the
Closing Date or, in the case of the Borrower only, issued solely to the Parent.

                   "Debt for Borrowed Money" means Debt of the types specified
in (a) clauses (a), (b), (d) and (e) of the definition of Debt and (b) to the
extent relating to Debt of the types specified in one or more of clauses (a),
(b), (d) and (e) of the definition of Debt, clauses (j) and (k) thereof.

                   "Decision Period" means, with respect to any decision to be
made for purposes of Section 7.01, the period commencing on the date of the
notice delivered by the Refinancing Lender Agent pursuant to Section 7.01(c)
related thereto and ending ten Business Days after the date of such notice;
provided that if any of the Lenders shall require any extension of time to make
any such decision, such Person may, upon written notice to the Refinancing
Lender Agent (in the case of any Springdale Lender or New Money Lender, given
through its Representative Agent) within the Decision Period specified in the
notice of the Refinancing Lender Agent delivered thereunder, extend such
Decision Period for such Person for an additional period of time as specified in
such notice; provided further that any such extension shall not exceed ten
Business Days beyond the final date of the original Decision Period.

                   "Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.

                   "Depository Bank" has the meaning specified in the Security
Agreement.

                   "Disclosed Litigation" has the meaning specified in
Section 3.01(j).

                   "Documentation Agent" has the meaning specified in the
preamble to this Agreement.

                   "Dollars" and "$" mean the lawful currency of the United
States of America.

                   "DWR Contract" means, collectively, (a) the Master Power
Purchase and Sale Agreement made as of March 23, 2001 between ATF (as assignee
of the Borrower), as Party A thereunder, and California Department of Water
Resources, as Party B and (b) the Master Power Purchase and Sale Agreement made
as of April 20, 2001 between ATF (as assignee of the Borrower), as Party A
thereunder, and California Department of Water Resources, as Party B.

                   "EBITDA" means, for any period, the net income (or net loss)
of the Borrower and its Subsidiaries, determined on a Consolidated basis in
accordance with GAAP for such period, plus (a) to the extent deducted in
determining such net income (or loss) for such period, the sum of the following:
(i) minority interest (ii) Interest Expense, (iii) income tax expense (or any
provision therefor), (iv) depreciation expense, (v) amortization expense, (vi)
unrealized losses on Hedge Agreements and commodity contracts, and (vii) any
nonrecurring charges including, but not limited to, impairment charges,
extraordinary losses, adjustments for changes in accounting principles, losses
from sales of assets and terminations of related Hedge Agreements and commodity
contracts, charges related to generating plant cancellations, special employee
termination benefits and employee benefit plan curtailments as defined in GAAP
and changes in fair value of Hedge Agreements and other commodity contracts due
to changes in valuation techniques and assumptions to the extent such
nonrecurring charges do not involve any cash expenditure during such period,
minus (b) unrealized gains on Hedge Agreements and commodity contracts, and (c)
to the extent not deducted in determining such net income (or loss) for such
period any cash expenditure during such period in connection with which a
nonrecurring charge was taken and added back to "EBITDA" pursuant to clause (a)
above in any prior period; provided that amounts related to the Borrower's
special employee termination benefits and employee benefit plan curtailment as
defined by GAAP and amounts related to adjustments for changes in accounting
principles shall not be included in this clause (c).

                   "Eligible Assignee" means (a) with respect to any Lender,
(i) any other Lender; (ii) an Affiliate of a Lender; (iii) a commercial bank
organized under the laws of the United States, or any State thereof, and having
a combined capital and surplus of at least $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at least
$500,000,000; (v) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or a political subdivision of any such country, and
having a combined capital and surplus of at least $500,000,000, so long as such
bank is acting through a branch or agency located in the country in which it is
organized or another country that is described in this clause (v); (vi) the
central bank of any country that is a member of the OECD; and (vii) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having a combined capital and surplus of at least $500,000,000;
and (viii) any other Person approved by the Representative Agent for such Lender
and the Refinancing Issuing Bank (if such Lender is a Refinancing Lender), such
approval not to be unreasonably withheld or delayed and (b) with respect to the
Refinancing Issuing Bank, a Person that is an Eligible Assignee under
subclause (iii) or (v) (so long as such bank is acting through a branch or
agency located in the United States) of clause (a) of this definition and is
approved by the Refinancing Lender Agent, such approval not to be unreasonably
withheld or delayed; provided that neither the Borrower nor any Affiliate of the
Borrower shall qualify as an Eligible Assignee under this definition.

                   "Enforcement Action" has the meaning specified in the
Security Agreement.

                   "Enforcement Proceeds Account" has the meaning specified in
the Security Agreement.

                   "Environmental Action" means any action, suit, demand letter,
claim by any Governmental Authority, notice of non-compliance or violation,
notice of liability or potential liability, investigation, proceeding, consent
order or consent agreement relating to any Environmental Law, Environmental
Permit or Hazardous Material or arising from alleged injury or threat to health
and safety or the environment relating to any Environmental Law, including
(a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.

                   "Environmental Law" means any Federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or legally binding judicial or agency interpretation, policy
or guidance relating to pollution or protection of the environment, health and
safety as it relates to Hazardous Materials or natural resources, including
those relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.

                   "Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.

                   "Equity Interests" means, with respect to any Person, shares
of capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, non-Debt securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit interests in) such
Person, True Equity Interests or warrants, rights or options for the purchase or
other acquisition from such Person of such shares (or such other interests), and
other ownership or profit interests in such Person (including partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.

                   "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.

                   "ERISA Affiliate" means any Person that for purposes of
Title IV of ERISA is a member of the controlled group of any Borrower Group
Member, or under common control within the meaning of Section 414 of the
Internal Revenue Code, with any Borrower Group Member.

                   "ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been waived
by the PBGC or (ii) the requirements of Section 4043(b) of ERISA apply with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA,
of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding
waiver in accordance with Section 412(d) of the Internal Revenue Code with
respect to a Plan; (c) the provision by the administrator of any Plan of a
notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any
Borrower Group Member or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by any Borrower Group Member or any
ERISA Affiliate from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of a lien under Section 302(f) of ERISA have been met
with respect to any Plan; (g) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.

                   "Events of Default" has the meaning specified in
Section 6.01.

                   "Existing A Notes" means the 8.13% Notes due November 15,
2007 issued by Allegheny Energy Supply Statutory Trust 2001 pursuant to the
Indenture dated November 28, 2001 made by Allegheny Energy Supply Statutory
Trust 2001 in favor of Bank One Trust Company, N.A., as indenture trustee.

                   "Existing Debt" means all Debt, as of the date hereof, of the
Borrower and its Subsidiaries.

                   "Existing Hedge Agreements" means those Hedge Agreements
listed on Part G of Schedule I.

                   "Existing Indentures" means (a) the Indenture dated March 15,
2001 between the Borrower, as issuer, and Bank One Trust Company, N.A., as
trustee and (b) the Indenture dated as of April 8, 2002 between the Borrower, as
issuer, and Bank One Trust Company, N.A., as trustee.

                   "Existing Lender Debt" has the meaning specified in
Preliminary Statement (1) of this Agreement.

                   "Existing Lender Debt Documents" has the meaning specified in
Preliminary Statement (1) of this Agreement.

                   "Existing Lenders" has the meaning specified in Preliminary
Statement (1) of this Agreement.

                   "Existing Letters of Credit" has the meaning specified in
Preliminary Statement (2) of this Agreement.

                   "Existing Springdale Debt" has the meaning specified in
Preliminary Statement (3) of this Agreement.

                   "Existing Springdale Documents" has the meaning specified in
Preliminary Statement (3) of this Agreement.

                   "Existing Springdale Debt Documents" has the meaning
specified in Preliminary Statement (3) of this Agreement.

                   "Existing Springdale Equity Documents" has the meaning
specified in Preliminary Statement (3) of this Agreement.

                   "Existing Springdale Equity Participations" has the meaning
specified in Preliminary Statement (3) of this Agreement.

                   "Existing Springdale Lease Participations" has the meaning
specified in Preliminary Statement (3) of this Agreement.

                   "Existing Springdale Lenders" has the meaning specified in
Preliminary Statement (3) of this Agreement.

                   "Extraordinary Receipt" means any cash received by or paid to
or for the account of any Person not in the ordinary course of business,
including tax refunds, pension plan reversions, proceeds of insurance (including
any key man life insurance but excluding proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and any purchase price adjustment received in connection with any
purchase agreement; provided that an Extraordinary Receipt shall not include
cash receipts received from proceeds of insurance, condemnation awards (or
payments in lieu thereof) or indemnity payments to the extent that such
proceeds, awards or payments (a) in respect of loss or damage to equipment,
fixed assets or real property are applied (or in respect of which expenditures
were previously incurred) to replace or repair the equipment, fixed assets or
real property in respect of which such proceeds were received in accordance with
the terms of the Financing Documents, so long as such application is made within
twelve months after the occurrence of such damage or loss or (b) are received by
any Person in respect of any third party claim against such Person and applied
to pay (or to reimburse such Person for its prior payment of) such claim and the
costs and expenses of such Person with respect thereto.

                   "Facility Only Acceleration Notice" has the meaning specified
in Section 6.02(b).

                   "Facilities" means, collectively, the New Money Facility, the
Refinancing Facility and the Springdale Facility; each, individually, a
"Facility".

                   "Facility Information" has the meaning set forth in Section
9.15(c).

                   "Federal Book Entry Regulations" means (a) the federal
regulations contained in Subpart B ("Treasury/Reserve Automated Debt Entry
System (TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R. Part
357, 31 C.F.R. Section 357.2, Section 357.10 through Section 357.14 and
Section 357.41 through Section 357.44 and (b) to the extent substantially
identical to the federal regulations referred to in clause (a) above (as in
effect from time to time), the federal regulations governing other book-entry
securities.

                   "Fee Letters" means, collectively, (a) each fee letter, if
any, between the Borrower and an Agent and (b) each fee letter, if any, among
the Borrower, the Parent and one or more Arrangers.

                   "Final Maturity Date" means the earlier of (a) April 18, 2005
and (b) the date of acceleration of all outstanding Advances and termination in
whole of the Commitments pursuant to Article VI.

                   "Finance Lease" means, for any Person, any lease, any hire
purchase, conditional sale or other form of title retention agreement which is
recognized, in accordance with GAAP, in such Person's financial statements as
being in the nature of a borrowing.

                   "Financial Advisor" means Lazard, LLC or any other financial
institution appointed by the Borrower as financial advisor to the Borrower which
is acceptable to the Required Lenders.

                   "Financing Documents" means the Credit Agreements, the Bank
Notes, the Collateral Documents, the Fee Letters, the Letter of Credit
Agreements (as defined in the Refinancing Credit Agreement), the Account Control
Agreements and the Intercreditor Agreement.

                   "Fiscal Year" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on December 31 in any calendar year.

                   "FTI" means FTI Consulting, Inc. or any successor consultant
appointed by legal counsel to the New Money Lender Agent and reasonably
acceptable to the Borrower.

                   "Funds Flow Memorandum" has the meaning specified in Section
3.01(l).

                   "GAAP" has the meaning set forth in Section 1.02(c).

                   "Governmental Approvals" has the meaning specified in
Section 4.01(d).

                   "Governmental Authority" means any national, state, county,
city, town, village, municipal or other de jure or de facto government
department, commission, board, bureau, agency, authority or instrumentality of a
country or any political subdivision thereof, and any Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to any of the foregoing entities, including all commissions, boards,
bureaus, arbitrators and arbitration panels, and any authority or other Person
controlled by any of the foregoing.

                   "Grantors" has the meaning specified in the preamble to this
Agreement.

                   "Group Assets" means all Assets of the Loan Parties other
than (a) the Springdale Assets, (b) the Assets of AGC, (c) the Assets of
Buchanan Generation, LLC (a Delaware limited liability company), (d) Equity
Interests in, and Assets of, each of NYC Energy LLC and Mon Synfuel, LLC (each,
a Delaware limited liability company) and (e) Assets of Conemaugh Fuels LLC (a
Delaware limited liability company).

                   "Hagerstown" means Hagerstown Trust Company, a national
banking association.

                   "Hagerstown Credit Agreement" means the Credit Agreement
dated as of the date hereof, among the AYE Borrowers, as borrowers, and
Hagerstown, as lender, as in effect on the date hereof and as amended, amended
and restated, supplemented or otherwise modified in accordance with the AYE
Credit Agreement.

                   "Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.

                   "Hedge Agreements" means all agreements relating to rate
swaps, basis swaps, forward rate transactions, commodity swaps, commodity
options, equity or equity index swaps, equity or equity index options, bond
options, interest rate options, foreign exchange transactions, cap transactions,
floor transactions, collar transactions, forward transactions, currency swap
transactions, cross currency rate swap transactions, currency options or any
other similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest
rates, foreign currencies, commodity prices, equity prices or other financial
measures (excluding in each case (a) the Affiliate Energy Contracts, (b) the DWR
Contract, (c) commodity purchase contracts for commodities used in the operation
and maintenance of physical Assets of the Borrower or any of its Subsidiaries,
(d) agreements for the sale of capacity, energy or ancillary services in an
aggregate amount the delivery of which may be satisfied using the installed
capacity (including projected additions thereto) of all power plants of the
Borrower and its Subsidiaries, in each case, in the ordinary course of business
and entered into in accordance with the Business Plan and (e) agreements for the
purchase of capacity, energy and ancillary services, in each case to the extent
necessary to satisfy corresponding obligations under any provider of last resort
contract which relates to an Asset disposed of pursuant to an Asset Sale
permitted under Section 5.02(e) if (i) such agreement is for a term ending no
earlier than six months after the date specified in clause (a) of the definition
of "Final Maturity Date" and (ii) payments under such agreement (or all such
agreements, if more than one such agreement is entered into to satisfy
corresponding obligations under any provider of last resort contract) do not, at
any time, exceed payments then due under such provider of last resort contract).

                   "Indemnified Costs" has the meaning set forth in Section
8.09.

                   "Indemnified Party" has the meaning set forth in Section
9.01(a).

                   "Indenture Trustee" means Law Debenture Trust Company of New
York.

                   "Independent Engineer" has the meaning set forth in the
Security Agreement.

                   "Information Memorandum" means the information memorandum
dated December, 2002 used by the Arrangers in connection with the syndication of
the Facilities.

                   "Initial Controlled Accounts" means all those bank and
securities accounts of the Borrower and the other Grantors set forth in Part A
of Schedule 4.01(z).

                   "Initial Pledged Equity" means, with respect to any Grantor,
the Equity Interests set forth opposite such Grantor's name on and as otherwise
described in Part I of Schedule II to the Security Agreement and issued by the
Persons named therein.

                   "Insolvency Proceeding," with respect to any Person, means
(a) any proceeding shall be instituted against such Person seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property and either such proceeding shall remain undismissed or unstayed
for a period of 60 consecutive days or the entry by any competent Governmental
Authority of any jurisdiction or a court having jurisdiction in the premises of
a decree or order approving or ordering any of the actions sought in such
proceeding (including the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or any substantial part of its property); or (b) commencement by such Person of
a voluntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated as bankrupt or insolvent, or the consent by such Person to the entry
of a decree or order for relief in respect of such Person in an involuntary case
or proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against such Person, or the filing by such Person of a petition or
answer or consent seeking reorganization or relief under any Applicable Law; or
consent by such Person to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Person or of any substantial part
of the property of such Person, or the making by such Person of an assignment
for the benefit of creditors or any other marshalling of the assets and
liabilities of such Person, or the admission by such Person in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by such Person in furtherance of any such action.

                   "Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18)
of ERISA.

                   "Insurance Consultant" has the meaning set forth in the
Security Agreement.

                   "Insurance Proceeds Account" has the meaning set forth in the
Security Agreement.

                   "Intercreditor Agent" has the meaning specified in the
Security Agreement.

                   "Intercreditor Agreement" means the Intercreditor Agreement,
dated as of the date hereof, among the Representative Agents, the Indenture
Trustee, the AYE Lender Agent, the AYE/AESC Intercreditor Agent, the Borrower
and the Parent.

                   "Interest Coverage Ratio" means, at any date of determination
with respect to any period, the ratio of (a) EBITDA to (b) the aggregate amount
of Interest Expenses during such period.

                   "Interest Expense" means interest charges (excluding
capitalized interest), incurred or accrued by the Borrower and its Subsidiaries,
solely to the extent paid or payable in cash.

                   "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.

                   "Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all of
the business of such Person, any capital contribution to such Person or any
other direct or indirect investment in such Person, including any acquisition by
way of a merger or consolidation and any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (j) or (k) of the
definition of "Debt" in respect of such Person.

                   "JPMC" has the meaning specified in the preamble to this
Agreement.

                   "Lenders" means the Refinancing Lenders, the New Money
Lenders and the Springdale Lenders; each, individually, a "Lender".

                   "Lien" means any lien, mortgage, deed of trust, pledge,
security interest or other charge or encumbrance of any kind, including the lien
or retained security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property.

                   "Limited Payment Default" means the occurrence of an Event of
Default under Section 6.01(a) with respect to one or two, but not all three,
Facilities.

                   "Loan Parties" means the Borrower and the other Grantors.

                   "Mandatory Capital Expenditures" means Capital Expenditures
required to be made by or under any Applicable Law which becomes effective after
the date hereof or that is necessary with respect to mandatory service
obligations of a Borrower Group Member or safety and reliability of any Asset of
a Borrower Group Member and, in each case, which is not a Scheduled Capital
Expenditure.

                   "Margin Stock" has the meaning specified in Regulation U.

                   "Market Consultant"

means PA Consulting Group, Inc. or any successor consultant appointed by the New
Money Lender Agent and reasonably acceptable to the Borrower.

                   "Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of (i) the Borrower or (ii) the Borrower Group Members,
taken as a whole, (b) the rights and remedies of any Secured Party under any
Financing Document or (c) the ability of any Loan Party to perform its
Obligations under any Relevant Document to which it is or is to be a party.

                   "Material Contracts" means (a) the DWR Contract, (b) the
Affiliate Energy Contracts, (c) the Operating Agreements and (d) the Tax
Allocation Agreement.

                   "Material Governmental Approvals" means those Governmental
Approvals listed in Part A of Schedule 4.01(d).

                   "Material Properties" means those properties listed on
Schedule 4.01(r) as "Material Properties".

                   "ML Interests" means the up to 2% of all issued and
outstanding Equity Interests in the Borrower which are owned by ML IBK
Positions, Inc, a Delaware corporation.

                   "Mortgage Policies" means the title insurance policies
insuring the Mortgages delivered pursuant to Sections 3.02, 3.03, 3.04 and
5.01(t).

                   "Mortgages" means the New Money Mortgages, the Refinancing
Mortgages, the Springdale Mortgages (Springdale Lenders), the Second New Money
Mortgages and all mortgages executed pursuant to Section 5.01(t)(vi) with
respect to Acquired Real Property.

                   "Mortgage/Loan Inspection Surveys" means boundary surveys
confirming the location of the facilities which are being secured pursuant to
the Mortgages.

                   "Mountaineer Gas" means Mountaineer Gas Company, a West
Virginia corporation.

                   "MPC" means Monongahela Power Company, a corporation
incorporated under the laws of the State of Ohio.

                   "Multiemployer Plan" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which any Borrower Group Member or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.

                   "Multiple Employer Plan" means a single-employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
any Borrower Group Member or any ERISA Affiliate and at least one Person other
than the Borrower Group Members and the ERISA Affiliates or (b) was so
maintained and in respect of which any Borrower Group Member or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.

                   "Net Cash Proceeds" means, with respect to any Asset Sale or
Debt/Equity Issuance by any Person, or any Extraordinary Receipt received by or
paid to or for the account of any Person, the aggregate amount of cash received
from time to time (whether as initial consideration or through payment or
disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) the following (to the extent directly and primarily relating to
such transaction): (a) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal, consultant and advisor fees, finder's
fees and other similar fees and commissions, (b) the amount of taxes (or amounts
owing pursuant to the Tax Allocation Agreement) payable in connection with or as
a result of such transaction and (c) in the case of any Asset Sale (other than
any Sale of the DWR Contract), (i) the amount of any Debt (including Debt under
the Pollution Control Bonds) secured by a prior Lien on the Asset which is the
subject of such Sale that is repaid, redeemed or defeased upon such disposition
as required pursuant to the terms of (A) the agreement or instrument governing
such Debt or (B) any undertaking or agreement of the Borrower made on or prior
to the Closing Date in favor of the issuer of any guaranty, surety bond or
insurance policy issued for the benefit of the holders of such Debt, including,
each of the consents, dated February 21, 2003, entered into among (1) the
Borrower, PEC and MBIA Insurance Corporation and (2) the Borrower, WPPC and MBIA
Insurance Corporation and (ii) the costs associated (in the Borrower's best
estimate) with terminating all Hedge Agreements, if any, entered into in
connection with such Asset, which Hedge Agreements are not being sold as part of
such Asset Sale, but only to the extent that the amounts so deducted are, at the
time or within a reasonable time (not to exceed ten days) of receipt of such
cash, actually paid to a Person that is not an Affiliate of such Person or any
Loan Party or any Affiliate of any Loan Party and are properly attributable to
such transaction or to the Asset that is the subject thereof; provided that, in
the case of taxes or termination costs that are deductible under clause (b) or
(c)(ii) above but for the fact that, at the time of receipt of such cash, such
amounts have not been actually paid or are not then payable, such Person may
deduct an amount (the "Reserved Amount") equal to the amount reserved in
accordance with GAAP for such Person's reasonable estimate of such amounts,
other than taxes for which such Person is indemnified; provided further that, at
the time such amounts are paid, an amount equal to the amount, if any, by which
the Reserved Amount for such amounts exceeds the amount of such amounts actually
paid shall constitute "Net Cash Proceeds" of the type for which such amounts
were reserved for all purposes hereunder.

                   "New Money Closing" means the time at which all conditions
precedent in Section 3.02 have been satisfied (or waived as provided in Section
3.04(b)).

                   "New Money Credit Agreement" means the Credit Agreement dated
as of the date hereof, among the Borrower, as borrower, the New Money Lenders
and the New Money Lender Agent.

                   "New Money Facility" means the $470,000,000 secured loan
facility made, or to be made, available to the Borrower pursuant to the New
Money Credit Agreement and the other Financing Documents.

                   "New Money Lender" means each of the banks, financial
institutions and other lenders that is listed on the signature pages hereto as a
"New Money Lender" and each other Person that may become a "New Money Lender"
party to the New Money Credit Agreement pursuant to the terms hereof and thereof
from time to time, in either case so long as such Person continues to be a party
to the New Money Credit Agreement.

                   "New Money Lender Agent" has the meaning specified in the
preamble to this Agreement.

                   "New Money Liens" means all Liens created or purported to be
created on the Springdale Assets and the Group Assets, securing the New Money
Obligations owing from time to time.

                   "New Money Maturity Date" means the earlier of September 30,
2004 and the date of acceleration of all outstanding Advances and termination in
whole of the Commitments pursuant to Article VI.

                   "New Money Mortgages" means the mortgages (in the form or in
substantially the form attached hereto as Exhibit D-1 or D-2, as applicable,
with such changes as may be required to account for local law matters and
otherwise in form and substance satisfactory to the Representative Agents)
executed pursuant to Section 3.02 securing the Advances to be made under the New
Money Credit Agreement on the New Money Closing.

                   "New Money Obligations" means all Obligations owing by the
Loan Parties to the New Money Lenders and their agents (including the New Money
Lender Agent, the Collateral Agent and the Intercreditor Agent) under the
Financing Documents.

                   "New Real Property" has the meaning specified in Section
3.01(k)(i).

                   "Non-UCC Property" means all personal property the creation,
granting or perfection of a Lien upon or in which is governed by Applicable Law
other than the UCC and Applicable Law under, or relating to, the UCC.

                   "Noteholder Liens" means all Liens created or purported to be
created on the Springdale Assets and the Group Assets, securing Obligations (or
any portion thereof) owing from time to time under the Amended Notes and the
Refinancing Indenture with respect thereto (excluding, for the avoidance of
doubt, the Amended C Note Obligations), in each case, in accordance with
Sections 2.01 and 2.02 of the Security Agreement.

                   "Noteholder Obligations" means all Obligations owing by the
Loan Parties to the Noteholders and their agents (including the Indenture
Trustee, the Collateral Agent and the Intercreditor Agent) under the Assumption
Documents, the Refinancing Indenture and the Amended Notes.

                   "Noteholders" means the holders of the Amended A Notes and
the Amended B Notes (each as defined in the Security Agreement).

                   "Notice of Bank Facility Default" has the meaning specified
in Section 7.01(c).

                   "NPL" means the National Priorities List under CERCLA.

                   "Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including 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(f).
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Financing Documents include (a) the obligation to pay principal,
interest, Refinancing Letter of Credit commissions, charges, expenses, fees,
attorneys' and consultants' fees and disbursements, indemnities and other
amounts payable by such Loan Party under any Financing Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any of the
foregoing that any Secured Party, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.

                   "OECD" means the Organization for Economic Cooperation and
Development.

                   "Officer's Certificate" means, with respect to any Person, a
certificate signed by a Responsible Officer of such Person.

                   "Operating Account Bank" means each bank or financial
institution with whom an Operating Account is maintained.

                   "Operating Accounts" means all those bank and securities
accounts of the Borrower and the other Grantors set forth in Part B of Schedule
4.01(z).

                   "Operating Agreements" means the agreements listed in
Schedule VIII to the Security Agreement.

                   "Other Perfection Requirements" means (a) the giving of
notice to any Person (other than an Affiliate of the Borrower or an Operating
Account Bank) of the Liens created by the Grantors under the Collateral
Documents and (b) any recording, notice, filing, registration, instrument or act
required to be undertaken, made or executed in order to grant or perfect any
Lien over Non-UCC Property.

                   "OVEC Agreement" means the Inter-Company Power Agreement,
dated as of July 10, 1953, among the Borrower, Ohio Valley Electric Corporation,
Appalachian Power Company, The Cincinnati Gas & Electric Company, Columbus
Southern Power Company, The Dayton Power and Light Company, Indiana Michigan
Power Company, Kentucky Utilities Company, Louisville Gas and Electric Company,
Monongahela Power Company, Ohio Edison Company, Ohio Power Company, Pennsylvania
Power Company, Southern Indiana Gas and Electric Company and The Toledo Edison
Company, as amended, modified or supplemented from time to time.

                   "OVEC Interest" means the rights and interests of the
Borrower in, to and under the OVEC Agreement.

                   "Parent" means Allegheny Energy, Inc., a Maryland
corporation.

                   "Partial Sale" means (a) any Sale by a Loan Party of some,
but not all, of its ownership interest in any electric generating plant which is
wholly or partially owned by such Loan Party or (b) any Sale by a Loan Party of
some, but not all, of its Equity Interests in any Person which directly or
indirectly wholly or partially owns any electric generating plant.

                   "PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).

                   "PCB Liens" means Liens existing on the date hereof securing
Pollution Control Bonds.

                   "PEC" means The Potomac Edison Company, a corporation
incorporated under the laws of the State of Maryland and of the State of
Virginia.

                   "Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Section 5.01(d); (b) Liens
imposed by law, such as materialmen's, mechanics', carriers', workmen's and
repairmen's Liens and other similar Liens arising in the ordinary course of
business securing obligations that are not overdue for a period of more than
60 days, except for such materialmen's, mechanics', carriers', workmen's and
repairmen's Liens which are senior to the priority of any Mortgage; (c) Liens or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) surety and appeal
bonds, bid bonds and performance and return of money bonds; (e) easements,
rights of way and other encumbrances on title to real property that do not
render title to the property encumbered thereby unmarketable or materially
adversely affect the use of such property for its present purposes; (f) PCB
Liens; (g) Liens relating to claims or liabilities against any Borrower Group
Member, the validity or amount of which are being contested in good faith by
appropriate proceedings timely instituted and diligently pursued within the
applicable statutory period and in accordance with Applicable Law; provided that
the following conditions are satisfied: (i) such Borrower Group Member has
posted a bond or other security in accordance with Applicable Law (if required)
or has established adequate reserves with respect to the contested items in
accordance with, and to the extent required by, GAAP; (ii) during the period of
such contest, the enforcement of any contested item is effectively stayed; (iii)
neither such Borrower Group Member nor any of its officers, directors or
employees nor any Bank Lender Party, Noteholder or Secured Party nor any of
their respective officers, directors or employees is, or could reasonably be
expected to become, subject to any criminal liability or sanction in connection
with such contested items; and (iv) the aggregate market value of all Assets at
any time subject to Liens under this clause (g) shall not exceed $5,000,000; (h)
set-off rights with respect to the Operating Accounts and pursuant to contracts
entered into in the ordinary course of business on reasonable market terms and
in accordance with the Financing Documents; and (i) Liens against which a
deposit has been made with the title insurance company in connection with the
issuance of a Mortgage Policy in form and substance acceptable to the
Representative Agents.

                   "Permitted Regulated Subsidiary Debt" means any Debt incurred
by a Regulated Subsidiary or Mountaineer Gas after the date hereof which (a)
matures no earlier than the date occurring six months after the date specified
in clause (a) of the definition of "Final Maturity Date" and does not require
any amortization or mandatory prepayment prior to such date and (b) the proceeds
of which are (i) used by such Regulated Subsidiary or Mountaineer Gas (as
applicable) upon receipt thereof to refinance Debt of such Regulated Subsidiary
or Mountaineer Gas (as applicable) in existence on the Closing Date in
accordance with the AYE Loan Documents as in effect on the date hereof, or (ii)
used upon, or reserved by such Regulated Subsidiary or Mountaineer Gas (as
applicable) to be used within twelve months after, receipt by such Regulated
Subsidiary or Mountaineer Gas (as applicable) thereof to fund Capital
Expenditures of such Regulated Subsidiary or Mountaineer Gas (as applicable)
which are (A) included in the CapEx Budget or (B) mandated or required by
Applicable Law or necessary with respect to the mandatory service obligations of
such Regulated Subsidiary or Mountaineer Gas (as applicable) or with respect to
safety and reliability, in the case of clause (ii)(B), up to an aggregate
principal amount of $50,000,000 in any calendar year.

                   "Person" means an individual, partnership, corporation
(including a business or statutory trust), limited liability company, joint
stock company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.

                   "Plan" means a Single-Employer Plan or a Multiple Employer
Plan.

                   "Pledged Account Bank" has the meaning set forth in the
Security Agreement.

                   "Pledged Accounts" has the meaning set forth in the Security
Agreement.

                   "Pledged Debt" has the meaning set forth in the Security
Agreement.

                   "Pledged Equity" has the meaning set forth in the Security
Agreement.

                   "Pollution Control Bonds" means all notes, bonds and other
instruments evidencing Debt issued pursuant to the Pollution Control Bond
Indentures.

                   "Pollution Control Bond Indentures" means (a) the Trust
Indenture dated as of April 15, 1992 between the County Commission of Harrison
County, West Virginia and JP Morgan Chase Trust Company, N.A. (formerly Chase
Manhattan Trust Company, N.A., successor trustee to Mellon Bank, N.A.), as
Trustee, providing for Solid Waste Disposal Revenue Bonds (West Penn Power
Company Harrison Station Project), (b) the Trust Indenture dated as of November
1, 1977 between Pleasants County, West Virginia and JP Morgan Chase Trust
Company, N.A. (formerly Chase Manhattan Trust Company, N.A., successor trustee
to Mellon Bank, N.A.), as Trustee, providing for Pollution Control Revenue Bonds
(West Penn Power Company Pleasants Station Project), (c) the Trust Indenture
dated as of December 1, 1980 between Washington County Industrial Development
Authority and JP Morgan Chase Trust Company, N.A. (formerly Chase Manhattan
Trust Company, N.A., successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Pollution Control Revenue Bonds (West Penn Power Company Mitchell
Station Project), (d) the Trust Indenture dated as of April 15, 1983 between the
County Commission of Monongalia County, West Virginia and JP Morgan Chase Trust
Company, N.A. (formerly Chase Manhattan Trust Company, N.A., successor trustee
to Mellon Bank, N.A.), as Trustee, providing for Pollution Control Revenue Bonds
(West Penn Power Company Fort Martin Station Project), (e) the Trust Indenture
dated as of February 1, 1977 between Greene County Industrial Development
Authority and JP Morgan Chase Trust Company, N.A. (formerly Chase Manhattan
Trust Company, N.A., successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Pollution Control Revenue Bonds (West Penn Power Company
Hatfield's Ferry Project), (f) the Trust Indenture dated as of April 15, 1992
between the County Commission of Harrison County, West Virginia and JP Morgan
Chase Trust Company, N.A. (formerly Chase Manhattan Trust Company, N.A.,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for Solid Waste
Disposal Revenue Bonds (The Potomac Edison Company Harrison Station Project),
(g) the Trust Indenture dated as of November 1, 1977 between Pleasants County,
West Virginia and JP Morgan Chase Trust Company, N.A. (formerly Chase Manhattan
Trust Company, N.A., successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Pollution Control Revenue Bonds (The Potomac Edison Company
Pleasants Station Project), (h) the Trust Indenture dated as of April 15, 1983
between the County Commission of Monongalia County, West Virginia and JP Morgan
Chase Trust Company, N.A. (formerly Chase Manhattan Trust Company, N.A.,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for Pollution
Control Revenue Bonds (The Potomac Edison Company Fort Martin Station Project),
(i) the Trust Indenture dated as of February 1, 1977 between Greene County
Industrial Development Authority and JP Morgan Chase Trust Company, N.A.
(formerly Chase Manhattan Trust Company, N.A., successor trustee to Mellon Bank,
N.A.), as Trustee, providing for Pollution Control Revenue Bonds (The Potomac
Edison Company Hatfield's Ferry Project), (j) the Trust Indenture dated as of
December 15, 1975 between the County Commission of Pleasants County, West
Virginia and JP Morgan Chase Trust Company, N.A. (formerly Chase Manhattan Trust
Company, N.A., successor trustee to Mellon Bank, N.A.), as Trustee, securing
Pollution Control Revenue Bonds (Monongahela Power Company Project), (k) the
Trust Indenture dated as of February 1, 1977 between Greene County Industrial
Development Authority and JP Morgan Chase Trust Company, N.A. (formerly Chase
Manhattan Trust Company, N.A., successor trustee to Mellon Bank, N.A.), as
Trustee, providing for Pollution Control Revenue Bonds (Monongahela Power
Company Hatfield's Ferry Project), (l) the Trust Indenture dated as of
November 1, 1977 between Pleasants County, West Virginia and JP Morgan Chase
Trust Company, N.A. (formerly Chase Manhattan Trust Company, N.A., successor
trustee to Mellon Bank, N.A.), as Trustee, providing for Pollution Control
Revenue Bonds (Monongahela Power Company Pleasants Station Project), (m) the
Trust Indenture dated as of April 15, 1983 between the County Commission of
Monongalia County, West Virginia and JP Morgan Chase Trust Company, N.A.
(formerly Chase Manhattan Trust Company, N.A., successor trustee to Mellon Bank,
N.A.), as Trustee, providing for Pollution Control Revenue Bonds (Monongahela
Power Company Fort Martin Station Project), (n) Trust Indenture dated as of
April 15, 1992 between the County Commission of Harrison County, West Virginia
and JP Morgan Chase Trust Company, N.A. (formerly Chase Manhattan Trust Company,
N.A., successor trustee to Mellon Bank, N.A.), as Trustee, providing for Solid
Waste Disposal Revenue Bonds (Monongahela Power Company Harrison Station
Project), (o) Trust Indenture dated as of December 15, 1975 between the County
Commission of Marion County, West Virginia and JP Morgan Chase Trust Company,
N.A. (formerly Chase Manhattan Trust Company, N.A., successor trustee to Mellon
Bank, N.A.), as Trustee, securing Pollution Control Revenue Bonds (Monongahela
Power Company Project) and (p) Trust Indenture dated as of December 15, 1975
between the County Commission of Preston County, West Virginia and JP Morgan
Chase Trust Company, N.A. (formerly Chase Manhattan Trust Company, N.A.,
successor trustee to Mellon Bank, N.A.), as Trustee, securing Pollution Control
Revenue Bonds (Monongahela Power Company Project).

                   "Preferred Interests" means, with respect to any Person,
Equity Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or upon
liquidation.

                   "Prepayment Amount (AYE Lenders)" means, as of any date, with
respect to any Debt/Equity Issuance by the Borrower or any of its Subsidiaries,
an amount equal to (a) the Net Cash Proceeds of such Debt/Equity Issuance,
multiplied by (b) the Proportionate Share (AYE Debt); provided that,
notwithstanding the foregoing, if the Refinancing Obligations, the Springdale
Obligations and the Noteholder Obligations are fully secured by the Group Assets
and the Springdale Assets pursuant to the Collateral Documents, the Prepayment
Amount (AYE Lenders) with respect to the initial $250,000,000 of Net Cash
Proceeds of the aggregate of all Debt/Equity Issuances involving only the sale
or issuance of True Equity Interests by the Parent shall be zero.

                   "Proportionate Share (AYE Debt)" means, as of any date, a
fraction (expressed as a fraction, carried out to the ninth decimal point), (a)
the numerator of which is the sum of (i) the aggregate outstanding principal
amount owing by the Parent under the Hagerstown Credit Agreement on such date
and (ii) the aggregate Loan Commitments (as defined in the AYE Credit Agreement)
of the AYE Lenders on such date (or, if such commitments have been terminated,
the aggregate principal amount of all outstanding loans under the AYE Credit
Agreement on such date) and (b) the denominator of which is the sum of (i) the
aggregate principal amount outstanding under each of the Hagerstown Credit
Agreement, the Refinancing Credit Agreement, the Amended Notes and the
Springdale Credit Agreement on such date, (ii) the aggregate Available Amount of
all Refinancing Letters of Credit outstanding on such date, (iii) the aggregate
Loan Commitments (as defined in the AYE Credit Agreement) of the AYE Lenders on
such date (or, if such commitments have been terminated, the aggregate principal
amount of all outstanding loans under the AYE Credit Agreement on such date) and
(iv) the aggregate Commitments of the New Money Lenders on such date (or, if
such Commitments have been terminated, the aggregate principal amount of all
outstanding Advances made by the New Money Lenders on such date).

                   "PUHCA" means the Public Utility Holding Company Act of 1935,
as amended.

                   "Redeemable" means, with respect to any Equity Interest, any
Debt or any other right or Obligation, any such Equity Interest, Debt, right or
Obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.

                   "Refinancing Closing" means the time at which all conditions
precedent in Section 3.03 have been satisfied (or waived as provided in Section
3.04(c)).

                   "Refinancing Credit Agreement" means the Credit Agreement
dated as of the date hereof, among the Borrower, as borrower, the Refinancing
Lenders, the Refinancing Issuing Bank and the Refinancing Lender Agent.

                   "Refinancing Facility" means the $987,657,215.77 loan
facility, with up to $200,000,000 thereof made, or to be made, available in the
form of Refinancing Letters of Credit, to be made available to the Borrower
pursuant to the Refinancing Credit Agreement and the other Financing Documents.

                   "Refinancing Indenture" means the Amended and Restated
Indenture, dated as of the date hereof, between the Borrower, as issuer, the
Indenture Trustee, and Bank One Trust Company, N.A., in respect of the 10.25%
Senior Notes due 2007.

                   "Refinancing Issuing Bank" has the meaning specified in the
preamble to this Agreement.

                   "Refinancing Lender" means each of the banks, financial
institutions and other lenders that is listed on the signature pages hereto as a
"Refinancing Lender" and each other Person that may become a "Refinancing
Lender" party to the Refinancing Credit Agreement pursuant to the terms hereof
and thereof from time to time, in either case so long as such Person continues
to be a party to the Refinancing Credit Agreement.

                   "Refinancing Lender Agent" has the meaning specified in the
preamble to this Agreement.

                   "Refinancing Lender Parties" means the Refinancing Lenders
and the Refinancing Issuing Bank.

                   "Refinancing Letters of Credit" means letters of credit
issued or assumed by the Refinancing Issuing Bank pursuant to the Refinancing
Credit Agreement.

                   "Refinancing Liens" means all Liens created or purported to
be created on the Springdale Assets and the Group Assets, securing Obligations
(or any portion thereof) owing from time to time to the Refinancing Lender
Parties and their agents (including the Refinancing Lender Agent, the Collateral
Agent and the Intercreditor Agent) in each case, in accordance with Sections
2.01 and 2.02 of the Security Agreement.

                   "Refinancing Obligations" means all Obligations owing by the
Loan Parties to the Refinancing Lender Parties and their agents (including the
Refinancing Lender Agent, the Collateral Agent and the Intercreditor Agent)
under the Financing Documents.

                   "Refinancing Mortgages" means the mortgages (in the form or
in substantially the form attached hereto as Exhibit E-1 or E-2, as applicable,
with such changes as may be required to account for local law matters and
otherwise in form and substance satisfactory to the Representative Agents)
executed pursuant to Section 3.03 securing the Secured Loan Advances (as defined
in the Security Agreement) under each of the Refinancing Credit Agreement and
the Springdale Credit Agreement and the Amended Secured Notes (as defined in the
Security Agreement).

                   "Regulated Subsidiaries" means, collectively, MPC, PEC and
WPPC.

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

                   "Related Lenders" shall mean, with respect to (a) the
Refinancing Lender Agent, the Refinancing Lender Parties, (b) the New Money
Lender Agent, the New Money Lenders and (c) the Springdale Lender Agent, the
Springdale Lenders.

                   "Relevant Document" shall mean the Financing Documents and
the Material Contracts.

                   "Relevant Properties" means those properties listed on
Schedule 4.01(r) as "Relevant Properties".

                   "Remedies Effective Date" has the meaning set forth in
Section 7.01(g).

                   "Representative Agent" means, with respect to (a) the
Refinancing Lender Parties and the Refinancing Facility, the Refinancing Lender
Agent, (b) the New Money Lenders and the New Money Facility, the New Money
Lender Agent and (c) the Springdale Lenders and the Springdale Facility, the
Springdale Lender Agent.

                   "Required Lenders" means, at any time, Lenders owed or
holding at least a majority in interest of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time, (b) prior to the
Second New Money Borrowing Date, the aggregate amount of the unused Commitments
of the New Money Lenders and (c) the aggregate Available Amount of all
Refinancing Letters of Credit outstanding at such time, or, if no such principal
amount and no Refinancing Letters of Credit are outstanding at such time,
Lenders holding at least a majority in interest of the aggregate of the
Commitments.

                   "Required New Money Lenders" has the meaning set forth in the
New Money Credit Agreement.

                   "Required Refinancing Lenders" has the meaning set forth in
the Refinancing Credit Agreement.

                   "Required Springdale Lenders" has the meaning set forth in
the Springdale Credit Agreement.

                   "Responsible Officer" means, with respect to any Person, the
president, any vice-president, the treasurer, the chief financial officer or an
Authorized Signatory of such Person.

                   "Restricted Payments" means, with respect to any Person, any
(a) dividends (in cash or property), purchase, redemption, retirement,
defeasance or other acquisition for value of any of its Equity Interests now or
hereafter outstanding, (b) return of capital to its stockholders, partners or
members (or the equivalent Persons thereof) as such, (c) distribution of assets,
Equity Interests, obligations or securities to its stockholders, partners or
members (or the equivalent Persons thereof) as such, (d) setting apart of money
for a sinking or other analogous fund for, or any purchase, redemption,
retirement or other acquisition of any Equity Interests in such Person and (e)
payments of Debt owing by any Borrower Group Member to, or any other payments
to, any of its Affiliates which is not also a Borrower Group Member.

                   "St. Joseph Costs" means all costs and expenses incurred by
the Borrower after the date hereof relating to the termination or suspension of
the development and construction of the St. Joseph Plant.

                   "St. Joseph Lease" means the Synthetic Lease transaction
providing for the lease financing of the St. Joseph Plant, as documented
pursuant to the St. Joseph Lease Documents.

                   "St. Joseph Lease Documents" means the St. Joseph
Participation Agreement and all other agreements, leases, guarantees, deeds,
conveyances, pledge agreements, mortgages, deeds of trust, trust deeds,
assignments and instruments related thereto.

                   "St. Joseph Participation Agreement" means the Participation
Agreement, dated as of November 28, 2001, among the Borrower, as Construction
Agent and Lessee, Allegheny Energy Supply Statutory Trust 2001, as the Trust,
State Street Bank and Trust Company of Connecticut, National Association, as
Trustee, the Persons named therein as "B-Note Holders" and "Certificate Holders"
and Bank One Trust Company, N.A., as Indenture Trustee.

                   "St. Joseph Plant" means the 630 MW gas-fired electric
generating plant being developed by the Borrower in St. Joseph, Indiana.

                   "Sale" means any sale (including by way of sale/leaseback),
lease, assignment, transfer or other disposition.

                   "Scheduled Capital Expenditure" means, for any fiscal year,
all Capital Expenditures included in the CapEx Budget for such year.

                   "Scotia" has the meaning specified in the preamble to this
Agreement.

                   "Second New Money Mortgages" means the mortgages (in the form
or in substantially the form attached hereto as Exhibit D-1 or D-2, as
applicable, with such changes as may be required to account for local law
matters and otherwise in form and substance satisfactory to the Representative
Agents) executed pursuant to Section 3.04 securing the Advances to be made under
the New Money Credit Agreement on the Second New Money Borrowing Date.

                   "Second New Money Borrowing Date" has the meaning set forth
in Section 3.04.

                   "Secured Obligations" has the meaning set forth in the
Security Agreement.

                   "Secured Parties" has the meaning set forth in the Security
Agreement.

                   "Security Agreement" means the Security and Intercreditor
Agreement dated as of the date hereof, among the Borrower, the other Grantors,
the Lenders, the Refinancing Issuing Bank, the Agents, the Depository Bank and
the Indenture Trustee.

                   "Senior Debt Obligations" means, without duplication, (a) the
Obligations of the Borrower to pay principal and interest on the Advances
(including any interest accruing after the filing of a petition with respect to,
or the commencement of, any Insolvency Proceeding, whether or not a claim for
post-petition interest is allowed in such proceeding), and (b) any and all
commissions, fees, indemnities, prepayment premiums, costs and expenses and
other amounts payable to any Bank Lender Party under any Financing Document,
including all renewals or extensions thereof (including any reimbursement
obligations for costs and expenses incurred by any Secured Party in preserving
any rights, interests and remedies with respect to the Collateral and/or the
Liens granted in favor of the Secured Parties); provided that notwithstanding
anything to the contrary in any Financing Document, "Senior Debt Obligations"
shall not include any Obligations of the Borrower owed to any of its Affiliates.

                   "Single-Employer Plan" means a single-employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
any Borrower Group Member or any ERISA Affiliate and no Person other than the
Borrower Group Members and the ERISA Affiliates or (b) was so maintained and in
respect of which any Borrower Group Member or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been or were to
be terminated.

                   "Solvent" and "Solvency" mean, with respect to any Person on
a particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) 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, (c) 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 (d) 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.

                   "Springdale Assets" has the meaning specified in the Security
Agreement.

                   "Springdale Consents" has the meaning specified in Section
3.02(g)(ii).

                   "Springdale Costs" means all costs and expenses incurred by
the Borrower after the date hereof for the development, design, engineering,
acquisition, installation, equipping, construction, assembly, inspection,
testing, completion and start-up of the Springdale Plant, including (without
duplication): (a) all amounts payable under any construction contracts, any
contractor bonuses, site acquisition and preparation costs, any transmission
upgrade costs payable by the Borrower, all steam and water interconnection
costs, all costs related to water clarification facilities and/or water
treatment facilities and all costs of acquisition and construction of natural
gas fuel handling and processing equipment (if any) and interconnection costs
payable by the Borrower; (b) all other costs, including fuel-related costs and
prepaid fuel costs, management services fees and expenses and expenses to
complete the development, acquisition, construction and financing of the
Springdale Plant; and (c) interest on New Money Advances made with respect to
Springdale Costs.

                   "Springdale Credit Agreement" means the Credit Agreement
dated as of the date hereof, among the Borrower, as borrower, the Springdale
Lenders and the Springdale Lender Agent.

                   "Springdale Equity Participants" has the meaning specified in
Preliminary Statement (3) of this Agreement.

                   "Springdale Facility" means the $270,122,947 loan facility
made, or to be made, available to the Borrower pursuant to the Springdale Credit
Agreement and the other Financing Documents.

                   "Springdale Lease" means the Synthetic Lease transaction
providing for the lease financing of the Springdale Plant, as documented
pursuant to the Springdale Lease Documents.

                   "Springdale Lease Documents" means the Springdale
Participation Agreement and all other agreements, leases, guarantees, deeds,
conveyances, pledge agreements, mortgages, deeds of trust, trust deeds,
assignments and instruments related thereto.

                   "Springdale Lender" means each of the banks, financial
institutions and other lenders that is listed on the signature pages hereto as a
"Springdale Lender" and each other Person that may become a "Springdale Lender"
party to the Springdale Credit Agreement pursuant to the terms hereof and
thereof from time to time, in either case so long as such Person continues to be
a party to the Springdale Credit Agreement.

                   "Springdale Lender Agent" has the meaning specified in the
preamble to this Agreement.

                   "Springdale Liens" means all Liens created or purported to be
created on the Springdale Assets and the Group Assets, securing Obligations (or
any portion thereof) owing from time to time to the Springdale Lenders and their
agents (including the Springdale Lender Agent, the Springdale Special Draw
Agent, the Collateral Agent and the Intercreditor Agent) in each case, in
accordance with Sections 2.01 and 2.02 of the Security Agreement.

                   "Springdale Mortgages (Springdale Lenders)" means the
mortgages (in the form or in substantially the relevant form attached hereto as
Exhibit F) executed pursuant to Section 3.02 securing the Springdale
Obligations.

                   "Springdale Obligations" means all Obligations owing by the
Loan Parties to the Springdale Lenders and their agents (including the
Springdale Lender Agent, the Springdale Special Draw Agent, the Collateral Agent
and the Intercreditor Agent) under the Financing Documents.

                   "Springdale Participation Agreement" means the Participation
Agreement dated as of November 21, 2002 among the Borrower, as lessee and
construction agent, Power Trust 2000-A, as lessor, Wilmington Trust Company, as
trustee, Scotiabanc, Inc. and PNC Commercial, LLC, as certificate holders,
Liberty Street Funding Corporation, as conduit, the various liquidity banks
referred to therein and The Bank of Nova Scotia, as liquidity agent.

                   "Springdale Plant" means An electrical generating facility,
as constructed or under construction, having or intended to have a capacity of
approximately 540 MW, together with related equipment, improvements, and land
situate on and including a tract of land comprising approximately ten (10)
acres, located in Springdale Township and the Borough of Springdale, Allegheny
County, Pennsylvania, which tract of land is specifically described in that
Open-End Mortgage and Security Agreement, Assignment of Rents and Financing
Statement, delivered by Allegheny Energy Supply Company, LLC, to Citibank, N.A.,
as Collateral Agent, and in Allegheny County, Pennsylvania.

                   "Springdale Special Draw Agent" has the meaning set forth in
the Security Agreement.

                   "Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or estate of which
(or in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits of
such partnership, joint venture or limited liability company or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other Subsidiaries.

                   "Syndication Agent" has the meaning specified in the preamble
to this Agreement.

                   "Synthetic Lease" means a financing for any Asset which is
characterized as an operating lease under GAAP, but which is treated as a
financing under the Internal Revenue Code.

                   "Tax Allocation Agreement" means the Tax Allocation
Agreement, dated as of January 1, 2001, by and between the Parent and its
Subsidiaries, as supplemented by Amendment No. 1, dated as of June 11, 2002,
Amendment No. 2, dated as of June 11, 2002, and Amendment No. 3, dated as of
July 1, 2002.

                   "Termination Event" means an event described in Section
4024(a) of ERISA.

                   "Taxes" means all federal, state, local or foreign income,
gross receipts, windfall profits, severance, property, production, sales, use,
excise, franchise, employment, value added, real estate, withholding or similar
taxes, assessments, fees, liabilities or other charges, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.

                   "Transaction" means (a) the payment and reconstitution of the
existing financial obligations of the Borrower under the Operative Documents (as
defined in the Springdale Participation Agreement), including those arising on
the exercise of the Purchase Option (as defined in the Springdale Participation
Agreement) in accordance with the Financing Documents and the Funds Flow
Memorandum and the acquisition of the Springdale Plant by the Borrower, (b) the
refinancing of the Existing Lender Debt and the Existing Springdale Debt, the
assumption of the Existing Letters of Credit and the provision of new financing,
in each case, pursuant to the Financing Documents and (c) the assumption and
amendment of the Existing A Notes pursuant to the Assumption Documents.

                   "True Equity Interests" means, with respect to any Person,
(a) shares of capital stock of (or other ownership or profit interests in) such
Person, (b) securities (i) that are convertible at all times at the option of
the issuer thereof or upon a fixed date without satisfaction of any other
condition or upon the occurrence of predetermined events which are not within
the control of the holders thereof (or any Affiliate of any such holder) into or
are exchangeable for, shares of capital stock of (or other ownership or profit
interests in) such Person and (ii) under which all payments to the holders
thereof are subordinated in priority of payment to the Senior Debt Obligations
and Obligations owing to the Noteholders and (c) any other similar Equity
Interests approved by the Required Lenders.

                   "UCC" or "Uniform Commercial Code" means the Uniform
Commercial Code as in effect, from time to time, in the State of New York;
provided that if perfection or the effect of perfection or non-perfection or the
priority of any security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
"UCC" means the Uniform Commercial Code as in effect from time to time in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.

                   "Unanimous Approval Matters" means any (a) waiver of any
conditions specified in Article III, except as otherwise provided in
Section 3.05; (b) change in the percentage of the Commitments or of the
aggregate unpaid principal amount of the Advances or the Bank Notes that shall
be required for the Bank Lender Parties or any of them to take any action
hereunder; (c) amendment or modification of Section 5.02(u), 6.02, 7.01 or 9.02;
(d) amendment to the definition of "Required Lenders", "Required Refinancing
Lenders", "Required New Money Lenders", "Required Springdale Lenders",
"Unanimous Approval Matters", New Money Maturity Date" or "Final Maturity Date";
and (e) any amendment or modification of, or supplement to, Section 2.04(c), or
any consent to departure by any Loan Party therefrom.

                   "Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.

                   "Waiting Period" has the meaning set forth in Section
7.01(d).

                   "WPPC" means West Penn Power Company, a corporation
incorporated under the laws of the State of Pennsylvania.

                   "Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.

TABLE OF CONTENTS

   

Page

ARTICLE I
DEFINITIONS AND INTERPRETATION

Section 1.01

Definitions

3

Section 1.02

Principles of Interpretation

3

ARTICLE II
PAYMENTS

Section 2.01

Availability of Advances and Letters of Credits

4

Section 2.02

Lenders' and Refinancing Issuing Bank's Obligations Several

5

Section 2.03

No Reborrowing

5

Section 2.04

Payments

5

ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT

Section 3.01

Conditions Precedent to Closing Date

6

Section 3.02

Conditions Precedent to New Money Closing

11

Section 3.03

Conditions Precedent to Refinancing Closing

14

Section 3.04

Second New Money Borrowing

16

Section 3.05

Determinations Under Sections 3.01, 3.02, 3.03 and 3.04

20

ARTICLE IV
REPRESENATIONS AND WARRANTIES

Section 4.01

Representations and Warranties of the Borrower

21

Section 4.02

Representations and Warranties of the Other Grantors

28

ARTICLE V
COVENANTS

Section 5.01

Affirmative Covenants of the Borrower

30

Section 5.02

Negative Covenants of the Borrower

37

Section 5.03

Financial Covenants of the Borrower

45

Section 5.04

Reporting Covenants of the Borrower

46

Section 5.05

Covenants of the Other Grantors

50

ARTICLE VI
EVENTS OF DEFAULT

Section 6.01

Events of Default

51

Section 6.02

Actions Following and Event of Default

54

Section 6.03

Actions in Respect of the Refinancing Letters of Credit Upon Default

55

ARTICLE VII
REMEDIES AND ENFORCEMENT

Section 7.01

Procedures Following and Event of Default

56

Section 7.02

Default Interest

58

ARTICLE VIII
THE AGENTS

Section 8.01

Reliance

58

Section 8.02

Citibank, Scotia and JPMC and Affiliates

59

Section 8.03

Liability

59

Section 8.04

Compensation of Agents

59

Section 8.05

Exculpatory Provisions

60

Section 8.06

Treatment of Lenders and Refinancing Issuing Bank

60

Section 8.07

Miscellaneous

60

Section 8.08

Bank Lender Parties Action

61

Section 8.09

Indemnity

61

Section 8.10

Sharing of Payments

61

ARTICLE IX
MISCELLANEOUS

Section 9.01

Indemnity and Expenses

62

Section 9.02

Amendments; No Waiver

63

Section 9.03

Notices; Etc.

64

Section 9.04

Execution in Counterparts

64

Section 9.05

Benefits of Agreement

64

Section 9.06

Severability

64

Section 9.07

Remedies

64

Section 9.08

Set-off 65

 

Section 9.09

Limitations

66

Section 9.10

Survival

66

Section 9.11

Governing Law

66

Section 9.12

Jurisdiction, Etc.

66

Section 9.13

Waiver of Jury Trial

67

Section 9.14

Disclosure to Other Agents and AYE Lender Agent

67

Section 9.15

Survival of Existing Indemnities

67

Section 9.16

Confidentiality

67

 

 

Schedules:

   

Schedule I

-

Existing Lender Debt, Existing Springdale Debt, Existing Letters of Credit and
Existing Hedge Agreements

     

Schedule 4.01(b)

-

Subsidiaries

Schedule 4.01(d)

-

Governmental Approvals and Filings

Schedule 4.01(f)

-

Disclosed Litigation

Schedule 4.01(g)

-

Disclosed Information

Schedule 4.01(n)

-

Certain Environmental Matters

Schedule 4.01(q)

-

Liens

Schedule 4.01(r)

-

Owned Real Property

Schedule 4.01(s)

-

Leased Real Property

Schedule 4.01(t)

-

Investments

Schedule 4.01(u)

-

Material Contract Defaults

Schedule 4.01(v)

-

Existing Debt

Schedule 4.01(x)

 

Existing Hedge Agreement Defaults

Schedule 4.01(z)

-

Initial Controlled Accounts and Operating Accounts

Schedule 5.02(c)

-

Incidental Businesses

Exhibits:

   

Exhibit A-1

-

Form of Consent and Agreement (West Virginia)

Exhibit A-2

-

Form of Consent and Agreement (Other States)

Exhibit B

-

Form of Authorized Signatory Incumbency Certificate

Exhibit C

-

Form of Market Consultant Certificate

Exhibit D-1

-

Form of New Money Mortgage (AESC)

Exhibit D-2

-

Form of New Money Mortgage (Non-AESC)

Exhibit E-1

-

Form of Refinancing Mortgage (AESC)

Exhibit E-2

-

Form of Refinancing Mortgage (Non-AESC)

Exhibit F

-

Form of Springdale Mortgage (Springdale Lenders)

Exhibit G

-

Form of Amended and Restated Tax Allocation Agreement

Appendices:

   

Appendix A

-

Definitions