Unassociated Document


EXECUTION
VERSION

































 

LETTER OF
CREDIT AND REIMBURSEMENT AGREEMENT

 

Dated as of
December 28, 2006

 

Among

 

FIRSTENERGY
CORP.,

as
Obligor,




THE LENDERS
NAMED HEREIN,

as
Lender,




and




WACHOVIA
FIXED INCOME STRUCTURED TRADING SOLUTIONS, LLC

as
Administrative Agent and as Fronting Bank


































 

TABLE OF CONTENTS

                                                        Page

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS




	
      SECTION
      1.01
	
      Certain
      Defined Terms
	
      1

	
      SECTION
      1.02
	
      Computation of
      Time Periods
	
      12

	
      SECTION
      1.03
	
      Accounting
      Terms
	
      12

	
      SECTION
      1.04
	
      Certain
      Reverences
	
      12




 

ARTICLE II AMOUNTS
AND TERMS OF THE ADVANCES AND LETTER OF CREDIT




	
      SECTION
      2.01
	
      The Pro-Rata
      Advances
	
      12

	
      SECTION
      2.02
	
      Making the
      Pro-Rata Advances
	
      13

	
      SECTION
      2.03
	
      Reserved
	
      14

	
      SECTION
      2.04
	
      Letters of
      Credit
	
      14

	
      SECTION
      2.05
	
      Fees
	
      20

	
      SECTION
      2.06
	
      Adjustment of
      the Commitments
	
      20

	
      SECTION
      2.07
	
      Repayment of
      Advances
	
      20

	
      SECTION
      2.08
	
      Interest on
      Advances
	
      20

	
      SECTION
      2.09
	
      Additional
      Interest on Advances
	
      21

	
      SECTION
      2.10
	
      Interest Rate
      Determination
	
      21

	
      SECTION
      2.11
	
      Conversion of
      Advances
	
      22

	
      SECTION
      2.12
	
      Prepayments
	
      23

	
      SECTION
      2.13
	
      Increased
      Costs
	
      23

	
      SECTION
      2.14
	
      Illegality
	
      24

	
      SECTION
      2.15
	
      Payments and
      Computations
	
      25

	
      SECTION 2.16
      
	
      Taxes
	
      26

	
      SECTION
      2.17
	
      Sharing of
      Payments, Etc.
	
      28

	
      SECTION
      2.18
	
      Noteless
      Agreement; Evidence of indebtedness
	
      28

	
      SECTION
      2.19
	
      Reserved
	
      28

	
      SECTION
      2.20
	
      Reserved
	
      28





 


ARTICLE III
CONDITIONS OF LENDING AND ISSUING LETTERS OF CREDIT

 




	
      SECTION
      2.21
	
      Conditions
      Precedent to Effectiveness
	
      29

	
      SECTION
      2.22
	
      Conditions
      Precedent to Issuance of Letter of Credit
	
      30

	
      SECTION
      2.23
	
      Conditions
      Precedent to Conversions
	
      30







 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

 





	
      SECTION
      3.01
	
      Representations
      and Warranties of the Obligor
	
      31





 


ARTICLE V COVENANTS
OF THE OBLIGOR

 




	
      SECTION
      4.01
	
      Affirmative
      Covenants of the Obligor
	
      34

	
      SECTION
      4.02
	
      Debt to
      Capitalization Ratio
	
      36

	
      SECTION
      4.03
	
      Negative
      Covenants of the Obligor
	
      36





 








i

















 


ARTICLE
VI EVENTS OF DEFAULT

 



	
      SECTION
      5.01
	
      Events of
      Default
	
      38





 


ARTICLE VII THE
ADMINISTRATIVE AGENT

 



	
      SECTION
      6.01
	
      Authorization
      and Action
	
      41

	
      SECTION
      6.02
	
      Administrative
      Agent's Reliance, Etc.
	
      41

	
      SECTION
      6.03
	
      FIST, Wachovia
      and Affiliates
	
      42

	
      SECTION
      6.04
	
      Lender Credit
      Decision
	
      42

	
      SECTION
      6.05
	
      Indemnification
	
      42

	
      SECTION
      6.06
	
      Successor
      Administrative Agent
	
      43





 

ARTICLE
VIII MISCELLANEOUS

 



	
      SECTION
      7.01
	
      Amendments,
      Etc.
	
      43

	
      SECTION
      7.02
	
      Notices,
      Etc.
	
      44

	
      SECTION
      7.03
	
      Electronic
      Communications
	
      44

	
      SECTION
      7.04
	
      No Waiver;
      Remedies
	
      45

	
      SECTION
      7.05
	
      Costs and
      Expenses, Indemnification
	
      46

	
      SECTION
      7.06
	
      Right of
      Set-off
	
      47

	
      SECTION
      7.07
	
      Binding
      Effect
	
      47

	
      SECTION
      7.08
	
      Assignments
      and Participations
	
      47

	
      SECTION
      7.09
	
      Governing
      Law
	
      51

	
      SECTION
      7.10
	
      Consent to
      Jurisdiction; Waiver of Jury Trial
	
      51

	
      SECTION
      7.11
	
      Severability
	
      51

	
      SECTION
      7.12
	
      Entire
      Agreement
	
      51

	
      SECTION
      7.13
	
      Execution in
      Counterparts
	
      51

	
      SECTION
      7.14
	
      USA PATRIOT
      Act Notice
	
      52






 





ii

 






















    SCHEDULES AND
EXHIBITS

                




	 Schedule
      I	
       -
	 List of
      Commitments and Lending Offices
		
       
	 
	 Exhibit A	
       -
	 Form of
      Assignment and Acceptance 
	 Exhibit B	
       -
	 Form of
      Note 
	 Exhibit
      C	
       -
	 Form of
      Letter of Credit
	 Exhibit
      D	
       -
	 Form of
      Notice of Pro Rata Borrowing
	 Exhibit
      E	
       -
	 Reserved
	 Exhibit
      F	
       -
	 Form of
      Letter of Credit Request 
	 Exhibit
      G	
       -
	 Form of
      Opinion of Gary D. Benz, Esq.
	 Exhibit
      H	
       -
	 Form of
      Opinion of Akin Gump Strauss Hauer & Feld LLP
	 Exhibit
      I	
       -
	 Reserved









iii

 























LETTER OF
CREDIT AND REIMBURSEMENT AGREEMENT







LETTER OF
CREDIT AND REIMBURSEMENT AGREEMENT (this “Agreement”), dated as of
December 28, 2006, among FIRSTENERGY CORP., an Ohio corporation (the “Obligor”), the Banks and
other financial institutions (the “Banks”) listed on the
signature pages hereof and Wachovia Fixed Income Structured Trading Solutions,
LLC (“FIST”), as Administrative
Agent (the “Administrative
Agent”) for the Lenders
hereunder and the fronting bank (the “Fronting
Bank”).




PRELIMINARY
STATEMENTS




(1) The Obligor
has
requested the Fronting Bank to issue, and the Fronting Bank agrees to issue, its
irrevocable standby letter of credit, in substantially the form of Exhibit
A
(as it may from time to time be extended or amended pursuant to the terms of
this Agreement, being the “Letter
of Credit”) in the amount of
$489,798,710 to
Wachovia Bank, National Association, as administrative agent under the
Letter
of Credit and Term Loan Agreement, dated as of December 5, 2006 (the
“Primary
Reimbursement Agreement”), among the
FirstEnergy Nuclear Generation Corp. (“Nuclear”), Wachovia Bank,
National Association (“Wachovia”), as
administrative agent and fronting bank (in such capacity, the “Beneficiary”), and the
participating banks parties thereto.

 

(2)  The Obligor will
derive substantial direct and indirect benefits from the transactions
contemplated by the Primary Reimbursement Agreement. 

 

(3) The execution and
delivery of this Agreement and the issuance of the Letter of Credit is a
condition precedent to the release of the guaranty of the Obligor of the
obligations of Nuclear under the Primary Reimbursement Agreement. 

 

NOW, THEREFORE, in consideration
of the premises, the parties hereto agree as follows:

 

 

ARTICLE I  

DEFINITIONS
AND ACCOUNTING TERMS

            SECTION
1.01.  Certain
Defined Terms.

 

As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):

 

“Administrative
Agent” has the meaning
set forth in the preamble hereto.

 

“Advance” means a Pro-Rata
Advance.

 

“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.

 

“Agreement” means this Letter
of Credit and Reimbursement Agreement, as amended, modified and supplemented
from time to time.

 

“Alternate
Base Rate” means, for any
period, a fluctuating interest rate per
annum as shall be in
effect from time to time, which rate per
annum shall at all times
be equal to the higher of (i) the rate of interest announced publicly by
Wachovia, from time to time, as its “base rate” and (ii) the sum of 1/2 of
1% per
annum plus the Federal
Funds Rate in effect from time to time.

 






















“Alternate
Base Rate Advance” means an Alternate
Base Rate Pro-Rata Advance.

 

“Alternate
Base Rate Pro-Rata Advance” means a Pro-Rata
Advance that bears interest as provided in Section 2.08(a).

 

“Applicable
Law” means all
applicable laws, statutes, treaties, rules, codes, ordinances, regulations,
permits, certificates, orders, interpretations, licenses and permits of any
Governmental Authority and judgments, decrees, injunctions, writs, orders or
like action of any court, arbitrator or other judicial or quasi-judicial
tribunal of competent jurisdiction (including those pertaining to health, safety
or the environment or otherwise). 

 

“Applicable
Lending Office” means, with respect
to each Lender, such Lender’s Domestic Lending Office in the case of an
Alternate Base Rate Advance, and such Lender’s Eurodollar Lending Office in the
case of a Eurodollar Rate Advance.

 

“Applicable
Margin” means 30 basis
points per annum. 

 

“Approval” means the SEC
Order. 

 

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

 

“ATSI” means American
Transmission Systems Incorporated, an Ohio Corporation.

 

“Available
Commitment” means, for each
Lender, the excess of such Lender’s Commitment over such Lender’s Percentage of
the Outstanding Credits. “Available
Commitments” shall refer to the
aggregate of the Lenders’ Available Commitments hereunder.

 

“Bankruptcy
Code” means the
Bankruptcy Reform Act of 1978, as amended from time to time, and any Federal law
with respect to bankruptcy, insolvency, reorganization, liquidation, moratorium
or similar laws affecting creditors’ rights generally.

 

“Banks” has the meaning
set forth in the preamble hereto.

 

“Beneficiary” has the meaning
set forth in the preamble hereto. 

 

“Borrowing” means a Pro-Rata
Borrowing.

 

“Business
Day” means a day of the
year on which banks are not required or authorized to close in Charlotte, North
Carolina or Akron, Ohio and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on in the London
interbank market.

 

“CEI” means The Cleveland
Electric Illuminating Company, an Ohio corporation.




“Change
of Control” has the meaning
set
forth in Section
6.01(j).

 

“Code” means the United
States Internal Revenue Code of 1986, as amended from time to time, and the
applicable regulations thereunder.

 








2













“Commitment” means, as to any
Lender, the amount set forth opposite such Lender’s name on Schedule I
hereto or, if such Lender has entered into any Assignment and Acceptance, set
forth for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 8.08(c), as such amount may be reduced pursuant to
Section 2.06(a).

 

“Consolidated
Debt” means at any date
of determination the aggregate Indebtedness of the Obligor and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP, but
shall not include (i) Nonrecourse Indebtedness of the Obligor and any of
its Subsidiaries, (ii) obligations under leases that shall have been or
should be, in accordance with GAAP, recorded as operating leases in respect of
which the Obligor or any of its Consolidated Subsidiaries is liable as a lessee,
(iii) the aggregate principal amount of Stranded Cost Securitization Bonds
of the Obligor and its Consolidated Subsidiaries and (iv) the aggregate
principal amount of Trust Preferred Securities and Junior Subordinated Deferred
Interest Obligations not exceeding 15% of the Total Capitalization of the
Obligor and its Consolidated Subsidiaries (determined, for purposes of such
calculation, without regard to the amount of Trust Preferred Securities and
Junior Subordinated Deferred Interest Debt Obligations outstanding of the
Obligor); provided that the amount of
any mandatory principal amortization or defeasance of Trust Preferred Securities
or Junior Subordinated Deferred Interest Debt Obligations prior to the
Termination Date shall be included in this definition of Consolidated
Debt.

 

“Commitment
Letter” means that certain
Commitment Letter dated November 29, 2006 from Wachovia Bank, National
Association and Wachovia Fixed Income Structured Trading Solutions, LLC to the
Obligor and Nuclear, as amended supplemented or otherwise modified from time to
time in accordance with its terms. 

 

“Consolidated
Subsidiary” means, as to any
Person, any Subsidiary of such Person the accounts of which are or are required
to be consolidated with the accounts of such Person in accordance with
GAAP.

 

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

 

“Convert”, “Conversion” and “Converted” each refers to a
conversion of Pro-Rata Advances of one Type into Pro-Rata Advances of another
Type or the selection of a new, or the renewal of the same, Interest Period for
Pro-Rata Eurodollar Rate Advances pursuant to Section 2.10 or
2.11.

 

“Date of
Issuance” means the date of
issuance by the Fronting Bank of the Letter of Credit under this Agreement which
shall be on or before January 31, 2007.

 

“Debt to
Capitalization Ratio” means the ratio of
Consolidated Debt of the Obligor to Total Capitalization of the
Obligor.

 

“Default
Rate” means a per annum
rate 2% greater than the rate which would otherwise be applicable (or if no rate
is applicable, whether in respect of interest, fees or other amounts, then the
Alternate Base Rate plus 2%). 

 

“Domestic
Lending Office” means, with respect
to any Lender, the office of such Lender specified as its “Domestic Lending
Office”
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender, or such other office of such Lender as
such Lender may from time to time specify to the Administrative
Agent.

 








3













“Drawing” means any drawing
by the Beneficiary under the Letter of Credit.

 

“Eligible
Assignee” means (i) a
commercial bank organized under the laws of the United States, or any State
thereof; (ii) 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,
provided that such bank is
acting through a branch or agency located in the United States; (iii) a
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership or other entity) engaged generally in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business; (iv) the central bank of any country that is a
member of the OECD; or (v) any Bank; provided,
however, that (A) any
Person described in clause (i), (ii), (iii) or (iv) above shall
also (x) have outstanding unsecured indebtedness that is rated A- or better
by S&P or A3 or better by Moody’s (or an equivalent rating by another
nationally recognized credit rating agency of similar standing if neither of
such corporations is in the business of rating unsecured indebtedness of
entities engaged in such businesses) and (y) have combined capital and
surplus (as established in its most recent report of condition to its primary
regulator, if applicable) of not less than $250,000,000 (or its equivalent in
foreign currency), (B) any Person described in clause (ii), (iii) or
(iv) above shall, on the date on which it is to become a Lender hereunder,
be entitled to receive payments hereunder without deduction or withholding of
any United States Federal income taxes (as contemplated by Section 2.16(d))
and (C) any Person described in clause (i), (ii), (iii) or
(iv) above shall, in addition, be reasonably acceptable to the
Administrative Agent and the Fronting Bank.

 

“Environmental
Laws” means any federal,
state or local laws, ordinances or codes, rules, orders, or regulations relating
to pollution or protection of the environment, including, without limitation,
laws relating to hazardous substances, laws relating to reclamation of land and
waterways and laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollution, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.

 

“ERISA” means the Employee
Retirement Income Security Act of 1974, and the regulations promulgated and
rulings issued thereunder, each as amended, modified and in effect from time to
time.

 

“Eurocurrency
Liabilities” has the meaning
assigned to that term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

“Eurodollar
Lending Office” means, with respect
to any Lender, the office of such Lender specified as its “Eurodollar Lending
Office”
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such Lender may
from time to time specify to the Administrative Agent.

 








4













“Eurodollar
Rate” means, for the
Interest Period for any Eurodollar Rate Advance made in connection with any
Borrowing, the interest rate per
annum at which eurodollar
deposits are offered in the London interbank market for a term equivalent to
such Interest Period determined by reference to Telerate page 3750 at 11:00 a.m.
(London time) two Business Days before the first day of such Interest Period for
a period equal to such Interest Period. If such rate is not
available at such time for any reason, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Advance being made, continued or converted by FIST in connection
with such Borrowing with a term equivalent to such Interest Period that would be
offered by Wachovia’s London branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period.

 

“Eurodollar
Rate Advance” means a Eurodollar
Rate Pro-Rata Advance.

 

“Eurodollar
Rate Pro-Rata Advance” means a Pro-Rata
Advance that bears interest as provided in Section 2.08(b).

 

“Eurodollar
Rate Reserve Percentage” of any Lender for
the Interest Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.

 

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

 

“Exchange
Act” means the
Securities Exchange Act of 1934, and the regulations promulgated thereunder, in
each case as amended and in effect from time to time.

 

“Expiration
Date” means, with respect
to the Letter of Credit, its stated expiration date.

 

“Extension
of Credit” means the making of
any Advance or the issuance or amendment (including, without limitation, an
extension or renewal) of the Letter of Credit.

 

“Federal
Funds Rate” means, for any
period, a fluctuating interest rate per annum equal for each day during such
period to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average (rounded upward to the nearest whole multiple of 1/100 of 1% per annum,
if such average is not such a multiple) of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

 

“FERC” means the Federal
Energy Regulatory Commission or successor organization.

 








5













"FERC
PUHCA 2005 Filing" means the
informational filing submitted to the FERC on February 21, 2006, pursuant to the
Public Utility Holding Company Act of 2005 and the FERC's Order No. 667, which
enabled the Obligor, as applicable, to continue to rely on the financing
authorizations authorized in the SEC Order.

 

“FES” means FirstEnergy
Solutions Corp., an Ohio corporation.

 

“First
Mortgage Indenture” means, with respect
to any Significant Subsidiary, an indenture or similar instrument pursuant to
which such Person may issue bonds, notes or similar instruments secured by a
lien on all or substantially all of such Person’s fixed assets.

 

“FIST” has the meaning
set forth in the preamble hereto.

 

“Fronting
Bank” has the meaning
set forth in the preamble hereto. 

 

“GAAP” means generally
accepted accounting principles in the United States in effect from time to
time.

 

“Generation
Transfers” has the meaning
set forth in Section 5.03(b) .

 

“Governmental
Action” means all
authorizations, consents, approvals, waivers, exceptions, variances, orders,
licenses, exemptions, publications, filings, notices to and declarations of or
with any Governmental Authority (other than routine reporting requirements the
failure to comply with which will not affect the validity or enforceability of
any Loan Document or have a material adverse effect on the transactions
contemplated by any Loan Document or any material rights, power or remedy of any
Person thereunder or any other action in respect of any Governmental
Authority).

 

“Governmental
Authority” means any Federal,
state, county, municipal, foreign, international, regional or other governmental
authority, agency, board, body, instrumentality or court.

 

“Hostile
Acquisition” means any Target
Acquisition (as defined below) involving a tender offer or proxy contest that
has not been recommended or approved by the board of directors (or similar
governing body) of the Person that is the subject of such Target Acquisition
prior to the first public announcement or disclosure relating to such Target
Acquisition. As used in this definition, the term “Target Acquisition” means any
transaction, or any series of related transactions, by which any Person directly
or indirectly (i) acquires all or substantially all of the assets or
ongoing business of any other Person, whether through purchase of assets, merger
or otherwise, (ii) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority in
ordinary voting power of the securities of any such Person that have ordinary
voting power for the election of directors or (iii) otherwise acquires
control of more than a 50% ownership interest in any such Person.

 








6













“Indebtedness” of any Person means
at any date, without duplication, (i) all obligations of such Person for
borrowed money, or with respect to deposits or advances of any kind, or for the
deferred purchase price of property or services, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments,
(iii) all obligations of such Person upon which interest charges are
customarily paid, (iv) all obligations under leases that shall have been or
should be, in accordance with GAAP, recorded as capital leases in respect of
which such Person is liable as lessee, (v) liabilities in respect of
unfunded vested benefits under Plans, (vi) withdrawal liability incurred
under ERISA by such Person or any of its affiliates to any Multiemployer Plan,
(vii) reimbursement obligations of such Person (whether contingent or
otherwise) in respect of letters of credit, bankers acceptances, surety or other
bonds and similar instruments, (viii) all Indebtedness of others secured by
a Lien on any asset of such Person, whether or not such Indebtedness is assumed
by such Person and (ix) obligations of such Person under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to above.


 

“Interest
Period” means, for each
Eurodollar Rate Advance made as part of the same Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or the date of the
Conversion of any Advance into a Eurodollar Rate Advance and ending on the last
day of the period selected by the Obligor pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period selected by
the Obligor pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as the Obligor may, upon notice
received by the Administrative Agent not later than 11:00 a.m., Charlotte, North
Carolina time, on the third Business Day prior to the first day of such Interest
Period, select; provided,
however, that:


 

(i) the Obligor may not
select any Interest Period that ends after the Termination Date;

 

(ii) Interest Periods
commencing on the same date for Advances made as part of the same Borrowing
shall be of the same duration; 

 

(iii) no more than 15
different Interest Periods shall apply to outstanding Eurodollar Rate Advances
on any date of determination; 

 

(iv) whenever the
last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, that if such extension would cause
the last day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next preceding
Business Day; and 

 

(iv) if any Interest
Period begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month.

 

“JCP&L” means Jersey
Central Power & Light Company, a New Jersey corporation.

 

“Junior
Subordinated Deferred Interest Debt Obligations” means subordinated
deferrable interest debt obligations of the Obligor or one of its Subsidiaries
(A) for
which the maturity date is subsequent to the Termination Date and (B) that are
fully subordinated in right of payment to the Indebtedness
hereunder.

 

“Lenders” means the Banks
listed on the signature pages hereof and each Eligible Assignee that shall
become a party hereto pursuant to Section 8.08.

 








7













“Letter
of Credit” has the meaning
set forth in Section 2.04(a).

 

“Letter
of Credit Cash Cover” has the meaning
set forth in Section 6.01.

 

“Letter
of Credit Request” has the meaning
set forth in Section 2.04(c).

 

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

 

“Loan
Documents” means this
Agreement, any Note, the Letter of Credit and the Commitment
Letter.

 

“Majority
Lenders” means, at any time
prior to the Termination Date, Lenders having in the aggregate more than 50% of
the Commitments (without giving effect to any termination in whole of the
Commitments pursuant to Section 6.01) and at any time on or after the
Termination Date, Lenders having more than 50% of the then aggregate Outstanding
Credits of the Lenders; provided, that for purposes
hereof, neither the Obligor, nor any of its Affiliates, if a Lender, shall be
included in (i) the Lenders having such amount of the Commitments or the
Advances or (ii) determining the total amount of the Commitments or the
Outstanding Credits.

 

“Margin
Stock” has the meaning
assigned to that term in Regulation U issued by the Board of Governors of
the Federal Reserve System, and as amended and in effect from time to
time.

 

“Met-Ed” means Metropolitan
Edison Company, a Pennsylvania corporation.

 

“Moody’s” means Moody’s
Investors Service, Inc. or any successor thereto.

 

“Multiemployer
Plan” means a
“multiemployer plan” as defined in Section 4001(a)(3) of
ERISA.

 

“Nonrecourse
Indebtedness” means any
Indebtedness that finances the acquisition, development, ownership or operation
of an asset in respect of which the Person to which such Indebtedness is owed
has no recourse whatsoever to the Obligor or any of its Affiliates other
than:

 


	 	
      (i)
	
      recourse to
      the named obligor with respect to such Indebtedness (the “Debtor”) for amounts
      limited to the cash flow or net cash flow (other than historic cash flow)
      from the asset; and




 


	 	
      (ii)
	
      recourse to
      the Debtor for the purpose only of enabling amounts to be claimed in
      respect of such Indebtedness in an enforcement of any security interest or
      lien given by the Debtor over the asset or the income, cash flow or other
      proceeds deriving from the asset (or given by any shareholder or the like
      in the Debtor over its shares or like interest in the capital of the
      Debtor) to secure the Indebtedness, but only if the extent of the recourse
      to the Debtor is limited solely to the amount of any recoveries made on
      any such enforcement; and




 








8














	 	
      (iii)
	
      recourse to
      the Debtor generally or indirectly to any Affiliate of the Debtor, under
      any form of assurance, undertaking or support, which recourse is limited
      to a claim for damages (other than liquidated damages and damages required
      to be calculated in a specified way) for a breach of an obligation (other
      than a payment obligation or an obligation to comply or to procure
      compliance by another with any financial ratios or other tests of
      financial condition) by the Person against which such recourse is
      available.




 

“Note” means any
promissory note issued at the request of a Lender pursuant to Section 2.18
in the form of Exhibit B hereto.

 

“Notice
of Pro-Rata Borrowing” means a notice of
a Pro-Rata Borrowing pursuant to Section 2.02(a), which shall be substantially
in the form of Exhibit D.

 

“Obligor” has the meaning
set forth in the preamble hereto.

 

“OE” means Ohio Edison
Company, an Ohio corporation.

 

“Organizational
Documents” shall mean, as
applicable to any Person, the charter, code of regulations, articles of
incorporation, by-laws, certificate of formation, operating agreement,
certificate of partnership, partnership agreement, certificate of limited
partnership, limited partnership agreement or other constitutive documents of
such Person.

 

“Other
Taxes” has the meaning set
forth in Section 2.16(b).

 

“Outstanding
Credits” means, on any date
of determination, an amount equal to (i) the aggregate principal amount of all
Advances outstanding on such date plus (ii) the aggregate
undrawn amount of the Letter of Credit outstanding on such date plus (iii) the aggregate
amount of Reimbursement Obligations outstanding on such date (exclusive of
Reimbursement Obligations that, on such date of determination, are repaid with
the proceeds of Advances made in accordance with Section 2.04(f) and (g), to the
extent the principal amount of such Advances is included in the determination of
the aggregate principal amount of all outstanding Advances as provided in clause
(i) of this definition). The “Outstanding Credits” of a Lender on any date of
determination shall be an amount equal to the outstanding Advances made by such
Lender plus the amount of such
Lender’s participation interest in the outstanding Letter of Credit and
Reimbursement Obligations included in the definition of “Outstanding
Credits”.

 

“Patriot
Act” means the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001), as
in effect from time to time.




“Payment
Date” means the date on
which payment of a Drawing is made by the Fronting Bank.

 

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

 

“Penelec” means Pennsylvania
Electric Company, a Pennsylvania corporation.

 

“Penn” means Pennsylvania
Power Company, a Pennsylvania corporation.

 

“Percentage” means, in respect
of any Bank on any date of determination, the percentage obtained by dividing
such Bank’s Commitment on such day by the total of the Commitments on such day,
and multiplying the quotient so obtained by 100%.

 








9













“Person” means an
individual, partnership, corporation (including a business 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, at any time,
an employee pension benefit plan that is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code and
is either (i) maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.

 

“Primary
Letters of Credit” has the meaning set
forth in Commitment Letter.

 

“Primary
Reimbursement Agreement” has the meaning set
forth in the preamble hereto. 

 

“Pro-Rata
Advance” means an advance by
a Lender to the Obligor as part of a Pro-Rata Borrowing pursuant to Section 2.01
and refers to an Alternate Base Rate Pro-Rata Advance or a Eurodollar Rate
Pro-Rata Advance, each of which shall be a “Type” of Pro-Rata
Advance, subject to Conversion pursuant to Section 2.10 or
2.11.

 

“Pro-Rata
Borrowing” means a borrowing
consisting of simultaneous Pro-Rata Advances of the same Type made by each of
the Banks pursuant to Section 2.01 or Converted pursuant to Section 2.10 or
2.11.

 

“PUCO” means The Public
Utilities Commission of Ohio or any successor thereto.

 

“Register” has the meaning set
forth in Section 8.08(c).

 

“Reimbursement
Obligation” means the
obligation of the Obligor to reimburse the Fronting Bank for any Drawing paid by
the Fronting Bank pursuant to Section 2.04(g).

 

“S&P” means Standard
& Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or
any successor thereto.

 

“SEC” means the United
States Securities and Exchange Commission or any successor thereto.

 

“SEC
Order” means the order
issued by the SEC that authorized the Obligor to obtain Extensions of Credit
until February 8, 2006, which authorization was extended through December 31,
2007, pursuant to the FERC PUHCA 2005 Filing.

 

“Significant
Subsidiaries” means
(i) each regulated energy Subsidiary of the Obligor, including, but not
limited to, OE, Penn, CEI, TE, JCP&L, Met-Ed and Penelec and any successor
to any of them, (ii) FES and ATSI, and (iii)  each other Subsidiary of the
Obligor the annual revenues of which exceed $100,000,000 or the total assets of
which exceed $50,000,000. 

 

“Stated
Amount” means the maximum
amount available to be drawn by the Beneficiary under the Letter of
Credit.

 








10













“Stranded
Cost Securitization Bonds” means any
instruments, pass-through certificates, notes, debentures, certificates of
participation, bonds, certificates of beneficial interest or other evidences of
indebtedness or instruments evidencing a beneficial interest that are secured by
or otherwise payable from non-bypassable cent per kilowatt hour charges
authorized pursuant to an order of a state commission regulating public
utilities to be applied and invoiced to customers of such utility. The charges
so applied and invoiced must be deducted and stated separately from the other
charges invoiced by such utility against its customers.

 

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

 

“Taxes” has the meaning set
forth in Section 2.16(a).

 

“TE” means The Toledo
Edison Company, an Ohio corporation.

 

“Termination
Date” means March 18,
2009.

 

“Termination
Event” means (i) a
Reportable Event described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), or (ii) the
withdrawal of any member of the Controlled Group from a Plan during a plan year
in which it was a “substantial
employer” as defined in
Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of
intent to terminate a Plan or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, or (iv) the institution of proceedings to
terminate a Plan by the PBGC, or (v) any other event or condition that
might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan.

 

“Total
Capitalization” means, with
respect to the Obligor at any date of determination the sum, without
duplication, of (i) Consolidated Debt of the Obligor,
(ii) the capital stock
(but excluding treasury stock and capital stock subscribed and unissued) and
other equity accounts (including retained earnings and paid in capital but
excluding accumulated other comprehensive income and loss) of the Obligor and
its Consolidated Subsidiaries, (iii) consolidated equity of the preference
stockholders of the Obligor and its Consolidated Subsidiaries, and (iv) the
aggregate principal amount of Trust Preferred Securities and Junior Subordinated
Deferred Interest Debt Obligations. 

 

“Trust
Preferred Securities” means (i) the
issued and outstanding preferred securities of Cleveland Electric Financing
Trust I and (ii) any other securities, however denominated, (A) issued by the
Obligor or any Consolidated Subsidiary of the Obligor, (B) that are not subject
to mandatory redemption or the underlying securities, if any, of which are not
subject to mandatory redemption, (C) that are perpetual or mature no less than
30 years from the date of issuance, (D) the indebtedness issued in connection
with which, including any guaranty, is subordinate in right of payment to the
unsecured and unsubordinated indebtedness of the issuer of such indebtedness or
guaranty, and (E) the terms of which permit the deferral of the payment of
interest or distributions thereon to a date occurring after the Termination
Date. 

 

“Type” has the meaning
assigned to that term in the definitions of “Pro-Rata Advance”.

 








11













“Unfunded
Vested Liabilities” means, with respect
to any Plan at any time, the amount (if any) by which (i) the present value
of all vested nonforfeitable benefits under such Plan exceeds (ii) the fair
market value of all Plan assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the Controlled Group
to the PBGC or the Plan under Title IV of ERISA.

 

“Unmatured
Default” means any event
that, with the giving of notice or the passage of time, or both, would
constitute an Event of Default.

 

            SECTION
1.02.  Computation
of Time Periods.

 

In this Agreement 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 means “to but excluding”.

 

            SECTION
1.03.  Accounting
Terms.

 

All accounting terms
not specifically defined herein shall be construed in accordance with GAAP
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(g) hereof.

 

            SECTION
1.04.  Certain
References.

 

Unless otherwise
indicated, references in this Agreement to articles, sections, paragraphs,
clauses, schedules and exhibits are to the same contained in or attached to this
Agreement.

 

 

ARTICLE II

AMOUNTS AND
TERMS OF THE ADVANCES AND LETTER
OF CREDIT

 

            SECTION
2.01.  The
Pro-Rata Advances.

 

Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
Pro-Rata Advances to the Obligor in U.S. dollars only from time to time on any
Business Day during the period from the date hereof until the Termination Date
in an aggregate amount not to exceed at any time outstanding the Available
Commitment of such Lender. Each Pro-Rata Borrowing shall be in an aggregate
amount not less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof (or, if less, the amount of the Drawing being reimbursed by a Pro-Rata
Advance pursuant to Section 2.04(g)(ii)) and shall consist of Advances of the
same Type and, in the case of Eurodollar Rate Pro-Rata Advances, having the same
Interest Period made or Converted on the same day by the Lenders ratably
according to their respective Commitments. Within the limits of each Lender’s
Available Commitment, and subject to the conditions set forth in
Article III and the other terms and conditions hereof, the Obligor may from
time to time borrow and prepay pursuant to Section 2.12; provided, however,
the Obligor may not reborrow under this Section 2.01. In no case shall any
Lender be required to make a Pro-Rata Advance to the Obligor hereunder if
(i) the amount of such Pro-Rata Advance would exceed such Lender’s
Available Commitment or (ii) the making of such Pro-Rata Advance, together
with the making of the other Pro-Rata Advances constituting part of the same
Pro-Rata Borrowing, would cause the total amount of all Outstanding Credits to
exceed the aggregate amount of the Commitments. Pro-Rata Advances may only be
made to reimburse the Fronting Bank for Drawings pursuant to Section
2.04(g)(ii).

 

 







12












 

            SECTION
2.02.  Making
the Pro-Rata Advances. 

 

(a)  Each Pro-Rata
Borrowing shall be made on notice, given (i) in the case of a Pro-Rata
Borrowing comprising Eurodollar Rate Pro-Rata Advances, not later than
11:00 a.m. (New York time) on the third Business Day prior to the date of
the proposed Borrowing, and (ii) in the case of a Pro-Rata Borrowing
comprising Alternate Base Rate Pro-Rata Advances, not later than 11:00 a.m.
(New York time) on the date of the proposed Pro-Rata Borrowing, by the Obligor
to the Administrative Agent, which shall give to each Lender prompt notice
thereof. Each such Notice of Pro-Rata Borrowing shall be by telecopier, in
substantially the form of Exhibit D hereto, specifying therein the
requested (A) date of such Pro-Rata Borrowing, (B) Type of Pro-Rata
Advances to be made in connection with such Pro-Rata Borrowing,
(C) aggregate amount of such Pro-Rata Borrowing, and (D) in the case
of a Pro-Rata Borrowing comprising Eurodollar Rate Pro-Rata Advances, the
initial Interest Period for each such Pro-Rata Advance, which Pro-Rata Borrowing
shall be subject to the limitations stated in the definition of “Interest
Period” in Section 1.01. Each Lender shall, before 1:00 p.m. (Charlotte, North
Carolina time) on the date of such Pro-Rata Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at its
address referred to in Section 8.02, in same day funds, such Lender’s
ratable portion (according to the Lenders’ respective Commitments) of such
Pro-Rata Borrowing. After the Administrative Agent’s receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Obligor at the
Administrative Agent’s aforesaid address. 

 

(b)  Each Notice of
Pro-Rata Borrowing delivered by the Obligor shall be irrevocable and binding. In
the case of any Notice of Pro-Rata Borrowing delivered requesting Eurodollar
Rate Pro-Rata Advances, the Obligor shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure by the
Obligor to fulfill on or before the date specified in such Notice of Pro-Rata
Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or redeployment of deposits or
other funds acquired by such Lender to fund the Pro-Rata Advance to be made by
such Lender as part of such Borrowing when such Pro-Rata Advance, as a result of
such failure, is not made on such date.

 

(c)  Unless the
Administrative Agent shall have received written notice via facsimile
transmission from a Lender prior to (A) 5:00 p.m. (New York time) one Business
Day prior to the date of a Pro-Rata Borrowing comprising Eurodollar Rate
Pro-Rata Advances or (B) 12:00 noon (New York time) on the date of a Pro-Rata
Borrowing comprising Alternate Base Rate Pro-Rata Advances that such Lender will
not make available to the Administrative Agent such Lender’s ratable portion of
such Pro-Rata Borrowing, the Administrative Agent may assume that such Lender
has made such portion available to the Administrative Agent on the date of such
Pro-Rata Borrowing in accordance with subsection (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon such
assumption, make available to the Obligor on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such ratable
portion available to the Administrative Agent, such Lender and the Obligor
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Obligor until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Obligor, the
interest rate applicable at the time to Pro-Rata Advances made in connection
with such Pro-Rata Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s
Pro-Rata Advance as part of such Pro-Rata Borrowing for purposes of this
Agreement. 

 

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

 

 







13












 

            SECTION
2.03.  Reserved.

 

            SECTION
2.04.  Letters of
Credit.

 

(a)  Agreement
of Fronting Bank. The Fronting Bank
agrees, on the terms and conditions of this Agreement, to issue the Letter of
Credit to the Beneficiary in an amount equal to the Available Commitments at or
before 5:00 P.M. (Charlotte, North Carolina time) on or before December 31,
2006. The Letter of Credit shall have an Expiration Date of no later than the
Termination Date. The Fronting Bank will issue the Letter of Credit in a Stated
Amount not to exceed the Available Commitments; provided,
however, that the Fronting
Bank will not amend the Letter of Credit if, immediately following such
amendment, the Stated Amount of the Letter of Credit plus any outstanding
Drawing would (A) exceed the Available Commitments or (B) when aggregated with
the outstanding Reimbursement Obligation would exceed the Available Commitments.
The Letter of Credit shall be denominated in U.S. dollars only.

 

(b)  Forms. The Letter of
Credit shall be substantially in the form of Exhibit C. 

 

(c)  Notice
of Issuance. The Obligor shall
give the Fronting Bank and the Administrative Agent written notice (or
telephonic notice confirmed in writing) at least one Business Day prior to the
requested Date of Issuance of the Letter of Credit, such notice to be in
substantially the form of Exhibit F hereto (a “Letter
of Credit Request”). 

 

(d)  Issuance. Provided that the
Obligor has given the notice prescribed by Section 2.04(c) and subject to
the other terms and conditions of this Agreement, including the satisfaction of
the applicable conditions precedent set forth in Article III, the Fronting
Bank shall issue the Letter of Credit on the requested Date of Issuance as set
forth in the Letter of Credit Request for the benefit of the Beneficiary and
shall deliver the original of the Letter of Credit to the Beneficiary at the
address specified in the notice. At the request of the Obligor, the Fronting
Bank shall deliver a copy of the Letter of Credit to the Obligor within a
reasonable time after the Date of Issuance thereof. 

 

(e)  Notice
of Drawing. The Fronting Bank
shall promptly notify the Obligor by telephone, facsimile or other
telecommunication of any Drawing under the Letter of Credit issued for the
account of the Obligor by the Fronting Bank.

 

(f)  Payments. The Obligor hereby
agrees to pay to the Fronting Bank, in the manner provided in subsection (g)
below:

 

(i)  On each Payment
Date, an amount equal to the amount paid by the Fronting Bank under the Letter
of Credit issued for the account of the Obligor by the Fronting Bank;
and

 

(ii)  if any Drawing shall
be reimbursed to the Fronting Bank after 12:00 noon (Charlotte, North
Carolina time) on the Payment Date, interest on any and all amounts required to
be paid pursuant to clause (i) of this subsection (f) from and after the
due date thereof until payment in full, payable on demand, at an annual rate of
interest equal to the Alternate Base Rate in effect from time to
time.

 

(g)  Method
of Reimbursement. The Obligor shall
reimburse the Fronting Bank for each Drawing under the Letter of Credit issued
for the account of the Obligor by the Fronting Bank pursuant to subsection (f)
above in the following manner:

 

(i)  the Obligor shall
immediately reimburse the Fronting Bank in the manner described in
Section 2.15; or

 

 







14












 

(ii)  if (A) the Obligor
has not reimbursed the Fronting Bank pursuant to clause (i) above, (B) the
applicable conditions to Borrowing set forth in Articles II and III have been
fulfilled, and (C) the Available Commitments in effect at such time exceed
the amount of the Drawing to be reimbursed, the Obligor may reimburse the
Fronting Bank for such Drawing with the proceeds of an Alternate Base Rate
Pro-Rata Advance or, if the conditions specified in the foregoing clauses (A),
(B) and (C) have been satisfied and a Notice of Borrowing requesting a
Eurodollar Rate Pro-Rata Advance has been given in accordance with Section 2.02
three Business Days prior to the relevant Payment Date, with the proceeds of a
Eurodollar Rate Pro-Rata Advance.

 

(h)  Nature
of Fronting Bank’s Duties. In determining
whether to honor any Drawing under the Letter of Credit issued by the Fronting
Bank, the Fronting Bank shall be responsible only to determine that the
documents and certificates required to be delivered under the Letter of Credit
have been delivered and that they comply on their face with the requirements of
the Letter of Credit. The Obligor otherwise assumes all risks of the acts and
omissions of, or misuse of the Letter of Credit issued by the Fronting Bank for
the account of the Obligor by, the Beneficiary of the Letter of Credit. In
furtherance and not in limitation of the foregoing, but consistent with
applicable law, the Fronting Bank shall not be responsible, absent gross
negligence or willful misconduct, (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of any drawing honored under
the Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign the Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, facsimile or otherwise, whether or not they be in
cipher; (iv) for errors in interpretation of technical terms; (v) for
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under the Letter of Credit, or the proceeds thereof;
(vi) for the misapplication by the Beneficiary of the Letter of Credit or
of the proceeds of any drawing honored under the Letter of Credit; and
(vii) for any consequences arising from causes beyond the control of the
Fronting Bank. None of the above shall affect, impair or prevent the vesting of
any of the Fronting Bank’s rights or powers hereunder. Not in limitation of the
foregoing, any action taken or omitted to be taken by the Fronting Bank under or
in connection with the Letter of Credit shall not create against the Fronting
Bank any liability to the Obligor or any Bank, except for actions or omissions
resulting from the gross negligence or willful misconduct of the Fronting Bank
or any of its agents or representatives, and the Fronting Bank shall not be
required to take any action that exposes the Fronting Bank to personal liability
or that is contrary to this Agreement or applicable law.

 

(i)  Obligations
of Obligor Absolute. The obligation of
the Obligor to reimburse the Fronting Bank for Drawings honored under the Letter
of Credit shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances including,
without limitation, the following circumstances:

 

(i)  any lack of validity
or enforceability of the Letter of Credit;

 

(ii)  the existence of any
claim, set-off, defense or other right that the Obligor or any Affiliate of the
Obligor may have at any time against the Beneficiary or any transferee of the
Letter of Credit (or any Persons or entities for whom any such Beneficiary or
transferee may be acting), the Fronting Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction;

 

(iii)  any draft, demand,
certificate or any other documents presented under the Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

 

 







15












 

(iv)  the surrender or
impairment of any security for the performance or observance of any of the terms
of any of the Loan Documents;

 

(v)  any non-application
or misapplication by the Beneficiary of the proceeds of any Drawing under the
Letter of Credit; or

 

(vi)  the fact that an
Event of Default, or event that would constitute an Event of Default but for the
requirement that notice be given or time elapse or both, shall have occurred and
be continuing.

 

No payment made
under this Section shall be deemed to be a waiver of any claim the Obligor may
have against the Fronting Bank or any other Person.

 

(j)  Participations
by Lenders. By the issuance of
the Letter of Credit and without any further action on the part of the Fronting
Bank or any Lender in respect thereof, the Fronting Bank, shall hereby be deemed
to have granted to each Lender, and each Lender shall hereby be deemed to have
acquired from the Fronting Bank, an undivided interest and participation in the
Letter of Credit equal to such Lender’s Percentage of the Stated Amount of the
Letter of Credit, effective upon the issuance of the Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Fronting Bank, in accordance with this
subsection (j), such Lender’s Percentage of each payment made by the Fronting
Bank in respect of an unreimbursed Drawing under the Letter of Credit. The
Fronting Bank shall notify the Administrative Agent of the amount of such
unreimbursed Drawing honored by it not later than (x) 12:00 noon
(Charlotte, North Carolina time) on the date of payment of a draft under the
Letter of Credit, if such payment is made at or prior to 11:00 a.m. (Charlotte,
North Carolina time) on such day, and (y) the close of business (Charlotte,
North Carolina time) on the date of payment of a draft under the Letter of
Credit, if such payment is made after 11:00 a.m. (Charlotte, North Carolina
time) on such day, and the Administrative Agent shall notify each Lender of the
date and amount of such unreimbursed Drawing under the Letter of Credit honored
by the Fronting Bank and the amount of such Lender’s Percentage therein no later
than (1) 1:00 p.m. (Charlotte, North Carolina time) on such day, if such
payment is made at or prior to 11:00 a.m. (Charlotte, North Carolina time) on
such day, and (2) 11:00 a.m. (Charlotte, North Carolina time) on the next
following Business Day, if such payment is made after 11:00 a.m. (Charlotte,
North Carolina time) on such day. Not later than 2:00 p.m. (Charlotte, North
Carolina time) on the date of receipt of a notice of an unreimbursed Drawing by
a Lender, such Lender agrees to pay to the Fronting Bank an amount equal to the
product of (A) such Lender’s Percentage and (B) the amount of the payment
made by the Fronting Bank in respect of such unreimbursed Drawing.

 

If payment of the
amount due pursuant to the preceding sentence from a Lender is received by the
Fronting Bank after the close of business on the date it is due, such Lender
agrees to pay to the Fronting Bank, in addition to (and along with) its payment
of the amount due pursuant to the preceding sentence, interest on such amount at
a rate per
annum equal to (i) for
the period from and including the date such payment is due to but excluding the
second succeeding Business Day, the Federal Funds Rate, and (ii) for the period
from and including the second Business Day succeeding the date such payment is
due to but excluding the date on which such amount is paid in full, the Federal
Funds Rate plus 2.00%.

 

 







16












 

(k)  Obligations
of Lenders Absolute. Each Lender
acknowledges and agrees that (i) its obligation to acquire a participation
in the Fronting Bank’s liability in respect of the Letter of Credit and
(ii) its obligation to make the payments specified herein, and the right of
the Fronting Bank to receive the same, in the manner specified herein, are
absolute and unconditional and shall not be affected by any circumstances
whatsoever, including, without limitation, (A) the occurrence and
continuance of any Event of Default or Unmatured Default; (B) any other breach
or default by the Obligor, the Administrative Agent or any Lender hereunder;
(C) any lack of validity or enforceability of the Letter of Credit or any
Loan Document; (D) the existence of any claim, setoff, defense or other right
that the Lender may have at any time against the Obligor, the Beneficiary, the
Fronting Bank or any other Lender; (E) the existence of any claim, setoff,
defense or other right that the Obligor may have at any time against the
Beneficiary, the Fronting Bank, the Administrative Agent, any Lender or any
other Person, whether in connection with this Agreement or any other documents
contemplated hereby or any unrelated transactions; (F) any amendment or waiver
of, or consent to any departure from the Letter of Credit or this Agreement; (G)
any statement or any document presented under the Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (H) payment by the Fronting
Bank under the Letter of Credit against presentation of a draft or certificate
that does not comply with the terms of the Letter of Credit, so long as such
payment is not the consequence of the Fronting Bank’s gross negligence or
willful misconduct in determining whether documents presented under the Letter
of Credit comply with the terms thereof; (I) the occurrence of the Termination
Date; or (J) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing. Nothing herein shall prevent the assertion by
any Lender of a claim by separate suit or compulsory counterclaim, nor shall any
payment made by a Lender under Section 2.04 hereof be deemed to be a waiver of
any claim that a Lender may have against the Fronting Bank or any other
Person.

 

(l)  Proceeds
of Reimbursements. Upon receipt of a
payment from the Obligor pursuant to subsection (f) hereof, the Fronting Bank
shall promptly transfer to each Lender such Lender’s pro
rata share (determined
in accordance with such Lender’s Percentage) of such payment based on such
Lender’s pro
rata share (determined
as aforesaid) of amounts previously paid pursuant to subsection (j), above, and
not previously transferred by the Fronting Bank pursuant to this subsection (l);
provided,
however, that if a Lender
shall fail to pay to the Fronting Bank any amount required by subsection (j)
above by the close of business on the Business Day following the date on which
such payment was due from such Lender, and the Obligor shall not have reimbursed
the Fronting Bank for such amount pursuant to subsection (f) hereof (such
unreimbursed amount being hereinafter referred to as a “Transferred
Amount”), the Fronting Bank
shall be deemed to have purchased, on such following Business Day (a
“Participation
Transfer Date”) from such Lender
(a “Defaulting
Lender”), a participation
in such Transferred Amount and shall be entitled, for the period from and
including the Participation Transfer Date to the earlier of (i) the date on
which the Obligor shall have reimbursed the Fronting Bank for such Transferred
Amount and (ii) the date on which such Lender shall have reimbursed the Fronting
Bank for such Transferred Amount (the “Participation
Transfer Period”), to the rights,
privileges and obligations of a “Lender” under this Agreement with respect to
such Transferred Amount, and such Defaulting Lender shall not be deemed to be a
Lender hereunder, and shall not have any rights or interests of a Lender
hereunder, with respect to such Transferred Amount, and its Percentage shall be
reduced accordingly with the amount by which such Percentage is reduced deemed
held by the Fronting Bank during the Participation Transfer Period; and
provided
further, however, that if, at any
time after the occurrence of a Participation Transfer Date with respect to any
Lender and prior to the reimbursement by such Lender of the Fronting Bank with
respect to the related Transferred Amount pursuant to subsection (j) above, the
Fronting Bank shall receive any payment from the Obligor pursuant to subsection
(f) hereof, the Fronting Bank shall not be obligated to pay any amounts to such
Lender, and the Fronting Bank shall retain such amounts (including, without
limitation, interest payments due from the Obligor pursuant to subsection (f)
hereof) for its own account as a Lender, provided that all such
amounts shall be applied in satisfaction of the unpaid amounts (including,
without limitation, interest payments due from such Lender pursuant to
subsection (j), above) due from such Lender with respect to such Transferred
Amount. 

 








17













If at any time after
the occurrence of a Participation Transfer Date with respect to any Lender, the
Administrative Agent shall receive any payment from the Obligor for the account
of such Lender pursuant to this Agreement, if at the time of receipt of such
amounts by the Administrative Agent such Lender shall not have reimbursed the
Fronting Bank with respect to the related Transferred Amount pursuant to
subsection (j) above, the Administrative Agent shall not pay any such amounts to
such Lender but shall pay all such amounts to the Fronting Bank, and the
Fronting Bank shall retain such amounts for its own account as a Lender and
apply such amounts in satisfaction of the unpaid amounts (including, without
limitation, interest payments due from such Lender pursuant to subsection (j)
above) due from such Lender with respect to such Transferred Amount.


 

All payments due to
the Lenders from the Fronting Bank pursuant to this subsection (l) shall be made
to the Lenders if, as, and, to the extent possible, when the Fronting Bank
receives payments in respect of Drawings under the Letter of Credit pursuant to
subsection (f) hereof, and in the same funds in which such amounts are received;
provided that if any Lender
to which the Fronting Bank is required to transfer any such payment (or any
portion thereof) pursuant to this subsection (l) does not receive such payment
(or portion thereof) prior to (i) the close of business on the Business Day on
which the Fronting Bank received such payment from the Obligor, if the Fronting
Bank received such payment prior to 1:00 p.m. (Charlotte, North Carolina time)
on such day, or (ii) 1:00 p.m. (Charlotte, North Carolina time) on the Business
Day next succeeding the Business Day on which the Fronting Bank received such
payment from the Obligor, if the Fronting Bank received such payment after 1:00
p.m. (Charlotte, North Carolina time) on such day, the Fronting Bank agrees to
pay to such Lender, along with its payment of the portion of such payment due to
such Lender, interest on such amount at a rate per
annum equal to (A) for
the period from and including the Business Day when such payment was required to
be made to the Lenders to but excluding the second succeeding Business Day, the
Federal Funds Rate and (B) for the period from and including the second Business
Day succeeding the Business Day when such payment was required to be made to the
Lenders to but excluding the date on which such amount is paid in full, the
Federal Funds Rate plus 2.00%. The provisions of this subsection (l) shall not
affect or impair any of the obligations under this Agreement of any Defaulting
Lender to the Fronting Bank, all of which shall remain unaffected by any default
in payment by the Fronting Bank to such Defaulting Lender. 

 

(m)  Concerning
the Fronting Bank. The Fronting Bank
will exercise and give the same care and attention to the Letter of Credit
issued by it as it gives to its other letters of credit and similar obligations,
and each Lender agrees that the Fronting Bank’s sole liability to each Lender
shall be (i) to distribute promptly, as and when received by the Fronting Bank,
and in accordance with the provisions of subsection (l) above, such Lender’s
pro
rata share (determined
in accordance with such Lender’s Percentage) of any payments to the Fronting
Bank by the Obligor pursuant to subsection (f) above in respect of Drawings
under the Letter of Credit issued by the Fronting Bank, (ii) to exercise or
refrain from exercising any right or to take or to refrain from taking any
action under this Agreement or the Letter of Credit issued by the Fronting Bank
as may be directed in writing by the Majority Lenders (or, when expressly
required by the terms of this Agreement, all of the Lenders) or the
Administrative Agent acting at the direction and on behalf of the Majority
Lenders (or, when expressly required by the terms of this Agreement, all of the
Lenders), except to the extent required by the terms hereof or thereof or by
applicable law, and (iii) as otherwise expressly set forth in this Section 2.04.
The Fronting Bank shall not be liable for any action taken or omitted at the
request or with approval of the Majority Lenders (or, when expressly required by
the terms of this Agreement, all of the Lenders) or of the Administrative Agent
acting on behalf of the Majority Lenders (or, when expressly required by the
terms of this Agreement, all of the Lenders) or for the nonperformance of the
obligations of any other party under this Agreement, the Letter of Credit or any
other document contemplated hereby or thereby. Without in any way limiting any
of the foregoing, the Fronting Bank may rely upon the advice of counsel
concerning legal matters and upon any written communication or any telephone
conversation that it believes to be genuine or to have been signed, sent or made
by the proper Person and shall not be required to make any inquiry concerning
the performance by the Obligor, the Beneficiary or any other Person of any of
their respective obligations and liabilities under or in respect of this
Agreement, the  Letter  of  Credit  or any other 
documents  contemplated   

 








18













hereby or thereby.
 The Fronting  Bank shall not have any  obligation to make 
any claim,  or assert  any Lien,  upon anyproperty held by the
Fronting Bank or assert any offset thereagainst in satisfaction of all or any
part of the obligations of the Obligor hereunder; provided that the Fronting
Bank shall, if so directed by the Majority Lenders or the Administrative Agent
acting on behalf of and with the consent of the Majority Lenders, have an
obligation to make a claim, or assert a Lien, upon property held by the Fronting
Bank in connection with this Agreement, or assert an offset thereagainst.


 

The Fronting Bank
may accept deposits from, make loans or otherwise extend credit to, and
generally engage in any kind of banking or trust business with the Obligor or
any of their Affiliates, or any other Person, and receive payment on such loans
or extensions of credit and otherwise act with respect thereto freely and
without accountability in the same manner as if it were not the Fronting Bank
hereunder. 

 

The Fronting Bank
makes no representation or warranty and shall have no responsibility with
respect to: (i) the genuineness, legality, validity, binding effect or
enforceability of this Agreement or any other documents contemplated hereby;
(ii) the truthfulness, accuracy or performance of any of the representations,
warranties or agreements contained in this Agreement or any other documents
contemplated hereby; (iii) the collectibility of any amounts due under this
Agreement; (iv) the financial condition of the Obligor or any other Person; or
(v) any act or omission of the Beneficiary with respect to its use of the Letter
of Credit or the proceeds of any Drawing under the Letter of Credit.


 

(n)  Indemnification
of Fronting Bank by Lenders. To the extent that
the Fronting Bank is not reimbursed and indemnified by the Obligor under Section
8.05 hereof, each Lender agrees to reimburse and indemnify the Fronting Bank on
demand, pro
rata in accordance with
such Lender’s Percentage, for 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 Fronting Bank, in any way relating to or arising out
of this Agreement, the Letter of Credit or any other document contemplated
hereby or thereby, or any action taken or omitted by the Fronting Bank under or
in connection with this Agreement, the Letter of Credit or any other document
contemplated hereby or thereby; provided,
however, that such Lender
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Fronting Bank’s gross negligence or willful misconduct; and
provided
further, however, that such Lender
shall not be liable to the Fronting Bank or any other Lender for the failure of
the Obligor to reimburse the Fronting Bank for any drawing made under the Letter
of Credit issued for the account of the Obligor with respect to which such
Lender has paid the Fronting Bank such Lender’s pro
rata share (determined
in accordance with such Lender’s Percentage), or for the Obligor’s failure to
pay interest thereon. Each Lender’s obligations under this subsection (n) shall
survive the payment in full of all amounts payable by such Lender under
subsection (j) above, and the termination of this Agreement and the Letter of
Credit. Nothing in this subsection (n) is intended to limit any Lender’s
reimbursement obligation contained in subsection (j) above.

 

(o)  Representations
of Lenders. As between the
Fronting Bank and the Lenders, by its execution and delivery of this Agreement
each Lender hereby represents and warrants solely to the Fronting Bank that (i)
it is duly organized and validly existing in good standing under the laws of the
jurisdiction of its formation, and has full corporate power, authority and legal
right to execute, deliver and perform its obligations to the Fronting Bank under
this Agreement; and (ii) this Agreement constitutes its legal, valid and binding
obligation enforceable against it in accordance with the terms hereof, except as
such enforceability may be limited by applicable bank organization, moratorium,
conservatorship or other laws now or hereafter in effect affecting the
enforcement of creditors rights in general and the rights of creditors of banks,
and except as such enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity).

 

 







19












 

            SECTION
2.05.  Fees.

 

(a)  The Obligor shall
pay to the Administrative Agent for its account, the account of the Lenders (in
such accounts agreed to by such parties in writing), or the account of the
Fronting Bank, the fees and other amounts specified in the Commitment Letter on
(i) the 15th day of each March, June, September and December commencing on
March 15, 2007 unless such day is not a Business Day, in which case the such
fees and other amounts (if any) shall be due on the next succeeding Business
Day; (ii) on the Termination Date; and (iii) if earlier, on the date
of any termination or reduction pursuant to Section 2.06.

 

(b)  The Obligor hereby
agrees to pay to the Administrative Agent, for the account of the Fronting Bank,
all normal costs and expenses of the Fronting Bank in connection with the
transfer, amendment, renewal, extension or other administration of the Letter of
Credit, including, a drawing fee in an amount equal to $100.00 (the
“Drawing
Fee”) for each drawing
under the Letter of Credit. 

 

(c)  All fees payable
hereunder shall be paid on the dates due, in immediately available funds to the
Administrative Agent for distribution. Absent manifest error, fees paid shall
not be refundable under any circumstances. Any overdue fees accrued under this
Section shall bear interest, payable on demand, for each day until paid at the
Default Rate.

 

(d)  Any reference herein
or in any other document to fees and/or other amounts or obligations payable
under this Agreement shall include all fees and other amounts payable pursuant
to the Commitment Letter and any reference to this Agreement shall be deemed to
include reference to the Commitment Letter. 

 

            SECTION
2.06.  Adjustment
of the Commitments.

 

(a)  Subject to the last
sentence of this clause (a) the Obligor may, upon at least three Business Days’
notice to the Administrative Agent, (i) terminate the Commitments at any time,
or (ii) ratably reduce from time to time by an aggregate amount of $10,000,000
or an integral multiple of $5,000,000 in excess thereof, the aggregate amount of
the Commitments in excess of the Outstanding Credits. On each date of
termination or reduction, the Obligor shall pay the amount, if any, due under
Section 2.05(a). No reduction or termination of the Commitments under this
Agreement shall be permitted if the Commitments under the Agreement are less
than the aggregate “Commitments” under and as defined in the Primary
Reimbursement Agreement.

 

            SECTION
2.07.  Repayment
of Advances.

 

The Obligor agrees
to repay the principal amount of each Advance made by each Lender no later than
the earlier of (i) 364 days after the date such Advance is made and (ii) the
Termination Date; provided, however, that if the
Obligor shall deliver to the Administrative Agent evidence reasonably
satisfactory to the Administrative Agent (including, without limitation,
certified copies of governmental approvals and legal opinions) that the Obligor
is authorized under Applicable Law to incur Indebtedness hereunder maturing more
than 364 days after the date of incurrence of such Indebtedness, the Obligor
shall repay each Advance made to it no later than the Termination
Date.

 

            SECTION
2.08.  Interest
on Advances.

 

The Obligor
shall
pay interest on the unpaid principal amount of each Advance made by each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:

 

 







20












 

(a)  Alternate
Base Rate Pro-Rata Advances. If such Advance is
an Alternate Base Pro-Rata Rate Advance, a rate per annum equal at all times to
the Alternate Base Rate in effect from time to time plus the Applicable Margin
for such Alternate Base Rate Pro Rata Advance in effect from time to time,
payable quarterly in arrears on the 15th day of each March,
June, September and December, on the Termination Date and on the date such
Alternate Base Rate Pro-Rata Advance shall be Converted or be paid in full and
as provided in Section 2.12; provided that at any time an Event of Default
shall have occurred and be continuing, thereafter each Alternate Base Pro-Rata
Rate Advance shall bear interest, payable on demand, at the Default Rate; or


 

(b)  Eurodollar
Rate Pro-Rata Advances. If such Advance is
a Eurodollar Rate Pro-Rata Advance, a rate per annum equal at all times during
the Interest Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin for such Eurodollar Rate Pro Rata
Advance in effect from time to time plus the Applicable Margin, payable on the
15th day of each Interest Period for such Eurodollar Rate Pro-Rata Advance (and,
in the case of any Interest Period of six months, on the last day of the third
month of such Interest Period), on the Termination Date and on the date such
Eurodollar Rate Pro-Rata Advance shall be Converted or be paid in full and as
provided in Section 2.12; provided that at any time an Event of Default
shall have occurred and be continuing, thereafter each Eurodollar Rate Pro-Rata
Advance shall bear interest, payable on demand, at the Default
Rate.

 

            SECTION
2.09.  Additional
Interest on Advances.

 

The Obligor agrees
to pay to each Lender, so long as such Lender shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid principal amount of
each Eurodollar Rate Advance made by such Lender to the Obligor, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per
annum equal at all times
to the remainder obtained by subtracting (i) the Eurodollar Rate for the
Interest Period for such Advance from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage of such Lender for such Interest Period, payable on each date
on which interest is payable on such Advance; provided, that no Lender
shall be entitled to demand additional interest under this Section 2.09
more than 90 days following the last day of the Interest Period in respect
of which such demand is made; provided
further, however, that the foregoing
proviso shall in no way limit the right of any Lender to demand or receive such
additional interest to the extent that such additional interest relates to the
retroactive application by the Board of Governors of the Federal Reserve System
of any regulation described above if such demand is made within 90 days
after the implementation of such retroactive regulation. Such additional
interest shall be determined by such Lender and notified to the Obligor through
the Administrative Agent, and such determination shall be conclusive and binding
for all purposes, absent manifest error.

 

            SECTION
2.10.  Interest
Rate Determination.

 

(a)  The Administrative
Agent shall give prompt notice to the Obligor and the Lenders of the applicable
interest rate determined by the Administrative Agent for purposes of
Section 2.08(a) or (b).

 

(b)  If, with respect to
any Eurodollar Rate Pro-Rata Advances, the Majority Lenders notify the
Administrative Agent that (i) dollar deposits are not being offered to banks in
the London interbank eurodollar market for the applicable amount and Interest
Period of such Eurodollar Rate Advances, (ii) adequate and reasonable means do
not exist for determining the Eurodollar Rate or (iii) the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Majority Lenders of making or funding their respective Eurodollar Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Obligor and the Lenders, whereupon

 

 







21












 

(i)  each Eurodollar Rate
Pro-Rata Advance will automatically, on the last day of the then existing
Interest Period, therefor, Convert into an Alternate Base Rate Pro-Rata Advance,
and

 

(ii)  the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Administrative Agent shall notify the Obligor and the
Lenders that the circumstances causing such suspension no longer
exist.

 

            SECTION
2.11.  Conversion
of Advances.

 

(a)  Voluntary. The Obligor may on
any Business Day, upon notice given to the Administrative Agent not later than
11:00 a.m. (Charlotte, North Carolina time) on the third Business Day prior to
the date of any proposed Conversion into Eurodollar Rate Pro-Rata Advances, and
on the date of any proposed Conversion into Alternate Base Rate Pro-Rata
Advances, and subject to the provisions of Sections 2.10 and 2.11, Convert
all Pro-Rata Advances of one Type made to the Obligor in connection with the
same Borrowing into Pro-Rata Advances of another Type or Types or Pro-Rata
Advances of the same Type having the same or a new Interest Period; provided,
however, that any
Conversion of, or with respect to, any Eurodollar Rate Pro-Rata Advances into
Pro-Rata Advances of another Type or Pro-Rata Advances of the same Type having
the same or new Interest Periods, shall be made on, and only on, the last day of
an Interest Period for such Eurodollar Rate Pro-Rata Advances, unless the
Obligor shall also reimburse the Lenders in respect thereof pursuant to
Section 8.05(b) on the date of such Conversion. Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Pro-Rata Advances to be Converted, and
(iii) if such Conversion is into, or with respect to, Eurodollar Rate
Pro-Rata Advances, the duration of the Interest Period for each such Pro-Rata
Advance.

 

(b)  Mandatory. If the Obligor
shall fail to select the Type of any Pro-Rata Advance or the duration of any
Interest Period for any Borrowing comprising Eurodollar Rate Pro-Rata Advances
in accordance with the provisions contained in the definition of “Interest
Period” in Section 1.01 and Section 2.11(a), or if any proposed
Conversion of a Borrowing that is to comprise Eurodollar Rate Pro-Rata Advances
upon Conversion shall not occur as a result of the circumstances described in
paragraph (c) below, the Administrative Agent will forthwith so notify
the Obligor and the Lenders, and such Advances will automatically, on the last
day of the then existing Interest Period therefor, Convert into Alternate Base
Rate Pro-Rata Advances.

 

(c)  Failure
to Convert. Each notice of
Conversion given by the Obligor pursuant to subsection (a) above shall be
irrevocable and binding on the Obligor. In the case of any Borrowing that is to
comprise Eurodollar Rate Pro-Rata Advances upon Conversion, the Obligor agrees
to indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on the date specified for such
Conversion the applicable conditions set forth in Article III, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or redeployment of deposits or other funds acquired by such Lender
to fund such Eurodollar Rate Pro-Rata Advances upon such Conversion, when such
Conversion, as a result of such failure, does not occur. The Obligor’s
obligations under this subsection (c) shall survive the repayment of
all other amounts owing by the Obligor to the Lenders and the Administrative
Agent under this Agreement and any Note and the termination of the
Commitments.

 

 







22












 

            SECTION
2.12.  Prepayments.

 

(a)  Optional. The Obligor may at
any time prepay the outstanding principal amounts of the Advances made to the
Obligor as part of the same Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid,
upon notice thereof given to the Administrative Agent by the Obligor not later
than 11:00 a.m. (Charlotte, North Carolina time) (i) on the date of any such
prepayment in the case of Alternate Base Rate Advances and (ii) on the second
Business Day prior to any such prepayment in the case of Eurodollar Rate
Advances; provided,
however, that (x) each
partial prepayment of any Borrowing shall be in an aggregate principal amount
not less than $5,000,000 with respect to Pro Rata Borrowings (or, if lower, the
principal amount outstanding hereunder on the date of such prepayment) or an
integral multiple of $1,000,000 in excess thereof and (y) in the case of
any such prepayment of a Eurodollar Rate Advance, the Obligor shall be obligated
to reimburse the Lenders in respect thereof pursuant to Section 8.05(b) on the
date of such prepayment. Any such optional prepayment shall automatically result
in a irrevocable permanent reduction of the Commitments by the aggregate
principal amount of such prepayment and be subject to the terms of Section
2.06(a).

 

(b)  Mandatory. If and to the
extent that the Outstanding Credits on any date hereunder shall exceed the
aggregate amount of the Commitments hereunder on such date, the Obligor agrees
to (A) prepay on such date a principal amount of Advances and/or
(B) pay to the Administrative Agent an amount in immediately available
funds (which funds shall be held as collateral pursuant to arrangements
satisfactory to the Administrative Agent) equal to all or a portion of the
amount available for drawing under the Letter of Credit outstanding at such
time, which prepayment under clause (A) and payment under clause (B) shall, when
taken together result in the amount of Outstanding Credits minus the amount paid to
the Administrative Agent pursuant to clause (B) being less than or equal to the
aggregate amount of the Commitments hereunder on such date. 

 

Any prepayment of
Advances shall be accompanied by accrued interest on the amount prepaid to the
date of such prepayment and, in the case of any such prepayment of Eurodollar
Rate Advances, the Obligor shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.05(b) on the date of such
prepayment. 

 

            SECTION
2.13.  Increased
Costs.

 

(a)  If, due to either
(i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or regulation, in
each case, after the date hereof, or (ii) the compliance with any guideline
or request from any central bank or other governmental authority (whether or not
having the force of law) issued, promulgated or made, as the case may be, after
the date hereof, there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Advances or
any increase in the cost to the Fronting Bank or any Lender of issuing,
maintaining or participating in Letter of Credit, then the Obligor shall from
time to time, upon demand by such Lender or the Fronting Bank (as the case may
be) (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender or the Fronting Bank (as the
case may be) additional amounts sufficient to compensate such Lender or the
Fronting Bank (as the case may be) for such increased cost. A certificate as to
the amount of such increased cost and the basis therefor, submitted to the
Obligor and the Administrative Agent by such Lender or the Fronting Bank (as the
case may be), shall constitute such demand and shall be conclusive and binding
for all purposes, absent manifest error.

 

 







23












 

(b)  If any Lender or the
Fronting Bank determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), issued, promulgated or made (as the
case may be) after the date hereof, affects or would affect the amount of
capital required or expected to be maintained by such Lender or the Fronting
Bank (as the case may be) or any corporation controlling such Lender or the
Fronting Bank (as the case may be) and that the amount of such capital is
increased by or based upon the existence of (i) such Lender’s commitment to
lend or participate in Letter of Credit hereunder and other commitments of this
type or (ii) the Advances made by such Lender or (iii) in the case of
the Fronting Bank, the Fronting Bank’s commitment to issue, maintain and honor
drawings under the Letter of Credit, or (iv) the honoring of the Letter of
Credit by the Fronting Bank hereunder, then, upon demand by such Lender or the
Fronting Bank (as the case may be) (with a copy of such demand to the
Administrative Agent), the Obligor shall immediately pay to the Administrative
Agent for the account of such Lender or the Fronting Bank (as the case may be),
from time to time as specified by such Lender or the Fronting Bank (as the case
may be), additional amounts sufficient to compensate such Lender, the Fronting
Bank or such corporation in the light of such circumstances, to the extent that
such Lender or the Fronting Bank (as the case may be) determines such increase
in capital to be allocable to (i) in the case of such Lender, the existence
of such Lender’s commitment to lend hereunder or the Advances made by such
Lender or (ii)  the participations in the Letter of Credit or (iii) in
the case of the Fronting Bank, the Fronting Bank’s Commitment to issue, maintain
and honor drawings under the Letter of Credit, or (iv) the honoring of the
Letter of Credit by the Fronting Bank hereunder. A certificate as to such
amounts submitted to the Obligor and the Administrative Agent by such Lender or
the Fronting Bank (as the case may be) shall constitute such demand and shall be
conclusive and binding for all purposes, absent manifest error.

            

            SECTION
2.14.  Illegality.

 

Notwithstanding any
other provision of this Agreement, if any Lender shall notify the Administrative
Agent that the introduction of or any change in or in the interpretation of any
law or regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, (i) the obligation
of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Obligor and
the Lenders that the circumstances causing such suspension no longer exist and
(ii) the Obligor shall forthwith prepay in full all Eurodollar Rate
Advances of all Lenders then outstanding, together with interest accrued
thereon, unless (A) the Obligor, within five Business Days of notice from
the Administrative Agent, Converts all Eurodollar Rate Pro-Rata Advances of all
Lenders then outstanding into Advances of another Type in accordance with
Section 2.11 or (B) the Administrative Agent notifies the Obligor that
the circumstances causing such prepayment no longer exist. Any Lender that
becomes aware of circumstances that would permit such Lender to notify the
Administrative Agent of any illegality under this Section 2.14 shall use
its best efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office if the
making of such change would avoid or eliminate such illegality and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

 

 







24












 

            SECTION
2.15.  Payments
and Computations.

 

(a)  The Obligor shall
make each payment hereunder and under any Note not later than 12:00 noon
(Charlotte, North Carolina time) on the day when due in U.S. dollars to the
Administrative Agent or, with respect to payments made in respect of
Reimbursement Obligations, to the Fronting Bank, at its address referred to in
Section 8.02 in same day funds, without set-off, counterclaim or defense
and any such payment to the Administrative Agent or the Fronting Bank (as the
case may be) shall constitute payment by the Obligor hereunder or under any Note
or under any Note, as the case may be, for all purposes, and upon such payment
the Lenders shall look solely to the Administrative Agent or the Fronting Bank
(as the case may be) for their respective interests in such payment. The
Administrative Agent or the Fronting Bank (as the case may be) will promptly
after any such payment cause to be distributed like funds relating to the
payment of principal or interest or facility fees or Reimbursement Obligations
ratably (other than amounts payable pursuant to Section  2.02(c), 2.05,
2.09, 2.11(c), 2.13, 2.16 or 8.05(b)) (according to the Lenders’ respective
Commitments) to the Lenders for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Lender to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to
Section 8.08(d), from and after the effective date specified in such
Assignment and Acceptance, the Administrative Agent and the Fronting Bank shall
make all payments hereunder in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.

 

(b)  The Obligor hereby
authorizes each Lender and the Fronting Bank, if and to the extent payment owed
to such Lender or the Fronting Bank (as the case may be) is not made by the
Obligor to the Administrative Agent or the Fronting Bank (as the case may be)
when due hereunder or under any Note held by such Lender, to charge from time to
time against any or all of the Obligor’s accounts (other than any payroll
account maintained by the Obligor with such Lender or the Fronting Bank (as the
case may be) if and to the extent that such Lender or the Fronting Bank (as the
case may be) shall have expressly waived its set-off rights in writing in
respect of such payroll account) with such Lender or the Fronting Bank (as the
case may be) any amount so due.

 

(c)  All computations of
interest based on the Alternate Base Rate (based upon Wachovia’s base rate)
shall be made by the Administrative Agent on the basis of a year of 365 or 366
days, as the case may be, and all computations of facility fees and other fees
and of interest based on the Alternate Base Rate (based upon the Federal Funds
Rate), the Eurodollar Rate or the Federal Funds Rate shall be made by the
Administrative Agent, and all computations of interest pursuant to
Section 2.09 shall be made by a Lender, on the basis of a year of 360 days,
in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such facility fees or
interest are payable. Each determination by the Administrative Agent (or, in the
case of Section 2.09, by a Lender) of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.

 

(d)  Whenever any payment
hereunder or under any 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 facility fees, as the case may be; provided,
however, if such extension
would cause payment of interest on or principal of Eurodollar Rate Advances to
be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.

 

 







25












 

(e)  Unless the
Administrative Agent shall have received notice from any Obligor prior to the
date on which any payment is due to the Lenders hereunder that the Obligor will
not make such payment in full, the Administrative Agent may assume that the
Obligor has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent that the Obligor shall not have so made
such payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.

 

(f)  Except as provided
otherwise in Section 2.08, any amount payable by the Obligor hereunder or under
any Note that is not paid when due (whether at stated maturity, by acceleration
or otherwise) shall (to the fullest extent permitted by law) bear interest from
the date when due until paid in full at the Default Rate.

 

(g)  To the extent that
any payment by or on behalf of the Obligor is made to the Administrative Agent,
any Fronting Bank or any Lender or the Administrative Agent, any Fronting Bank
or any Lender exercises its right of setoff, and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, the Fronting Bank or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any bankruptcy, insolvency or
other similar law now or hereafter in effect or otherwise (a “Returned
Payment”), then (i) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (ii) each Lender
and the Fronting Bank severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per
annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders and the Fronting Banks under clause (ii) of the
preceding sentence shall survive the payment in full of any amounts hereunder
and the termination of this Agreement.

 

     SECTION
2.16.  Taxes.

 

(a)  Any and all payments
by the Obligor hereunder and under any Note shall be made, in accordance with
Section 2.15, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of
each Lender, the Fronting Bank and the Administrative Agent, such taxes, levies,
imposts, deductions and charges in the nature of franchise taxes or taxes
measured by the gross receipts or net income of any Lender, the Fronting Bank or
the Administrative Agent by any jurisdiction in which such Lender, the Fronting
Bank or the Administrative Agent (as the case may be) is organized, located or
conducts business or any political subdivision thereof and, in the case of each
Lender, by the jurisdiction of such Lender’s Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being herein referred to as
“Taxes”). If the Obligor
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note to any Lender, the Fronting Bank or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.16) such Lender, the Fronting Bank
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Obligor
shall make such deductions and (iii) the Obligor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with Applicable Law.

 

 







26












 

(b)  In addition, the
Obligor agrees to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies that arise from any
payment made hereunder or under any Note or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Letter of
Credit or any Note (herein referred to as “Other
Taxes”).

 

(c)  The Obligor agrees
to indemnify each Lender, the Fronting Bank and the Administrative Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.16) paid by such Lender, the Fronting Bank or the Administrative
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender, the Fronting Bank or the
Administrative Agent (as the case may be) makes written demand
therefor.

 

(d)  Prior to the date of
the issuing of the Letter of Credit in the case of each Lender, and on the date
of the Assignment and Acceptance pursuant to which it became a Lender in the
case of each other Lender, and from time to time thereafter if requested by the
Obligor or the Administrative Agent, each Lender organized under the laws of a
jurisdiction outside the United States shall provide the Administrative Agent,
the Fronting Bank and the Obligor with the forms prescribed by the Internal
Revenue Service of the United States certifying that such Lender is exempt from
United States withholding taxes with respect to all payments to be made to such
Lender hereunder and under any Note. If for any reason during the term of this
Agreement, any Lender becomes unable to submit the forms referred to above or
the information or representations contained therein are no longer accurate in
any material respect, such Lender shall promptly notify the Administrative
Agent, the Fronting Bank and the Obligor in writing to that effect. Unless the
Obligor, the Fronting Bank and the Administrative Agent have received forms or
other documents satisfactory to them indicating that payments hereunder or under
any Note are not subject to United States withholding tax, the Obligor, the
Fronting Bank or the Administrative Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments to or for any
Lender organized under the laws of a jurisdiction outside the United
States.

 

(e)  Any Lender claiming
any additional amounts payable pursuant to this Section 2.16 shall use its
best efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

 

(f)  Without prejudice to
the survival of any other agreement of the Obligor hereunder, the agreements and
obligations of the Obligor contained in this Section 2.16 shall survive the
payment in full of principal and interest hereunder and under any
Note.

 

 







27












 

            SECTION
2.17.  Sharing
of Payments, Etc.

 

If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances made by it or
participations in the Letter of Credit acquired by it (other than pursuant to
Section 2.02(c), 2.09, 2.11(c), 2.13, 2.16 or 8.05(b)) in excess of its
ratable share of payments on account of the Advances or the Letter of Credit (as
the case may be) obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in the Advances made by them
or participations in Letter of Credit acquired by them (as the case may be) as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided,
however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender’s ratable share (according to the
proportion of (a) the amount of such Lender’s required repayment to
(b) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. The Obligor agrees that any Lender so purchasing
a participation from another Lender pursuant to this Section 2.17 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Obligor in the amount of such
participation.

 

            SECTION
2.18.  Noteless
Agreement; Evidence of Indebtedness.

 

(a)  Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Obligor to such Lender resulting from each Advance made
by such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.

 

(b)  The Administrative
Agent shall also maintain accounts in which it will record (i) the amount
of each Advance made hereunder, the Obligor thereof, the Type thereof and the
Interest Period (if any) with respect thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Obligor to each Lender hereunder, and (iii) the amount of any sum received
by the Administrative Agent hereunder from the Obligor and each Lender’s share
thereof.

 

(c)  The entries
maintained in the accounts maintained pursuant to subsections (a) and (b) above
shall be prima facie evidence of the existence and amounts of the obligations
therein recorded; provided,
however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Obligor to repay
such obligations in accordance with their terms.

 

(d)  Any Lender may
request that its Advances be evidenced by a Note. In such event, the Obligor
shall prepare, execute and deliver to such Lender a Note payable to the order of
such Lender. Thereafter, the Advances evidenced by such Note and interest
thereon shall at all times (including after any assignment pursuant to Section
8.08) be represented by one or more Notes payable to the order of the payee
named therein or any assignee pursuant to Section 8.08, except to the extent
that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Borrowings once again be evidenced as
described in subsections (a) and (b) above. 

 

            SECTION
2.19.  Reserved.

 

            SECTION
2.20.  Reserved.

 

 







28













 

CONDITIONS
OF LENDING AND ISSUING
LETTERS OF CREDIT

 

            SECTION
2.21.  Conditions
Precedent to Effectiveness.

 

This Agreement shall
become effective on the date that the following conditions shall be
satisfied:

 

(a)  The Administrative
Agent shall have received the following, each dated the same date (except for
the financial statements referred to in paragraph (iv)), in form and
substance satisfactory to the Administrative Agent and (except for any Note)
with one copy for the Fronting Bank and each Lender:

 

(i)  This Agreement, duly
executed by each of the parties hereto, and Notes requested by any Lender
pursuant to Section 2.18(d), duly completed and executed by the Obligor and
payable to the order of such Lender.

 

(ii)  Certified copies of
the resolutions of the Board of Directors of the Obligor approving this
Agreement and the other Loan Documents to which it is, or is to be, a party and
of all documents evidencing any other necessary corporate action with respect to
this Agreement and such Loan Documents;

 

(iii)  A certificate of the
Secretary or an Assistant Secretary of the Obligor certifying (A) the names
and true signatures of the officers of the Obligor authorized to sign each Loan
Document to which the Obligor is, or is to become, a party and the other
documents to be delivered hereunder; (B) that attached thereto are true and
correct copies of the Organizational Documents of the Obligor, in each case as
in effect on such date; and (C) that attached thereto are true and correct
copies of all governmental and regulatory authorizations and approvals
(including the Obligor’s Approval, as applicable) required for the due
execution, delivery and performance by the Obligor of this Agreement and each
other Loan Document to which the Obligor is, or is to become, a
party;

 

(iv)  Copies of the
consolidated balance sheets of the Obligor and its Subsidiaries as of
December 31, 2005, and the related consolidated statements of income,
retained earnings and cash flows of the Obligor and its Subsidiaries for the
fiscal year then ended, certified by PricewaterhouseCoopers LLP, and the
unaudited consolidated balance sheets of the Obligor and its Subsidiaries as of
September 30, 2006 and related consolidated statements of income, retained
earnings and cash flows of the Obligor and its Subsidiaries for the three-month
period then ended, in all cases as amended and restated to the date of
delivery;

 

(v)  An opinion of Gary
D. Benz, Esq., counsel for the Obligor, substantially in the form of
Exhibit G hereto;

 

(vi)  An opinion of Akin
Gump Strauss Hauer & Feld LLP, special counsel for the Obligor,
substantially in the form of Exhibit H hereto;

 

(vii)  Such other
certifications, opinions, financial or other information, approvals and
documents as the Administrative Agent, the Fronting Bank or any other Lender may
reasonably request, all in form and substance satisfactory to the Administrative
Agent, the Fronting Bank or such other Lender (as the case may be).


 

(b)  The Obligor shall
have paid all of the fees required to be paid to the Lenders, the Fronting Bank
and the Administrator Agent, and all expenses related to the preparation,
execution and delivery of the Loan Documents.

 

 







29












 

(c)  The Administrative
Agent shall have received all documentation and information required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation the Patriot Act.


 

(d)  Evidence that the
Primary Facility is effective and the Primary Letters of Credit shall have been
issued; 

 

(e)  The Administrative
Agent’s completion of all due diligence with respect to the Obligor and its
Subsidiaries in the scope and determination satisfactory to the Administrative
Agent.

 

            SECTION
2.22.  Conditions
Precedent to Issuance of Letter of Credit.

 

The obligation of
the Fronting Bank to issue, amend, extend or renew the Letter of Credit, shall
be subject to the further conditions precedent that on the date of
issuance:

 

(i)  The following
statements shall be true (and each of the giving of the applicable Letter of
Credit Request and the acceptance of the Letter of Credit by the Beneficiary
shall constitute a representation and warranty by the Obligor that on the date
of such Extension of Credit such statements are true):

 

(A)  The representations
and warranties of the Obligor contained in Section 4.01 hereof are true and
correct on and as of the date of such Extension of Credit, before and after
giving effect to such Extension of Credit and to the application of the proceeds
therefrom, as though made on and as of such date; 

 

(B)  No event has
occurred and is continuing, or would result from such Extension of Credit or
from the application of the proceeds therefrom, that constitutes an Event of
Default with respect to the Obligor or would constitute an Event of Default with
respect to the Obligor but for the requirement that notice be given or time
elapse or both; and

 

(C)  Immediately
following such Extension of Credit, (1) the aggregate amount of Outstanding
Credits shall not exceed the aggregate amount of the Commitments then in effect,
(2) the Outstanding Credits of any Lender shall not exceed the amount of
such Lender’s Commitment, (3) the aggregate principal amount of Advances
outstanding for the Obligor shall not exceed amounts authorized under the
Obligor’s Approval;

 

(ii)  The Obligor shall
have delivered to the Administrative Agent copies of such other approvals,
opinions, and documents as the Administrative Agent, the Fronting Bank or any
other Lender (through the Administrative Agent) may reasonably
request.

 

            SECTION
2.23.  Conditions
Precedent to Advance and Conversions.

 

The obligation of
each Lender to make any Advance pursuant to Section 2.02 or to Convert any
Advance of the Obligor pursuant to Section 2.11 is subject to the conditions
precedent that on the date of such Advance or Conversion, as the case may
be:

 

(a)  The following
statements shall be true (and the giving of the notice of Borrowing pursuant to
Section 2.02 or the notice of Conversion pursuant to Section 2.11, as the
case may be, shall constitute a representation and warranty by the Obligor that
on the date of such Advance or Conversion such statements are
true):

 

 







30












 

(i)  The representations
and warranties of the Obligor contained in Section 4.01 (other than
subsections (f) and (g) thereof) are correct on and as of the date of such
Advance or Conversion, as the case may be, before and after giving effect to
such Advance or Conversion, as though made on and as of such date;
and

 

(ii)  No event has
occurred and is continuing or would result from such Advance or Conversion, as
the case may be, that constitutes an Event of Default or that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both; and

 

(b)  The Obligor shall
have delivered to the Administrative Agent copies of such other approvals,
opinions, and documents as the Administrative Agent may reasonably request.


 

 

ARTICLE III  

REPRESENTATIONS
AND WARRANTIES

 

            SECTION
3.01.  Representations
and Warranties of the Obligor.

 

The Obligor
represents and warrants as follows:

 

(a)  Corporate
Existence and Power. It is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, is duly qualified to do business
as a foreign corporation in and is in good standing under the laws of each state
in which the ownership of its properties or the conduct of its business makes
such qualification necessary except where the failure to be so qualified would
not have a material adverse effect on its business or financial condition or its
ability to perform its obligations under the Loan Documents, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.

 

(b)  Corporate
Authorization. The execution,
delivery and performance by it of each Loan Document to which it is, or is to
become, a party, have been duly authorized by all necessary corporate action on
its part and do not, and will not, require the consent or approval of its
shareholders, or any trustee or holder of any Indebtedness or other obligation
of it, other than such consents and approvals as have been duly obtained, given
or accomplished.

 

(c)  No
Violation, Etc. Neither the
execution, delivery or performance by it of this Agreement or any other Loan
Document to which it is, or is to become, a party, nor the consummation by it of
the transactions contemplated hereby or thereby, nor compliance by it with the
provisions hereof or thereof, conflicts or will conflict with, or results or
will result in a breach or contravention of any of the provisions of its
Organizational Documents, any Applicable Law, or any indenture, mortgage, lease
or any other agreement or instrument to which it or any of its Affiliates is
party or by which its property or the property of any of its Affiliates is
bound, or results or will result in the creation or imposition of any Lien upon
any of its property or the property of any of its Affiliates except as provided
herein. There is no provision of its Organizational Documents, or any Applicable
Law, or any such indenture, mortgage, lease or other agreement or instrument
that materially adversely affects, or in the future is likely (so far as it can
now foresee) to materially adversely affect, its business, operations, affairs,
condition, properties or assets or its ability to perform its obligations under
this Agreement or any other Loan Document to which it is, or is to become, a
party. The Obligor and each of its Subsidiaries is in compliance with all laws
(including, without limitation, ERISA and Environmental Laws), regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, has not had
and could not reasonably be expected to have a material adverse effect on
(i) the business, assets, operations, condition (financial or otherwise) or
prospects of the Obligor and its Subsidiaries taken as a whole, or (ii) the
legality, validity or enforceability of any of the Loan Documents or the rights,
remedies and benefits available to the parties thereunder or the ability of the
Obligor to perform its obligations under the Loan Documents.

 

 







31












 

(d)  Governmental
Actions. No Governmental
Action is or will be required in connection with the execution, delivery or
performance by it, or the consummation by it of the transactions contemplated by
this Agreement or any other Loan Document to which it is, or is to become, a
party other than the SEC Order.

 

(e)  Execution
and Delivery. This Agreement and
the other Loan Documents to which it is, or is to become, a party have been or
will be (as the case may be) duly executed and delivered by it, and this
Agreement is, and upon execution and delivery thereof each other Loan Document
will be, the legal, valid and binding obligation of it enforceable against it in
accordance with its terms, subject,
however, to the application
by a court of general principles of equity and to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally.

 

(f)  Litigation. Except as
disclosed with respect to ATSI and FES, in the Obligor’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2005, its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2006 and its
Current Reports on Form 8-K filed in 2006 prior to the date hereof (copies of
which have been furnished to each Bank), there is no pending or threatened
action or proceeding (including, without limitation, any proceeding relating to
or arising out of Environmental Laws) affecting it or any of its Subsidiaries
before any court, governmental agency or arbitrator that has a reasonable
possibility of having a material adverse effect on the business, condition
(financial or otherwise), results of operations or prospects of it and its
consolidated subsidiaries, taken as a whole, or on the ability of the Obligor to
perform its obligations under this Agreement or any other Loan Document, and
there has been no development in the matters disclosed in such filings that has
had such a material adverse effect.

 

(g)  Financial
Statements; Material Adverse Change. The consolidated
balance sheets of the Obligor and its Subsidiaries as at December 31, 2005,
and the related consolidated statements of income, retained earnings and cash
flows of the Obligor and its Subsidiaries for the fiscal year then ended,
certified by PricewaterhouseCoopers LLP, independent public accountants, and the
unaudited consolidated balance sheet of the Obligor and its Subsidiaries as at
September 30, 2006, and the related consolidated statements of income, retained
earnings and cash flows of the Obligor and its Subsidiaries for the nine months
then ended, copies of each of which have been furnished to each Lender and the
Fronting Bank, in all cases as amended and restated to the date hereof, present
fairly the consolidated financial position of the Obligor and its Subsidiaries
as at such dates and the consolidated results of the operations of the Obligor
and its Subsidiaries for the periods ended on such dates, all in accordance with
GAAP consistently applied. Except as disclosed in the Obligor’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2005, its Quarterly Report on
form 10-Q for the quarter ended September 30, 2006 and its Current Reports on
Form 8-K filed in 2006 prior to the date hereof (copies of which have been
furnished to each Lender), there has been no material adverse change in the
business, condition (financial or otherwise), results of operations or prospects
of the Obligor and its Consolidated Subsidiaries, taken as a whole, since
December 31, 2005.

 

(h)  ERISA.

 

(i)  No Termination Event
has occurred or is reasonably expected to occur with respect to any
Plan.

 

(ii)  Schedule B
(Actuarial Information) to the most recent annual report (Form 5500 Series)
with respect to each Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lenders, is complete and accurate and
fairly presents the funding status of such Plan, and since the date of such
Schedule B there has been no material adverse change in such funding
status.

 

(iii)  Neither it nor any
member of the Controlled Group has incurred nor reasonably expects to incur any
withdrawal liability under ERISA to any Multiemployer Plan.

 

 







32












 

(i)  Taxes. The Obligor and
each of its Subsidiaries has filed all tax returns (federal, state and local)
required to be filed and paid all taxes shown thereon to be due, including
interest and penalties, or provided adequate reserves for payment thereof in
accordance with GAAP other than such taxes that the Obligor or its Subsidiary is
contesting in good faith by appropriate legal proceedings.

 

(j)  Use of
Proceeds. The proceeds of
each Extension of Credit and the Letter of Credit will be used solely to support
the obligations under the Primary Reimbursement Agreement and the proceeds of
Advances shall be used solely to reimburse Drawings under the Letter of
Credit.

 

(k)  Margin
Stock. After applying the
proceeds of each Extension of Credit, not more than 25% of the value of the
assets of the Obligor and its Subsidiaries subject to the restrictions of
Section 5.03(a) or (b) will consist of or be represented by Margin Stock.
The Obligor is not engaged in the business of extending credit for the purpose
of purchasing or carrying Margin Stock, and no proceeds of any Extension 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.

 

(l)  Investment
Company. The Obligor is not
an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, or an
“investment advisor” within the meaning of the Investment Advisers Act of 1940,
as amended.

 

(m)  No Event
of Default. No event has
occurred and is continuing that constitutes an Event of Default or that would
constitute an Event of Default (including, without limitation, an Event of
Default under Section 6.01(e)) but for the requirement that notice be given
or time elapse or both. 

 

(n)  Solvency.  (i)  The
fair saleable value of its assets will exceed the amount that will be required
to be paid on or in respect of the probable liability on its existing debts and
other liabilities (including contingent liabilities) as they mature;
(ii) its assets do not constitute unreasonably small capital to carry out
its business as now conducted or as proposed to be conducted; (iii) it does
not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be received by it and the
amounts to be payable on or in respect of its obligations); and (iv) it
does not believe that final judgments against it in actions for money damages
presently pending will be rendered at a time when, or in an amount such that, it
will be unable to satisfy any such judgments promptly in accordance with their
terms (taking into account the maximum reasonable amount of such judgments in
any such actions and the earliest reasonable time at which such judgments might
be rendered). Its cash flow, after taking into account all other anticipated
uses of its cash (including the payments on or in respect of debt referred to in
clause (iii) above), will at all times be sufficient to pay all such
judgments promptly in accordance with their terms.

 

(o)  No
Material Misstatements. The reports,
financial statements and other written information furnished by or on behalf of
the Obligor to the Administrative Agent, the Fronting Bank or any Lender
pursuant to or in connection with the Loan Documents and the transactions
contemplated thereby do not contain and will not contain, when taken as a whole,
any untrue statement of a material fact and do not omit and will not omit, when
taken as a whole, to state any fact necessary to make the statements therein, in
the light of the circumstances under which they were or will be made, not
misleading in any material respect.

 

 







33












 

ARTICLE I

COVENANTS OF
THE OBLIGOR

 

            SECTION
4.01.  Affirmative
Covenants of the Obligor.

 

Unless the Majority
Lenders shall otherwise consent in writing, so long as any amount payable by the
Obligor hereunder shall remain unpaid, the Letter of Credit shall remain
outstanding or any Lender shall have any Commitment hereunder, the Obligor
will:

 

(a)  Preservation
of Corporate Existence, Etc. (i) Without
limiting the right of the Obligor to merge with or into or consolidate with or
into any other corporation or entity in accordance with the provisions of
Section 5.03(c) hereof, preserve and maintain its corporate existence
in the state of its incorporation and qualify and remain qualified as a foreign
corporation in each jurisdiction in which such qualification is reasonably
necessary in view of its business and operations or the ownership of its
properties and (ii) preserve, renew and keep in full force and effect the
rights, privileges and franchises necessary or desirable in the normal conduct
of its business.

 

(b)  Compliance
with Laws, Etc. Comply, and cause
each of its Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations, and orders of any Governmental Authority, the
noncompliance with which would materially and adversely affect the business or
condition of the Obligor and its Subsidiaries, taken as a whole, such compliance
to include, without limitation, compliance with the Patriot Act, regulations
promulgated by the U.S. Treasury Department Office of Foreign Assets Control,
Environmental Laws and ERISA and paying before the same become delinquent all
material taxes, assessments and governmental charges imposed upon it or upon its
property, except to the extent compliance with any of the foregoing is then
being contested in good faith by appropriate legal proceedings.

 

(c)  Maintenance
of Insurance, Etc. Maintain insurance
with responsible and reputable insurance companies or associations or through
its own program of self-insurance in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Obligor operates and furnish
to the Administrative Agent, within a reasonable time after written request
therefor, such information as to the insurance carried as any Lender or the
Fronting Bank, through the Administrative Agent, may reasonably
request.

 

(d)  Inspection
Rights. At any reasonable
time and from time to time as the Administrative Agent, the Fronting Bank or any
Lender may reasonably request, permit the Administrative Agent, the Fronting
Bank or such Lender 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 Obligor and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Obligor and any of its Subsidiaries with
any of their respective officers or directors; provided,
however, that the Obligor
reserves the right to restrict access to any of its Subsidiaries’ generating
facilities in accordance with reasonably adopted procedures relating to safety
and security. The Administrative Agent, the Fronting Bank and each Lender agree
to use reasonable efforts to ensure that any information concerning the Obligor
or any of its Subsidiaries obtained by the Administrative Agent, the Fronting
Bank or such Lender pursuant to this subsection (d) or subsection (g)
that is not contained in a report or other document filed with the SEC,
distributed by the Obligor to its security holders or otherwise generally
available to the public, will, to the extent permitted by law and except as may
be required by valid subpoena or in the normal course of the Administrative
Agent’s, the Fronting Bank’s or such Lender’s business operations be treated
confidentially by the Administrative Agent, the Fronting Bank or such Lender, as
the case may be, and will not be distributed or otherwise made available by the
Administrative Agent, the Fronting Bank or such Lender, as the case may be, to
any Person, other than the Administrative Agent’s, the Fronting Bank’s or such
Lender’s employees, authorized agents or representatives (including, without
limitation, attorneys and accountants).

 

 







34












 

(e)  Keeping
of Books. Keep, and cause
each Subsidiary to keep, proper books of record and account in which entries
shall be made of all financial transactions and the assets and business of the
Obligor and each of its Subsidiaries in accordance with GAAP.

 

(f)  Maintenance
of Properties. Maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, all of
its properties that are used or that are useful in the conduct of its business
in good working order and condition, ordinary wear and tear excepted, it being
understood that this covenant relates only to the good working order and
condition of such properties and shall not be construed as a covenant of the
Obligor or any of its Subsidiaries not to dispose of such properties by sale,
lease, transfer or otherwise.

 

(g)  Reporting
Requirements. Furnish, or cause
to be furnished, to the Administrative Agent, with sufficient copies for each
Lender and the Fronting Bank, the following:

 

(i)  promptly after the
occurrence of any Event of Default, the statement of an authorized officer of
the Obligor setting forth details of such Event of Default and the action that
the Obligor has taken or proposes to take with respect thereto;

 

(ii)  as soon as available
and in any event within 50 days after the close of each of the first three
quarters in each fiscal year of the Obligor, consolidated balance sheets of the
Obligor and its Subsidiaries as at the end of such quarter and consolidated
statements of income of the Obligor and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, fairly presenting the financial condition of the Obligor and its
Subsidiaries as at such date and the results of operations of the Obligor and
its Subsidiaries for such period and setting forth in each case in comparative
form the corresponding figures for the corresponding period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer, treasurer, assistant
treasurer or controller of the Obligor as having been prepared in accordance
with GAAP consistently applied;

 

(iii)  as soon as available
and in any event within 105 days after the end of each fiscal year of the
Obligor, a copy of the annual report for such year for the Obligor and its
Subsidiaries, containing consolidated and consolidating financial statements of
the Obligor and its Subsidiaries for such year certified in a manner acceptable
to the Lenders and the Fronting Bank by PricewaterhouseCoopers LLP or other
independent public accountants acceptable to the Lenders and the Fronting Bank,
together with statements of projected financial performance prepared by
management for the next fiscal year, in form satisfactory to the Administrative
Agent;

 

(iv)  concurrently with
the delivery of the financial statements specified in clauses (ii) and
(iii) above a certificate of the chief financial officer, treasurer,
assistant treasurer or controller of the Obligor (A) stating whether he has
any knowledge of the occurrence at any time prior to the date of such
certificate of an Event of Default not theretofore reported pursuant to the
provisions of clause (i) of this subsection (g) or of the occurrence
at any time prior to such date of any such Event of Default, except Events of
Default theretofore reported pursuant to the provisions of clause (i) of
this subsection (g) and remedied, and, if so, stating the facts with
respect thereto, and (B) setting forth in a true and correct manner, the
calculation of the ratios contemplated by Section 5.02 hereof, as of the
date of the most recent financial statements accompanying such certificate, to
show the Obligor’s compliance with or the status of the financial covenants
contained in Section 5.02 hereof;

 

(v)  promptly after the
sending or filing thereof, copies of any reports that the Obligor sends to any
of its securityholders, and copies of all reports on Form 10-K, Form 10-Q or
Form 8-K that the Obligor or any of its Subsidiaries files with the
SEC;

 

 







35












 

(vi)  as soon as possible
and in any event (A) within 30 days after the Obligor or any member of the
Controlled Group knows or has reason to know that any Termination Event
described in clause (i) of the definition of Termination Event with respect
to any Plan has occurred and (B) within 10 days after the Obligor or any member
of the Controlled Group knows or has reason to know that any other Termination
Event with respect to any Plan has occurred, a statement of the chief financial
officer of the Obligor describing such Termination Event and the action, if any,
that the Obligor or such member of the Controlled Group, as the case may be,
proposes to take with respect thereto;

 

(vii)  promptly and in any
event within two Business Days after receipt thereof by the Obligor or any
member of the Controlled Group from the PBGC, copies of each notice received by
the Obligor or any such member of the Controlled Group of the PBGC’s intention
to terminate any Plan or to have a trustee appointed to administer any
Plan;

 

(viii)  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;

 

(ix)  promptly and in any
event within five Business Days after receipt thereof by the Obligor or any
member of the Controlled Group from a Multiemployer Plan sponsor, a copy of each
notice received by the Obligor or any member of the Controlled Group concerning
the imposition of withdrawal liability pursuant to Section 4202 of
ERISA;

 

(x)  promptly and in any
event within five Business Days after Moody’s or S&P has changed any
relevant Reference Rating, notice of such change; and

 

(xi)  such other
information respecting the condition or operations, financial or otherwise, of
the Obligor or any of its Subsidiaries, including, without limitation, copies of
all reports and registration statements that the Obligor or any Subsidiary files
with the SEC or any national securities exchange, as the Administrative Agent or
the Fronting Bank or any Lender (through the Administrative Agent) may from time
to time reasonably request.

 

(h)  Obligor
Approvals. Maintain the
Obligor’s Approval in full force and effect and comply with all terms and
conditions thereof until all amounts outstanding under the Loan Documents shall
have been repaid or paid (as the case may be) and the Termination Date has
occurred.

 

            SECTION
4.02.  Debt to
Capitalization Ratio.

 

Unless the Majority
Lenders shall otherwise consent in writing, so long as any amount payable by the
Obligor hereunder shall remain unpaid, the Letter of Credit shall remain
outstanding or any Lender shall have any Commitment to the Obligor hereunder,
the Obligor will maintain a
Debt to Capitalization Ratio of no more than 0.65 to 1.00 (determined as of the
last day of each fiscal quarter).

 

            SECTION
4.03.  Negative
Covenants of the Obligor.

 

Unless the Majority
Lenders shall otherwise consent in writing, so long as any amount payable by the
Obligor hereunder shall remain unpaid, the Letter of Credit shall remain
outstanding or any Lender shall have any Commitment to the Obligor hereunder,
the Obligor will not:

 

 







36












 

(a)  Sales,
Etc. (i) Sell,
lease, transfer or otherwise dispose of any shares of common stock of any
domestic Significant Subsidiary, whether now owned or hereafter acquired by the
Obligor, or permit any Significant Subsidiary that is a Subsidiary of the
Obligor to do so or (ii) permit the Obligor or any Subsidiary to sell, lease,
transfer or otherwise dispose of (whether in one transaction or a series of
transactions) assets located in The United States of America representing in the
aggregate more than 15% (determined at the time of each such transaction) of the
value of all of the consolidated fixed assets of the Obligor, as reported on the
most recent consolidated balance sheet of the Obligor, to any entity other than
the Obligor or any of its wholly owned direct or indirect Subsidiaries or, in
the case of TE, to Centerior Funding Corporation; provided, however, that this
provision shall not restrict the transfer of nuclear and fossil generation
assets from Penn, OE, CEI and TE to FirstEnergy Nuclear Generation Corp. and
FirstEnergy Generation Corp., respectively (the “Generation
Transfers”).

 

(b)  Liens,
Etc. Create or suffer to
exist, or permit any Significant Subsidiary that is a Subsidiary of the Obligor
to create or suffer to exist, any Lien upon or with respect to any of its
properties (including, without limitation, any shares of any class of equity
security of any Significant Subsidiary that is a Subsidiary of the Obligor), in
each case to secure or provide for the payment of Indebtedness, other than
(i) liens consisting of (A) pledges or deposits in the ordinary course
of business to secure obligations under worker’s compensation laws or similar
legislation, (B) deposits in the ordinary course of business to secure, or
in lieu of, surety, appeal, or customs bonds to which the Obligor or Significant
Subsidiary is a party, (C) pledges or deposits in the ordinary course of
business to secure performance in connection with bids, tenders or contracts
(other than contracts for the payment of money), or (D) materialmen’s,
mechanics’, carriers’, workers’, repairmen’s or other like Liens incurred in the
ordinary course of business for sums not yet due or currently being contested in
good faith by appropriate proceedings diligently conducted, or deposits to
obtain in the release of such Liens; (ii) purchase money liens or purchase
money security interests upon or in any property acquired or held by the Obligor
or Significant Subsidiary in the ordinary course of business, which secure the
purchase price of such property or secure indebtedness incurred solely for the
purpose of financing the acquisition of such property; (iii) Liens existing
on the property of any Person at the time that such Person becomes a direct or
indirect Significant Subsidiary of the Obligor or Significant Subsidiary;
provided that such Liens
were not created to secure the acquisition of such Person; (iv) Liens in
existence on the date of this Agreement; (v) Liens created by any First Mortgage
Indenture, so long as (A) under the terms thereof no “event of default”
(howsoever designated) in respect of any bonds issued thereunder will be
triggered by reference to an Event of Default or Unmatured Default and (B) no
such Liens shall apply to assets acquired from the Obligor or any Significant
Subsidiary if such assets were free of Liens (other than as a result of a
release of such Liens in contemplation of such acquisition) immediately prior to
any such acquisition; (vi) Liens on assets of ATSI to secure Indebtedness
of ATSI, provided, however, that the aggregate
principal amount of Indebtedness secured by such Liens shall not at any time
exceed 60% of the depreciated book value of the property subject to such Liens;
(vii) Liens securing Stranded Cost Securitization Bonds; (viii)  Liens
on cash (in an aggregate amount not to exceed $270,000,000) pledged to secure
reimbursement obligations for letters of credit issued for the account of OE;
(ix) Liens on assets transferred in the Generation Transfers in favor of
the transferor thereof; and (x) Liens created for the sole purpose of
extending, renewing or replacing in whole or in part Indebtedness secured by any
Lien referred to in the foregoing clauses (i) through (ix); provided, however, that the principal
amount of Indebtedness secured thereby shall not exceed the principal amount of
Indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement, as the case may be, shall be
limited to all or a part of the property or Indebtedness that secured the Lien
so extended, renewed or replaced (and any improvements on such property).


 

 







37












 

(c)  Mergers,
Etc. Merge with or into
or consolidate with or into any other Person, or permit any of its Subsidiaries
to do so unless (i) immediately after giving effect thereto, no event shall
occur and be continuing that constitutes an Event of Default, (ii) the
consolidation or merger shall not materially and adversely affect the ability of
the Obligor (or its successor by merger or consolidation as contemplated by
clause (i) of this subsection (c)) to perform its obligations
hereunder or under any other Loan Document, and (iii) in the case of any
merger or consolidation to which the Obligor is a party, the corporation formed
by such consolidation or into which the Obligor shall be merged shall assume the
Obligor’s obligations under this Agreement and the other Loan Documents to which
it is a party in a writing satisfactory in form and substance to the Majority
Lenders and the Fronting Bank.

 

(d)  Compliance
with ERISA. (i) Enter
into any “prohibited transaction” (as defined in Section 4975 of the Code,
and in ERISA) involving any Plan that may result in any liability of the Obligor
to any Person that (in the opinion of the Majority Lenders and the Fronting
Bank) is material to the financial position or operations of the Obligor or
(ii) allow or suffer to exist any other event or condition known to the
Obligor that results in any liability of the Obligor to the PBGC that (in the
opinion of the Majority Lenders and the Fronting Bank) is material to the
financial position or operations of the Obligor. For purposes of this
subsection (d), “liability” shall not include termination insurance
premiums payable under Section 4007 of ERISA.

 

(e)  Use of
Proceeds. Use the proceeds of
any Advance for any purpose other than to reimburse the Fronting Bank for
Drawings under the Letter of Credit.

 

 

ARTICLE V

EVENTS OF
DEFAULT

 

            SECTION
5.01.  Events
of Default.

 

If any of the
following events shall occur and be continuing (an “Event of
Default”):

 

(a)  Any principal of, or
interest on, any Advance, or any Reimbursement Obligation, or any fees or other
amounts payable hereunder shall not be paid by the Obligor when the same become
due and payable; or

 

(b)  Any representation
or warranty made by the Obligor (or any of its officers) in any Loan Document or
in connection with any Loan Document shall prove to have been incorrect or
misleading in any material respect when made; or

 

(c)  (i) The Obligor
shall fail to perform or observe any covenant set forth in Section 5.02 or
Section 5.03 on its part to be performed or observed or (ii) the
Obligor shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement or any other Loan Document on its part to be
performed or observed and such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to the Obligor by the
Administrative Agent or any Lender; or

 

(d)  Any material
provision of this Agreement or any other Loan Document shall at any time and for
any reason cease to be valid and binding upon the Obligor, except pursuant to
the terms thereof, or shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by the Obligor or any Governmental
Authority, or the Obligor shall deny that it has any or further liability or
obligation under this Agreement or any other Loan Document; or

 

 







38












 

(e)  The Obligor or any
Significant Subsidiary that is a Subsidiary of the Obligor shall fail to pay any
principal of or premium or interest on any Indebtedness (other than,
Indebtedness owed under this Agreement) that is outstanding in a principal
amount in excess of $50,000,000 in the aggregate 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
Indebtedness; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Indebtedness 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 Indebtedness; or any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or

 

(f)  The Obligor or any
Significant Subsidiary that is a Subsidiary of the Obligor shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Obligor or
any Significant Subsidiary that is a Subsidiary of the Obligor seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition or
arrangement with creditors, a readjustment of its debts, in each case 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, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted or acquiesced in by it), either such proceeding shall remain
undismissed or unstayed for a period of 60 consecutive days, or any of the
actions sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or the Obligor or any Significant Subsidiary that is a
Subsidiary of the Obligor shall take any corporate action to authorize or to
consent to any of the actions set forth above in this subsection (f);
or

 

(g)  Any judgment or
order for the payment of money exceeding any applicable insurance coverage by
more than $50,000,000 shall be rendered by a court of final adjudication against
the Obligor or any Significant Subsidiary that is a Subsidiary of the Obligor
and either (i) valid enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) 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

 

(h)  Any Termination
Event with respect to a Plan shall have occurred, and, 30 days after notice
thereof shall have been given to the Obligor by the Administrative Agent or any
Lender, (i) such Termination Event (if correctable) shall not have been
corrected and (ii) the then Unfunded Vested Liabilities of such Plan exceed
$10,000,000 (or in the case of a Termination Event involving the withdrawal of a
“substantial
employer” (as defined in
Section 4001(a)(2) of ERISA), the withdrawing employer’s proportionate
share of such excess shall exceed such amount), or the Obligor or any member of
the Controlled Group as employer under a Multiemployer Plan shall have made a
complete or partial withdrawal from such Multiemployer Plan and the Plan sponsor
of such Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred a withdrawal liability in an amount exceeding
$10,000,000; or

 

(i)  Any change in
Applicable Law or any Governmental Action shall occur that has the effect of
making the transactions contemplated by this Agreement or any other Loan
Document unauthorized, illegal or otherwise contrary to Applicable Law with
respect to the Obligor; or

 

 







39












 

(j)  (i) the Obligor
shall fail to own directly or indirectly 100% of the issued and outstanding
shares of common stock of each Significant Subsidiary, (ii) 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, as amended), directly or indirectly,
of securities of the Obligor (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities of the Obligor entitled to vote in the election of directors;
(iii) commencing after December 5, 2006, individuals who as of December 5,
2006 were directors shall have ceased for any reason to constitute a majority of
the Board of Directors of the Obligor unless the Persons replacing such
individuals were nominated by the stockholders or the Board of Directors of the
Obligor in accordance with the Obligor’s Organizational Documents; or
(iv) 90 days shall have elapsed after any Person or two or more Persons
acting in concert shall have entered into a contract or arrangement that upon
consummation will result in its or their acquisition of, or control over,
securities of the Obligor (or other securities convertible into such securities)
representing 30% or more of the combined voting power of all securities of the
Obligor entitled to vote in the election of directors (each a “Change
of Control”).

 

(k)  An “Event of
Default” shall occur or be continuing under the Primary Reimbursement Agreement.





then, and in any
such event, the Administrative Agent shall at the request, or may with the
consent, of the Majority Lenders, (i) by notice to the defaulting Obligor,
declare the obligation of each Lender to make Advances to the Obligor, and the
obligation of the Fronting Bank to issue the Letter of Credit, to be terminated,
whereupon the same shall forthwith terminate, and (ii) by notice to the
Obligor, declare the Advances made to the Obligor, an amount equal to the
aggregate Stated Amount of all issued but undrawn Letter of Credit, (such amount
being the “Letter
of Credit Cash Cover”) and all other
amounts payable under this Agreement and the other Loan Documents by the Obligor
to be forthwith due and payable, whereupon such Advances 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 Obligor; provided,
however, that in the event
of an actual or deemed entry of an order for relief with respect to the Obligor
or any Significant Subsidiary that is a Subsidiary of the Obligor under the
Bankruptcy Code, (A) the obligation of each Lender to make Advances to the
Obligor, and the obligation of the Fronting Bank to issue the Letter of Credit,
shall automatically be terminated and (B) all Advances made to the Obligor,
the Letter of Credit Cash Cover with respect to the Obligor and all other
amounts payable under this Agreement by the Obligor 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 Obligor. In the event that
the Obligor is required to pay the Letter of Credit Cash Cover pursuant to this
Section, such payment shall be made in immediately available funds to the
Administrative Agent, which shall hold such funds as collateral pursuant to
arrangements satisfactory to the Administrative Agent and the Fronting Bank to
secure Reimbursement Obligations in respect of the Letter of Credit then
outstanding.

 

 







40












 

ARTICLE VI  

THE
ADMINISTRATIVE AGENT

 

            SECTION
6.01.  Authorization
and Action.

 

Each Lender, each
Fronting Bank hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
and such instructions shall be binding upon all Lenders and all Fronting Bank;
provided,
however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law. The Administrative Agent agrees to give to each Lender and
the Fronting Bank prompt notice of each notice given to it by the Obligor
pursuant to the terms of this Agreement and to promptly forward to each Lender
and the Fronting Bank the financial statements and any other certificates or
statements delivered to the Administrative Agent pursuant to Section
5.01(g).

 

            SECTION
6.02.  Administrative
Agent’s Reliance, Etc.

 

Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable to any Lender, the Fronting Bank or the Obligor for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Administrative Agent:
(i) may treat each Lender listed in the Register as a “Lender” with a
Commitment in the amount recorded in the Register until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by a Lender
listed in the Register, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.08, at which time the Administrative Agent will make
such recordations in the Register as are appropriate to reflect the assignment
effected by such Assignment and Acceptance; (ii) may consult with legal
counsel (including counsel for the Obligor), 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; (iii) makes no warranty or representation
to any Lender or the Fronting Bank and shall not be responsible to any Lender or
the Fronting Bank for any statements, warranties or representations (whether
written or oral) made in or in connection with the Loan Documents;
(iv) 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 the
Loan Documents on the part of the Obligor or to inspect the property (including
the books and records) of the Obligor; (v) shall not be responsible to any
Lender or the Fronting Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; and (vi) shall
incur no liability under or in respect of this Agreement by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram or cable) believed by it in good faith to be genuine and
signed or sent by the proper party or parties.

 

 







41












 

            SECTION
6.03.  FIST,
Wachovia and Affiliates.

 

With respect to its
Commitment and the Advances made by it and any Note issued to it, each of FIST
and Wachovia shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the Administrative
Agent or the Fronting Bank (as the case may be); and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include each of FIST and
Wachovia in its individual capacity. Each of FIST and Wachovia and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Obligor,
any of its respective subsidiaries and any Person who may do business with or
own securities of the Obligor or any such subsidiary, all as if FIST or Wachovia
were not the Administrative Agent or the Fronting Bank (as the case may be) and
without any duty to account therefor to the Lenders or the Fronting
Bank.

 

            SECTION
6.04.  Lender
Credit Decision.

 

Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Fronting Bank or any other Lender and based on the
financial statements referred to in Section 4.01(g) and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Fronting Bank or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.

 

            SECTION
6.05.  Indemnification.

 

The Lenders agree to
indemnify the Administrative Agent (to the extent not reimbursed by the
Obligor), ratably according to the amounts of their respective Commitments, 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
Administrative Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement;
provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that such
expenses are reimbursable by the Obligor but for which the Administrative Agent
is not reimbursed by the Obligor.

 

 







42












 

            SECTION
6.06.  Successor
Administrative Agent.

 

The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders,
the Fronting Bank and the Obligor and may be removed at any time with or without
cause by the Majority Lenders and the Fronting Bank. Upon any such resignation
or removal, the Majority Lenders and the Fronting Bank shall have the right,
with the prior written consent of the Obligor (unless an Event of Default or an
Unmatured Default has occurred and is continuing), which consent shall not be
unreasonably withheld or delayed, to appoint a successor Administrative Agent.
If no successor Administrative Agent shall have been so appointed by the
Majority Lenders and the Fronting Bank, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent’s giving of
notice of resignation or the Majority Lenders’ and the Fronting Bank’s removal
of the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of the Lenders and the Fronting Bank, appoint a successor
Administrative Agent, which shall be a commercial bank described in clause
(i) or (ii) of the definition of “Eligible Assignee” and having a
combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent’s resignation or removal hereunder as Administrative Agent,
the provisions of this Article VII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement. Notwithstanding the foregoing, if no Event of Default or
Unmatured Default shall have occurred and be continuing, then no successor
Administrative Agent shall be appointed under this Section 7.06 without the
prior written consent of the Obligor, which consent shall not be unreasonably
withheld or delayed.

 

 

ARTICLE VII

MISCELLANEOUS

 

            SECTION
7.01.  Amendments,
Etc.

 

No amendment or
waiver of any provision of this Agreement , nor consent to any departure by the
Obligor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided,
however, that no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders, do any
of the following: (a) waive any of the conditions specified in
Section 3.01, 3.02, 3.03 or 3.04 (b) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (c) reduce
the principal of, or interest on, the Advances or any fees or other amounts
payable hereunder, (d) postpone any date fixed for any payment of principal
of, or interest on, the Advances or any fees or other amounts payable hereunder,
(e) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Advances, the aggregate undrawn amount of the Letter of
Credit or the number of Lenders, that shall be required for the Lenders or any
of them to take any action hereunder or (f) amend this Section 8.01;
and provided,
further, that no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required above to take such action, affect the
rights or duties of the Administrative Agent under this Agreement; and
provided,
further, that no amendment,
waiver or consent that would adversely affect the rights of, or increase the
obligations of, the Fronting Bank, or that would alter any provision hereof
relating to or affecting the Letter of Credit, shall be effective unless agreed
to in writing by the Fronting Bank; and provided,
further, that this
Agreement may be amended and restated without the consent of any Lender, the
Fronting Bank or the Administrative Agent if, upon giving effect to such
amendment and restatement, such Lender, the Fronting Bank or the Administrative
Agent, as the case may be, shall no longer be a party to this Agreement (as so
amended and restated) or have any Commitment or other obligation hereunder
(including, without limitation, any obligation to make payment on account of a
Drawing) and shall have been paid in full all amounts payable hereunder to such
Lender, the Fronting Bank or the Administrative Agent, as the case may
be.

 

 







43












 

            SECTION
7.02.  Notices,
Etc.

 

Unless specifically
provided otherwise in this Agreement, all notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
cable communication) and mailed, telecopied, telegraphed, cabled or delivered,
if to the Obligor, to it in care of the Obligor at its address at 76 South Main
Street, Akron, Ohio 44308, Attention: Treasurer, Telecopy: (330) 384-3772; if to
any Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto or at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; if to the
Administrative Agent, at its address at One Wachovia Center, 301 South College
Street, 7th Floor Charlotte, North Carolina 28288, Attention: Michael J.
Kolosowsky; if to the Fronting Bank identified on Schedule II hereto, at the
address specified opposite its name on Schedule II hereto; if to any other
Fronting Bank, at such address as shall be designated by the Fronting Bank in a
written notice to the other parties; or, as to each party, at such other address
as shall be designated by such party in a written notice to the other parties.
All such notices and communications shall, when mailed,
telecopied, telegraphed or cabled, be effective when deposited in the mails,
telecopied, delivered to the telegraph company or delivered to the cable
company, respectively, except that notices and communications to the
Administrative Agent or the Fronting Bank pursuant to Article II or VII
shall not be effective until received by the Administrative Agent or the
Fronting Bank (as the case may be).

 

            SECTION
7.03.  Electronic
Communications.

 

(a)  The
Obligor
hereby agrees that it will provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to the Loan Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an
existing, Borrowing or other Extension of Credit (including any election of an
interest rate or Interest Period relating thereto), (ii) relates to the payment
of any principal or other amount due under the Credit Agreement prior to the
scheduled date therefor, (iii) provides notice of any Unmatured Default or Event
of Default under the Credit Agreement or (iv) is required to be delivered to
satisfy any condition precedent to the effectiveness of the Credit Agreement
and/or any Borrowing or other Extension of Credit thereunder (all such
non-excluded communications being referred to herein collectively as
“Communications”), by transmitting
the Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to an email address of the Administrative Agent as
specified by the Administrative Agent from time to time or faxing the
Communications to (704) 383-0661. In addition, the Obligor agrees to continue to
provide the Communications to the Administrative Agent in the manner otherwise
specified in this Agreement, but only to the extent requested by the
Administrative Agent.

 

(b)  The Obligor further
agrees that the Administrative Agent may make the Communications available to
the Lenders by posting the Communications on Intralinks or a substantially
similar electronic transmission systems (the “Platform”). The Obligor
acknowledges that the distribution of material through an electronic medium is
not necessarily secure and that there are confidentiality and other risks
associated with such distribution.

 

 







44












 

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

 

(d)  The Administrative
Agent agrees that the receipt of the Communications by the Administrative Agent
at its e-mail address set forth above shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of the Loan Documents.
Each Lender agrees that notice to it (as provided in the next sentence)
specifying that the Communications have been posted to the Platform shall
constitute effective delivery of the Communications to such Lender for purposes
of the Loan Documents. Each Lender agrees to notify the Administrative Agent in
writing (including by electronic communication) from time to time of such
Lender’s e-mail address to which the foregoing notice may be sent by electronic
transmission and that the foregoing notice may be sent to such e-mail
address.

 

(e)  Nothing herein shall
prejudice the right of the Administrative Agent or any Lender to give any notice
or other communication pursuant to any Loan Document in any other manner
specified in such Loan Document.

 

            SECTION
7.04.  No
Waiver; Remedies.

 

No failure on the
part of any Lender, the Fronting Bank or the Administrative Agent to exercise,
and no delay in exercising, any right hereunder or under any Note 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. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

 

 








45













SECTION
7.05    Costs and
Expenses; Indemnification.

 

(a)  The Obligor agrees
to pay on demand all costs and expenses incurred by either the Administrative
Agent or the Fronting Bank in connection with the preparation, execution,
delivery, syndication administration, modification and amendment of this
Agreement, any Note, the Letter of Credit and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent and the Fronting
Bank with respect thereto and with respect to advising the Administrative Agent
and the Fronting Bank as to their rights and responsibilities under this
Agreement. The Obligor further agrees to pay on demand all costs and expenses,
if any (including, without limitation, reasonable counsel fees and expenses of
counsel), incurred by the Administrative Agent, the Fronting Bank and the
Lenders in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, any Note and the other documents to
be delivered hereunder, including, without limitation, counsel fees and expenses
in connection with the enforcement of rights under this
Section 8.05(a).

 

(b)  If any payment of
principal of, or Conversion of, any Eurodollar Rate Advance is made other than
on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.11 or 2.14 or a prepayment
pursuant to Section 2.12 or acceleration of the maturity of any amounts
owing hereunder pursuant to Section 6.01 or upon an assignment made upon
demand of the Obligor pursuant to Section 8.08(h) or for any other
reason, the Obligor shall, upon demand by any Lender (with a copy of such demand
to the Administrative Agent), pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or redeployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance. The Obligor’s
obligations under this subsection (b) shall survive the repayment of
all other amounts owing to the Lenders and the Administrative Agent under this
Agreement and the termination of the Commitments.

 

(c)  The Obligor hereby
agrees to indemnify and hold each Lender, the Fronting Bank, the Administrative
Agent and their respective Affiliates and their respective officers, directors,
employees and professional advisors (each, an “Indemnified
Person”) harmless from and
against any and all claims, damages, liabilities, costs or expenses (including
reasonable attorney’s fees and expenses, whether or not such Indemnified Person
is named as a party to any proceeding or is otherwise subjected to judicial or
legal process arising from any such proceeding) that any of them may incur or
that may be claimed against any of them by any Person (including the Obligor) by
reason of or in connection with or arising out of any investigation, litigation
or proceeding related to the Commitments or the commitment of the Fronting Bank
hereunder and any use or proposed use by the Obligor of the proceeds of any
Extension of Credit or the existence or use of the Letter of Credit or the
amounts drawn thereunder, except to the extent such claim, damage, liability,
cost or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Person’s gross
negligence or willful misconduct. The Obligor’s obligations under this
Section 8.05(c) shall survive the repayment of all amounts owing to
the Lenders, the Fronting Bank and the Administrative Agent under this Agreement
and the termination of the Commitments, the commitment of the Fronting Bank
hereunder and the Letter of Credit. If and to the extent that the obligations of
the Obligor under this Section 8.05(c) are unenforceable for any
reason, the Obligor agrees to make the maximum payment in satisfaction of such
obligations that are not unenforceable that is permissible under Applicable Law
or, if less, such amount that may be ordered by a court of competent
jurisdiction. 

 

(d)  To the extent
permitted by law, the Obligor also agrees not to assert any claim against any
Indemnified Person on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to
actual or direct damages) in connection with, arising out of, or
otherwise relating to this Agreement, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the
Advances.

 

 







46












 

            SECTION
7.06.  Right of
Set-off.

 

Upon the occurrence
and during the continuance of any Event of Default each Lender and the Fronting
Bank is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, excluding,
however, any payroll
accounts maintained by the Obligor with such Lender or the Fronting Bank (as the
case may be) if and to the extent that such Lender or the Fronting Bank (as the
case may be) shall have expressly waived its set-off rights in writing in
respect of such payroll account) at any time held and other indebtedness at any
time owing by such Lender or the Fronting Bank (as the case may be) to or for
the credit or the account of the Obligor against any and all of the obligations
of the Obligor now or hereafter existing under this Agreement, whether or not
such Lender or the Fronting Bank (as the case may be) shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured. Each Lender and the Fronting Bank agrees promptly to notify the
Obligor after any such set-off and application made by such Lender or the
Fronting Bank (as the case may be), provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender and the Fronting Bank under this Section 8.06 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Lender or the Fronting Bank (as the case may be)
may have.

 

            SECTION
7.07.  Binding
Effect.

 

This Agreement shall
become effective when it shall have been executed by the Obligor and the
Administrative Agent and when the Administrative Agent shall have been notified
by each Lender and the Fronting Bank that such Lender or the Fronting Bank (as
the case may be) has executed it and thereafter shall be binding upon and inure
to the benefit of the Obligor, the Administrative Agent, the Fronting Bank and
each Lender and their respective successors and permitted assigns, except that
the Obligor shall not have the right to assign its rights or obligations
hereunder or any interest herein without the prior written consent of the
Lenders and the Fronting Bank.

 

            SECTION
7.08.  Assignments
and Participations.

 

(a)  Each Lender may,
with the prior written consent of the Obligor, the Fronting Bank (in the
Fronting Bank’s sole discretion) and the Administrative Agent (which consents,
in the case of the Obligor and the Administrative Agent, shall not unreasonably
be withheld or delayed and, in the case of the Obligor, shall not be required if
an Event of Default then exists), assign to one or more banks or other entities
all or a portion of its rights and obligations, under this Agreement and the
other Loan Documents (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and any Note held by it); provided,
however, that (i) each
such assignment may be of a varying, percentage of all the assigning Lender’s
rights and obligations under this Agreement, (ii) the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $1,000,000 (or if
less, the entire amount of such Lender’s Commitment) and shall be an integral
multiple of $1,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,500. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its continuing obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto). Notwithstanding anything  to the
contrary in  this  Section, any Lender,  without the consent of
the Obligor, may assign  and  pledge all or any  portion


 








47













of its rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and any Note held by it) to any direct or indirect counterparties in swap
agreements to the extent required in connection with the physical settlement of
any Lender’s obligations pursuant thereto.

 

(b)  By executing and
delivering an Assignment and Acceptance, the Lender assignor thereunder and the
assignee thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Acceptance, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Obligor or the
performance or observance by the Obligor of any of their obligations under this
Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in
Section 4.01(g) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, the Fronting Bank, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.

 

(c)  The Administrative
Agent shall maintain at its address referred to in Section 8.02 a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Advances owing to, each Lender from time to time
(the “Register”). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Obligor, the Administrative Agent, the Fronting Bank and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Obligor, the Fronting Bank or any Lender at any reasonable
time and from time to time upon reasonable prior notice.

 

(d)  Upon its receipt of
an Assignment and Acceptance executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with any Note subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit A
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Obligor and the Obligor shall deliver any Note requested pursuant
to Section 2.18 in favor of such assignee or assignor (as the case may be),
after giving effect to such assignment. 

 

 







48












 

(e)  Each Lender may sell
participations to one or more Lenders or other entities in or to all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its Commitment,
the Advances owing to it); provided,
however, that (i) such
Lender’s obligations under this Agreement (including, without limitation, its
Commitment to the Obligor hereunder and its obligations to the Fronting Bank
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes
of this Agreement, (iv) such Lender may not subject its ability to consent
to any modification of this Agreement to the prior consent of the bank or other
entity to which such participation was sold, except in the case of proposed
waivers or modifications with respect to interest, principal and fees payable
hereunder and under any Note and with respect to any extension of the
Termination Date, and (v) the Obligor, the Administrative Agent, the
Fronting Bank and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.

 

(f)  Any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 8.08, disclose to the assignee or
participant or proposed assignee or participant, any information relating to the
Obligor furnished to such Lender by or on behalf of the Obligor; provided, that prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any confidential information
relating to the Obligor received by it from such Lender.

 

(g)  Notwithstanding
anything to the contrary set forth herein, any Lender may assign, as collateral
or otherwise, any of its rights hereunder and under any Note (including, without
limitation, its rights to receive payments of principal and interest hereunder
and under any Note) to (i) any Federal Reserve Bank, (ii) any
Affiliate of such Lender or (iii) any other Lender, in either case, without
notice to or consent of the Obligor, the Fronting Bank or the Administrative
Agent; provided, that no such
assignment shall release the assigning Lender from its obligations
hereunder.

 

(h)  If any Lender shall
make demand for payment under Section 2.13(a), 2.13(b) or 2.16, or
shall deliver any notice to the Administrative Agent pursuant to
Section 2.14 resulting in the suspension of certain obligations of the
Lenders with respect to Eurodollar Rate Advances, then, within 30 days of such
demand (if, and only if, such payment demanded under Section 2.13(a),
2.13(b) or 2.16, as the case may be, shall have been made by the
Obligor) or such notice (if such suspension is still in effect), as the case may
be, the Obligor may demand that such Lender assign in accordance with this
Section 8.08 to one or more Eligible Assignees designated by the Obligor
all (but not less than all) of such Lender’s Commitment and the Advances owing
to it within the next 15 days. If any such Eligible Assignee designated by the
Obligor shall fail to consummate such assignment on terms acceptable to such
Lender, or if the Obligor shall fail to designate any such Eligible Assignee for
all of such Lender’s Commitment or Advances, then such Lender may assign such
Commitment and Advances to any other Eligible Assignee in accordance with this
Section 8.08 during such 15-day period; it being understood for purposes of
this Section 8.08(h) that such assignment shall be conclusively deemed
to be on terms acceptable to such Lender, and such Lender shall be compelled to
consummate such assignment to an Eligible Assignee designated by the Obligor, if
such Eligible Assignee shall agree to such assignment in substantially the form
of Exhibit A hereto and shall offer compensation to such Lender in an
amount equal to the sum of the principal amount of all Advances
outs

 

 







49












 

(i)  tanding to such
Lender plus all interest accrued thereon to the date of such payment plus all
other amounts payable by the Obligor to such Lender hereunder (whether or not
then due) as of the date of such payment accrued in favor of such Lender
hereunder. Notwithstanding the foregoing, no Lender shall make any assignment at
any time pursuant to this subsection (h) if, at such time, (i) an Event of
Default or Unmatured Default has occurred and is continuing, (ii) the Obligor
has not satisfied all of its obligations hereunder with respect to such Lender
or (iii) such replacement of such Lender is not acceptable to the Administrative
Agent and the Fronting Bank. 

 

(j)  Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting
Bank”) may grant to a
special purpose funding vehicle (an “SPC”) of such Granting
Bank identified as such in writing from time to time by the Granting Bank to the
Administrative Agent and the Obligor, the option to provide to the Obligor all
or any part of any Advance that such Granting Bank would otherwise be obligated
to make to the Obligor pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any such SPC to make
any Advance, (ii) if such SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting Bank
shall be obligated to make such Advance pursuant to the terms hereof and
(iii) no SPC or Granting Bank shall be entitled to receive any greater
amount pursuant to Section 2.09 or 2.13 than the Granting Bank would have
been entitled to receive had the Granting Bank not otherwise granted such SPC
the option to provide any Advance to the Obligor. The making of an Advance by an
SPC hereunder shall utilize the Commitment of the Granting Bank to the same
extent, and as if, such Advance were made by such Granting Bank. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Bank would otherwise be
liable so long as, and to the extent that, the related Granting Bank provides
such indemnity or makes such payment. In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against or join any other person in
instituting against such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. Notwithstanding the foregoing, the Granting Bank unconditionally
agrees to indemnify the Obligor, the Administrative Agent, the Fronting Bank and
each Lender against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be incurred by or asserted against the Obligor, the
Administrative Agent, the Fronting Bank or such Lender, as the case may be, in
any way relating to or arising as a consequence of any such forbearance or delay
in the initiation of any such proceeding against its SPC. Each party hereto
hereby acknowledges and agrees that no SPC shall have the rights of a Lender
hereunder, such rights being retained by the applicable Granting Bank.
Accordingly, and without limiting the foregoing, each party hereby further
acknowledges and agrees that no SPC shall have any voting rights hereunder and
that the voting rights attributable to any Advance made by an SPC shall be
exercised only by the relevant Granting Bank and that each Granting Bank shall
serve as the administrative agent and attorney-in-fact for its SPC and shall on
behalf of its SPC receive any and all payments made for the benefit of such SPC
and take all actions hereunder to the extent, if any, such SPC shall have any
rights hereunder. In addition, notwithstanding anything to the contrary
contained in this Agreement any SPC may, with notice to, but without the prior
written consent of, any other party hereto, assign all or a portion of its
interest in any Advances to the Granting Bank. This Section may not be amended
without the prior written consent of each Granting Bank, all or any part of
whose Advance is being funded by an SPC at the time of such
amendment.

 

 







50












 

SECTION
7.09.  Governing
Law.

 

THIS
AGREEMENT AND ANY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

 

            SECTION
7.10.  Consent
to Jurisdiction; Waiver of Jury Trial.

 

(a)  To the fullest
extent permitted by law, the Obligor hereby irrevocably (i) submits to the
non-exclusive jurisdiction of any New York State or Federal court 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, any other Loan Document or the
Letter of Credit, and (ii) agrees that all claims in respect of such action
or proceeding may be heard and determined in such New York State court or in
such Federal court. The Obligor hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The Obligor also irrevocably consents, to the fullest
extent permitted by law, to the service of any and all process in any such
action or proceeding by the mailing by certified mail of copies of such process
to the Obligor at its address specified in Section 8.02. The Obligor
agrees, to the fullest extent permitted by law, 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.

 

(b)  THE OBLIGOR,
THE ADMINISTRATIVE AGENT, THE FRONTING BANK AND THE LENDERS HEREBY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE LETTER OF CREDIT,
OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
THEREUNDER.

 

            SECTION
7.11.  Severability. 

 

Any provision of
this Agreement that is prohibited, unenforceable or not authorized in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.

 

            SECTION
7.12.  Entire
Agreement.

 

This Agreement and
the Notes issued hereunder constitute the entire contract among the parties
relative to the subject matter hereof. Any previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement,
except (i) as expressly agreed in any such previous agreement and
(ii) for the Fee Letter and the Fronting Bank Fee Letters. Except as is
expressly provided for herein, nothing in this Agreement, expressed or implied,
is intended to confer upon any party other than the parties hereto any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.

 

            SECTION
7.13.  Execution
in Counterparts.

 

This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

 

 







51












 

            SECTION
7.14.  USA
PATRIOT Act Notice.

 

Each Lender that is
subject to the Patriot Act, the Fronting Bank and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Obligor pursuant to
the requirements of the Patriot Act that it is required to obtain, verify and
record information that identifies the Obligor, which information includes the
name and address of the Obligor and other information that will allow such
Lender, the Fronting Bank or the Administrative Agent, as applicable, to
identify the Obligor in accordance with the Patriot Act.

 




 

[Signatures to
Follow]

 




 











52
















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

 




 


	 	 	 
	 	FIRSTENERGY
      CORP.
	 
 	 
 	 
 
	 	By:  	 
	 	
      

       Name:
	 	 Title:





























	 	 	 
	 	WACHOVIA FIXED INCOME STRUCTURED TRADING
      SOLUTIONS
	 
 	 
 	 
 
	 	By:  	 
	 	
      

      Name:
	 	Title