Exhibit 10.25


 


EXECUTION
COPY


 


AMENDED AND
RESTATED

CREDIT AGREEMENT


 


dated as of
October 26, 2004


 


among


 


AES EASTERN
ENERGY, L.P.


as
Borrower


 


and


 


THE BANKS
NAMED HEREIN


as Banks


 


and


 


THE LETTER
OF CREDIT ISSUING BANKS

PARTIES HERETO FROM TIME TO TIME


as Issuing
Banks


 


and


 


CALYON NEW
YORK BRANCH


as Agent


 





















 


TABLE OF
CONTENTS


 


	
  Article 1
  INTERPRETATION

  	
   

  
	
  Section 1.01.

  	
  Defined Terms

  	
   

  
	
  Section 1.02.

  	
  Other
  Interpretive Provisions

  	
   

  
	
  Section 1.03.

  	
  Accounting
  Matters

  	
   

  
	
  Section 1.04.

  	
  Representations
  and Warranties

  	
   

  
	
  Section 1.05.

  	
  Captions

  	
   

  
	
  Section 1.06.

  	
  Interpretation
  of Related Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 2 LOAN
  FACILITY; COMPUTATIONS

  	
   

  
	
  Section 2.01.

  	
  Commitment to
  Lend

  	
   

  
	
  Section 2.02.

  	
  Manner of
  Borrowing

  	
   

  
	
  Section 2.03.

  	
  Interest 

  	
   

  
	
   (a)

  	
  Rates

  	
   

  
	
   (b)

  	
  Payment

  	
   

  
	
   (c)

  	
  Conversion and Continuation

  	
   

  
	
   (d)

  	
  Maximum
  Interest Rate

  	
   

  
	
  Section 2.04.

  	
  Repayment

  	
   

  
	
  Section 2.05.

  	
  Prepayments

  	
   

  
	
   (a)

  	
  Optional
  Payments

  	
   

  
	
   (b)

  	
  Commitment
  Reduction Mandatory Prepayments

  	
   

  
	
   (c)

  	
  Clean-Up Period
  Mandatory Prepayments

  	
   

  
	
   (d)

  	
  Rent Payment
  Date Mandatory Prepayments

  	
   

  
	
   (e)

  	
  Total
  Commitment Amount Reduction Mandatory Prepayments/Cash Collateralization

  	
   

  
	
  Section 2.06.

  	
  Limitation
  on Types of Loans

  	
   

  
	
  Section 2.07.

  	
  Termination or
  Reduction of Commitments

  	
   

  
	
  Section 2.08.

  	
  Fees

  	
   

  
	
   (a)

  	
  Commitment
  Fees

  	
   

  
	
   (b)

  	
  Letter
  of Credit Fees

  	
   

  
	
   (c)

  	
  Agency Fees

  	
   

  
	
   (d)

  	
  Fronting Fees

  	
   

  
	
   (e)

  	
  Supplemental
  Fees for Utilizations over $50,000,000

  	
   

  
	
   (f)

  	
  Fees
  Non-Refundable

  	
   

  
	
   (g)

  	
  Survival

  	
   

  
	
  Section 2.09.

  	
  Computation
  of Interest and Fees

  	
   

  
	
  Section 2.10.

  	
  Evidence
  of Indebtedness

  	
   

  
	
  Section 2.11.

  	
  Payments
  by the Borrower

  	
   

  
	
   (a)

  	
  Time, Place and Manner

  	
   

  
	
   (b)

  	
  No Reductions

  	
   

  
	
   (c)

  	
  Extension of Payment Dates

  	
   

  
	
  Section 2.12.

  	
  Distribution of
  Payments by the Agent

  	
   

  
	
  Section 2.13.

  	
  Taxes

  	
   

  
	
   (a)

  	
  Taxes Payable by the
  Borrower

  	
   

  
	
   (b)

  	
  Taxes
  Payable by the Agent, any Bank or any Issuing Bank

  	
   

  



 


i





















 


	
   (c)

  	
  Limitations

  	
   

  
	
   (d)

  	
  Exemption
  from U.S. Withholding Taxes

  	
   

  
	
  Section 2.14.

  	
  Pro Rata Treatment

  	
   

  
	
  Section 2.15.

  	
  Extension
  of Maturity Date

  	
   

  
	
  Section 2.16.

  	
  Working
  Capital Facility Designation

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 3 LETTERS OF
  CREDIT

  	
   

  
	
  Section 3.01.

  	
  Issuing Banks

  	
   

  
	
  Section 3.02.

  	
  Letters of Credit

  	
   

  
	
  Section 3.03.

  	
  Issuing Bank Fees

  	
   

  
	
  Section 3.04.

  	
  Reimbursement
  to Issuing Banks; Interest

  	
   

  
	
  Section 3.05.

  	
  Obligations
  Absolute

  	
   

  
	
  Section 3.06.

  	
  Liability
  of Issuing Banks and the Banks

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 4
  CONDITIONS TO EXTENSIONS OF CREDIT

  	
   

  
	
  Section 4.01.

  	
  Conditions
  to the Initial Extension of Credit

  	
   

  
	
  Section 4.02.

  	
  Conditions
  to increase the Total Commitment Amount

  	
   

  
	
  Section 4.03.

  	
  Conditions
  to Each Extension of Credit

  	
   

  
	
  Section 4.04.

  	
  Reliance on
  Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 5
  CERTAIN REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  Section 5.01.

  	
  Due
  Organization, Etc

  	
   

  
	
  Section 5.02.

  	
  Loan
  Documents: Authorization: Enforceability; Required Consents; Absence of
  Conflicts

  	
   

  
	
  Section 5.03.

  	
  Operative
  Documents: Due Authorization, Enforceability, Etc

  	
   

  
	
  Section 5.04.

  	
  Operative
  Documents: No Conflicts

  	
   

  
	
  Section 5.05.

  	
  Operative
  Documents: Governmental Actions

  	
   

  
	
  Section 5.06.

  	
  Litigation

  	
   

  
	
  Section 5.07.

  	
  No Defaults

  	
   

  
	
  Section 5.08.

  	
  Liens

  	
   

  
	
  Section 5.09.

  	
  Regulatory
  Status/Utility Regulation

  	
   

  
	
  Section 5.10.

  	
  Investment
  Company Act

  	
   

  
	
  Section 5.11.

  	
  Compliance With
  Laws

  	
   

  
	
  Section 5.12.

  	
  Taxes 

  	
   

  
	
  Section 5.13.

  	
  ERISA

  	
   

  
	
  Section 5.14.

  	
  Adequate Rights

  	
   

  
	
  Section 5.15.

  	
  Environmental
  Matters

  	
   

  
	
  Section 5.16.

  	
  Subsidiaries

  	
   

  
	
  Section 5.17.

  	
  Property

  	
   

  
	
  Section 5.18.

  	
  No Event of Loss

  	
   

  
	
  Section 5.19.

  	
  AEE2 Liens

  	
   

  
	
  Section 5.20.

  	
  AEE2 Adequate
  Rights

  	
   

  
	
  Section 5.21.

  	
  Additional
  Facilities Environmental Matters

  	
   

  
	
  Section 5.22.

  	
  Burdensome
  Provisions

  	
   

  
	
  Section 5.23.

  	
  No
  Adverse Change or Event

  	
   

  
	
  Section 5.24.

  	
  Additional
  Adverse Facts

  	
   

  
	
  Section 5.25.

  	
  Margin Stock

  	
   

  



 


ii





















 


	
  Section 5.26.

  	
  Title to
  Properties

  	
   

  
	
  Section 5.27.

  	
  Insurance

  	
   

  
	
  Section 5.28.

  	
  Lien
  in Collateral

  	
   

  
	
  Section 5.29.

  	
  Projections

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 6 CERTAIN
  COVENANTS

  	
   

  
	
  Section 6.01.

  	
  Coverage Ratio

  	
   

  
	
  Section 6.02.

  	
  Preservation of Existence and
  Properties, Scope of Business, Compliance with Law, Payment of Taxes and
  Claims Preservation of Enforceability

  	
   

  
	
  Section 6.03.

  	
  Insurance

  	
   

  
	
  Section 6.04.

  	
  Use of Proceeds

  	
   

  
	
  Section 6.05.

  	
  Liens

  	
   

  
	
  Section 6.06.

  	
  Merger or Consolidation

  	
   

  
	
  Section 6.07.

  	
  Disposition of Assets

  	
   

  
	
  Section 6.08.

  	
  Incurrence of Indebtedness

  	
   

  
	
  Section 6.09.

  	
  Limitations on Investments

  	
   

  
	
  Section 6.10.

  	
  Transactions with Affiliates

  	
   

  
	
  Section 6.11.

  	
  Subsidiaries

  	
   

  
	
  Section 6.12.

  	
  Additional Facilities

  	
   

  
	
  Section 6.13.

  	
  Payment of Operating and Maintenance
  Costs

  	
   

  
	
  Section 6.14.

  	
  Annual Operating Budget

  	
   

  
	
  Section 6.15.

  	
  AEE Revenues

  	
   

  
	
  Section 6.16.

  	
  No Abandonment

  	
   

  
	
  Section 6.17.

  	
  Assignment

  	
   

  
	
  Section 6.18.

  	
  Compliance with ERISA

  	
   

  
	
  Section 6.19.

  	
  Restricted Payments

  	
   

  
	
  Section 6.20.

  	
  PPA Term

  	
   

  
	
  Section 6.21.

  	
  Commitment Increase Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 7 INFORMATION

  	
   

  
	
  Section 7.01.

  	
  Information to Be Furnished

  	
   

  
	
   (a)

  	
  Quarterly Financial
  Statements

  	
   

  
	
   (b)

  	
  Year-End
  Financial Statements; Accountants’ Certificate

  	
   

  
	
   (c)

  	
  Operating Budgets

  	
   

  
	
   (d)

  	
  Monthly
  Operations Report

  	
   

  
	
   (e)

  	
  Notices
  under each of the Participation Agreements

  	
   

  
	
   (f)

  	
  Reports,
  Filings and Notices

  	
   

  
	
   (g)

  	
  Requested
  Information

  	
   

  
	
   (h)

  	
  Notice
  of Defaults, Material Adverse Changes and Other Matters

  	
   

  
	
  Section 7.02.

  	
  Accuracy of Financial
  Statements and Information

  	
   

  
	
   (a)

  	
  Historical
  Financial Statements

  	
   

  
	
   (b)

  	
  Future
  Financial Statements

  	
   

  
	
   (c)

  	
  Historical Information

  	
   

  
	
   (d)

  	
  Future
  Information

  	
   

  
	
  Section 7.03.

  	
  Additional Covenants
  Relating to Disclosure

  	
   

  
	
   (a)

  	
  Accounting Methods and Financial Records

  	
   

  
	
   (b)

  	
  Fiscal
  Year

  	
   

  



 


iii





















 


	
   (c)

  	
  Visits,
  Inspections and Discussions

  	
   

  
	
  Section 7.04.

  	
  Authorization of
  Third Parties to Deliver Information and Discuss Affairs

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 8 DEFAULT

  	
   

  
	
  Section 8.01.

  	
  Events of Default

  	
   

  
	
  Section 8.02.

  	
  Remedies upon Event of
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 9
  ADDITIONAL CREDIT FACILITY PROVISIONS

  	
   

  
	
  Section 9.01.

  	
  Mandatory Suspension and
  Conversion of Eurodollar Rate Loans and Eurodollar Rate Drawings

  	
   

  
	
  Section 9.02.

  	
  Regulatory Changes

  	
   

  
	
  Section 9.03.

  	
  Capital Requirements

  	
   

  
	
  Section 9.04.

  	
  Funding Losses

  	
   

  
	
  Section 9.05.

  	
  Certain Determinations;
  Survival

  	
   

  
	
  Section 9.06.

  	
  Change of Lending Office

  	
   

  
	
  Section 9.07.

  	
  Replacement of Bank in
  Respect of Increased Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 10 THE AGENT

  	
   

  
	
  Section 10.01.

  	
  Appointment and Powers

  	
   

  
	
  Section 10.02.

  	
  Limitation on Agent’s
  Liability

  	
   

  
	
  Section 10.03.

  	
  Defaults

  	
   

  
	
  Section 10.04.

  	
  Rights as a Bank

  	
   

  
	
  Section 10.05.

  	
  Indemnification

  	
   

  
	
  Section 10.06.

  	
  Non-Reliance on Agent
  and Other Banks

  	
   

  
	
  Section 10.07.

  	
  Execution and Amendment
  of Loan Documents on Behalf of the Banks

  	
   

  
	
  Section 10.08.

  	
  Resignation of the
  Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 11
  MISCELLANEOUS

  	
   

  
	
  Section 11.01.

  	
  Notices and Deliveries

  	
   

  
	
   (a)

  	
  Notices
  and Materials Other than Collateral

  	
   

  
	
   (b)

  	
  Collateral

  	
   

  
	
  Section 11.02.

  	
  Expenses; Indemnification

  	
   

  
	
  Section 11.03.

  	
  Amounts Payable Due upon
  Request for Payment

  	
   

  
	
  Section 11.04.

  	
  Remedies of the Essence

  	
   

  
	
  Section 11.05.

  	
  Rights Cumulative

  	
   

  
	
  Section 11.06.

  	
  Amendments; Waivers

  	
   

  
	
  Section 11.07.

  	
  Set-Off; Suspension of Payment
  and Performance

  	
   

  
	
  Section 11.08.

  	
  Sharing of Recoveries

  	
   

  
	
  Section 11.09.

  	
  Assignments and
  Participations

  	
   

  
	
   (a)

  	
  Assignments

  	
   

  
	
   (b)

  	
  Participations

  	
   

  
	
  Section 11.10.

  	
  Governing Law

  	
   

  
	
  Section 11.11.

  	
  Judicial Proceedings;
  Waiver of Jury Trial

  	
   

  
	
  Section 11.12.

  	
  LIMITATION OF LIABILITY

  	
   

  
	
  Section 11.13.

  	
  Process Agent

  	
   

  
	
  Section 11.14.

  	
  Severability of
  Provisions

  	
   

  
	
  Section 11.15.

  	
  Counterparts

  	
   

  



 


iv





















 


	
  Section 11.16.

  	
  Survival of Obligations

  	
   

  
	
  Section 11.17.

  	
  Entire Agreement

  	
   

  
	
  Section 11.18.

  	
  Successors and Assigns

  	
   

  
	
  Section 11.19.

  	
  No Fiduciary
  Relationship Established By Loan Documents

  	
   

  
	
  Section 11.20.

  	
  No Recourse to
  Affiliates

  	
   

  
	
  Section 11.21.

  	
  Confidential
  Information

  	
   

  
	
  Section 11.22.

  	
  Registered Notes

  	
   

  
	
  Section 11.23.

  	
  USA PATRIOT Act

  	
   

  
	
  Section 11.24.

  	
  J. Aron Letters of Credit

  	
   

  



 


	
  ANNEX

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex A

  	
  -

  	
  Commitments,
  Lending Offices and Notice Addresses

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 2.02

  	
  -

  	
  Notice of Borrowing

  	
   

  
	
  Schedule 2.03(c)(iv)

  	
  -

  	
  Notice of Conversion or
  Continuation

  	
   

  
	
  Schedule 2.05(a)

  	
  -

  	
  Notice of Prepayment

  	
   

  
	
  Schedule 2.05(c)

  	
  -

  	
  Notice of Clean-Up Period

  	
   

  
	
  Schedule 2.13(d)

  	
  -

  	
  Non-US Bank Certificate

  	
   

  
	
  Schedule 3.04(e)

  	
  -

  	
  Notice of Conversion of Base Rate
  Drawing

  	
   

  
	
  Schedule 4.01
  (a)(xi)

  	
  -

  	
  Form of
  Opinion of Special New York Counsel to the Borrower and AES NY

  	
   

  
	
  Schedule 5.05

  	
  -

  	
  Governmental Actions

  	
   

  
	
  Schedule 5.06

  	
  -

  	
  Litigation

  	
   

  
	
  Schedule 5.09

  	
  -

  	
  Utility Regulation

  	
   

  
	
  Schedule 5.13

  	
  -

  	
  ERISA

  	
   

  
	
  Schedule 5.15

  	
  -

  	
  Environmental Matters

  	
   

  
	
  Schedule 5.24

  	
  -

  	
  Additional Material Adverse Facts

  	
   

  
	
  Schedule 7.01 (a)

  	
  -

  	
  Certificate As To Financial
  Statements and Defaults

  	
   

  
	
  Schedule 7.02(a)

  	
  -

  	
  Base Financial Statements

  	
   

  
	
  Schedule 8.01 (g)

  	
  -

  	
  Certain Events of Default (Lease
  Agreement)

  	
   

  
	
  Schedule 11.09(a)

  	
  -

  	
  Notice of Assignment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of
  Promissory Note

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of
  Pledge Agreement

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of
  Issuing Bank Agreement

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of
  Letter of Credit

  	
   

  
	
  Exhibit E

  	
  -

  	
  Form of
  Bank Assignment

  	
   

  



 


v





















 


AMENDED AND
RESTATED CREDIT AGREEMENT


 


Dated as of October 26, 2004


 


AES EASTERN ENERGY, L.P., as Borrower, the BANKS, the ISSUING BANKS,
and CALYON NEW YORK BRANCH, as Agent, agree as follows (with certain terms used
herein being defined in Article 1):


 


RECITALS


 


WHEREAS, on April 10, 2001, the Borrower entered into the Existing
Credit Facility (as hereinafter defined) with Union Bank of California, N.A.,
as the “Agent” (in such capacity, the “Original Agent”);


 


WHEREAS, Union Bank of California, N.A. (“Union Bank”) entered
into the Issuing Bank Agreement dated as of April 10, 2001 between the
Borrower and Union Bank, as the “Issuing Bank” (in such capacity, the “Original
Issuing Bank”) (the “Original Issuing Bank Agreement”);


 


WHEREAS, Calyon New York Branch, immediately prior to the execution and
delivery of this Agreement on the Agreement Date (as hereinafter defined), has
purchased the outstanding loans (the “Existing Loans”) made under the
Existing Credit Facility by each of Union Bank and Citibank, N.A. (“Citi”),
as the bank parties thereto (Union Bank and Citi, collectively, the “Transferor
Banks”) and the Unreimbursed Drawings owed to each of the Tansferor Banks
and has assumed all of the rights and obligations of the Transferor Banks under
the Existing Credit Facility including the Commitments of each Transferor Bank;


 


WHEREAS, immediately prior to the execution and delivery of this
Agreement on the Agreement Date, the Borrower will arrange to have each letter
of credit issued pursuant to the Original Issuing Bank Agreement returned to
the Original Issuing Bank;


 


WHEREAS, pursuant to Section 10.08 of the Existing Credit
Facility, Union Bank will resign as the Original Agent hereunder immediately
prior to the Agreement Date;


 


WHEREAS, the Agent is willing to assume the obligations and the
responsibilities of the Original Agent under the Existing Credit Facility; and


 


WHEREAS, the parties hereto mutually desire to amend the Existing
Credit Facility to provide for, among other things, the making by Calyon of
Loans and the issuance of Letters of Credit (as hereinafter defined) by Calyon
as Issuing Bank, and for convenience to restate the Existing Credit Facility,
as amended in its entirety as hereinafter set forth.


 


NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree that on the Agreement
Date, the Existing Credit Facility shall be amended and restated in its
entirety to read as follows:


 





















 


ARTICLE 1


 


INTERPRETATION


 


Section 1.01.                             Defined Terms.  Each
capitalized term used herein and not otherwise defined herein shall have the
definition assigned to such term in Appendix A to the Participation Agreement (Kintigh
A-l), dated as of May 1, 1999, as amended on or before the date hereof
(and as amended, supplemented or otherwise modified after the date hereof with
the prior written consent of the Required Banks and the Issuing Banks) (“Appendix
A”), among the Borrower, as Lessee, Kintigh Facility Trust A-l, as Owner
Trust, DCC Project Finance Fourteen, Inc., as Owner Participant, Bankers
Trust Company, as Indenture Trustee, and Bankers Trust Company, as Pass Through
Trustee, and the principles of interpretation set forth in such Appendix A
shall apply to such definitions. As used herein, (i) the term “Leases”
shall refer not only to the singular of such term as defined in such Appendix A
but shall also refer to each Other Lease and each Related Lease as such terms
are defined in such Appendix A, (ii) the term “Participation Agreements”
shall refer not only to the singular of such term as defined in such Appendix A
but shall also refer to each other Participation Agreement as defined in any
Other Lease or any Related Lease, (iii) the term “Facility” shall refer
not only to the singular of such term as defined in such Appendix A but shall
also refer to each Related Facility as such term is defined in such Appendix A,
(iv) the term “Facility Site” shall refer not only to the singular of such
term as defined in such Appendix A but shall also refer to each Related
Facility Site as such term is defined in such Appendix A, (v) the term “Site
Lease” shall refer not only to the singular of such term as defined in such
Appendix A but shall also refer to each Related Site Lease as such term is
defined in such Appendix A, and (vi) the term “Operative Documents” shall
refer not only to the singular of such term as defined in such Appendix A but
shall also refer to each Other Operative Document as such term is defined in
such Appendix A. For the purposes of the Loan Documents:


 


“Adjusted Eurodollar Rate” means, for any Interest Period, a rate per
annum (rounded upward, if necessary, to the nearest whole
multiple of 1/100 of 1%) equal to the rate obtained by dividing (a) the Eurodollar Rate for
such Interest Period by (b) a percentage equal to 1 minus the Reserve Requirement in effect
from time to time during such Interest Period.


 


“AEE2” means AEE2, L.L.C., a limited liability company organized
under the laws of the State of Delaware.


 


“AEE2 Entity” means AEE2, AES Westover, L.L.C. and AES Greenidge,
L.L.C.


 


“AES” means The AES Corporation, a Delaware corporation.


 


“AES Cayuga” means AES Cayuga, L.L.C., a limited liability
company organized under the laws of the State of Delaware.


 


“AES Somerset” means AES Somerset, L.L.C., a limited liability
company organized under the laws of the State of Delaware.


 


2





















 


“Affiliate” means, with respect to a Person, any other Person
that, directly or indirectly through one or more intermediaries, Controls, or
is Controlled by, or is under common Control with, such first Person; unless
otherwise specified, “Affiliate” means an Affiliate of the Borrower.


 


“Agent” means Calyon New York Branch, as agent for and
representative (within the meaning of Section 9-102(a)(72) of the
Uniform Commercial Code) of the Banks and the Issuing Banks under this
Agreement and the other Loan Documents, and any successor Agent appointed
pursuant to Section 10.08.


 


“Agent’s Fee Letter” means the letter agreement dated the date
hereof between the Borrower and the Agent.


 


“Agent’s Office” means the address of the Agent specified in or
determined in accordance with the provisions of Section 11.01(a)(ii).


 


“Agreement” means this Agreement, including all schedules,
annexes and exhibits hereto.


 


“Agreement Date” means the date set forth as such on the
signature pages hereof, which is the date the executed copies of this
Agreement were delivered by all parties hereto and, accordingly, this Agreement
became effective and the Banks and the Issuing Banks first became committed to
provide the Extensions of Credit pursuant to the terms of, and as contemplated
by, this Agreement. If no such date is there set forth, the Agreement Date
shall be the date as of which this Agreement is dated.


 


“Appendix A” has the meaning assigned to that term in the
initial paragraph of this Section 1.01.


 


“Applicable Law” means, anything in Section 11.10 to the
contrary notwithstanding, (a) all applicable common law and principles of
equity and (b) all applicable provisions of all (i) constitutions,
statutes, rules, regulations and orders of governmental bodies, (ii) Governmental
Approvals and Governmental Registrations and (iii) orders, decisions,
judgments and decrees.


 


“Applicable Margin”: (i) for each Type of Loan (prior to
the second anniversary of the Agreement Date), the rate per annum set
forth under the relevant column heading below:


 




	
  Base
  Rate

  Loans

  	
   

  	
  Eurodollar Rate

  Loans

  	
   

  
	
  0.750

  	
  %

  	
  1.750

  	
  %

  






 


(ii)                                  for each Type of Loan (on or after the second
anniversary of the Agreement Date) the rate per annum set forth opposite such
period under the relevant column heading below:


 


3





















 




	
  Base
  Rate

  Loans

  	
   

  	
  Eurodollar Rate

  Loans

  	
   

  
	
  1.00

  	
  %

  	
  2.00

  	
  %

  






 


“Available Commitment” means, as to any Bank, at any time, an
amount equal to the excess, if any, of (a) the amount of such Bank’s
Commitment (provided that for
purposes of this definition only, each Bank’s Commitment shall at all times be
determined by using a Total Commitment Amount equal to the Increased Total
Commitment Amount) then in effect over (b) the sum of such Bank’s (i) Loans,
(ii) Unreimbursed Drawings then outstanding and (iii) Percentage of
LC Outstandings.


 


“Available Commitments” means the aggregate of the Banks’
Available Commitments.


 


“Bank” means (a) any Person listed on the signature pages hereof
following the Agent and (b) any Person (other than the Borrower or any of
its Affiliates) that has been assigned any or all of the rights or obligations
of a Bank pursuant to Section 11.09(a).


 


“Bank Tax” means any net income or franchise tax or an
equivalent type of tax imposed upon any Bank by any jurisdiction (or political
subdivision thereof) in which such Bank or any of its Lending Offices is
located.


 


“Bank Assignment” means, the Bank Assignment dated as of October 26,
2004 among the Transferor Banks and Calyon, substantially in the form of Exhibit E
hereto.


 


“Base Rate” means, for any day, a rate per annum equal
to the higher of (a) the Prime Rate in effect on such day and (b) the
sum of the Federal Funds Rate in effect on such day plus 0.50%.


 


“Base Rate Drawing” means any Unreimbursed Drawing the interest
on which is, or is to be, as the context may require, computed on the basis of
the Base Rate.


 


“Base Rate Loan” means any Loan the interest on which is, or is
to be, as the context may require, computed on the basis of the Base Rate.


 


“Borrower” means AES Eastern Energy, L.P., a Delaware limited
partnership.


 


“Business Day” means any day other than a Saturday, Sunday or
other day on which banks in New York City are authorized or required by law to
close.


 


“Calyon” means, Calyon New York Branch.


 


“Capital Security” means, with respect to any Person, (a) any
share of capital stock of or other unit of ownership interest in such Person or
(b) any security convertible into, or any option, warrant or other right
to acquire, any share of capital stock of or other unit of ownership interest
in such Person.


 


4





















 


“Clean-Up Period” means, with respect to each consecutive period
of 365 or, in the case of a leap year, 366 consecutive days occurring within
the period from the Agreement Date through the Maturity Date, one period of 15
consecutive days.


 


“Closing Date” means the date upon which each of the conditions
precedent enumerated in Section 4.01 has been fulfilled to the
satisfaction of the Agent and the Borrower. All transactions contemplated by
the Closing Date shall take place on or before October 26, 2004, at the
offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New
York, New York 10017, at 10:00 A.M., or such other time and/or location as
the parties hereto may mutually agree.


 


“Code” means the Internal Revenue Code of 1986.


 


“Collateral” means all property in which a Lien is created
pursuant to the Pledge Agreement.


 


“Commitment” means, as to any Bank, the obligation of such Bank
to make Loans to the Borrower and to participate in Extensions of Credit
resulting from the issuance (or extension, modification or amendment) of any
Letter of Credit, in an aggregate amount not to exceed at any time the product
of (i) such Bank’s Percentage and (ii) the Total Commitment Amount in
effect at such time, as such amount may be reduced from time to time pursuant
to Section 2.07 or increased or reduced from time to time pursuant to
assignments in accordance with Section 11.09(a) or (b), as the
context may require.


 


“Commitment Increase Date” means the date upon which each of the
conditions precedent enumerated in Section 4.02 has been fulfilled, which
date must occur on or prior to December 31, 2004.


 


“Contract” means (a) any agreement (whether bilateral or
unilateral or executory or non-executory and whether a Person entitled to
rights thereunder is so entitled directly or as a third party beneficiary),
including an indenture, lease or license, (b) any deed or other instrument
of conveyance, (c) any certificate of incorporation, charter, partnership
agreement, limited liability company agreement or other organizational document
and (d) any by-law.


 


“Control” means, with respect to a Person, possession by another
Person, directly or indirectly, of the power to direct or cause the direction
of the management or policies of such first Person, whether through the
ownership of voting securities, by contract or otherwise. The words “Controlling”
and “controlled” have correlative meanings.


 


“Debt” means any Liability that constitutes “debt” or “Debt”
under section 101(12) of the Bankruptcy Code or under the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any analogous
Applicable Law.


 


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


 


“Dollars” and the sign “$” mean lawful money of the
United States of America.


 


5





















 


“Domestic Lending Office” of any Bank means (a) the branch
or office of such Bank set forth below such Bank’s name under the heading “Domestic
Lending Office” on Annex A or, in the case of a Bank that becomes a Bank
pursuant to an assignment, the branch or office of such Bank set forth under
the heading “Domestic Lending Office” in the Notice of Assignment given to the
Borrower and the Agent with respect to such assignment, as the case may be, or (b) such
other branch or office of such Bank designated by such Bank from time to time
as the branch or office at which its Base Rate Loans and Base Rate Drawings are
to be made or maintained.


 


“Eligible Assignee” means (a) any commercial bank, savings
and loan institution or savings bank organized under the laws of the United
States, or any State thereof, and having combined capital and surplus in excess
of $100,000,000, (b) any commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development (“OECD”), or a political subdivision of any such country,
and having combined capital and surplus (or the equivalent thereof under the
accounting principles applicable thereto) in excess of $100,000,000, provided that such bank is acting through
a branch, agency or Affiliate located in the country in which it is organized
or another country that is also a member of the OECD, (c) the central bank
of any country that is a member of the OECD or (d) any insurance company,
pension fund, mutual fund or other financial institution of recognized
standing.


 


“Enacted” as applied to a Regulatory Change, means the date such
Regulatory Change first becomes effective or is implemented or first required
or expected to be complied with, whether the same is (a) the result of an
enactment by a government or any agency or political subdivision thereof, a
determination of a court or regulatory authority, a request or directive of a
regulatory authority, or otherwise or (b) enacted, adopted, issued or
proposed before or after the Agreement Date.


 


“Eurodollar Business Day” means any Business Day on which
dealings in Dollar deposits are carried on in the London interbank market and
on which commercial banks are open for domestic and international business
(including dealings in Dollar deposits) in London, England.


 


“Eurodollar Lending Office” of any Bank means (a) the
branch or office of such Bank set forth below such Bank’s name under the heading
“Eurodollar Lending Office” on Annex A or, in the case of a Bank that
becomes a Bank pursuant to an assignment, the branch or office of such Bank set
forth under the heading “Eurodollar Lending Office” in the Notice of Assignment
given to the Borrower and the Agent with respect to such assignment, as the
case may be, or (b) such other branch or office of such Bank designated by
such Bank from time to time as the branch or office at which its Eurodollar
Rate Loans and Eurodollar Rate Drawings are to be made or maintained.


 


“Eurodollar Rate” means, for any Interest Period, an interest
rate per  annum
(rounded upwards, if necessary, to the nearest whole multiple of
1/100 of 1%) equal to the rate per annum appearing
on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. (London,
England time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest


 


6





















 


Period. If for any reason such rate is not available the Eurodollar
Rate shall be determined by reference to such other comparable publicly
available service for displaying Eurodollar Rates as may be selected by the
Agent with the consent of the Borrower (such consent not to be unreasonably
withheld) or, in the absence of such availability, the Eurodollar Rate shall
be, for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the rate per
annum at which deposits in Dollars are offered to the Agent
in the London interbank market at approximately 11:00 A.M. (New York City
time) two Business Days prior to the first day of such Interest Period in an
amount of $1,000,000 and for a period equal to such Interest Period.


 


“Eurodollar Rate Drawing” means any Unreimbursed Drawing the
interest on which is, or is to be, as the context may require, computed on the
basis of the Adjusted Eurodollar Rate.


 


“Eurodollar Rate Loan” means any Loan the interest on which is,
or is to be, as the context may require, computed on the basis of the Adjusted
Eurodollar Rate.


 


“Event of Default” means any of the events specified in Section 8.01.


 


“Existing Credit Facility” means the $35,000,000 Credit
Agreement, dated as of April 10, 2001, as amended, among the Borrower, the
banks party thereto, and Union Bank of California, N.A., as Agent.


 


“Extension of Credit” means (i) the making of any Loan, (ii) the
issuance of any Letter of Credit, or (iii) the amendment of any Letter of
Credit having the effect of extending the stated expiration date thereof,
increasing the LC Outstandings thereunder, or otherwise altering any of the
material terms or conditions thereof.


 


“Federal Funds Rate” means, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York or, if such rate is not so published for
any day that is a Business Day, the average of quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.


 


“Governmental Approval” means any authority, consent, approval,
license (or the like) or exemption (or the like) of any governmental unit.


 


“Governmental Registration” means any registration or filing (or
the like) with, or report or notice (or the like) to, any governmental unit.


 


“Increased Total Commitment Amount” means $75,000,000 (or such
lesser amount to which the Commitments may have been reduced pursuant to Section 2.07
hereof) provided, that
if as of any Rent Payment Date a PPA Term is in effect and (i) the
Coverage Ratio for either of the two semi-annual Rent Payment Periods
immediately preceding such Rent Payment Date (based on actual operating
history) shall be less than 1.7 to 1.0 but greater than 1.6 to 1.0 or the Pro
Forma Coverage Ratio for any of the two semi-annual periods immediately


 


7





















 


succeeding
such Rent Payment Date (based on Pro Forma) shall be less than 1.7 to 1.0 but
greater than 1.6 to 1.0, then until the next Rent Payment Date the Total
Commitment Amount shall equal $69,000,000 so long as clause (ii) is not
otherwise applicable or (ii) the Coverage Ratio for either of the two
semi-annual Rent Payment Periods immediately preceding such Rent Payment Date
(based on actual operating history) shall be less than 1.6 to 1.0 or the Pro
Forma Coverage Ratio for any of the two semi-annual periods immediately
succeeding such Rent Payment Date (based on Pro Forma) shall be less than 1.6
to 1.0, then until the next Rent Payment Date the Total Commitment Amount shall
equal $63,000,000; provided further that
if the Total Commitment Amount is less than $75,000,000 (or such lesser amount
to which the Commitments may have been reduced pursuant to Section 2.07
hereof) by reason of the proviso set forth above, the Borrower shall be
permitted to increase the Total Commitment Amount up to $75,000,000 (or such
lesser amount to which the Commitments may have been reduced pursuant to Section 2.07
hereof) by providing cash collateral to the Agent, as Secured Party (with the
Agent holding such cash collateral for its benefit and the benefit of the
Issuing Bank and the Banks) pursuant to a cash collateral security agreement
acceptable to the Agent and the Total Commitment Amount shall be increased by
the amount of cash collateral so provided to the Agent provided further that
the Total Commitment Amount shall in no event exceed $75,000,000 (or such
lesser amount to which the Commitments may have been reduced pursuant to Section 2.07
hereof).


 


“Indemnified Person” means any Person that is, or at any time,
was, the Agent, a Bank, an Issuing Bank, an Affiliate of the Agent, a Bank or
an Issuing Bank, or a director, officer, employee or agent of any such Person.


 


“Independent Engineer” E3 Consulting or such other nationally
recognized engineering firm reasonably acceptable to the Borrower as the Agent
may designate.


 


“Information” means data, certificates, reports, statements
(including financial statements), opinions of counsel, documents and other
information.


 


“Insolvency” means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA.


 


“Insolvent” means pertaining to a condition of Insolvency.


 


“Insurance Consultant”: Marsh USA, Inc., or such other
insurance consultant reasonably acceptable to the Borrower as the Agent may
designate.


 


“Intellectual Property” means (a)(i) patents and patent
rights, (ii) trademarks, trademark rights, trade names, trade name rights,
corporate names, business names, trade styles, service marks, logos and general
intangibles of like nature and (iii) copyrights, in each case whether
registered, unregistered or under pending registration and, in the case of any
such that are registered or under pending registration, whether registered or
under pending registration under the laws of the United States or any other
country, (b) reissues, continuations, continuations-in-part and extensions
of any Intellectual Property referred to in clause (a), and (c) rights
relating to any Intellectual Property referred to in clause (a) or (b),
including rights


 


8





















 


under applications (whether pending under the laws of the United States
or any other country) or licenses relating thereto.


 


“Interest Payment Date” means each Rent Payment Date and the
second calendar day of April and October of each year.


 


“Interest Period” means a period commencing, in the case of the
first Interest Period applicable to a Eurodollar Rate Loan or Eurodollar Rate
Drawing (as the case may be), on the date of the making of, or conversion into,
such Eurodollar Rate Loan or Eurodollar Rate Drawing (as the case may be), and,
in the case of each subsequent, successive Interest Period applicable thereto,
on the last day of the immediately preceding Interest Period. The duration of
each Interest Period shall be one, two, three or six months or any other period
less than one month agreed to by the Agent (provided, that
the Borrower may not select an Interest Period of six months in the case of a
Eurodollar Rate Drawing), as the Borrower may, in accordance with Section 2.02(a),
Section 2.03(c) or Section 3.04(e), as applicable, select,
except that (a) any Interest Period that would otherwise have a Rent Payment
Date occur during the term of such Interest Period shall end on the day that is
such Rent Payment Date, (b) any Interest Period that would otherwise end
on a day that is not a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day unless such Eurodollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Eurodollar Business Day, (c) any Interest Period that
begins on the last Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month in which
such Interest Period ends) shall end on the last Eurodollar Business Day of a
calendar month, (d) the Borrower may not select any Interest Period that ends
after the Maturity Date, and (e) any Interest Period selected by the
Borrower in respect of a Eurodollar Rate Drawing must end on the next-scheduled
Rent Payment Date following the date of such Eurodollar Rate Drawing.


 


“Issuing Bank” means any Bank designated by the Borrower in
accordance with Section 3.01 as the issuer of a Letter of Credit pursuant
to an Issuing Bank Agreement; provided, that
each Issuing Bank shall, at the time of such designation, have outstanding
unsecured indebtedness that is rated A- or better by S&P and A3 or better
by Moody’s (or an equivalent rating by another nationally-recognized credit
rating agency of similar standing if either of such corporations is not then in
the business of rating unsecured indebtedness of entities engaged in such
businesses). As of the date hereof, the Borrower has designated Calyon as an
Issuing Bank and Calyon has accepted such designation as an Issuing Bank.


 


“Issuing Bank Agreement” means an agreement between an Issuing
Bank and the Borrower, substantially in the form of Exhibit C or
otherwise in form and substance satisfactory to the Agent, providing for the
issuance of one or more Letters of Credit.


 


“Issuing Bank’s Fee Letter” means the letter agreement dated the
date hereof between the Borrower and the Issuing Bank.


 


“LC Payment Notice” has the meaning assigned to that term in Section 3.04(b).


 


9





















 


“LC Outstandings” means, for any Letter of Credit on any date of
determination, the maximum amount available to be drawn under such Letter of
Credit at any time on or after such date (assuming the satisfaction of all
conditions for drawing set forth therein).


 


“Lending Office” of any Bank means the Domestic Lending Office
or the Eurodollar Lending Office of such Bank.


 


“Letter of Credit” means any irrevocable standby letter of
credit, substantially in the form of Exhibit D or otherwise in form
and substance satisfactory to the Agent and the Borrower, issued by an Issuing
Bank pursuant to Section 3.02, with an expiration date not longer than one
year after the issuance thereof, to support the obligations of the Borrower to (a) purchasers
of power from the Borrower’s or its Subsidiaries’ power generating facilities
and/or (b) third parties in connection with obligations incurred by the
Borrower or its Subsidiaries in connection with the use and/or operation of the
Borrower’s or its Subsidiaries’ power generating facilities from time to time,
as such letter of credit may from time to time be amended, modified or extended
in accordance with the terms of this Agreement and the Issuing Bank Agreement
to which it relates.


 


“Liability” of any Person means (in each case, whether with full
or limited recourse) any indebtedness, liability, obligation, covenant or duty
of or binding upon, or any term or condition to be observed by or binding upon,
such Person or any of its assets, of any kind, nature or description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, whether arising under Contract, Applicable Law, or
otherwise, whether now existing or hereafter arising, and whether for the
payment of money or the performance or non-performance of any act.


 


“Lien” means (a) with respect to any property or asset of
any Person, including any investment property, or any income or profits
therefrom, in each case whether the same is consensual or nonconsensual or
arises by Contract, operation of law, legal process or otherwise, (i) any
mortgage, lien, pledge, attachment, levy or other security interest of any kind
thereupon or in respect thereof or (ii) any other arrangement, express or
implied, under which the same is subordinated, transferred, sequestered or
otherwise identified so as to subject the same to, or make the same available
for, the payment or performance of any Liability in priority to the payment of
the ordinary, unsecured Liabilities of such Person, or (b) in the case of
any investment property, any Contract or other arrangement, express or implied,
under which any Person has the right to control such investment property, provided that for purposes of this
definition the right of the Borrower to direct the investment of such property
shall not constitute control of such investment property. For the purposes of
this Agreement, a Person 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” means any amount advanced by a Bank pursuant to Section 2.01.


 


“Loan Document Related Claim” means any claim or dispute
(whether arising under Applicable Law, including any “environmental” or similar
law, under Contract or otherwise and, in the case of any proceeding relating to
any such claim or dispute, whether civil,


 


10





















 


criminal, administrative or otherwise) in any way arising out of,
related to, or connected with the Loan Documents, the relationships established
thereunder or any actions or conduct thereunder or with respect thereto,
whether such claim or dispute arises or is asserted before or after the
Agreement Date or before or after the Repayment Date.


 


“Loan Document Representation and Warranty” means any “Representation
and Warranty” as defined in any Loan Document and any other representation or
warranty made or deemed made under any Loan Document.


 


“Loan Documents” means (a) this Agreement, the Notes, the
Pledge Agreement, the Issuing Bank Agreement(s), the Agent’s Fee Letter, the
Issuing Bank’s Fee Letter and the Depositary Agreement and (b) all other
agreements, documents and instruments relating to, arising out of, or in any
way connected with any agreement, document or instrument referred to in clause (a) to
which the Agent, any Bank or any Issuing Bank and the Borrower, AES or one or
more AEE Entities are parties.


 


“Loan Party” means any Person (other than the Agent, a Bank or
an Issuing Bank) that is a party to a Loan Document.


 


“Loan Sublimit” means $35,000,000.


 


“Materially Adverse Effect” means (a) with respect to any
Person, any materially adverse effect on such Person’s business, assets,
Liabilities, financial condition, results of operations or business prospects, (b) with
respect to a group of Persons “taken as a whole,” any materially adverse effect
on such Persons’ business, assets, Liabilities, financial conditions, results
of operations or business prospects taken as a whole on, where appropriate, a
consolidated basis in accordance with GAAP, (c) with respect to any Loan
Document, any adverse effect, in any material respect, on the binding nature,
validity or enforceability thereof as an obligation of the Borrower and (d) with
respect to any Collateral, or any category of Collateral, pledged by the
Borrower, a materially adverse effect on its value as Collateral or a
Materially Adverse Effect with respect to AEE2, AES Somerset or AES Cayuga or
any of such Persons’ utility in the Borrower’s business or an adverse effect,
in any material respect, on the validity, perfection, priority or
enforceability of the Security Interest therein. Any such adverse effect may
have occurred, and such an event may have occurred or failed to occur, at any
particular time notwithstanding the fact that at such time no Default shall
have occurred and be continuing.


 


“Maturity Date” means January 2, 2008 or such later date to
which the Maturity Date is extended in accordance with Section 2.15


 


“Maximum Permissible Rate” means, with respect to interest
payable on any amount, the rate of interest on such amount that, if exceeded,
could, under Applicable Law, result in (a) civil or criminal penalties
being imposed on the payee or (b) the payee’s being unable to enforce
payment of (or, if collected, to retain) all or any part of such amount or the
interest payable thereon.


 


“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, that is subject to Title IV of ERISA and to which the Borrower or any of
its ERISA Affiliates is making or accruing an obligation to make contributions,
or has


 


11





















 


within any of the preceding five plan years made or
accrued an obligation to make contributions, such plan being maintained pursuant
to one or more collective bargaining agreements.


 


“Multiple Employer Plan” means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that is subject to Title IV of
ERISA and that (i) is maintained for employees of the Borrower or any of
its ERISA Affiliates and at least one Person other than the Borrower and its
ERISA Affiliates, or (ii) was so maintained and in respect of which the
Borrower or any of its ERISA Affiliates could have liability under Section 4064
or 4069 of ERISA in the event such plan has been or were to be terminated.


 


“Non-US Bank” means a Person that is not a United States Person
and that is not described in Section 881(c)(3) of the Code.


 


“Note” means any Note in the form of Exhibit A.


 


“Notice of Assignment” means any notice to the Borrower and the
Agent with respect to an assignment pursuant to Section 11.09(a) in
the form of Schedule 11.09(a).


 


“NYPSC Order” means the order from the New York Public Service
Commission approving working capital facility financing for the Borrower of up
to $75 million under Section 69 of the Public Service Law.


 


“PBGC” means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.


 


“Percentage” means, as to any Bank, the percentage set forth
opposite such Bank’s name on Annex A under the heading “Commitment
Percentage”, as the same may from time to time be modified or amended in
accordance with the terms of Section 11.09 hereof or otherwise in
accordance with the terms hereof.


 


“Person” means any individual, sole proprietorship, corporation,
partnership, trust, limited liability company, unincorporated organization,
mutual company, joint stock company, estate, union, employee organization,
government or any agency or political subdivision thereof.


 


“Pledge Agreement” means the Amended and Restated LLC Membership
Interest Pledge Agreement to be entered into on the Agreement Date, between the
Borrower and the Agent, as Secured Party, substantially in the form of Exhibit B.


 


“Post-Default Rate” means a rate per annum equal
at all times to the higher of (i) the Base Rate in effect from time to time plus
the Applicable Margin for Base Rate Loans plus 2.0% or (ii) the rate otherwise
applicable under Section 2.03(a)(i) plus
2.0%.


 


“Prime Rate” means the rate of interest per annum publicly announced from time to
time by the Agent as its prime commercial lending rate in effect at its
principal office in New York, New York (it being acknowledged that the prime
rate may not necessarily be the lowest rate of interest charged by the Agent in
connection with extensions of credit to debtors).


 


12





















 


“Public Service Law” means the New York Public Service Law.


 


“Register” means a register kept at the Agent’s office by the
Agent on behalf of the Borrower, at no extra charge to the Borrower, on which
the Agent records the names of the Registered Holders of Registered Notes.


 


“Registered Holder” means the Person in whose name a Registered
Note is registered.


 


“Registered Note” means a Note payable to any Person whose name
has been recorded on the Register by the Agent as the holder of such Note. The
registration of a Note shall constitute the registration of any Loan and
Unreimbursed Drawing evidenced thereby.


 


“Regulation D” means Regulation D of the Board of Governors of
the Federal Reserve System.


 


“Regulation U” means Regulation U of the Board of Governors of
the Federal Reserve System.


 


“Regulation X” means Regulation X of the Board of Governors of
the Federal Reserve System.


 


“Regulatory Change” means any Applicable Law, interpretation,
directive, determination, request or guideline (whether or not having the force
of law), or any change therein or in the administration or enforcement thereof,
that is Enacted after the Agreement Date, including any such that imposes,
increases or modifies any Tax, reserve requirement, insurance charge, special
deposit requirement, assessment or capital adequacy requirement, but excluding
any such that imposes, increases or modifies any Bank Tax.


 


“Reorganization” means, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of Section 4241
of ERISA.


 


“Repayment Date” means the later to occur of (a) the
termination of the Commitments (whether as a result of the occurrence of the
Maturity Date, termination pursuant to Section 2.07, or termination
pursuant to Section 8.02) and (b) the payment in full in cash of the
Loans, any Unreimbursed Drawings and all other amounts payable or accrued under
the Loan Documents and the termination or expiration of all Letters of Credit.


 


“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which notice is waived by the PBGC
pursuant to the regulations issued under Section 4043 of ERISA.


 


“Representation and Warranty” means any representation or
warranty made pursuant to or under (a) Section 4.03, Article 5, Section 7.02
or any other provision of this Agreement or (b) any amendment to, or
waiver of rights under, this Agreement, WHETHER OR NOT, IN THE CASE OF ANY
REPRESENTATION OR WARRANTY REFERRED TO IN CLAUSE (a) OR (b) OF THIS
DEFINITION (EXCEPT, IN EACH CASE, TO THE EXTENT


 


13





















 


OTHERWISE EXPRESSLY PROVIDED), THE INFORMATION THAT IS THE SUBJECT
MATTER THEREOF IS WITHIN THE KNOWLEDGE OF THE BORROWER.


 


“Request for Issuance” has the meaning assigned to that term in Section 3.02(a).


 


“Required Banks” means, on any date of determination, Banks
that, collectively, on such date (i) hold at least 51% of the then
aggregate outstanding principal amount of the Loans and Unreimbursed Drawings
owing to Banks and (ii) if no Loans or Unreimbursed Drawings are then
outstanding, have Percentages in the aggregate of at least 51%. Any
determination of those Banks constituting the Required Banks shall be made by
the Agent and shall be conclusive and binding on all parties absent manifest
error.


 


“Reserve Requirement” means, at any time, the then current
maximum rate for which reserves (including any marginal, special, supplemental
or emergency reserve) are required to be maintained under Regulation D by
member banks of the Federal Reserve System in New York City with deposits
exceeding five billion Dollars against “Eurocurrency liabilities,” as that term
is used in Regulation D. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.


 


“Secured Party” has the meaning ascribed to such term in the
Pledge Agreement.


 


“Security Interest” means the Liens created, or purported to be
created, by the Loan Documents.


 


“Single Employer Plan” means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, which is subject to Title IV of ERISA and
which (i) is maintained for employees of the Borrower or any of its ERISA
Affiliates and no Person other than the Borrower and its ERISA Affiliates, or (ii) was
so maintained and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated.


 


“Subsidiary” means, with respect to any Person at any time, (a) any
other Person the accounts of which would be consolidated with those of such
first Person in its consolidated financial statements as of such time, and (b) any
other Person (i) that is, at such time, Controlled by, or (ii) securities
of which having ordinary voting power to elect a majority of the board of
directors (or other persons having similar functions), or other ownership
interests of which ordinarily constituting a majority voting interest, are at
such time, directly or indirectly, owned or controlled by, such first Person,
or by such first Person and one or more of its Subsidiaries; unless otherwise
specified, “Subsidiary” means a Subsidiary of the Borrower.


 


“Tax” means any Federal, State or foreign tax, assessment or
other governmental charge (including any withholding tax) upon a Person or upon
its assets, revenues, income or profits.


 


“Total Commitment Amount” means, (A) for the period
commencing on the Agreement Date until the Commitment Increase Date,
$35,000,000 and (B) for the period commencing on the Commitment Increase
Date and thereafter, the Increased Total Commitment Amount.


 


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“Type” means, with respect to Loans, any of the following, each
of which shall be deemed to be a different “Type” of Loan: Base Rate Loans and
Eurodollar Rate Loans.


 


“Unavailable Commitment Amount” means, as to any Bank at any
time after the Commitment Increase Date, the product obtained by multiplying (a) such
Bank’s Percentage times (b) the
amount by which $75,000,000 (or such lesser amount to which the Commitments may
have been reduced pursuant to Section 2.07 hereof) exceeds the Total
Commitment Amount at such time.


 


“Uniform Commercial Code” means the Uniform Commercial Code as
in effect from time to time in the State of New York.


 


“United States Person”
means a corporation, partnership or other Person created, organized or
incorporated under the laws of the United States of America or a State thereof
(including the District of Columbia).


 


“Unreimbursed Drawing” means any drawing under a Letter of
Credit that has not yet been reimbursed by the Borrower to (i) the Issuing
Bank that paid such drawing or (ii) if such Issuing Bank has been
reimbursed for such drawing by the Banks pursuant to Section 3.03, the
Banks.


 


“Unsecured Amount” means, as to any Bank at any date of
determination after the Commitment Increase Date, the product obtained by
multiplying (a) such Bank’s Percentage times
(b) the amount by which (x) the sum of the Loans, LC
Outstandings and Unreimbursed Drawings then outstanding exceeds (y)
$50,000,000. The Unsecured Amount shall never be less than $0.


 


“Upfront Fee” has the meaning set forth in the Agent’s Fee
Letter.


 


Section 1.02.                             Other Interpretive Provisions. (a) Except as otherwise specified
herein, all references herein (i) to any Person shall be deemed to include
such Person’s successors and assigns, (ii) to any Applicable Law defined
or referred to herein shall be deemed references to such Applicable Law or any
successor Applicable Law as the same may have been or may be amended or
supplemented from time to time and (iii) to any Loan Document or Contract
(other than each of the Leases and each of the Participation Agreements,
including Appendix A thereto) defined or referred to herein shall be deemed
references to such Loan Document or Contract (and, in the case of any Note or
any other instrument, any instrument issued in substitution therefor) as the
terms thereof may have been or may be amended, supplemented, restated, waived
or otherwise modified from time to time (subject to any restrictions on such
amendments, supplements, restatements, waivers or modifications set forth
herein or therein).


 


(b)                                 When used in this Agreement, the words “herein,”
“hereof” and “hereunder,” and words of similar import, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
the words “Article,” “Section,” “Annex,” “Schedule” and “Exhibit” shall refer
to Articles and Sections of, and Annexes, Schedules and Exhibits to, this
Agreement unless otherwise specified.


 


15





















 


(c)                                  Whenever the context so requires, the neuter
gender includes the masculine or feminine, the masculine gender includes the
feminine, and the singular number includes the plural, and vice versa.


 


(d)                                 Any item or list of items set forth following
the word “including,” “include” or “includes” is set forth only for the purpose
of indicating that, regardless of whatever other items are in the category in
which such item or items are “included,” such item or items are in such category,
and shall not be construed as indicating that the items in the category in
which such item or items are “included” are limited to such items or to items
similar to such items.


 


(e)                                  Each authorization in favor of the Agent, the
Banks, any Issuing Bank or any other Person granted by or pursuant to this
Agreement shall be deemed to be irrevocable and coupled with an interest.


 


(f)                                    Except as otherwise specified herein, all
references herein to the Agent, any Bank, any Issuing Bank or the Borrower
shall be deemed to refer to such Person however designated in Loan Documents,
so that (i) a reference to rights or duties of the Agent under the Loan Documents
shall be deemed to include the rights or duties of such Person as the Secured
Party under the Pledge Agreement, (ii) a reference to costs incurred by a
Bank or an Issuing Bank in connection with the Loan Documents shall be deemed
to include costs incurred by such Person as a “Principal” under the Pledge
Agreement and (iii) a reference to the obligations of the Borrower under
the Loan Documents shall be deemed to include the obligations of such Person as
the “Pledgor” under the Pledge Agreement.


 


(g)                                 Except as otherwise specified herein, all
references to the time of day shall be deemed to be to New York, New York time
as then in effect.


 


(h)                                 Except where the context clearly indicates a
different meaning, all terms defined in Article 1, 8 or 9 of the Uniform
Commercial Code, as such definitions may be amended from time to time, are used
herein with the meanings therein ascribed to them.


 


Section 1.03.                             Accounting Matters. Unless otherwise specified herein, all
accounting determinations hereunder and all computations utilized by the
Borrower in complying with the covenants contained herein shall be made, all
accounting terms used herein shall be interpreted, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP,
except, in the case of such financial statements, for departures from GAAP that
may from time to time be approved in writing by the independent certified
public accountants who are at the time, in accordance with Section 7.02(b),
reporting on the Borrower’s financial statements.


 


Section 1.04.                             Representations and Warranties. All Representations and Warranties shall be
deemed made (a) in the case of any Representation and Warranty contained
in this Agreement, at the time of its initial execution and delivery, except
where otherwise stated therein at and as of the Agreement Date, (b) in the
case of any Representation and Warranty contained in this Agreement or any
other document, at the time any Extension of Credit is made, except where
otherwise stated therein at and as of such time and (c) in the case of any
particular Representation and Warranty, wherever contained, at such other time
or times as such Representation and Warranty is made or deemed made in
accordance with the provisions of this


 


16





















 


Agreement or the document pursuant to, under or in connection with
which such Representation and Warranty is made or deemed made.


 


Section 1.05.                             Captions.  Captions to Articles, Sections
and subsections of, and Annexes, Schedules and Exhibits to, this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or in any way affect the meaning or
construction of any provision of this Agreement.


 


Section 1.06.                             Interpretation of Related Documents.  Except
as otherwise specified therein, terms that are defined herein that are used in
Notes, certificates, opinions and other documents delivered in connection
herewith shall have the meanings ascribed to them herein and such documents
shall be otherwise interpreted in accordance with the provisions of this Article 1.


 


ARTICLE 2


 


LOAN FACILITY; COMPUTATIONS


 


Section 2.01.                             Commitment to Lend.  Upon
the terms and subject to the conditions of this Agreement, each Bank agrees to
make, from time to time during the period from the Agreement Date through the
Maturity Date, one or more Loans to the Borrower in an aggregate principal
amount at any one time outstanding which, when added to the sum of such Bank’s
Percentage of the LC Outstandings and such Bank’s Unreimbursed Drawings, does
not exceed the amount of such Bank’s Commitment at such time provided, that in
no event, shall the aggregate principal amount of the Loans outstanding
hereunder exceed the Loan Sublimit. Subject to Section 2.06 and the other
terms and conditions of this Agreement, the Loans may, at the option of the
Borrower, be made as, and from time to time continued as or converted into,
Base Rate Loans or Eurodollar Rate Loans, or any combination thereof. Upon the
terms and subject to the conditions of this Agreement, the Borrower may borrow,
pay or prepay and reborrow Loans.


 


Section 2.02.                             Manner of Borrowing.  (a) The
Borrower shall give the Agent notice (which shall be irrevocable) no later than
11:00 A.M. on, in the case of Base Rate Loans, the Business Day before the
requested date for the making of such Loans, and, in the case of Eurodollar Rate
Loans, the third Eurodollar Business Day before the requested date for the
making of such Loans. Each such notice shall be in the form of Schedule 2.02
and shall specify (i) the requested date for the making of the requested
Loans, which (x) shall be, in the case of Base Rate Loans, a Business Day and,
in the case of Eurodollar Rate Loans, a Eurodollar Business Day and (y) shall
not be a day during a Clean-Up Period, (ii) the Type or Types of Loans
requested, (iii) the amount of each such Type of Loan, and (iv) the
Interest Period, if any, for such Loans. Upon receipt of any such notice, the
Agent shall promptly notify each Bank of the contents thereof and of the amount
and Type of each Loan to be made by such Bank on the requested date specified
therein.


 


(b)                                 Not later than 12:00 noon on each requested
date for the making of Loans, each Bank shall, if it has received the notice
contemplated by Section 2.02(a) on or prior to its close of business
on, in the case of Base Rate Loans, the Business Day, and, in the case of
Eurodollar Rate Loans, the third Eurodollar Business Day, before such date,
make available to the Agent, in Dollars in funds immediately available to the
Agent at the Agent’s Office, the Loans to be made


 


17





















 


by such Bank on such date. Any Bank’s failure to make any Loan to be
made by it on the requested date therefor shall not relieve any other Bank of
its obligation to make any Loan to be made by such other Bank on such date, but
such other Bank shall not be liable for such failure.


 


(c)                                  Unless the Agent shall have received notice
from a Bank prior to 10:00 A.M. on the requested date for the making of
any Loans that such Bank will not make available to the Agent the Loans
requested to be made by such Bank on such date, the Agent may assume that such
Bank has made such Loans available to the Agent on such date in accordance with
Section 2.02(b) and the Agent in its sole discretion may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount on behalf of such Bank. If and to the extent such Bank
shall not have so made available to the Agent the Loans requested to be made by
such Bank on such date and the Agent shall have so made available to the
Borrower a corresponding amount on behalf of such Bank, such Bank shall, on
demand, pay to the Agent such corresponding amount together with interest
thereon, for each day from the date such amount shall have been so made
available by the Agent to the Borrower until the date such amount shall have
been repaid to the Agent, at the Federal Funds Rate until (and including) the third
Business Day after demand is made and thereafter at the Base Rate. If such Bank
does not pay such corresponding amount promptly upon the Agent’s demand
therefor, the Agent may notify the Borrower and the Borrower shall immediately
repay such corresponding amount to the Agent together with accrued interest
thereon at the applicable rate or rates provided in Section 2.03.


 


(d)                                 All Loans made available to the Agent in
accordance with Section 2.02(b) shall be disbursed by the Agent not
later than 1:00 P.M. on the requested date therefor in Dollars in funds immediately
available to the Borrower by credit to an account of the Borrower at the Agent’s
Office or in such other manner as may have been specified in the applicable
notice and as shall be acceptable to the Agent. Notwithstanding the foregoing
or any other provision contained herein, the proceeds of all Loans made
available to the Agent shall be deposited directly by the Agent or, to the
extent received by the Borrower, by the Borrower into the Revenue Account pursuant
to Section 3.1(a) of the Depositary Agreement.


 


Section 2.03.                             Interest.  (a) Rates. (i) Subject to Section 2.03(a)(ii),
(A) each Loan shall bear interest on the outstanding principal amount
thereof at a rate per annum equal
to (1) so long as it is a Base Rate Loan, the Base Rate as in effect from
time to time plus the Applicable Margin and (2) so long as
it is a Eurodollar Rate Loan, the applicable Adjusted Eurodollar Rate plus
the Applicable Margin and (B) except as otherwise
provided herein or in any other Loan Document, each other amount due and
payable under the Loan Documents shall, to the maximum extent permitted by
Applicable Law, bear interest at a rate per annum equal to the Base Rate
as in effect from time to time plus the
Applicable Margin.


 


(ii)                                  Upon the occurrence and during the
continuance of an Event of Default (and whether before or after judgment), each
Loan (whether or not due) and, to the maximum extent permitted by Applicable
Law, each other amount due and payable under the Loan Documents shall bear
interest at a rate per annum equal to the applicable
Post-Default Rate.


 


18





















 


(b)                                 Payment.  Interest
shall be payable (i) in the case of Base Rate Loans, on each Interest
Payment Date, (ii) in the case of Eurodollar Rate Loans, on the last day
of each applicable Interest Period and, if such Interest Period has a duration
of more than three months, on that day of each third month during such Interest
Period that corresponds to the first day of such Interest Period (or, if any
such month does not have a corresponding day, then on the last day of such
month), (iii) in the case of each Loan, when such Loan shall be due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) or converted, but only to the extent then accrued on the amount then
so due or converted, and (iv) in the case of all other amounts due and
payable under the Loan Documents (other than amounts payable pursuant to Article 3),
on demand. Except as otherwise provided in Article 3, interest at the
Post-Default Rate shall be payable on demand.


 


(c)                                  Conversion
and Continuation.  (i) All
or any part of the principal amount of Loans of any Type may, on any Business
Day, be converted into any other Type or Types of Loans, except that (A) Eurodollar
Rate Loans may be converted only on the last day of an applicable Interest
Period and (B) Base Rate Loans may be converted into Eurodollar Rate Loans
only on a Eurodollar Business Day.


 


(ii)                                  Base Rate Loans shall continue as Base Rate
Loans unless and until such Loans are converted into Loans of another Type.
Eurodollar Rate Loans shall continue as Loans of such Type until the end of the
then current Interest Period therefor, at which time they shall be
automatically converted into Base Rate Loans unless the Borrower shall have
given the Agent notice in accordance with Section 2.03(c)(iv) requesting
either that such Loans continue as Loans of such Type for another Interest
Period or that such Loans be converted into Loans of another Type at the end of
such Interest Period.


 


(iii)                               Notwithstanding anything to the contrary
contained in Section 2.03(c)(i) or (ii), upon the occurrence and
during the continuance of any Default, the Agent may notify the Borrower that
Loans may only be converted into or continued as Loans of certain specified
Types and, thereafter, until such Default no longer exists, Loans may not be
converted into or continued as Loans of any Type other than one or more of such
specified Types.


 


(iv)                              The Borrower shall give the Agent notice
(which shall be irrevocable) of each conversion of Loans or continuation of
Eurodollar Rate Loans no later than 10:00 A.M. on, in the case of a
conversion into Base Rate Loans, the Business Day, and, in the case of a
conversion into or continuation of Eurodollar Rate Loans, the third Eurodollar
Business Day, before the requested date of such conversion or continuation.
Each notice of conversion or continuation shall be in the form of Schedule 2.03(c)(iv) and
shall specify (A) the requested date of such conversion or continuation, (B) the
amount and Type and, in the case of Eurodollar Rate Loans, the last day of the
applicable Interest Period of the Loans to be converted or continued, (C) the
amount and Type or Types of Loans into which such Loans are to be converted or
as which such Loans are to be continued, and (D) the requested initial
Interest Period, if any, to be applicable to the Loans resulting from such
conversion or continuation. Upon receipt of any


 


19





















 


such notice, the Agent shall promptly notify each Bank of (1) the
contents thereof, (2) the amount and Type and, in the case of Eurodollar
Rate Loans, the last day of the applicable Interest Period of each Loan to be
converted or continued by such Bank, (3) the amount and Type or Types of
Loans into which such Loans are to be converted or as which such Loans are to
be continued, and (4) the Interest Period, if any, to be applicable to the
Loans resulting from such conversion or continuation.


 


(d)                                 Maximum
Interest Rate. Nothing contained in the Loan Documents
shall require the Borrower at any time to pay interest at a rate exceeding the
Maximum Permissible Rate. If interest payable by the Borrower on any date would
exceed the maximum amount permitted by the Maximum Permissible Rate, such
interest payment shall automatically be reduced to such maximum permitted
amount, and interest for any subsequent period, to the extent less than the
maximum amount permitted for such period by the Maximum Permissible Rate shall
be increased by the unpaid amount of such reduction. Any interest actually
received for any period in excess of such maximum amount permitted for such
period shall be deemed to have been applied as a prepayment of the Loans.


 


Section 2.04.                             Repayment. The Loans shall mature and become due and payable, and shall be
repaid by the Borrower, in full on the Maturity Date.


 


Section 2.05.                             Prepayments.


 


(a)                                  Optional
Payments. The Borrower may, at any time and from time
to time, prepay the Loans in whole or in part, without premium or penalty (but
subject to Section 9.04), except that any partial prepayment shall be in
an aggregate principal amount of at least $1,000,000. Under the terms and
subject to the conditions of this Agreement, the Borrower may reborrow amounts
that have been prepaid. The Borrower shall give the Agent notice of each prepayment
no later than 10:00 A.M. on, in the case of a prepayment of Base Rate
Loans, the Business Day, and, in the case of a prepayment of Eurodollar Rate
Loans, the third Eurodollar Business Day, before the date of such prepayment.
Each such notice of prepayment shall be in the form of Schedule 2.05(a) and
shall specify (i) the date such prepayment is to be made and (ii) the
amount and Type and, in the case of Eurodollar Rate Loans, the last day of the
applicable Interest Period of the Loans to be prepaid. Upon receipt of any such
notice, the Agent shall promptly notify each Bank of the contents thereof and
the amount and Type and, in the case of Eurodollar Rate Loans, the last day of
the applicable Interest Period of each Loan of such Bank to be prepaid. Amounts
to be prepaid shall irrevocably be due and payable on the date specified in the
applicable notice of prepayment, together with interest thereon as provided in Section 2.03(b).


 


(b)                                 Commitment Reduction Mandatory Prepayments. On the date of any termination or reduction of the Commitments
pursuant to Section 2.07, the Borrower shall pay or prepay so much of the
Loans and Unreimbursed Drawings outstanding hereunder as shall be necessary in order
that the sum of (x) the principal amount of the Loans outstanding, (y) the Unreimbursed
Drawings and (z) the LC Outstandings (after giving effect to all Extensions of
Credit to be made on such date and the application of the proceeds thereof)
will not exceed the Commitments following such termination or reduction,
together with (i) accrued interest to the date of such


 


20





















 


prepayment
on the principal amount prepaid and (ii) in the case of prepayments of
Eurodollar Rate Loans, any amount payable to the Banks pursuant to Section 9.04.
Any prepayments required by this subsection (b) shall be applied to
outstanding Base Rate Loans up to the full amount thereof before they are
applied to outstanding Eurodollar Rate Loans.


 


(c)                                  Clean-Up Period Mandatory Prepayments. The Borrower shall prepay in whole all
Loans on the Business Day immediately preceding each Clean-Up Period. The
Borrower shall, not later than the first day of each Clean-Up Period, notify
the Agent of the commencement of such Clean-Up Period. Each such notice of the
commencement of a Clean- Up Period shall be in the form of Schedule 2.05(c) and
shall specify the commencement date of such Clean-Up Period.


 


(d)                                 Rent Payment Date Mandatory Prepayments. The Borrower shall prepay in whole all
Loans outstanding immediately prior to making any payment of Rent, other than
any payment of Rent made solely with amounts drawn under Rent Reserve Account
Payment Undertaking Agreements, and shall not borrow hereunder on the date on
which any payment of Rent shall be made.


 


(e)                                  Total Commitment Amount Reduction Mandatory Prepayments/Cash Collateralization. If as of any Rent Payment Date when a PPA
Term is in effect the sum of (i) the principal amount of the Loans
outstanding, (ii) the Unreimbursed Drawings and (iii) the LC
Outstandings exceeds the Total Commitment Amount as of such Rent Payment Date
(the amount of such excess, the “Overdrawn Amount”), the Borrower shall
pay to the Agent on such Rent Payment Date an amount equal to the Overdrawn
Amount to be applied by the Agent (at the Borrower’s direction) to the payment
or prepayment of the Loans outstanding and/or Unreimbursed Drawings outstanding
hereunder and/or the cash collateralization of the LC Outstandings (with the
Agent holding such cash collateral for its benefit and the benefit of the Issuing
Banks and the Banks) as contemplated in the definition of Increased Total
Commitment Amount. Any prepayment of the principal amount hereunder shall also
include (x) accrued interest to the date of such prepayment on the principal
amount prepaid and (y) in the case of prepayments of Eurodollar Rate Loans, any
amount payable to the Banks pursuant to Section 9.04. Any prepayments made
under this subsection (e) shall be applied to outstanding Base Rate
Loans up to the full amount thereof before they are applied to outstanding
Eurodollar Rate Loans.


 


Section 2.06.                             Limitation on Types of Loans. Notwithstanding anything to the contrary
contained in this Agreement, the Borrower shall borrow, prepay, convert and
continue Loans in a manner such that (a) the aggregate principal amount of
Eurodollar Rate Loans having the same Interest Period shall at all times be not
less than $5,000,000, (b) there shall not be, at any one time, more than
five Interest Periods in effect with respect to Eurodollar Rate Loans and (c) each
Base Rate Loan shall be in a principal amount of not less than $1,000,000.


 


Section 2.07.                             Termination or Reduction of Commitments. The Borrower may terminate in whole or
reduce in part the Commitments by giving the Agent notice (which shall be irrevocable)
thereof no later than 10:00 A.M. on the third Business Day before the
requested date of such termination or reduction; provided, that (a) in the case of a termination of the
Commitments, no Loans, Letters of Credit or Unreimbursed Drawings are outstanding
at the


 


21





















 


time of such termination, and (b) in the case of any reduction of
the Commitments, (i) such reduction shall apply ratably among the Banks, (ii) such
reduction shall be in an aggregate amount not less than $1,000,000 and (iii) the
Commitments shall in no event be reduced to an amount which is less than the
sum of (A) the aggregate LC Outstandings on the date of such reduction and
(B) the aggregate principal amount of Unreimbursed Drawings on the date of
such reduction. Upon receipt of any such notice, the Agent shall promptly
notify each Bank of the contents thereof and, if applicable, the amount to
which such Bank’s Commitment is to be irrevocably reduced. Once terminated or
reduced, the Commitments may not be increased by the Borrower at any time
thereafter.


 


Section 2.08.                             Fees. (a) Commitment Fees. The
Borrower shall pay to the Agent for the account of each Bank a commitment fee
on the average daily amount of such Bank’s Available Commitment for each day
from the Agreement Date through (but excluding) the Maturity Date at a rate per
annum of 0.50%, payable quarterly in arrears on each Interest
Payment Date, on the Maturity Date and on the date of any termination of such
Bank’s Commitment. In addition, commencing on the Commitment Increase Date and
thereafter, the Borrower shall pay to the Agent for the account of each Bank a
supplemental commitment fee on the average daily amount of such Bank’s
Unavailable Commitment Amount for each day from the Agreement Date through (but
excluding) the Maturity Date at a rate
per annum of 0.25% payable
quarterly in arrears on each Interest Payment Date, on the Maturity Date and on
the date of any termination of such Bank’s Commitment.


 


(b)                                 Letter of
Credit Fees. The Borrower shall pay to the Agent for the
account of each Bank a letter of credit fee on the average daily aggregate
amount of the LC Outstandings for each day from the Agreement Date through (but
excluding) the Maturity Date at a rate
per annum equal to the
Applicable Margin then in effect with respect to Eurodollar Rate Loans (provided,
however, that upon the occurrence and during the continuance
of an Event of Default, such rate shall increase to the Applicable Margin then
in effect with respect to Eurodollar Rate Loans plus 2.0%), payable quarterly in arrears on each Interest
Payment Date, on the Maturity

Date and on the date of any termination of such Bank’s Commitment.


 


(c)                                  Agency Fees.
The Borrower shall pay to the Agent, for its own account, the fees payable to
it under the Agent’s Fee Letter, in the amounts and at the times specified
therein.


 


(d)                                Fronting Fees. The Borrower shall pay to the Issuing Bank, for its own account, the
fees payable to it under the Issuing Bank Fee Letter, in the amounts and at the
times specified therein.


 


(e)                                  Supplemental Fees for Utilizations over $50,000,000. The Borrower shall pay to the Agent for the
account of each Bank a supplemental fee on the average daily amount of such Bank’s
Unsecured Amount, if any, for each day from the Agreement Date through (but excluding)
the Maturity Date at a rate per annum equal to 0.50% from the
Agreement Date until the second anniversary of the Agreement Date and at a rate per
annum of 0.25% thereafter, payable quarterly in arrears on
each Interest Payment Date, on the Maturity Date and on the date of any
termination of such Bank’s Commitment.


 


22





















 


(f)                                    Fees
Non-Refundable.  None
of the fees payable under this Section 2.08 shall be refundable in whole
or in part.


 


(g)                                 Survival.  Without prejudice to the
survival of any other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.08 shall survive
the repayment of all other amounts owing to the Agent and the Banks under the
Loan Documents and the termination of the Commitments.


 


Section 2.09.                             Computation of Interest and Fees.  Interest calculated on the basis of the
Adjusted Eurodollar Rate or the Federal Funds Rate and all fees payable
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed. Interest calculated on the basis of the Prime
Rate shall be computed on the basis of a year of 365 or 366 days, as
applicable, and paid for the actual number of days elapsed. Interest for any
period shall be calculated from and including the first day thereof to but
excluding the last day thereof.


 


Section 2.10.                             Evidence of Indebtedness.  Each
Bank’s Loans and Unreimbursed Drawings and the Borrower’s obligation to repay
such Loans and Unreimbursed Drawings with interest in accordance with the terms
of this Agreement shall be evidenced by this Agreement, the records of such
Bank and a single Note payable to the order of such Bank which, subject to Section 11.22,
may be a Registered Note. The records of each Bank shall be prima facie evidence of such Bank’s Loans,
Unreimbursed Drawings and accrued interest thereon and of all payments made in
respect thereof.


 


Section 2.11.                             Payments by the Borrower.  (a) Time, Place and Manner. All
payments due to the Agent, the Banks or the Issuing Banks under the Loan
Documents shall be made to the Agent at the Agent’s Office or to such other
Person or at such other address as the Agent may designate by written notice to
the Borrower. All payments due to any Bank under the Loan Documents, whether
made to the Agent or directly to such Bank, shall be made for the account of,
in the case of payments in respect of Eurodollar Rate Loans and Eurodollar Rate
Drawings, such Bank’s Eurodollar Lending Office and, in the case of all other
payments, such Bank’s Domestic Lending Office. A payment shall not be deemed to
have been made on any day unless such payment has been received by the required
Person, at the required place of payment, in Dollars in funds immediately
available to such Person at such place, no later than 12:00 noon on such day.


 


(b)                                 No Reductions.  All payments due to the Agent,
any Bank or any Issuing Bank under the Loan Documents, and all other terms,
conditions, covenants and agreements to be observed and performed by the
Borrower hereunder, shall be made, observed or performed by the Borrower
without any reduction or deduction whatsoever, including any reduction or deduction
for any set-off, recumbent, counterclaim (whether sounding in tort, contract or
otherwise) or Tax, except, subject to Section 2.13, for any withholding or
deduction for Taxes required to be withheld or deducted under Applicable Law.


 


(c)                                  Extension
of Payment Dates.  Whenever
any payment to the Agent, any Bank or any Issuing Bank under the Loan Documents
would otherwise be due (except by reason of acceleration) on a day that is not
a Business Day, or, in the case of payments of the principal of


 


23





















 


Eurodollar Rate Loans, a Eurodollar Business Day, such payment shall
instead be due on the next succeeding Business Day or Eurodollar Business Day,
as the case may be, unless, in the case of a payment of the principal of
Eurodollar Rate Loans, such extension would cause payment to be due in the next
succeeding calendar month, in which case such due date shall be advanced to the
next preceding Eurodollar Business Day. If the date any payment under the Loan
Documents is due is extended (whether by operation of any Loan Document,
Applicable Law or otherwise), such payment shall bear interest for such
extended time at the rate of interest applicable hereunder.


 


Section 2.12.                             Distribution of Payments by the Agent.  (a) The
Agent shall promptly distribute to each Bank its ratable share of each payment
received by the Agent under the Loan Documents for the account of the Banks by
credit to an account of such Bank at the Agent’s Office or by wire transfer to
an account of such Bank at an office of any other commercial bank located in
the United States.


 


(b)                                 Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Banks
under the Loan Documents that the Borrower will not make such payment in full,
the Agent may assume that the Borrower has made such payment in full to the
Agent on such date and the Agent in its sole discretion may, in reliance upon
such assumption, cause to be distributed to each Bank on such due date a
corresponding amount with respect to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent and the Agent shall have so distributed to any Bank a corresponding
amount, such Bank shall, on demand, repay to the Agent the amount so
distributed together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at the Federal Funds Rate until (and including) the third
Business Day after demand is made and thereafter at the Base Rate. Nothing in
this Section 2.12 shall be deemed to limit the rights of the Agent or any
Bank against the Borrower with respect to any such payment that has not been
paid in full by the Borrower.


 


Section 2.13.                             Taxes


 


(a)                                  Taxes Payable by the Borrower.  If
under Applicable Law any Tax is required to be withheld or deducted by the
Borrower from, or is otherwise payable by the Borrower in connection with, any
payment to the Agent, any Bank or any Issuing Bank under the Loan Documents,
the Borrower (I) shall (A) if so required, withhold or deduct the
amount of such Tax from such payment and, in any case, pay such Tax to the
appropriate taxing authority in accordance with Applicable Law and (B) indemnify
the Agent, such Bank and such Issuing Bank in accordance with the provisions of
Section 11.02(d) against its failure so to do and (ii) shall,
subject to Section 2.13(c), pay to the Agent, such Bank or such Issuing
Bank, as applicable, such additional amounts as may be necessary so that the
net amount received by the Agent, such Bank or such Issuing Bank with respect
to such payment, after withholding or deducting all Taxes required to be
withheld or deducted by the Borrower, is equal to the full amount payable under
the Loan Documents. If any Tax is withheld or deducted by the Borrower from, or
is otherwise payable by the Borrower in connection with, any payment payable to
the Agent, any Bank or any Issuing Bank under the Loan Documents, the Borrower
shall, as soon as possible after the date of such payment, furnish to the
Agent, such Bank or such Issuing Bank, as applicable, the original


 


24










 













 


or a certified copy of a receipt for such Tax from the applicable
taxing authority. If any payment due to the Agent, any Bank or any Issuing Bank
under the Loan Documents is or is expected to be made without withholding or
deducting therefrom, or otherwise paying in connection therewith, any Tax
payable by the Borrower to any taxing authority, the Borrower shall, within 30
days after any request from the Agent, such Bank or such Issuing Bank, as
applicable, furnish to the Agent, such Bank or such Issuing Bank a certificate
from such taxing authority, or an opinion of counsel acceptable to the Agent,
such Bank or such Issuing Bank, in either case stating that no Tax payable to
such taxing authority was or is, as the case may be, required to be withheld or
deducted from, or otherwise paid by the Borrower in connection with, such
payment.


 


(b)                                 Taxes Payable by the Agent, any Bank or any
Issuing Bank.  The
Borrower shall, within thirty days of request by the Agent, any Bank or any
Issuing Bank for the payment thereof, but subject to Section 2.13(c), pay
to the Agent, such Bank or such Issuing Bank, as the case may be, (i) all Taxes
(other than Bank Taxes, payable by the Agent or such Bank, as the case may be)
with respect to any payment due to the Agent, such Bank or such Issuing Bank under
the Loan Documents and (B) all Taxes payable by the Agent, such Bank or such
Issuing Bank as a result of payments made by the Borrower (whether made to a
taxing authority or to the Agent, such Bank or such Issuing Bank) pursuant to
this Section 2.13(b). A certificate as to the amount of such payment or
liability delivered to the Borrower by a Bank or Issuing Bank, or by the Agent
on its own behalf or on behalf of a Bank or Issuing Bank, shall be conclusive
absent manifest error.


 


(c)                                  Limitations. Notwithstanding anything to the contrary
contained herein, the Borrower shall not be required to pay any additional
amount in respect of withholding of United States Federal income taxes pursuant
to this Section 2.13 to any Bank (i) except to the extent such Taxes are
required to be withheld as a result of (A) in the case of a Person that is a
Bank on the Agreement Date, a Regulatory Change Enacted after the Agreement
Date and (B) in the case of a Person that becomes a Bank after the Agreement
Date pursuant to Section 11.09(a), a Regulatory Change Enacted after such
Person becomes a Bank, or (ii) to the extent such withholding is required
because such Bank has failed to submit any form or certificate that it is entitled
to so submit under Applicable Law (including any Forms required to be submitted
pursuant to Section 2.13(d)).


 


(d)                                 Exemption from U.S. Withholding Taxes.  There
shall be submitted to the Borrower and the Agent (i) on or before the first
date that interest or fees are payable to such Bank under the Loan Documents,
(A) if at the time the same are applicable by each Bank that is a Non-US Bank,
(x) a duly completed Internal Revenue Service Form W-8ECI or W-8BEN, as applicable,
and (y) a certification in the form of Schedule 2.13(d) that such
Bank is a Non-US Bank or (B) if at the time any of the foregoing are
inapplicable, duly completed and signed copies of such form, if any, as
entitles such Bank to exemption from withholding of United States federal
income taxes to the maximum extent to which such Bank is then entitled under Applicable
Law, and (ii) from time to time thereafter, prior to the expiration or
obsolescence of any previously delivered form or upon any previously delivered
form becoming inaccurate or inapplicable, such further duly completed and
signed copies of such form, if any, as entitles such Bank to exemption from
withholding of United States federal income taxes to the maximum extent to
which such Bank is then entitled under Applicable Law. Each Bank shall promptly
notify the Borrower and the Agent if (I) it is required to withdraw or cancel
any form or


 


25





















 


certificate
previously submitted by it or any such form or certificate has otherwise become
ineffective or inaccurate or (II) payments to it are or will be subject to
withholding of United States federal income taxes to a greater extent than the
extent to which payments to it were previously subject. Upon the request of the
Borrower or the Agent, each Bank that is a United States Person shall from time
to time submit to the Borrower and the Agent a certificate to the effect that
such Bank is a United States Person and a duly completed Internal Revenue
Service Form W-9.


 


Section 2.14.         Pro
Rata Treatment.  Except to the extent otherwise
provided herein, (a) Loans of each Type to be made on any day shall be made by the Banks pro rata in accordance with their
respective Commitments, (b) Loans of the Banks shall be converted and continued
pro rata in accordance with their
respective amounts of Loans of the Type and, in the case of Eurodollar Rate
Loans, having the Interest Period being so converted or continued, (c) each
reduction in the Commitments shall be made pro rata in accordance with the
respective amounts thereof and (d) each payment of the principal of or interest
on the Loans and on Unreimbursed Drawings or of fees shall be made for the
account of the Banks pro rata in accordance with the
respective amounts thereof then due and payable.


 


Section 2.15.         Extension of Maturity Date.  At
least 60 but not more than 120 days prior to the then-scheduled Maturity Date,
the Borrower may, by delivering a written notice to such effect to the Agent
(each such request being irrevocable), request that each Bank and Issuing Bank
consent to a one-year extension of the Maturity Date. Upon receipt of any such
notice, the Agent shall promptly communicate such request to the Banks and the
Issuing Banks. Within 30 days following the giving of such notice by the
Borrower, the Banks and the Issuing Banks shall indicate to the Agent whether
the Borrower’s request to so extend the then-scheduled Maturity Date is
acceptable to the Banks and the Issuing Banks (and, if so, the conditions, if
any, relating to such acceptance), it being understood that the unanimous
written consent of the Banks and the Issuing Banks shall be required to effect
any such request, that the determination by each Bank and Issuing Bank will be
in its sole and absolute discretion and that the failure of any Bank or Issuing
Bank to so respond within such period shall be deemed to constitute a refusal
by such Bank or Issuing Bank (as the case may be) to consent to such request
(with the result being that such request is denied). The Agent shall promptly
notify the Borrower, the Banks and the Issuing Banks of the result of such
request, and if such request shall have been consented to by all of the Banks
and Issuing Banks, the Maturity Date shall be extended to the first anniversary
of the then-scheduled Maturity Date (which date shall be a Rent Payment Date).


 


Section 2.16.          Working
Capital Facility Designation.  The Loans, Letters of Credit,
LC Outstandings, Unreimbursed Drawings, aggregate Commitments and Extensions of
Credit hereunder, all interest payable hereunder and under the Notes, all fees
payable pursuant to Section 2.08, and all other amounts payable hereunder
and under the other Loan Documents, and all covenants, agreements and other
obligations of the Borrower relating thereto, are designated as the “Working Capital
Facility” as such term is used in the Operative Documents. The rights,
obligations and remedies of the Agent, the Issuing Bank and the Banks, in their
collective capacity as “Working Capital Provider” (as such term is used in the
Operative Documents), under the Operative Documents (including Sections 2.04,
3.1(b)(i), 3.1(b)(ii), 3.2 and 3.3 of the Depositary Agreement) shall apply
solely with respect to, and shall be limited to the extent of amounts owed in
respect of, such “Working Capital Facility”. For the avoidance of doubt, this


 


26





















 


Section 2.16 shall not restrict or otherwise limit the rights or
remedies of the Agent, the Issuing Banks or the Banks in connection with any
Permitted Indebtedness (other than the Working Capital Facility) provided by
any such Person to the Borrower.


 


ARTICLE 3



LETTERS OF CREDIT


 


Section 3.01.         Issuing Banks.  Subject
to the terms and conditions hereof, the Borrower may from time to time identify
and arrange for one or more Banks to act as an Issuing Bank hereunder. Any such
designation by the Borrower shall be notified to the Agent at least three
Business Days prior to the first date upon which the Borrower proposes that
such Issuing Bank issue its first Letter of Credit. Nothing contained herein
shall be deemed to require any Bank to agree to act as an Issuing Bank, if it
does not so desire; provided, however, that
if no other Bank agrees to be an Issuing Bank hereunder, Calyon shall be the
sole Issuing Bank hereunder. The Borrower hereby notifies the Agent of the
designation of Calyon to act as an Issuing Bank hereunder. The Agent hereby
acknowledges such notice and Calyon hereby accepts such designation.


 


Section 3.02.         Letters of Credit. (a) Each Letter of Credit shall be issued
(or the stated expiration date thereof extended or terms thereof modified or
amended) on not less than two Business Days’ prior written notice thereof by
the Borrower to the Agent (which shall promptly distribute copies thereof to
the Banks) and the relevant Issuing Bank. Each such notice (a “Request for
Issuance”) shall specify (i) the date (which shall be a Business Day) of
issuance of such Letter of Credit (or the date of effectiveness of such
extension, modification or amendment) and the stated expiry date thereof (which
shall be no later than the date that is five Business Days prior to the
Maturity Date), (ii) the proposed stated amount of such Letter of Credit, (iii)
the name and address of the beneficiary of such Letter of Credit, (iv) whether
such Letter of Credit should be delivered directly to the beneficiary thereof
or to the Borrower and (v) such other information as shall demonstrate
compliance of such Letter of Credit with the requirements specified therefor in
this Agreement and the relevant Issuing Bank Agreement. Each Request for
Issuance shall be irrevocable unless modified or rescinded by the Borrower not
less than two days prior to the proposed date of issuance (or effectiveness)
specified therein. Not later than 12:00 noon on the proposed date of issuance
(or effectiveness) specified in such Request for Issuance, and upon fulfillment
of the applicable conditions precedent and the other requirements set forth
herein and in the relevant Issuing Bank Agreement, such Issuing Bank shall
issue (or extend, amend or modify) such Letter of Credit in accordance with
such Request for Issuance and provide notice and a copy thereof to the Agent,
which shall promptly furnish copies thereof to the Banks and the Borrower.


 


(b)          Each Bank severally agrees with such Issuing Bank to
participate in the Extension of Credit resulting from the issuance (or
extension, modification or amendment) of such Letter of Credit, in the manner
and the amount provided in Section 3.04(b), and the issuance of such Letter
of Credit shall be deemed to be a confirmation by such Issuing Bank and each
Bank of such participation in such amount.


 


27





















 


(c)                                 Notwithstanding anything herein to the
contrary, the sum of (i) the aggregate LC Outstandings of all Letters of Credit
outstanding at any one time, (ii) the aggregate principal amount of
Unreimbursed Drawings outstanding at such time and (iii) the Loans at such time
shall not exceed the Total Commitment Amount at such time.


 


(d)                                To the extent that any provision of any
Request for Issuance related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall
apply.


 


Section 3.03.         Issuing Bank Fees.  The
Borrower shall pay directly to each Issuing Bank such fees and expenses, if
any, specified to be paid to such Issuing Bank pursuant to the Issuing Bank
Agreement to which it is a party, at the times, and in the manner, specified in
such Issuing Bank Agreement; provided,
however, that if, pursuant to the Depositary Agreement, the Borrower
is not permitted to pay any such fees and expenses to such Issuing Bank on the
due date therefor, the Borrower shall pay such fees and expenses on the first
date thereafter (but in no event later than the next-scheduled Rent Payment
Date) that the Borrower is permitted to pay such fees and expenses, provided, that, in such case, all such
fees and expenses shall bear interest at a rate per annum equal to the Base Rate plus
the Applicable Margin then in effect with respect to Base
Rate Loans from such due date until paid in full, payable to such Issuing Bank
on the date that such fees and expenses are paid by the Borrower.


 


Section 3.04.           Reimbursement to Issuing Banks;
Interest.  (a) The Borrower hereby agrees to pay to the
Agent for the account of each Issuing Bank, on demand made by such Issuing Bank
to the Borrower and the Agent, on and after each date on which such Issuing
Bank shall pay any amount under the Letter of Credit issued by such Issuing
Bank, a sum equal to the amount so paid (but only to the extent that the
Issuing Bank has not received payment therefor from the Banks pursuant to subsection (b)
below) plus interest on such
amount from the date so paid by such Issuing Bank until repayment to such
Issuing Bank in full at a fluctuating interest rate per annum equal
at all times to the Base Rate plus the Applicable Margin then in
effect with respect to Base Rate Loans; provided,
however, that if, pursuant to the Depositary Agreement, the Borrower
is not permitted to pay any such amounts to such Issuing Bank on the date of
demand therefor, the Borrower shall pay such amounts (other than any amounts
paid by such Issuing Bank under such Letter of Credit that have been repaid to
the Issuing Bank pursuant to subsection (b) below) on the first date
thereafter (but in no event later than the next-scheduled Rent Payment Date)
that the Borrower is permitted to pay such amounts, provided, that, in such case, all such amounts
shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin then in effect
with respect to Base Rate Loans from such date of demand until paid in full,
payable to such Issuing Bank on the date that such amounts are paid by the
Borrower.


 


(b)          If
any Issuing Bank shall not have been reimbursed in full for any payment made by
such Issuing Bank under any Letter of Credit issued by such Issuing Bank on the
date of such payment, such Issuing Bank shall give the Agent and each Bank
prompt notice thereof (an “LC Payment Notice”) no later than 12:00 noon
on the Business Day immediately succeeding the date of such payment by such
Issuing Bank. Each Bank severally agrees to purchase a participation in the
reimbursement obligation of the Borrower to such Issuing Bank under subsection (a)
above, by paying to the Agent for the account of such Issuing Bank an amount


 


28





















 


equal to such Bank’s Percentage of such unreimbursed amount paid by
such Issuing Bank, plus interest on such amount at a
rate per
annum equal to the Federal Funds Rate from the date of such
payment by such Issuing Bank to the date of payment to such Issuing Bank by
such Bank. Each such payment by a Bank shall be made not later than 3:00 P.M.
on the later to occur of (i) the Business Day immediately following the date of
such payment by such Issuing Bank and (ii) the Business Day on which such Bank
shall have received an LC Payment Notice from such Issuing Bank. Each Bank’s
obligation to make each such payment to the Agent for the account of such
Issuing Bank shall be several and shall not be affected by the occurrence or
continuance of any Default or the failure of any other Bank to make any payment
under this Section 3.04. Each Bank further agrees that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.


 


(c)                                The failure of any Bank to make any payment to the Agent for the
account of an Issuing Bank in accordance with subsection (b) above shall
not relieve any other Bank of its obligation to make payment, but no Bank shall
be responsible for the failure of any other Bank. If any Bank (a “non-performing
Bank”) shall fail to make any payment to the Agent for the account of an
Issuing Bank in accordance with subsection (b) above within five Business
Days after the LC Payment Notice relating thereto, then, for so long as such
failure shall continue, such Issuing Bank shall be deemed, for purposes of Section 11.08
and Article 8 hereof, to be a Bank hereunder owed a Loan in an amount
equal to the outstanding principal amount due and payable by such
non-performing Bank to the Agent for the account of such Issuing Bank pursuant
to subsection (b) above.


 


(d)                               Each Unreimbursed Drawing shall bear interest on the outstanding principal
amount thereof at a rate per annum equal to (i) the Base
Rate as in effect from time to time plus the Applicable Margin then in
effect with respect to Base Rate Loans, compounded quarterly on each Interest
Payment Date, or (ii) upon the election of the Borrower pursuant to subsection (e)
below to have such Unreimbursed Drawing bear interest at the Adjusted
Eurodollar Rate, the applicable Adjusted Eurodollar Rate plus the
Applicable Margin then in effect with respect to Eurodollar Rate Loans; provided, however, that each Unreimbursed
Drawing owing to an Issuing Bank (as a result of the failure by one or more
Banks to make payment to such Issuing Bank pursuant to subsection (b)
above) shall bear interest pursuant to subsection (a) above. Upon the occurrence
and during the continuance of an Event of Default (and whether before or after judgment),
each Unreimbursed Drawing (whether or not due) shall bear interest at a rate per annum
equal to the applicable Post-Default Rate. Interest on each
Unreimbursed Drawing (including interest at the Post-Default Rate) shall be
payable on the earlier to occur of (A) the next-scheduled Rent Payment Date
following the date of such Unreimbursed Drawing or (B) the date that the
Borrower reimburses the Banks for such Unreimbursed Drawing.


 


(e)                                So long as no Default has occurred and is continuing, the Borrower may,
upon notice delivered to the Agent not later than 10:00 A.M. three Eurodollar
Business Days prior to the requested date therefor, request that any Base Rate
Drawing or Base Rate Drawings be converted into a Eurodollar Rate Drawing. Each
such notice shall be irrevocable and shall specify (i) the requested date of
such conversion (which date shall be a Eurodollar Business Day), (ii) the
aggregate principal amount of Base Rate Drawings to be converted (which amount shall
be at least $1,000,000), and (iii) the Interest Period to be applicable to the
Eurodollar Rate Drawing resulting from such conversion (which Interest Period
shall be one, two or three months


 


29





















 


and shall end on the next-scheduled Rent Payment Date following the
date of such conversion). Upon receipt of any such notice, the Agent shall
promptly notify each Bank of the contents thereof. Each notice of conversion
delivered pursuant to this Section 3.04(e) shall be in the form of Schedule 3.04(e)


 


(f)            Each
Unreimbursed Drawing shall mature and become due and payable, and shall be
repaid by the Borrower, in full on the next-scheduled Rent Payment Date
following the date of such Unreimbursed Drawing (but in any event no later than
the Maturity Date). The Borrower may, to the extent permitted under the terms
of the Depositary Agreement, prepay any Unreimbursed Drawing in whole or in
part, without premium or penalty (but subject to Section 9.04), except
that any partial prepayment shall be in an aggregate principal amount of at
least $1,000,000. The Borrower shall give the Agent notice of each prepayment
no later than 10:00 A.M. on, in the case of a prepayment of Base Rate Drawings,
the Business Day, and, in the case of a prepayment of Eurodollar Rate Drawings,
the third Eurodollar Business Day, before the date of such prepayment. Each
such notice of prepayment shall specify (i) the date such prepayment is to be
made, (ii) the amount of such prepayment, and (iii) in the case of any
prepayment of Eurodollar Rate Drawings, the last day of the Interest Period
applicable thereto. Upon receipt of any such notice, the Agent shall promptly
notify each Bank of the contents thereof. Amounts to be prepaid shall
irrevocably be due and payable on the date specified in the applicable notice
of prepayment, together with accrued and unpaid interest thereon.


 


Section 3.05.         Obligations
Absolute.  The payment obligations of each Bank under Section 3.04(b)
and of the Borrower under this Agreement in respect of any payment under any
Letter of Credit and any Unreimbursed Drawing shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following circumstances:


 


(a)                                 any lack of validity or enforceability of any
Loan Document or any other agreement or instrument relating thereto or to such
Letter of Credit;


 


(b)                                any amendment or waiver of, or any consent to
departure from, all or any of the Loan Documents;


 


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


 


(d)                                any statement or any other document presented
under such 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;


 


(e)                                 payment in good faith by any Issuing Bank
under the Letter of Credit issued by such Issuing Bank against presentation of
a draft or certificate which does not comply with the terms of such Letter of
Credit; or


 


30





















 


(f)                                  any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.


 


Section 3.06.         Liability
of Issuing Banks and the Banks.  As among the Borrower, the
Agent, the Banks and the Issuing Banks, the Borrower assumes all risks of the
acts and omissions of any beneficiary or transferee of any Letter of Credit.
Neither the Issuing Bank that has issued such Letter of Credit, the Agent, the
Banks nor any of their respective officers, directors, employees, agents or
Affiliates shall be liable or responsible for (a) the use that may be made of
such Letter of Credit or any acts or omissions of any beneficiary or transferee
thereof in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by such Issuing Bank against presentation of documents that do not
comply with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make payment
under such Letter of Credit, except that, notwithstanding anything contained
herein to the contrary, the Borrower shall have the right to bring suit against
such Issuing Bank, and such Issuing Bank shall be liable to the Borrower and
any Bank, to the extent of any direct, as opposed to consequential, damages
suffered by the Borrower or such Bank which the Borrower or such Bank proves
were caused by such Issuing Bank’s willful misconduct or gross negligence,
including such Issuing Bank’s willful failure to make timely payment under such
Letter of Credit following the presentation to it by the beneficiary thereof of
a draft and accompanying certificate(s) which strictly comply with the terms
and conditions of such Letter of Credit. In furtherance and not in limitation
of the foregoing, any Issuing Bank may accept sight drafts and accompanying
certificates presented under the Letter of Credit issued by such Issuing Bank
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Notwithstanding the foregoing, no Bank (other than the applicable Issuing Bank)
shall be obligated to indemnify the Borrower for damages caused by such Issuing
Bank’s willful misconduct or gross negligence, and the obligation of the
Borrower to reimburse the Banks hereunder shall be absolute and unconditional,
notwithstanding the gross negligence or willful misconduct of any Issuing Bank.


 


ARTICLE
4



CONDITIONS TO EXTENSIONS OF CREDIT


 


Section 4.01.         Conditions
to the Initial Extension of Credit.  The obligation of each Bank
and Issuing Bank to make its initial Extension of Credit is subject to the
satisfaction of each of the following conditions:


 


(a)           The Agent shall have received, on or before the day of the
initial Extension of Credit, the following, each dated such day (except as
otherwise specified below):


 


(i)                                     This Agreement, duly executed by the
Borrower, each Bank, Calyon, in its capacity as an Issuing Bank, and the Agent.


 


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(ii)                                  The Pledge Agreement, duly executed by the
Borrower, together with:


 


(A)                              acknowledgment copies, dated on or before the
date of the initial Extension of Credit, of proper Financing Statements (Form
UCC-3) duly filed under the Uniform Commercial Code of all jurisdictions as may
be necessary or, in the opinion of the Agent, desirable to perfect the Liens created
by the Pledge Agreement;


 


(B)                                certified copies of Requests for Information
or Copies (Form UCC-11), or equivalent reports satisfactory to the Agent, dated
on or before the Agreement Date and listing the Financing Statements referred
to in paragraph (A) above (or, if such Financing Statements are not so listed,
other evidence satisfactory to the Agent that the same shall have been duly
filed), and all other effective financing statements that name the Borrower
(under its present name and any previous name) as debtor and that are filed in
the jurisdictions referred to in said paragraph (A), together with copies of
such other financing statements (none of which shall cover the collateral
purported to be covered by the Pledge Agreement);


 


(C)                                certificates evidencing all limited liability
company membership interests included in the Collateral, accompanied by irrevocable
stock powers, executed in blank; and


 


(D)                               evidence of the completion of all other
recordings and filings, and all other actions, as may be necessary or, in the
opinion of the Agent, desirable to perfect the Liens created by the Pledge
Agreement.


 


(iii)          An Issuing Bank Agreement and the Issuing Bank’s Fee
Letter, duly executed by the Borrower and Calyon, in form and substance
satisfactory to Calyon.


 


(iv)          The Agent’s Fee Letter, duly executed by the Borrower, in
form and substance satisfactory to the Agent.


 


(v)           Certified copies of the resolutions of the Board of
Directors (or comparable governing body) of AES NY authorizing the Borrower to
enter into each of the Loan Documents to which it is, or is to be, a party, and
of all documents evidencing other necessary action (partnership, limited
liability company or otherwise) and Governmental Approvals, if any, with
respect to such Loan Documents.


 


(vi)          A certificate of AES NY certifying the names, true
signatures and incumbency of the officers of AES NY authorized to sign the Loan
Documents to which the Borrower is, or is to be, a party, and the other
documents to be delivered hereunder and thereunder.


 


32





















 


(vii)         Copies of the certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement, certificate of incorporation, by-laws or comparable organizational
documents of the Borrower and each AEE Entity, together with all amendments
thereto, in each case certified in a manner satisfactory to the Agent.


 


(viii)        Certified copies of each of the executed
Operative Documents referred to in Section 4.1 of each of the
Participation Agreements (other than the Tax Indemnity Agreement).


 


(ix)           Good standing certificates in respect of the Borrower and
each AEE Entity (other than AES NY3) from its jurisdiction of organization and
each jurisdiction in which it is qualified to do business as a foreign
corporation, limited liability company or partnership, as the case may be.


 


(x)            the Notes payable to the order of each Bank, duly
executed by the Borrower in replacement of the notes issued under the Existing
Credit Facility.


 


(xi)           Favorable opinion of Chadbourne & Parke LLP, special
New York counsel to the Borrower and AES NY, in substantially the form of Schedule 4.01(a)(xi).


 


(xii)          Such other approvals, reports (including reports of any
consultants deemed necessary or desirable by the Agent), opinions and documents
as the Agent may reasonably request.


 


(b)                                 The Agent shall have received:


 


(i)            the Bank Assignment duly executed and delivered by the
parties thereto effecting the transfers of the Existing Loans, Unreimbursed
Drawings and Commitments and other rights and obligations contemplated thereby,


 


(ii)           satisfactory evidence that the letters of credit issued in
connection with the Existing Credit Facility have been returned to the Original
Issuing Bank,


 


(iii)          evidence satisfactory to it that the Original Issuing Bank
Agreement shall have been terminated.


 


(c)                                  The following statements shall be true and
the Agent shall have received a certificate of the Borrower, dated the Closing
Date and in sufficient copies for each Bank, stating that:


 


(i)            the representations and warranties set forth in Article 5
and Section 7.02 of this Agreement and Section 2.01 of the Pledge
Agreement are true and correct on and as of the Closing Date with the same
effect as though made on and as of the Closing Date, and


 


33





















 


(ii)           no Default has occurred and is continuing, both before and
after giving effect to the transactions contemplated by the Loan Documents.


 


(d)                                All fees payable on or prior to the requested
date of such Extension of Credit pursuant to Section 2.08 of this
Agreement or any other Loan Document, and all amounts payable pursuant to Section 11.02
of this Agreement for which invoices have been delivered to the Borrower on or
prior to such date, shall have been paid in full or arrangements satisfactory
to the Agent shall have been made to cause them to be paid in full concurrently
with the Extension of Credit to be made on such date.


 


(e)                                 All Governmental Approvals (except for the
NYPSC Order) necessary in connection with the Loan Documents and the
transactions contemplated thereby shall have been obtained and be in full force
and effect. All third party approvals necessary or, in the judgment of the
Agent, advisable in connection with the Loan Documents and the transactions
contemplated thereby shall have been obtained and be in full force and effect.
All such Governmental Approvals and third party approvals, if any, shall be in form
and substance satisfactory to the Agent and the Banks.


 


(f)                                   All interest, if any, on the Existing Loans
which is accrued and unpaid up to and including the Agreement Date and all
commissions, fees and other amounts payable by the Borrower under the Original
Issuing Bank Agreement which are accrued and unpaid to and including the
Agreement Date (whether or not then due and payable) shall have been paid in
full.


 


Section 4.02.         Conditions to increase the Total
Commitment AmountThe
increase of the Total Commitment Amount from $35,000,000 to the Increased Total
Commitment Amount is subject to the satisfaction of each of the following
conditions on or prior to December 31, 2004:


 


(a)                                the NYPSC Order shall have been issued and
shall be in full force and effect and the Agent and each Bank shall have
received a copy thereof;


 


(b)                               the second installment of the Upfront Fee
shall have been paid as set forth in the Agent’s Fee Letter;


 


(c)                                the increase in the Total Commitment Amount
will not contravene any Applicable Law applicable to the Agent or any Bank;


 


(d)                               the Notes payable to the order of each Bank
shall have been amended to reflect the increased Commitment of each Bank as of
the Commitment Increase Date; and


 


(e)                                the Issuing Bank Agreement between the
Borrower and Calyon shall have been amended to reflect the Total Commitment
Amount.


 


Section 4.03.         Conditions
to Each Extension of Credit. The obligation of each Bank or Issuing Bank, as the case may be, to
make an Extension of Credit (including the initial Extension of Credit) is
subject to the satisfaction of each of the following conditions:


 


34





















 


(a)                                In the case of any Extension of Credit
consisting of Loans, (i) the Agent shall have received a Funding Date
Certificate complying with the requirements of the Depositary Agreement setting
forth the amounts to be applied or transferred pursuant to Section 3.1(b)
of the Depositary Agreement, and (ii) after giving effect to such applications
or transfers, including, but not limited to, the Loans to be made on the Funding
Date referred to therein, the amounts remaining in the Revenue Account, the Operating
Account and each bank account of the Borrower or any Subsidiary or otherwise
then available to the Borrower or any Subsidiary for payment of Operating and Maintenance
Costs, other than pursuant to Section 3.13 of the Depositary Agreement (collectively,
“Available Amounts”), would, in the aggregate, be less than $10 million;
provided, that the sum of (A) the
aggregate amount transferred to the Operating Account with respect to any Rent
Payment Period (including sums properly withdrawn therefrom during such Rent
Payment Period to pay Operating and Maintenance Costs), (B) Available Amounts
prior to giving effect to such Loans plus (C)
the aggregate principal amount of such Loans, does not exceed the sum of (1)
125% of the amount set forth in the Annual Operating Budget for such Rent
Payment Period plus (2) fuel
costs payable for such Rent Payment Period;


 


(b)                               the Agent shall have received (i) if such
Extension of Credit consists of Loans, a notice of borrowing, for the Funding
Date referred to in subsection (a) above, with respect to such Loans
complying with the requirements of Section 2.02, and/or (ii) in the case
of any other Extension of Credit, a Request for Issuance that complies with the
requirements of Section 3.02(a);


 


(c)                                each Loan Document Representation and
Warranty shall be true and correct in all material respects at and as of the
time such Extension of Credit is to be made, both with and without giving
effect to such Extension of Credit and all other Extensions of Credit to be
made at such time and to the application of the proceeds thereof,


 


(d)                               no Default shall have occurred and be
continuing at the time such Extension of Credit is to be made or would result
from the making of such Extension of Credit and all other Extensions of Credit
to be made at such time or from the application of the proceeds thereof;


 


(e)                                such Bank or Issuing Bank (as the case may
be) shall have received such Information as it may have requested pursuant to Section 7.01(f);
and


 


(f)                                  such Extension of Credit will not contravene
any Applicable Law applicable to such Bank.


 


Except to the extent that the Borrower shall have
disclosed in the notice of borrowing or Request for Issuance (as the case may
be), or in a subsequent notice given to the Agent, the Banks and the Issuing
Banks prior to 5:00 P.M. on the Business Day before the requested date for the
making of the requested Extension of Credit, that a condition specified in
clause (c) or (d) above will not be fulfilled as of the requested time for the
making of such Extension of Credit, the Borrower shall be deemed to have made a
Representation and Warranty


 


35





















 


as of the time of the making of such Extension of Credit that the
conditions specified in such clauses have been fulfilled as of such time. No
such disclosure by the Borrower that a condition specified in clause (c) or (d)
above will not be fulfilled as of the requested time for the making of the
requested Extension of Credit shall affect the right of each Bank or Issuing
Bank (as the case may be) to not make the Extension of Credit requested to be
made by it if, in such Bank’s or Issuing Bank’s determination, such condition
has not been fulfilled at such time.


 


Section 4.04.         Reliance on Certificates. The Banks, the Issuing Banks and the Agent
shall be entitled to rely conclusively upon the certificates delivered from
time to time by officers of AES NY (in its capacity as general partner of the Borrower)
as to the names, incumbency, authority and signatures of the respective persons
named therein until such time as the Agent may receive a replacement
certificate, in form acceptable to the Agent, from an officer of AES NY (in its
capacity as general partner of the Borrower) identified to the Agent as having
authority to deliver such certificate, setting forth the names and true
signatures of the officers and other representatives of AES NY thereafter
authorized to act on behalf of the Borrower and AES NY (in its capacity as
general partner of the Borrower).


 


ARTICLE
5



CERTAIN REPRESENTATIONS AND WARRANTIES


 


In order to induce each Bank
and Issuing Bank to enter into this Agreement and to make each Extension of
Credit requested to be made by it, the Borrower represents and warrants as
follows:


 


Section 5.01.          Due
Organization. Etc.
The Borrower is a limited partnership duly formed, validly existing, and in
good standing under the laws of the State of Delaware, is duly licensed or
qualified and in good standing in each jurisdiction in which the failure to so
qualify could reasonably be expected to result in (a) a Material Adverse Effect
or (b) a Materially Adverse Effect on (i) AES NY, (ii) the Borrower and the AEE
Subsidiaries taken as a whole, (iii) any Loan Document or (iv) the Collateral,
and has the partnership power and authority to own, or hold under lease, its
assets and properties, conduct its business as now conducted and as presently
proposed to be conducted and enter into and perform its obligations under this
Agreement and the other Loan Documents and the Operative Documents to which it
is or will be a party. The sole general partner of the Borrower is AES NY. The
sole limited partner of the Borrower is AES NY2. Each of AES NY, AES NY2 and the
AEE Subsidiaries is a limited liability company duly organized, validly
existing, and in good standing under the laws of the State of Delaware, is duly
licensed or qualified and in good standing in each jurisdiction in which the
failure to so qualify could reasonably be expected to result in (A) a Material
Adverse Effect or (B) a Materially Adverse Effect on (1) AES NY, (2) the
Borrower and the AEE Subsidiaries taken as a whole, (3) any Loan Document or
(4) the Collateral, and has all requisite power and authority to own, or hold
under lease, its assets and properties and conduct its business as now
conducted and as presently proposed to be conducted.


 


Section 5.02.         Loan
Documents: Authorization: Enforceability: Required Consents: Absence of
Conflicts. The
Borrower has the power, and has taken all necessary action to authorize it, to
execute, deliver and perform in accordance with their respective terms the Loan


 


36





















 


Documents
and to request and receive Extensions of Credit in an aggregate amount equal to
the Commitments. This Agreement has been, and each of the other Loan Documents
when delivered to the Agent will have been, duly executed and delivered by the
Borrower and is, or when so delivered will be, a legal, valid and binding
agreement of the Borrower, assuming the due authorization, execution and
delivery by each other party thereto, enforceable against the Borrower in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.
The execution, delivery and performance in accordance with their respective
terms by the Borrower of the Loan Documents, and each Extension of Credit made
hereunder, whether or not in the amount of the unused Commitments, do not and
(absent any change in any Applicable Law or applicable Contract) will not (a)
require any Governmental Approval or any other consent or approval, including
any consent or approval of any partner of the Borrower or any member of any AEE
Entity, to have been obtained or any Governmental Registration to have been
made, other than Governmental Approvals and other consents and approvals and
Governmental Registrations that have been obtained or made, as the case may be,
are final and not subject to review on appeal or to collateral attack, and are
in full force and effect, except that (i) as of the Agreement Date and until
the Commitment Increase Date, the NYPSC Order has not yet been obtained and
(ii) after the issuance of the NYPSC Order, such order is subject to an appeal
period of four months from the date of such order, or (b) violate, conflict
with, result in a breach of, constitute a default under, or result in or
require the creation of any Lien (other than Permitted Liens described in Section 6.05(a))
upon any assets of the Borrower or any AEE Entity under (i) any Contract to
which the Borrower or any AEE Entity is a party or by which the Borrower or any
AEE Entity or any of their respective properties may be bound, or (ii) any
Applicable Law that could reasonably be expected to have a Materially Adverse
Effect on (x) any Loan Document or (y) the Collateral.


 


Section 5.03.         Operative Documents: Due
Authorization, Enforceability, Etc. The execution, delivery and performance of each of the Operative
Documents to which it is or will be a party and the compliance by it with the
terms and provisions thereof have been duly authorized by all necessary action
of each of the Borrower and the AEE Entities, as applicable, and such action
does not and will not require any further action, consent or approval by any
trustee or holder of any Indebtedness of the Borrower or such AEE Entities, as
applicable. Each of the Operative Documents to which it is or will be a party
has been duly executed and delivered by each of the Borrower and the AEE
Entities, as applicable. Assuming the due authorization, execution and delivery
by each other party thereto, the Operative Documents to which the Borrower or
any AEE Entity is or will be a party constitute the legal, valid and binding
obligations of the Borrower or such AEE Entity, as applicable, enforceable
against the Borrower or such AEE Entity, as applicable, in accordance with
their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.


 


Section 5.04.         Operative Documents: No Conflicts. The execution, delivery and performance by
each of the Borrower and the AEE Entities, as applicable, of each of the
Operative Documents to which it is or will be a party, the consummation by the
Borrower and such AEE Entities of the transactions contemplated thereby, and
compliance by the Borrower and such AEE Entities with the terms and provisions
thereof, do not and will not (i) conflict with or result in any breach of any
agreement to which the Borrower or any AEE Entity is a party


 


37





















 


(including any Material Agreement), (ii) conflict with any Applicable
Law which could reasonably be expected to result in a Material Adverse Effect,
(iii) conflict with the partnership agreement of the Borrower or the
organizational documentation of any AEE Entity or (iv) result in the creation
of any Lien (except Permitted Liens) upon any of the property or assets of the
Borrower and such AEE Entities pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement or any other agreement, contract or instrument
to which the Borrower or such AEE Entity is a party or by which any of their
respective property or assets are bound.


 


Section 5.05.         Operative Documents: Governmental
Actions. Except
for such Governmental Approvals as have been validly issued, are in full force
and effect and are non-appealable (“Existing Governmental Approvals”),
and except as set forth in Section 5.02 with respect to the NYPSC Order
and as specifically disclosed in Schedule 5.15, no Governmental
Approval is required to be obtained in the name of the Borrower or any AEE
Entity or the Owner Trust in connection with (i) the ownership, operation and
maintenance of the Facility, the Related Facility and the Additional
Facilities, (ii) the execution, delivery and performance by the Borrower of the
Operative Documents to which it is or will be a party, or (iii) the leasing of
the Undivided Interest, except such Governmental Approvals (A) as may be
required by Applicable Law not now in effect, (B) as may be required in
consequence of any transfer of ownership of the Undivided Interest by the Owner
Trust, (C) as would be required by Applicable Law upon termination or
expiration of the Lease in connection with taking possession of an interest in
any assets of the Borrower in accordance with the Support Agreements or any
part thereof or the property purported to be covered by the Site Lease, (D) as
may be required by Applicable Law if, after termination or expiration of the
Lease, the Borrower or any other Person should provide transmission services
for the Owner Trust, (E) as may be required in consequence of any exercise of
remedies or other rights by any such Person in connection with taking
possession of an interest in the Facility or the property purported to be
covered by the Site Lease, or (F) as may be required as filings pursuant to the
terms of a Governmental Approval (which filings the Borrower agrees to make
promptly when required) and other types of routine operating plans and filings
required under Applicable Law. Except as specifically disclosed in Schedule 5.05
or Schedule 5.15, all of the Existing Governmental Approvals have
been validly issued, are in full force and effect and are non-appealable except
as set forth in Section 5.02 with respect to the NYPSC Order, and there is
no proceeding pending or, to the Actual Knowledge of the Borrower, threatened,
which seeks to, or which may reasonably be expected to, rescind, terminate,
modify, condition, suspend or otherwise alter any such Governmental Approval
(except as are necessary for the transfer or reissuance of such Governmental
Approvals to the Borrower or any AEE Entity). Except as specifically disclosed
in Schedule 5.15, each of the Borrower and the AEE Entities has
obtained and is in compliance with all Governmental Approvals required to be
obtained by it as of the date hereof unless the failure to obtain such
approvals or such non-compliance therewith, individually or in the aggregate,
could not reasonably be expected to result in (a) a Material Adverse Effect or
(b) a Materially Adverse Effect on (i) AES NY, (ii) the Borrower and the AEE
Subsidiaries taken as a whole, (iii) any Loan Document or (iv) the Collateral.


 


Section 5.06.         Litigation. (a) Except as specifically disclosed in Schedule 5.06
or Schedule 5.15, there is no pending or, to the Actual Knowledge
of the Borrower, threatened action, suit, investigation or proceeding at law or
in equity by or before any Governmental Entity, against or affecting the
Borrower or any property or other assets or rights of the Borrower


 


38





















 


or with respect to any Operative Document, the Undivided Interest, the
Ground Interest, the Facility, the Facility Site, or any of the other Assigned
Assets that, individually or in the aggregate, if determined adversely could
reasonably be expected to result in a Material Adverse Effect.


 


(b)          Except as specifically disclosed in Schedule 5.06
or Schedule 5.15, there are not, in any court or before any
arbitrator of any kind or before or by any governmental or nongovernmental
body, any actions, suits, investigations or proceedings pending or, to the
Actual Knowledge of the Borrower or any AEE Entity, threatened (nor to the
Actual Knowledge of the Borrower or any AEE Entity is there any substantial
basis therefor) against or in any other way relating to or affecting (i) the
Borrower or any AEE Entity or any of their respective businesses or properties,
(ii) any Loan Document or (iii) the Collateral, except actions, suits,
investigations or proceedings that, if adversely determined, would not, singly
or in the aggregate, have a Materially Adverse Effect on (A) AES NY, (B) the
Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document or
(D) the Collateral.


 


Section 5.07.         No
Defaults. Neither
the Borrower nor any AEE Entity is in default, and no condition exists that
with notice or lapse of time or both would constitute a default, under any of
the Operative Documents. Neither the Borrower nor any AEE Entity is in default
under, and neither the Borrower nor any AEE Entity, to its Actual Knowledge, is
aware of a default by any other party to, any Material Agreement in any such
case where any such default, individually or in the aggregate, could reasonably
be expected to result in (a) a Material Adverse Effect or (b) a Materially
Adverse Effect on (i) AES NY, (ii) the Borrower and the AEE Subsidiaries taken
as a whole, (iii) any Loan Document or (iv) the Collateral.


 


Section 5.08.         Liens. (a) The Borrower has good record and
marketable fee title in the Facility Site and the Related Facility Site, in
each case free and clear of all Liens other than Permitted Liens.


 


(b)                               Good and marketable fee simple title to the
Undivided Interest has been duly, validly and effectively conveyed and
transferred to the Owner Trust, free and clear of all Liens other than
Permitted Liens. A good and valid leasehold interest in the Ground Interest has
been duly, validly and effectively granted to the Owner Trust upon the terms
and conditions in the Site Lease, free and clear of all Liens other than
Permitted Liens. A good and valid easement estate in the Easements has been
duly, validly and effectively granted to the Owner Trust upon the terms and
conditions in the Site Lease, free and clear of all Liens other than Permitted
Liens.


 


(c)                                None of the Permitted Liens shall materially
interfere with the use, operation or possession of the Facility (as
contemplated by the Operative Documents) or the use of or exercise by the Owner
Trust of its rights under the Site Lease with respect to the Facility or the Facility
Site.


 


Section 5.09.         Regulatory
Status/Utility Regulation. Each of the Borrower and AEE2 is an “Exempt Wholesale Generator” as
such term is defined in Section 32 of PUHCA. Neither the Borrower nor any
of the AEE Entities is (a) regulated as a “public utility company,” or a “holding
company,” a “subsidiary company” or an “affiliate,” in each case, of either a “holding
company” or a “public utility company,” as such terms are defined in PUHCA, or
(b) except as


 


39





















 


described in Schedule 5.09, subject to any electric utility
regulation under New York law. To the Actual Knowledge of the Borrower, none of
the Owner Trust, the Owner Participant, the Agent, the Banks, the Issuing
Banks, any Certificateholder nor any of their respective Affiliates is nor,
solely by virtue of the execution, delivery or performance of, or the
consummation of the transactions contemplated by, the Loan Documents or the
Lease Financing (and in the case of the Owner Participant and the Owner Trust,
assuming that the representations and warranties of the Owner Participant and
the Owner Trust set forth in the Participation Agreement are true and correct
at all times), will be regulated as a “public utility company,” or a “holding
company,” a “subsidiary company” or an “affiliate,” in each case, of either a “holding
company” or a “public utility company,” as such terms are defined in PUHCA nor
subject to any electric utility regulation under New York law,
provided, however, that the exercise of rights or enforcement
of remedies under the Operative Documents or the Loan Documents, as the case
may be, by any of the Owner Trust, the Owner Participant, the Agent, the Banks,
the Issuing Banks, any Certificateholder or any of their respective Affiliates,
that results in such party taking ownership of, or operating control over, the
Borrower, any AEE Entity, the Facilities or the Additional Facilities, may result
in such party being regulated as a “public utility company,” or a “holding
company,” a “subsidiary company” or an “affiliate,” in each case, of either a “holding
company” or a “public utility company,” as such terms are defined in PUHCA, or
may result in such party being subject to electric utility Regulation Under New
York law. Neither the Borrower nor any AEE Entity is subject to electric rate
regulation under New York law.


 


Section 5.10.         Investment Company Act. Neither the Borrower nor any AEE Entity is
an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act.


 


Section 5.11.         Compliance With Laws. Each of the Borrower and the AEE Entities
are in compliance with all Applicable Laws, including, without limitation, all
Environmental Laws, and none of such parties has received any written notice
from any Governmental Entity of non-compliance with the need to perform any
work, make repairs or make any capital improvements in order to comply with, or
the imposition or threat of the imposition of penalties under, Applicable Law,
except as specified on Schedule 5.06, Schedule 5.13 or Schedule 5.15
hereto and otherwise, in the case of any Applicable Law, where such
non-compliance is the subject of appropriate proceedings and could not
reasonably be expected to result in (i) a Material Adverse Effect or (ii) a
Materially Adverse Effect on (A) AES NY, (B) the Borrower and the AEE
Subsidiaries taken as a whole, (C) any Loan Document or (D) the Collateral.


 


Section 5.12.         Taxes. Each of the Borrower and the AEE Entities
has filed, or caused to be filed, all tax and information returns that are
required to have been filed in any jurisdiction, and has paid all taxes shown
to be due and payable on such returns and all other taxes and assessments
payable by such Person, to the extent the same have become due and payable,
other than taxes the payment of which is being contested by appropriate
proceedings, in accordance with Section 5.7 of the Participation
Agreement, and the Borrower has no Actual Knowledge of any actual or proposed
deficiency or additional assessment in connection therewith which, either
individually or in the aggregate, could reasonably be expected to result in (i)
a Material Adverse Effect or (ii) a Materially Adverse Effect on (A) AES NY,
(B) the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan
Document or (D) the Collateral.


 


40





















 


Section 5.13.         ERISA. Except as specifically disclosed in Schedule 5.13:


 


(a)                                Neither a Reportable Event nor an “accumulated funding deficiency “ (within
the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this representation
is made or deemed made with respect to any Plan, and each Plan has complied in
all respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. Neither the Borrower
nor any ERISA Affiliate has (i) sought a waiver of the minimum funding standard
under Section 412 of the Code in respect of any Plan, (ii) failed to make
any contribution or payment to any Plan, or made any amendment to any Plan,
which has resulted or could result in the imposition of a Lien or the posting
of a bond or other security under ERISA or the Code or (iii) incurred any
liability in excess of $100,000 under Title IV of ERISA other than a liability
to the PBGC for premiums under Section 4007 of ERISA. Neither the Borrower
nor any ERISA Affiliate has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Borrower nor any ERISA Affiliate would
become subject to any liability under ERISA if the Borrower or any such ERISA
Affiliate were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No such Multiemployer Plan is in Reorganization or
Insolvent. Each of the representations and warranties set forth in this Section 5.13(a)
is made subject to the qualification that any inaccuracy thereof has not resulted
in and could not reasonably be expected to result in a Materially Adverse
Effect on (i) AES NY, (ii) the Borrower and the AEE Subsidiaries taken as a
whole, (iii) any Loan Document or (iv) the Collateral.


 


(b)                               The Borrower is not (i) a plan described in Section 3(3)
of ERISA or Section 4975 of the Code or (ii) a “foreign person” as defined
in Section 1445 of the Code.


 


(c)                                Assuming the correctness of the
representations contained in Sections 3.2, 3.3, 3.4 and 3.5 of the
Participation Agreement and of the Certificateholders in the Certificates, the
Lease Financing did not constitute a non-exempt “prohibited transaction” within
the meaning of Section 406 of ERISA or Section 4975(c)(l) of the Code
(or in the case of a governmental plan or church plan (each as defined in
ERISA) any substantially similar federal, state or local law).


 


Section 5.14.         Adequate
Rights. (a) To
the Actual Knowledge of the Borrower, in all material respects, (i) the rights
and interests made available to the Owner Trust pursuant to the Support
Agreements and the other Operative Documents, together with (ii) all materials,
supplies and services, including, but not limited to, all natural gas,
electrical, telephone, water, sanitary waste disposal, ash disposal, rail, coal
supply, septic or water treatment system or services and all other utility services
necessary for the present use, operation and maintenance of the Facility
(currently available at the Facility, which to the Actual Knowledge of the
Borrower are connected under valid permits and in working order, in all
material respects) permit on a commercially practicable basis as of the date
hereof (A) the occupation, maintenance and repair of the Facility and the
Facility Site, (B) the use, operation, leasing and possession of the Facility


 


41





















 


and
the Facility Site, (C) the use, operation, leasing, possession, maintenance,
replacement, renewal and repair of all alterations, modifications, additions,
accessions, improvements, appurtenances, replacements and substitutions thereof
and thereto, subject to the provisions of the Operative Documents, (D)
appropriate ingress to and egress from the Facility for any reasonable purpose
in connection with the operation, maintenance and use of the Facility,
including, without limitation, access to dedicated public roads and all other
material roads, easements, servitude, rights-of-way and other rights of ingress
and egress as are necessary for the present operation, maintenance and use of
the Facility, (E) the procurement of other rights and services necessary or appropriate
to utilize the Facility in a commercial manner, (F) transmission services from
the Facility sufficient to enable the sale of the output of the Facility, and
(G) the operation of the Facility as an independent unit.


 


(b)                                To the Actual Knowledge of the Borrower, in all material respects (i)
the electrical, plumbing, heating, drainage, air conditioning, ventilation and
other mechanical and electrical systems on and in the Facility are in good
working order and repair and are adequate in quantity and quality for present
operation of the Facility by the Borrower under the Lease; and (ii) the
Facility is otherwise in safe condition and there are no structural or other
patent defects in the roofs, and other structural portions of the Facility,
including walls, pillars, supporting columns and foundations.


 


(c)                                 To the Actual Knowledge of the Borrower,
other than Permitted Liens, the use of the Facility does not in any material
respect depend on any variance, special exception or other municipal approval,
permit or consent that has not been obtained for its present use, and all material
building, construction and use related permits, approvals and consents
necessary for such use have been issued and are in full force and effect; provided, that no representation is made
herein regarding zoning ordinances or regulations.


 


(d)                                To the Actual Knowledge of the Borrower, no default or breach exists
under any covenant, condition, restriction, right-of-way, easement or other
agreement affecting all or any portion of the Facility which is to be performed
or complied with by the owner or occupant of all or any portion of the Facility
the nonperformance of which could reasonably be expected to result in (i) a
Material Adverse Effect or (ii) a Materially Adverse Effect on (A) AES NY, (B)
the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document
or (D) the Collateral.


 


(e)                                 To the Actual Knowledge of the Borrower,
there are no subleases, rental agreements or other agreements conferring on any
Person other than the Borrower the right to use or occupy all or any portion of
the Facility or the Facility Site except those, if any, reflected in the Title
Policies.


 


(f)                                   To the Actual Knowledge of the Borrower,
there are no public improvements pending or intended that would result in any
charge or special assessment against the Facility, except those, if any,
reflected in the Title Policies. To the Actual Knowledge of the Borrower, the
Facility is not subject to any material utility “tap-in” fees, except those, if
any, reflected in the Title Policies.


 


42





















 


Section 5.15.         Environmental
Matters. (a)
Except as specifically disclosed in Schedule 5.15 or except as
would not have (i) a Material Adverse Effect or (ii) a Materially Adverse
Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries taken as a
whole, (C) any Loan Document or (D) the Collateral, neither the Borrower, nor
any AEE Entity, nor, to the Actual Knowledge of the Borrower, NYSEG or NGE has
received from any Governmental Entity any written notice, letter, citation,
order, warning, complaint, inquiry, claim or demand that: (1) there has been a
release, or there is a threat of release, of any Hazardous Substance in, on,
under or from the Facility or the Facility Site except for releases authorized
under or in compliance with Applicable Laws, including Environmental Laws; (2)
the Borrower, NYSEG or NGE have or has any liability for the costs of cleaning
up, remedying or responding to a release of any Hazardous Substance pertaining
to the Facility or the Facility Site; or (3) either the Facility or the
Facility Site is subject to a Lien in favor of any Governmental Entity in
response to a release of any Hazardous Substance.


 


(b)                               Except as specifically disclosed in Schedule 5.15
or except as would not have (i) a Material Adverse Effect or (ii) a Materially
Adverse Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries taken
as a whole, (C) any Loan Document or (D) the Collateral, the Borrower and, to
the Actual Knowledge of the Borrower, each of NYSEG and NGE have taken, or are
taking, all required or necessary response actions, including any removal or
remedial or other response action, in respect of any release, emission,
discharge or disposal, or threat of release, discharge, disposal or emission of
any Hazardous Substance, in, on, under or from the Facility or the Facility
Site, so as to be in compliance with all Applicable Laws, including Environmental
Laws.


 


(c)                                To the Actual Knowledge of the Borrower,
except as specifically disclosed in Schedule 5.15 or except as
would not have (i) a Material Adverse Effect or (ii) a Materially Adverse
Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries taken as a
whole, (C) any Loan Document or (D) the Collateral:


 


(1)                                the Facility and the Facility Site and the
ownership, use, maintenance, modification and operation of the Facility and the
Facility Site are now in compliance with applicable Environmental Laws in all
material respects;


 


(2)                                the disposal of all Hazardous Substances
generated, maintained, produced, manufactured, processed, distributed, used,
treated, managed, stored, contained, recycled, transported or handled on, to,
at or from the Facility or the Facility Site has been performed in compliance
with applicable Environmental Laws;


 


(3)                                no Hazardous Substances are located in, on,
at or under the Facility or the Facility Site, except to the extent incidental
to the current use of the Facility or the Facility Site, and the Borrower and,
to the Actual Knowledge of the Borrower, each of NYSEG and NGE has not and is
not currently maintaining, producing, manufacturing, processing, distributing,
handling, treating, managing, containing, recycling, transporting, releasing,
emitting, discharging, depositing, generating, storing, disposing of or
creating any Hazardous Substances in its ownership, alteration, modification,
construction, use, operation or maintenance of the Facility or the Facility
Site other than in compliance with applicable Environmental Laws;


 


43





















 


(4)                                there are no Environmental Conditions with
respect to the Facility or the Facility Site;


 


(5)                                no Hazardous Substances have been released
at, to, under, about or from the Facility or the Facility Site other than in
compliance with all Environmental Laws;


 


(6)                                there are no underground storage tanks,
treatment tanks, sumps, water, gas or oil wells, or associated piping located
at on or under any of the Facility or the Facility Site, in each case that are
leaking;


 


(7)                                (x) there is no friable asbestos or urea
formaldehyde insulation contained in, forming any part of, or contaminating any
part of the Facility or the Facility Site, and (y) no polychlorinated biphenyls
(PCBs) are used, stored, located at or contaminate any part of the Facility or
the Facility Site; and


 


(8)                                no Lien has attached to the Facility by
reason of any Environmental Condition.


 


(d)          To the Actual Knowledge of the Borrower, there are no
Environmental Conditions with respect to the Facility or the Facility Site that
would reasonably be likely to result in the temporary or permanent shutdown of,
or cessation of operations at, the Facility.


 


Section 5.16.         Subsidiaries. The Borrower is the record and beneficial
owner of 100% of the limited liability company membership interests and other
Capital Securities (if any) of AEE2, AES Cayuga and AES Somerset. AEE2 is the
record and beneficial owner of 100% of the limited liability company membership
interests and other Capital Securities (if any) of AES Westover, L.L.C. and AES
Greenidge, L.L.C. As of the Agreement Date, the Borrower has no Subsidiaries
other than AEE2, AES Cayuga, AES Somerset, AES Westover, L.L.C. and AES
Greenidge, L.L.C.


 


Section 5.17.         Property. Each of the Borrower and the AEE Entities
has good and marketable title to and possession of, or a good and valid
leasehold interest in, the Assigned Assets (and the Borrower has good and
marketable fee simple title to the Facility Site and AEE2 has good and
marketable fee simple title to the Additional Facilities) free and clear of all
Liens (except Permitted Liens), including all intellectual property or rights
to use intellectual property and other rights required for the conduct of its
respective business, but only to the extent such intellectual property and
other rights are required and the failure to obtain such property could
reasonably be expected to result in (i) a Material Adverse Effect or (ii) a
Materially Adverse Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries
taken as a whole, (C) any Loan Document or (D) the Collateral. The Borrower is
not a party to any contract or agreement to sell any interest in the Facility
other than pursuant to the Operative Documents and the operative documents
executed in connection with the lease financings contemplated by the Other
Leases. AEE2 is not a party to any contract or agreement to sell any interest
in the Additional Facilities.


 


Section 5.18.         No Event of Loss. No Event of Loss has occurred, and, to the
Actual Knowledge of the Borrower, no event giving rise to an Event of Loss is
threatened, in each case with the respect to the Facility.


 


44





















 


Section 5.19.        AEE2
Liens. (a) AEE2
has good record and marketable fee title in each of the Additional Facilities,
in each case free and clear of all Liens other than Permitted Liens.


 


(b)          None of the Permitted Liens will materially interfere with
the use, operation or possession of the Additional Facilities.


 


Section 5.20.        AEE2 Adequate Rights. (a) AEE2 is able to obtain all materials,
supplies and services, including, but not limited to, all natural gas,
electrical, telephone, water, sanitary waste disposal, ash disposal, rail, coal
supply, septic or water treatment system or services and all other utility
services necessary for the present use, operation and maintenance of the
Additional Facilities (and, to the Actual Knowledge of the Borrower and the AEE
Entities, all such services are currently available and are connected under
valid permits and in working order, in all material respects) so as to permit
on a commercially practicable basis (i) the occupation, maintenance and repair
of the Additional Facilities, (ii) the use, operation, leasing and possession
of the Additional Facilities, (iii) the use, operation, leasing, possession,
maintenance, replacement, renewal and repair of all alterations, modifications,
additions, accessions, improvements, appurtenances, replacements and
substitutions thereof and thereto, (iv) appropriate ingress to and egress from
the Additional Facilities for any reasonable purpose in connection with the
exercise of rights under AEE2’s interest in the Additional Facilities,
including, without limitation, access to dedicated public roads and to the
Actual Knowledge of the Borrower and the AEE2 Entities, all other material
roads, easements, servitudes, rights-of-way and other rights of ingress and
egress as are necessary for the present operation, maintenance and use of the
Additional Facilities, (v) the procurement of other rights and services
necessary or appropriate to utilize the Additional Facilities in a commercial
manner, (vi) transmission services from the Additional Facilities sufficient to
enable AEE2 to sell the output of the Additional Facilities, and (vii) the
operation of the Additional Facilities as independent units.


 


(b)                              To the Actual Knowledge of the Borrower and the AEE2 Entities, in all
material respects (i) the electrical, plumbing, heating, drainage, air
conditioning, ventilation and other mechanical and electrical systems on and in
the Additional Facilities are in good working order and repair and are adequate
in quantity and quality for present operation of the Additional Facilities by
the AEE2 Entities; and (ii) the Additional Facilities are otherwise in safe
condition and there are no structural or other patent defects in the roofs, and
other structural portions of the Additional Facilities, including walls,
pillars, supporting columns and foundations.


 


(c)                               To the Actual Knowledge of the Borrower and the AEE2 Entities, other
than Permitted Liens, the use of the Additional Facilities does not in any
material respect depend on any variance, special exception or other municipal
approval, permit or consent that has not been obtained for its present use, and
all material building, construction and use related permits, approvals and
consents necessary for such use have been issued and are in full force and
effect; provided, that no
representation is made herein regarding zoning ordinances or regulations.


 


(d)                              To the Actual Knowledge of the Borrower and the AEE2 Entities, no
default or breach exists under any covenant, condition, restriction,
right-of-way, easement or other agreement affecting all or any portion of the
Additional Facilities which is to be performed or complied with by the owner or
occupant of all or any portion of the Additional Facilities the


 


45





















 


nonperformance of which could reasonably be expected to result in (i) a
Material Adverse Effect or (ii) a Materially Adverse Effect on (A) AES NY, (B)
the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document
or (D) the Collateral.


 


(e)                                 To the Actual Knowledge of the Borrower and
the AEE2 Entities, there are no subleases, rental agreements or other
agreements conferring on any Person other than the AEE2 Entities the right to
use or occupy all or any portion of the Additional Facilities.


 


(f)                                   To the Actual Knowledge of the Borrower and
the AEE2 Entities, there are no public improvements pending or intended that
would result in any charge or special assessment against the Additional
Facilities, except those, if any, reflected in the title policies relating to
the Additional Facilities.


 


Section 5.21.         Additional Facilities Environmental
Matters. (a)
Except as specifically disclosed in Schedule 5.15 or except as
would not have (i) a Material Adverse Effect or (ii) a Materially Adverse
Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries taken as a
whole, (C) any Loan Document or (D) the Collateral, no AEE2 Entity has received
from any Governmental Entity any written notice, letter, citation, order,
warning, complaint, inquiry, claim or demand that: (1) there has been a
release, or there is a threat of release, of any Hazardous Substance in, on,
under or from the Additional Facilities except for releases authorized under or
in compliance with Applicable Laws, including Environmental Laws, or any
release or releases for which, in the aggregate, no AEE2 Entity has any
liability for the costs of cleaning up, remedying or responding to a release of
any Hazardous Substance pertaining to the Additional Facilities; (2) any AEE2
Entity has any liability for the costs of cleaning up, remedying or responding
to a release of any Hazardous Substance pertaining to the Additional
Facilities; or (3) any Additional Facility is subject to a Lien in favor of any
Governmental Entity in response to a release of any Hazardous Substance.


 


(b)                               Except for the conditions specifically
disclosed in Schedule 5.15 or except as would not have (i) a
Material Adverse Effect or (ii) a Materially Adverse Effect on (A) AES NY, (B)
the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document
or (D) the Collateral, each AEE2 Entity has taken, or is taking, all required
or necessary response actions, including any removal or remedial or other
response action, in respect of any release, emission, discharge or disposal, or
threat of release, discharge, disposal or emission of any Hazardous Substance,
in, on, under or from the Additional Facilities, so as to be in compliance with
all Applicable Laws, including Environmental Laws.


 


(c)                                To the Actual Knowledge of the Borrower and
each AEE2 Entity, except as specifically disclosed in Schedule 5.15
or except as would not have (i) a Material Adverse Effect or (ii) a Materially
Adverse Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries taken
as a whole, (C) any Loan Document or (D) the Collateral:


 


(1)           the Additional Facilities and the ownership, use,
maintenance, modification and operation of the Additional Facilities are now in
compliance with applicable Environmental Laws;


 


46





















 


(2)                                  the disposal of all Hazardous Substances
generated, maintained, produced, manufactured, processed, distributed, used,
treated, managed, stored, contained, recycled, transported or handled on, to,
at or from the Additional Facilities has been performed in compliance with
applicable Environmental Laws;


 


(3)                                  no Hazardous Substances are located in, on,
at or under the Additional Facilities, except to the extent incidental to the
current use of the Additional Facilities, and each AEE2 Entity has not and is
not currently maintaining, producing, manufacturing, processing, distributing,
handling, treating, managing, containing, recycling, transporting, releasing,
emitting, discharging, depositing, generating, storing, disposing of or
creating any Hazardous Substances in its ownership, alteration, modification,
construction, use, operation or maintenance of the Additional Facilities other
than in compliance with applicable Environmental Laws;


 


(4)                                  there are no Environmental Conditions with
respect to the Additional Facilities;


 


(5)                                  no Hazardous Substances have been released
at, to, under, about or from the Additional Facilities other than in compliance
with all Environmental Laws;


 


(6)                                  there are no underground storage tanks,
treatment tanks, sumps, water, gas or oil wells, or associated piping located
at on or under any of the Additional Facilities, in each case that are leaking,
other than any such for which, in the aggregate, no AEE2 Entity has any
liability for the costs of cleaning up, remedying or responding to a release of
any Hazardous Substance pertaining to the Additional Facilities;


 


(7)                                  (A) there is no friable asbestos or urea
formaldehyde insulation contained in, forming any part of, or contaminating any
part of the Additional Facilities, and (B) no polychlorinated biphenyls (PCBs)
are used, stored, located at or contaminate any part of the Additional
Facilities other than any of the foregoing for which, in the aggregate; no AEE2
Entity has any liability for the costs of cleaning up, remedying or responding
to a release of any Hazardous Substance pertaining to the Additional Facilities;
and


 


(8)                                  no Lien has attached to the Additional
Facilities by reason of any Environmental Condition.


 


(d)           To the Actual Knowledge of the Borrower, there are no
Environmental Conditions with respect to any Additional Facility that would
reasonably be likely to result in the temporary or permanent shutdown of, or
cessation of operations at, such Additional Facility.


 


Section 5.22.         Burdensome
Provisions.
Neither the Borrower nor any Subsidiary is a party to or bound by any Contract
or Applicable Law, compliance with which could reasonably be expected to have a
Materially Adverse Effect on (a) any Loan Document or (b) the Collateral.


 


Section 5.23.         No
Adverse Change or Event. Except as specifically set forth in Schedule 5.06, Schedule 5.13
or Schedule 5.15, since December 31,2003, no change in the
business, assets, Liabilities, financial condition, results of operations or
business prospects of the Borrower or any AEE Entity has occurred, and no event
has occurred or failed to occur, that has


 


47





















 


had or could reasonably be expected to have, either alone or in
conjunction with all such other changes, events and failures, a Materially
Adverse Effect on (a) AES NY, (b) the Borrower and the AEE Subsidiaries taken
as a whole, (c) any Loan Document or (d) the Collateral.


 


Section 5.24.         Additional Adverse Facts. Except for facts and circumstances
disclosed on Schedule 5.06, Schedule 5.13, Schedule 5.15
or Schedule 5.24, neither the Borrower nor any AEE Entity has Actual
Knowledge of any fact or circumstance, as of the Agreement Date, that, either
alone or in conjunction with all other such facts and circumstances, has had or
could reasonably be expected to have (to the Actual Knowledge of the Borrower
or any AEE Entity) a Materially Adverse Effect on (a) AES NY, (b) the Borrower
and the AEE Subsidiaries taken as whole, (c) any Loan Document or (d) the
Collateral. If a fact or circumstance disclosed on such Schedules should in the
future have a Materially Adverse Effect on (i) AES NY, (ii) the Borrower and
the AEE Subsidiaries taken as a whole, (iii) any Loan Document or (iv) the
Collateral, such Materially Adverse Effect shall be a change or event subject
to Section 5.23 notwithstanding such disclosure.


 


Section 5.25.         Margin
Stock. Following
application of the proceeds of each Extension of Credit, not more than 25
percent (25%) of the value of the assets of the Borrower will be margin stock
(within the meaning of Regulation U). The Borrower is not engaged in the business
of extending credit for the purpose of buying or carrying margin stock (within
the meaning of Regulation U), and no proceeds of any Loan or any drawing under
any Letter of Credit will be used to buy or carry any margin stock or to extend
credit to others for the purpose of buying or carrying any margin stock.


 


Section 5.26.         Title to Properties. The Borrower has good and marketable title
to all of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all Liens, charges or
claims (including infringement claims with respect to patents, trademarks,
copyrights and the like), other than Permitted Liens. The Borrower has complied
in all respects with all obligations under all leases to which it is a party
and all such leases are in full force and effect, except, respectively, where a
failure to comply or to be in full force and effect could not reasonably be
expected to have a Materially Adverse Effect on (a) AES NY, (b) the Borrower
and the AEE Subsidiaries taken as a whole, (c) any Loan Document or (d) the
Collateral. The Borrower enjoys peaceful and undisturbed possession under all
material leases to which it is a party.


 


Section 5.27.         Insurance. All insurance required by Section 6.03
is in full force and effect and all premiums with respect thereto have been
paid (to the extent due and payable).


 


Section 5.28.         Lien in Collateral.
The Pledge Agreement creates a valid and perfected first priority Lien in the
Collateral, subject only to Permitted Liens described in Section 6.05(a),
and all filings and other actions necessary to perfect and protect such Lien
have been taken.


 


Section 5.29.         Projections.
All financial projections of the Borrower and its Subsidiaries previously
furnished by or on behalf of the Borrower to the Agent and the Banks are based
upon good faith estimates and assumptions that the Borrower believed were
reasonable at the time


 


48





















 


such projections were delivered and such projections represent as of
the Agreement Date the Borrower’s best estimate of future performance by the
Borrower and its Subsidiaries.


 


ARTICLE 6



CERTAIN COVENANTS


 


From the Agreement Date and until the Repayment
Date,


 


Section 6.01.         Coverage Ratio.
The Borrower shall maintain, as of the last day of each fiscal quarter
(commencing with the fiscal quarter ending June 30, 2004), for the
immediately preceding four-consecutive-fiscal quarter period ending on such
day, a Coverage Ratio of at least 1.20 to 1.00.


 


Section 6.02.         Preservation of
Existence and Properties, Scope of Business, Compliance with Law, Payment of
Taxes and Claims Preservation of Enforceability. The Borrower shall and
shall cause each AEE Entity to (a) preserve and maintain its legal existence
and all of its other franchises, licenses, rights and privileges, (b) preserve,
protect and obtain all Intellectual Property, and preserve and maintain in good
repair, working order and condition all other properties, required for the
conduct of its business, including the observation of the life extension
programs of the Additional Facilities, (c) engage only in businesses in
substantially the same fields as the businesses conducted on the Agreement
Date, (d) comply with Applicable Law and with all of its obligations under the
Operative Documents, (e) pay or discharge when due all Taxes and all
Liabilities that are or could reasonably be expected to become Liens on any of
its properties and (f) take all action and obtain all consents and Governmental
Approvals and make all Governmental Registrations required so that its
obligations under the Loan Documents will at all times be legal, valid and
binding and enforceable in accordance with their respective terms, except that
this Section 6.02 (other than clauses (a), insofar as it requires the
Borrower to preserve its legal existence, (c) and (f)) shall not apply in any
circumstance where noncompliance, together with all other noncompliances with
this Section 6.02, will not have a Materially Adverse Effect on (x) any
Loan Document or (y) the Collateral.


 


Section 6.03.         Insurance. The
Borrower shall and shall cause each AEE Entity to maintain insurance with
responsible insurance companies against at least such risks and in at least
such amounts as is customarily maintained by similar businesses, or as may be
required by Applicable Law or reasonably requested by the Required Banks.
Insurance against such risks and in at least such amounts as is required from
time to time under the Leases shall be deemed to be what is “customarily
maintained by similar businesses” for purposes of this Section 6.03 in
regards to the Additional Facilities.


 


Section 6.04.         Use
of Proceeds. The Borrower shall and shall cause each AEE2 Entity to use the
proceeds of the Loans only to pay Operating and Maintenance Costs. None of the
proceeds of any of the Loans or of any drawing under a Letter of Credit shall
be used to purchase or carry, or to reduce or retire or refinance any credit
incurred to purchase or carry, any margin stock (within the meaning of
Regulations U and X of the Board of Governors of the Federal Reserve System) or
to extend credit to others for the purpose of purchasing or carrying any


 


49





















 


margin stock. If requested by any Bank, the Borrower shall complete and
sign Part I of a copy of Federal Reserve Form U-l referred to in Regulation U
and deliver such copy to such Bank.


 


Section 6.05.         Liens.
(a) The Borrower shall not, and shall not permit any AEE Subsidiary to,
directly or indirectly permit to exist, at any time, any Lien upon any of the
AEE Subsidiaries’ properties or assets of any character (including the
Additional Facilities) or upon any Collateral, in each case whether now owned
or hereafter acquired, or upon any income or profits therefrom, except that
this Section 6.05(a) shall not apply to (i) Permitted Liens, (ii) any
revenues of any AEE Subsidiary required to be deposited into the Revenue
Account pursuant to Section 3.1 (a) of the Depositary Agreement, or (iii)
equitable Liens (if any) in existence on the date hereof, in favor of the Owner
Trust, on the assets of AEE2 deemed to be created under the Operative Documents
(as in effect on the date hereof) pursuant to Applicable Law by virtue of AEE2’s
obligations under the Depositary Agreement and other covenants applicable to
AEE2 contained in the Operative Documents (as in effect on the date hereof);
provided, however, that for purposes of this Section 6.05(a),
clause (e) of the definition “Permitted Liens” contained in Appendix A shall
read as follows “(e) Liens created by any Loan Document” and clause (i) of the
definition “Permitted Liens” contained in Appendix A shall be omitted.


 


(b)          The Borrower shall not directly or indirectly permit to
exist, at any time, any Lien upon any of the Borrower’s properties or assets of
any character (other than the Collateral), whether now owned or hereafter
acquired, or upon any income or profits therefrom, except that this Section 6.05(b)
shall not apply to Permitted Liens; provided,
however, that for purposes of this Section 6.05(b), clause (e)
of the definition “Permitted Liens” contained in Appendix A shall read as
follows “(e) Liens created by any Operative Document or any Other Operative
Document, in each case as in effect on the Agreement Date” and clause (f) of
the definition “Permitted Liens” contained in Appendix A shall be omitted.


 


Section 6.06.         Merger or
Consolidation. The Borrower shall not, and shall not permit AES NY or any
AEE Subsidiary to, (a) liquidate, wind up or dissolve or (b) consolidate or
merge with or into any other Person, unless, in the case of this clause (b),
the Borrower shall have provided at least ten Business Days’ prior written
notice to the Agent, the Banks and the Issuing Banks and, immediately after
giving effect to such transaction, (i) no Default shall have occurred and be
continuing, (ii) the entity resulting from such consolidation or surviving in
such merger shall be (A) in the case of the Borrower, the Borrower, (B) in the
case of AES NY, AES NY, and (C) in the case of any AEE Subsidiary, the Borrower
or any such AEE Subsidiary, and (iii) the Borrower shall have delivered to the
Agent a certificate of a Responsible Officer of the Borrower certifying that
the provisions of this Section 6.06(b) have been complied with together
with such other documentation as the Agent may reasonably require to determine
compliance with this Section 6.06.


 


Section 6.07.         Disposition of Assets.
The Borrower shall not, and shall not permit AEE2 or any other AEE Subsidiary
to, sell, lease, license, transfer or otherwise dispose of any asset or any
interest therein, or to purchase, lease or acquire property or other assets, to
from any Person or Persons in one or a series of transactions, except that the
foregoing shall not apply to any of the following: (a) any such transaction in
the ordinary course of business of the Borrower or any AEE Subsidiary, (b) any
transfer or other disposition of emission allowances or the Additional Land to
a third party purchaser, (c) any Permitted Affiliate Transaction that is
permitted under


 


50





















 


Section 6.10, and (d) solely with the prior
written consent of the Agent, the Issuing Banks and the Banks, the transfer or
other disposition of the Related Facility (at any time when it is owned by the
Borrower or any Affiliate thereof, unless acquired by the Borrower or such
Affiliate as a result of an “Event of Loss” as defined in the Related Lease) or
either of the Additional Facilities.


 


Section 6.08.         Incurrence of
Indebtedness. The Borrower shall not, and shall not permit any AEE
Subsidiary to, create, incur, assume or suffer to exist any Indebtedness, other
than (a) Indebtedness of any AEE2 Entity referred to in clause (a) of the
definition of “Permitted Indebtedness” contained in Appendix A, (b)
Indebtedness of the Borrower referred to in clauses (a) and (f) of the
definition of “Permitted Indebtedness” contained in Appendix A, or (c) unsecured
Permitted Subordinated Indebtedness.


 


Section 6.09.         Limitations on
Investments. The Borrower shall not permit any AEE2 Entity to make or
authorize any loans, advances, purchases of securities or other investments
other than Permitted Investments as set forth in Section 3.13 of the
Depositary Agreement.


 


Section 6.10.        Transactions
with Affiliates. The Borrower shall not, and shall not permit any AEE
Subsidiary to, enter into any transactions with an Affiliate, other than
Permitted Affiliate Transactions, without the prior written consent of the
Agent and the Required Banks; provided,
however, that (i) any Permitted Affiliate Transaction described in
clause (a)(iii) of the definition thereof contained in Appendix A shall require
the prior written consent of the Agent and the Banks (in the case of the sale
of any part of the Assigned Assets constituting all or any part of the
Additional Facilities) or the prior written consent of the Agent and the
Required Banks (in the case of any sale of any part of the Assigned Assets that
does not constitute any part of the Additional Facilities) and (ii) any
Permitted Affiliate Transaction described in clause (b)(II)(2)(y) of the
definition thereof contained in Appendix A shall require the prior written
consent of the Agent and the Required Banks.


 


Section 6.11.         Subsidiaries. The
Borrower shall not permit any AEE2 Entity to create, acquire or permit to exist
any Subsidiary of any AEE2 Entity, other than AES Westover, L.L.C. and AES
Greenidge, L.L.C.


 


Section 6.12.         Additional Facilities.
The Borrower shall cause each Additional Facility to be maintained and operated
to the same maintenance and operating standards as the Borrower is required to
maintain and operate the Kintigh Station and Millikin Station under each Lease
as in effect as of the date hereof.


 


Section 6.13.        Payment of Operating
and Maintenance Costs. (a) Subject to the terms of the Depositary
Agreement, the Borrower shall not apply or cause the transfer of monies in the
Revenue Account to any Account with a lower order of priority than the Working
Capital Account (i) so long as any Loan or Unreimbursed Drawing is outstanding
hereunder, or (ii) during any Rent Payment Period, in each case under this
clause (ii) until either (A) the aggregate amount transferred to the Operating
Account with respect to such Rent Payment Period (including sums properly
withdrawn therefrom during such Rent Payment Period to pay Operating and
Maintenance Costs) is equal to the sum of 125% of the amount set forth in the
Annual Operating Budget for such Rent Payment Period plus fuel costs payable for such Rent


 


51





















 


Payment Period or (B) all Operating and Maintenance Costs for such Rent
Payment Period have been paid.


 


(b)          The Borrower shall not, and shall not permit any Subsidiary
to, commingle monies transferred to it from the Operating Account with any
other monies. The Borrower shall, and shall cause each Subsidiary to, hold all
monies transferred to it from the Operating Account in a separate deposit
account in which only monies transferred from the Operating Account shall be
deposited. The Borrower shall not and shall not permit any Person to use monies
transferred to it from the Operating Account for any purpose other than to pay
Operating and Maintenance Costs.


 


Section 6.14.         Annual Operating
Budget. The Borrower shall cause each of the Facility, the Related Facility
and the Additional Facilities to be operated and maintained in accordance with
the Annual Operating Budget and shall not permit the aggregate expenditures in
any year for Operating and Maintenance Costs to exceed 125% of the amount set
forth in the Annual Operating Budget. Copies of the Annual Operating Budget for
each calendar year shall be furnished by the Borrower to the Independent
Engineer at least 30 days before final adoption thereof. Any amendment,
modification or reallocation of the Annual Operating Budget by the Borrower
that would cause a change of more than twenty five percent (25%) (positive or
negative) in the amounts set forth in the Annual Operating Budget shall be
accompanied by confirmation of the Independent Engineer that such amendment,
modification or reallocation is based on reasonable assumptions. For purposes
of this Section 6.14, fuel costs shall not be included in the calculation
of the percentage change (positive or negative) in the amounts specified in the
Annual Operating Budget.


 


Section 6.15.         AEE Revenues. The
Borrower shall, and shall cause each AEE Subsidiary to, cause all AEE Revenues
to be deposited directly into the Revenue Account (except, to the extent
provided in the Depositary Agreement, for any revenues received by any AEE
Entity under any Operation and Maintenance Agreement).


 


Section 6.16.         No
Abandonment. Subject to the prior written consent of the Agent, the
Borrower shall not, and shall not permit any AEE Entity to, abandon or agree to
abandon the operation or maintenance of the Facility or the Related Facility or
otherwise cease to diligently pursue the operation and maintenance of the
Facility and the Related Facility in accordance with Prudent Industry Practice
or voluntarily reduce the operations of the Facility or the Related Facility in
any material respect (except to the extent required by customary maintenance
procedures). Subject to the prior written consent of the Agent, the Borrower
shall not, and shall not permit any AEE Entity to, abandon or agree to abandon
the operation or maintenance of either of the Additional Facilities or
otherwise cease to diligently pursue the operation and maintenance of such
Additional Facilities in accordance with Prudent Industry Practice (except to
the extent required by customary maintenance procedures), during the expected
useful life of such Additional Facility.


 


Section 6.17.         Assignment.
The Borrower may not Transfer any Lease or any other Operative Document or any
interests therein without the prior written consent of the Agent and the
Required Banks (which consent shall not be unreasonably withheld).


 


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Section 6.18.         Compliance
with ERISA. The Borrower shall not (a) permit to exist any “accumulated
funding deficiency” (as defined in Section 412(a) of the Code) with
respect to any Plan (unless such deficiency exists with respect to a Multiple
Employer Plan or Multiemployer Plan and the Borrower has no control over the
reduction or elimination of such deficiency), (b) terminate, or permit any of
its ERISA Affiliates to terminate, any Plan of the Borrower or such ERISA
Affiliate so as to result in any liability of the Borrower to the PBGC that, in
the reasonable opinion of the Required Banks, could reasonably be expected to
result in a Materially Adverse Effect on (i) AES NY, (ii) the Borrower and the
AEE Subsidiaries taken as a whole, (iii) any Loan Document, or (iv) the
Collateral, or (c) permit to exist any occurrence of any Reportable Event, or
any other event or condition with respect to any Plan, that could reasonably be
expected to (i) present a material risk of such a termination by the PBGC of
any Plan of the Borrower or such ERISA Affiliate and (ii) result in any
liability to the Borrower that, in the reasonable opinion of the Required
Banks, could reasonably be expected to result in a Materially Adverse Effect on
(A) AES NY, (B) the Borrower and the AEE Subsidiaries taken as a whole, (C) any
Loan Document, or (D) the Collateral.


 


Section 6.19.         Restricted Payments.
Notwithstanding any provision to the contrary set forth in the Depositary
Agreement, the Borrower will not make any Distribution (and Borrower will not
permit any AEE Subsidiary to make any Distribution other than to Borrower or
any other AEE Subsidiary) unless such Distribution is made on or within ten
Business Days after a Rent Payment Date (commencing with the Rent Payment Date
occurring January 2, 2005) and at the time of such Distribution, the
Coverage Ratios for each of the two semi-annual Rent Payment Periods
immediately preceding such Rent Payment Date (based on actual operating
history) shall be equal to or greater than the Required Coverage Ratio and the
Pro Forma Coverage Ratios for each of the four semi-annual periods immediately
succeeding such Rent Payment Date (based on Pro Forma) shall be equal to or
greater than the Required Coverage Ratio.


 


Section 6.20.         PPA TermThe Borrower
agrees that at the time it seeks to obtain the Owner Participant’s consent
pursuant to the last sentence of the definition of “PPA Term”, the Borrower
shall be required, concurrently therewith, to obtain the prior written consent
of the Required Banks.


 


Section 6.21.         Commitment Increase
DateThe Borrower shall cause the Commitment Increase Date to occur as soon
as practicable after the receipt of the NYPSC Order.


 


ARTICLE 7



INFORMATION


 


Section 7.01.         Information to Be
Furnished. From the Agreement Date and until the Repayment Date, the
Borrower shall furnish to the Agent (with sufficient copies for each Bank):


 


(a)           Quarterly Financial Statements. As soon as reasonably practicable after the
end of each fiscal quarter but in no event later than 60 days after the end of
such quarter (i) an unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income for such quarter and for the portion of the
Borrower’s fiscal year ended at the end of such quarter, and the related


 


53





















 


consolidated statements of cash flows for such quarter and for the
portion of the fiscal year ended at the end of such quarter, in each case
setting forth comparative figures for previous dates and periods, to the extent
available, and prepared in accordance with GAAP (subject to normal year-end
adjustments), and (ii) an Officer’s Certificate, in the form of Schedule 7.01(a),
of the Borrower stating that (A) the signer has made, or caused to be made
under its supervision, a review of this Agreement, the other Loan Documents and
the Operative Documents; and (B) such review has not disclosed the existence
during such fiscal quarter (and the signer does not have knowledge of the
existence as of the date of such certificate) of any condition or event
constituting a Lease Material Default or Lease Event of Default or an Event of
Loss or a Default or, if any such condition or event existed or exists,
specifying the nature thereof, the period of existence thereof and what action
the Borrower has taken or proposes to take with respect thereto. Such Officer’s
Certificate shall also contain reasonably detailed calculations demonstrating
compliance, as of the end of such fiscal quarter, with the financial covenants
contained in Section 6.01.


 


(b)                               Year-End Financial Statements: Accountants’
Certificate. As soon as reasonably practicable after the
end of each fiscal year but in no event later than 120 days after the end of such
year, (i) a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income, retained earnings and cash flows for such fiscal year
(together with footnotes thereto and management discussion and analysis),
setting forth in each case in comparative form the figures for the previous
fiscal year, to the extent available, all prepared in accordance with GAAP and
reported on and audited by an independent public accountant of nationally
recognized standing, together with any other information required to be filed
with the Securities and Exchange Commission in respect of the Pass Through
Certificates under applicable securities laws, (ii) an Officer’s Certificate of
the Borrower, in the form of Schedule 7.01 (a), stating, among other things, that (A)
the signer has made, or caused to be made under its supervision, a review of
this Agreement, the other Loan Documents and the Operative Documents; and (B)
such review has not disclosed the existence during such fiscal year (and the
signer does not have knowledge of the existence as of the date of such
certificate) of any condition or event constituting a Lease Material Default or
Lease Event of Default or an Event of Loss or a Default or, if any such
condition or event existed or exists, specifying the nature thereof, the period
of existence thereof and what action the Borrower has taken or proposes to take
with respect thereto and (iii) a copy of FERC Form No. 1 to the extent filed
with FERC pursuant to 18 C.F.R. Section 141.1. Such Officer’s Certificate shall
also contain reasonably detailed calculations demonstrating compliance, as of
the end of such fiscal year, with the financial covenants contained in Section 6.01.


 


(c)                                Operating Budgets. At least 30 days prior to the commencement
of any fiscal year, the Annual Operating Budget for such fiscal year
demonstrating that the Borrower will meet the Required Coverage Ratios,
together with confirmation by the Independent Engineer that such budget is
based on reasonable assumptions and is prepared in accordance with the Operative
Documents. Such budget shall be furnished to the Agent and each Bank pursuant
to Section 11.21. Such Annual Operating Budget shall include Pro Forma
projections and projections indicating updated projected Coverage Ratios
(taking the Independent Forecast into account) and shall indicate projected
changes, if any, in the Rent Reserve Account and the Additional Liquidity
Account.


 


54





















 


(d)                                 Monthly
Operations Report.  As soon as
practicable following the end of each month, a Monthly Operations Report for
each of the Facility, the Related Facility and the Additional Facilities.  The Borrower agrees to amend the Monthly
Operations Report to include such additional operation and maintenance
information as the Agent may reasonably request.  The Borrower and the Agent will work together
and establish a mutually acceptable format for such report.  The Monthly Operations Reports shall be deemed
confidential for purposes of Section 11.21 of this Agreement.


 


(e)                                  Notices
under each of the Participation Agreements.  At the time such Information is delivered to
any Owner Participant, Owner Trust, Indenture Trustee or Pass Through Trustee,
the Information provided to such Owner Participant, Owner Trust, Indenture Trustee
or Pass Through Trustee pursuant to Article 5 or 6 of any Participation
Agreement to the extent not otherwise delivered hereunder, provided that each opinion or certificate
so delivered shall also be addressed to the Agent.


 


(f)                                    Reports,
Filings and Notices.  (i) Promptly
upon receipt thereof, copies of all reports, if any, submitted to the Borrower
or any Subsidiary, or the Board of Directors of the Borrower or any Subsidiary,
by its independent certified public accountants, including any management
letter; (ii) as soon as practicable, copies of all such financial statements
and reports as the Borrower or any Subsidiary shall send to its stockholders
(or other equity owners) and of all registration statements and all regular or
periodic reports that the Borrower or any Subsidiary shall file, or may be
required to file, with the Securities and Exchange Commission or any successor
commission; (iii) promptly after its completion, the annual actuarial valuation
for each Plan of AES NY, the Borrower and each Subsidiary of the Borrower; and
(iv) promptly upon receipt thereof, copies of all notices or other
communications received by the Borrower or any AEE Entity from the Depositary
Agent or any Owner Participant, Owner Trust, Indenture Trustee or Pass Through
Trustee pursuant to or in connection with any Operative Document.


 


(g)                                 Requested
Information.  From time to time and
promptly upon request of the Agent or any Bank, such Information regarding the
Loan Documents or the Operative Documents to which the Borrower or any
Subsidiary is a party, the Loans, the Letters of Credit or the business,
assets, Liabilities, financial condition, results of operations or business
prospects of the Borrower and the Subsidiaries as the Agent or such Bank may
reasonably request, in each case in form and substance and certified in a
manner satisfactory to the Agent or such requesting Bank (as the case may be).


 


(h)                                 Notice
of Defaults, Material Adverse Changes and Other Matters.  Prompt notice of:


 


(i)                                     any
Default,


 


(ii)                                  the
threatening or commencement of, or the occurrence or nonoccurrence of any
change or event relating to, any action, suit or proceeding that would cause
the Representation and Warranty contained in Section 5.06 to be incorrect
if made at such time,


 


55





















 


(iii)                               the occurrence or
nonoccurrence of any change or event that would cause the Representation and
Warranty contained in Section 5.23 to be incorrect if made at such time,
and


 


(iv)                              any
change in the rating given by any nationally recognized rating agency to any
securities issued by the Borrower or any of its Subsidiaries.


 


Section 7.02.  Accuracy of
Financial Statements and Information.  (a)     Historical
Financial Statements.  The Borrower
hereby represents and warrants that (i) Schedule 7.02(a) sets forth
a complete and correct list of the financial statements submitted by the
Borrower to the Banks in order to induce them to execute and deliver this
Agreement, (ii) such financial statements present fairly in all material
respects, in accordance with GAAP, the consolidated financial position of the
Borrower and the Consolidated Subsidiaries as at their respective dates and the
consolidated results of operations, retained earnings and, as applicable,
changes in financial position or cash flows of the Borrower and such
Subsidiaries for the respective periods to which such statements relate, and
(iii) except as disclosed or reflected in such financial statements or
otherwise disclosed in Schedule 5.06, Schedule 5.13, Schedule 5.15
or Schedule 5.24, neither the Borrower nor any Subsidiary has or
had any Liability, contingent or otherwise, or any unrealized or anticipated
loss, that, singly or in the aggregate, has had or could reasonably be expected
to have a Materially Adverse Effect on the Borrower and the Consolidated
Subsidiaries taken as a whole.


 


(b)                                 Future
Financial Statements.  The financial
statements delivered pursuant to Section 7.01(a) or (b) shall present
fairly in all material respects, in accordance with GAAP (except for changes
therein or departures therefrom that are described in the certificate or report
accompanying such statements and that have been approved in writing by the
Borrower’s then current independent certified public accountants), the
consolidated financial position of the Borrower and the Consolidated
Subsidiaries as at their respective dates and the consolidated results of
operations, retained earnings and cash flows of the Borrower and such
Subsidiaries for the respective periods to which such statements relate, and
the furnishing of the same to the Agent and the Banks shall constitute a
representation and warranty by the Borrower made on the date the same are
furnished to the Agent and the Banks to that effect and to the further effect that,
except as disclosed or reflected in such financial statements, as at the
respective dates thereof or otherwise disclosed to each Bank pursuant to Section 7.01(f)
or Section 7.01(h), neither the Borrower nor any Subsidiary has or had any
Liability, contingent or otherwise, or any unrealized or anticipated loss,
that, singly or in the aggregate, has had or could reasonably be expected to
have a Materially Adverse Effect on the Borrower and the Consolidated
Subsidiaries taken as a whole.


 


(c)                                  Historical
Information.  The Borrower hereby
represents and warrants that all Information furnished to the Agent or the
Banks by or on behalf of the Borrower or any Subsidiary prior to the Agreement
Date in connection with or pursuant to the Loan Documents and the relationships
established thereunder, at the time the same was so furnished, but in the case
of Information dated as of a prior date, as of such date, (i) in the case of
any Information prepared in the ordinary course of business, was complete and
correct in all material respects and in the light of the purpose prepared, and,
in the case of any Information the preparation of which was requested by the
Agent or any Bank, was complete and correct in all material respects to the


 


56





















 


extent necessary to give
the Agent or such Bank (as the case may be) true and accurate knowledge of the
subject matter thereof, (ii) did not contain any untrue statement of a material
fact, and (iii) did not omit to state a material fact necessary in order to
make the statements contained therein not misleading in the light of the
circumstances under which they were made; provided,
however, that any representation and warranty contained in this subsection (c)
in respect of any Information that relates to any Person other than the
Borrower or any AEE Entity is to the best knowledge of the Borrower.


 


(d)                                 Future
Information.  All Information
furnished to the Agent or the Banks by or on behalf of the Borrower or any
Subsidiary on or after the Agreement Date in connection with or pursuant to the
Loan Documents or in connection with or pursuant to any amendment or
modification of, or waiver of rights under, the Loan Documents, shall, at the
time the same is so furnished, but in the case of Information dated as of a
prior date, as of such date, (i) in the case of any Information prepared in the
ordinary course of business, be complete and correct in all material respects
and in the light of the purpose prepared, and, in the case of any Information
required by the terms of the Loan Documents or the preparation of which was
requested by the Agent or any Bank, be complete and correct to the extent
necessary to give the Agent or such Bank (as the case may be) true and accurate
knowledge of the subject matter thereof in all material respects, (ii) not
contain any untrue statement of a material fact, and (iii) not omit to state a
material fact necessary in order to make the statements contained therein not
misleading in the light of the circumstances under which they were made, and
the furnishing of the same to the Agent or any Bank shall constitute a
representation and warranty by the Borrower made on the date the same are so
furnished to the effect specified in clauses (i), (ii) and (iii) above; provided, however, that any representation
and warranty contained in this subsection (d) in respect of any
Information that relates to any Person other than the Borrower or any AEE
Entity is to the best knowledge of the Borrower.


 


Section 7.03.  Additional
Covenants Relating to Disclosure.  From the Agreement Date and until the
Repayment Date, the Borrower shall and shall cause each Subsidiary to:


 


(a)                                  Accounting
Methods and Financial Records.  Maintain a system of accounting, and keep such
books, records and accounts (which shall be true and complete), as may be required
or necessary to permit (i) the preparation of financial statements required to
be delivered pursuant to Section 7.01(a) and (b) and (ii) the
determination of the compliance of the Borrower and its Subsidiaries with the
terms of the Loan Documents.


 


(b)                                 Fiscal
Year.  Maintain the same opening and
closing dates for each fiscal year as for the fiscal year reflected in the
financial statements set forth in Schedule 7.02(a) or, if the opening
and closing dates for the fiscal year reflected in such financial statements
were determined pursuant to a formula, determine the opening and closing dates
for each fiscal year pursuant to the same formula.


 


(c)                                  Visits,
Inspections and Discussions.  Permit
or, in the case of premises, property, books, records or Persons not within its
immediate control, promptly upon reasonable notice take such actions as are
necessary or desirable in order to permit, representatives (whether or not officers
or employees) of the Agent or any Bank, from time to time during operating or
business hours, as often as may be reasonably requested, to (i) visit any of
its premises or property or any


 


57





















 


premises or property of
others on which any of its property or books and records (or books and records
of others relating to it) may be located, (ii) inspect, and verify the amount,
character and condition of, any of its property, (iii) review and make extracts
from its books and records and books and records of others relating to it,
including management letters prepared by its independent certified public
accountants, and (iv) discuss with any Person (including its principal officers,
independent certified public accountants, suppliers, customers, debtors and
other creditors) its business, assets, Liabilities, financial condition,
results of operation and business prospects.


 


Section 7.04.  Authorization of
Third Parties to Deliver Information and Discuss Affairs.  The Borrower hereby authorizes and directs
each Person whose preparation or delivery to the Agent or the Banks of any
opinion, report or other Information is a condition or covenant under the Loan
Documents (including under Article 4 or this Article 7) to so prepare
or deliver such Information for the benefit of the Agent and the Banks.  The Borrower further authorizes and directs
all Persons (a) to furnish to the Agent and the Banks any Information regarding
the matters referred to in Section 7.01(g) that the Agent or any Bank may
request, (b) to permit representatives of the Agent or any Bank to make the
visits, inspections, reviews and extracts of premises, property, books and
records within their possession and control contemplated by Section 7.03(c)
and (c) to discuss with representatives of the Agent or any Bank the matters
referred to in Section 7.03(c). The Borrower agrees to promptly execute
and deliver from time to time such further authorizations to effect the purposes
of this Section 7.04 as the Agent or any Bank may reasonably request.


 


ARTICLE 8


 


DEFAULT


 


Section 8.01.  Events of Default.
 Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of the Borrower or
any Subsidiary, or be effected by operation of law or pursuant to any judgment
or order of any court or any order, rule or regulation of any governmental or
nongovernmental body.


 


(a)                                  (i)
Any payment of principal of any of the Loans, any Unreimbursed Drawings or the
Notes shall not be made when and as due (whether at maturity, by reason of
notice of prepayment or acceleration or otherwise) and in accordance with the
terms of this Agreement and the Notes; or (ii) any payment of any interest,
fees or other amount under this Agreement or any other Loan Document (other
than a payment which is elsewhere in this Section specifically dealt with)
shall not be made within five Business Days after the same shall be due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) and in accordance with the terms of this Agreement and the other
Loan Documents.


 


(b)                                 Any
Loan Document Representation and Warranty shall at any time prove to have been
incorrect or misleading in any material respect when made and, in the case of a
representation or warranty pursuant to or under Section 5.03, Section 5.04,
Section 5.05, Section 5.06(a), Section 5.07, Section 5.08, Section 5.09,
Section 5.10,


 


58





















 


Section 5.11,
Section 5.12, Section 5.13(b), Section 5.13(c), Section 5.14,
Section 5.15, Section 5.17, Section 5.18, Section 5.19, Section 5.20
or Section 5.21, if capable of being remedied, such representation or
warranty shall continue to be incorrect or misleading in any material respect
for a period of 30 days after notice thereof shall have been given to the
Borrower by the Agent or any other Transaction Party, provided, that if a good faith effort to remedy is
initiated within such 30 day period and pursued diligently, no Event of Default
with respect thereto shall be deemed to have occurred unless (i) the event
resulting in such representation or warranty being incorrect or misleading in any
material respect could or does result in a Materially Adverse Effect on (A) AES
NY, (B) the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan
Document or (D) the Collateral or (ii) such representation or warranty remains
incorrect or misleading in any material respect for 180 days after such notice
is given.


 


(c)                                  (i)
The Borrower shall default in the performance or observance of:


 


(A)                              any
term, covenant, condition or agreement contained in Section 6.01, Section 6.02(a)
(insofar as such Section requires the preservation of the corporate
existence of the Borrower),

Section 6.02(f), Section 6.03 through Section 6.08, Section 6.10
through Section 6.20 or Section 7.01(h)(i); or


 


(B)                                any
term, covenant, condition or agreement contained in this Agreement or any other
Loan Document (other than a term, covenant, condition or agreement a default in
the performance or observance of which is elsewhere in this Section specifically
dealt with) and, if capable of being remedied, such default shall continue unremedied
for a period of 30 days after notice shall have been given by the Agent or any
other Transaction Party to the Borrower requiring that such default be cured, provided, that if such default is capable
of being remedied and a good faith effort to remedy such default is initiated
within such 30 day period and pursued diligently, no Event of Default with
respect thereto shall be deemed to have occurred until (1) such default has had
a Materially Adverse Effect on (w) AES NY, (x) the Borrower and the AEE Subsidiaries
taken as a whole, (y) any Loan Document or (z) the Collateral or (2) such
default has remained uncured for a period of 180 days after the notice set
forth above shall have been given to the Borrower by the Agent or any other
Transaction Party;


 


(ii)                                  The
Borrower shall default in the performance or observance of:


 


(A)                              any
term, covenant, condition or agreement contained in Article 1, Section 3.01
(a), (b), (c), (d) or (g)(i), or Section 3.02 of the Pledge Agreement; or


 


(B)                                any
term, covenant, condition or agreement contained in the Pledge Agreement (other
than any term, covenant, condition or agreement a default in the performance or
observance of which is


 


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elsewhere in this Section specifically
dealt with) and, if capable of being remedied, such default shall continue
unremedied for a period of 30 days after notice shall have been given by the
Agent to the Borrower requiring that such default be cured.


 


(d)                                 Any
AEE Entity or any of its Affiliates asserts, or any AEE Entity or any of its
Affiliates or any other Transaction Party institutes any proceedings seeking to
establish, that (i) any provision of the Loan Documents is invalid, not binding
or unenforceable or (ii) the Security Interest is not a valid
and perfected first priority security interest in the Collateral subject only
to Permitted Liens described in Section 6.05(a); or


 


(e)                                  The
Borrower shall at any time beneficially directly own less than 100% of AEE2’s
issued and outstanding Capital Securities.


 


(f)                                    The
limited liability company agreement or other organizational document of any
AEE2 Entity shall be amended, changed, modified or supplemented in any material
respect.


 


(g)                                 The
occurrence of a Lease Event of Default under any Lease as in effect as of the
date hereof. (See Schedule 8.01
(g), for information purposes.)


 


(h)                                 Any
material provision of any of the Loan Documents, after delivery thereof
pursuant to Article 4, shall for any reason, except to the extent
permitted by the express terms hereof or thereof, cease to be valid and binding
on or enforceable against the Borrower.


 


(i)                                     (i)
Any Person shall engage in any “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan that is not otherwise exempt under any statute, regulation
or administrative action, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in
favor of the PBGC or a Plan shall arise on the assets of the Borrower or any
ERISA Affiliate, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Required Banks, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA or notice is given of intent to terminate any
Single Employer Plan, (v) the Borrower or any ERISA Affiliate shall, or in the
reasonable opinion of the Required Banks is likely to, incur any liability in
connection with (A) a withdrawal from a Multiemployer Plan or Multiple Employer
Plan or (B) the Insolvency or Reorganization of a Multiemployer Plan or (vi)
any other event or condition shall occur or exist with respect to a Plan; provided that, in each case in clauses (i)
through (vi) above, such event or condition, together with all other such
events or conditions, if any, has had or could reasonably be expected to have a
Materially Adverse Effect on


 


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(w) AES NY, (x) the
Borrower and the AEE Subsidiaries taken as a whole, (y) any Loan Document or
(z) the Collateral.


 


(j)                                     The
Pledge Agreement, after delivery thereof pursuant to Article 4, shall for
any reason, except to the extent permitted by the terms hereof or thereof,
cease to create a valid and perfected first priority Lien (subject only to
Permitted Liens described in Section 6.05(a)) in any portion of the
Collateral.


 


(k)                                  At
any time any Issuing Bank shall have been served with or otherwise subjected to
a court order, injunction, or other process or decree issued or granted at the
instance of the Borrower restraining or seeking to restrain such Issuing Bank
from paying any amount under any Letter of Credit issued by it and either (i)
there has been a drawing under such Letter of Credit which such Issuing Bank
would otherwise be obligated to pay or (ii) the stated expiration date or any
reduction of the stated amount of such Letter of Credit has occurred but the
right of the beneficiary to draw thereunder has been extended in connection
with the pendency of the related court action or proceeding.


 


Section 8.02.  Remedies upon
Event of Default.  During the
continuance of any Event of Default (other than one specified in Section 16(g)
or (h) of any Lease) and in every such event, the Agent, upon notice to the
Borrower, may do any or all of the following: (a) declare, in whole or, from
time to time, in part, the principal of and interest on the Loans, the
Unreimbursed Drawings and the Notes and all other amounts owing under the Loan
Documents to be, and the Loans, the Unreimbursed Drawings and the Notes and all
such other amounts shall thereupon and to that extent become, due and payable,
(b) terminate, in whole or, from time to time, in part, the Commitments, (c)
require the Borrower to pay immediately to the Agent an amount equal to the
aggregate LC Outstandings of all Letters of Credit then outstanding, to be held
by the Agent (for its benefit and the benefit of the Issuing Banks and the
Banks) as cash collateral securing such LC Outstandings, and/or (d) exercise in
respect of the Collateral, in addition to the other rights and remedies
provided for herein and in the Pledge Agreement or otherwise available to the
Agent or the Banks, all the rights and remedies of a secured party on default
under the Uniform Commercial Code in effect in the State of New York and in
effect in any other jurisdiction in which any Collateral is located at that
time.  Upon the occurrence of an Event of
Default specified in Section 16(g) or (h) of any Lease, automatically and
without any notice to the
Borrower, (i) the principal of and interest on the Loans, the Unreimbursed
Drawings and the Notes and all other amounts owing under the Loan Documents
shall be due and payable, (ii) the Commitments shall terminate and (iii) the
Borrower shall pay immediately to the Agent an amount equal to the aggregate LC
Outstandings of all Letters of Credit then outstanding, to be held by the Agent
(for its benefit and the benefit of the Issuing Banks and the Banks) as cash
collateral securing such LC Outstandings.  Presentment, demand, protest or notice of any
kind (other than the notice provided for in the first sentence of this Section 8.02)
are hereby expressly waived.


 


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ARTICLE 9


 


ADDITIONAL CREDIT
FACILITY PROVISIONS


 


Section 9.01.  Mandatory
Suspension and Conversion of Eurodollar Rate Loans and Eurodollar Rate Drawings.
 A Bank’s obligations to make, continue
or convert into Eurodollar Rate Loans or Eurodollar Rate Drawings shall be
suspended, all such Bank’s outstanding Eurodollar Rate Loans and Eurodollar
Rate Drawings shall be converted on the last day of their applicable Interest
Periods (or, if earlier, in the case of clause (c) below, on the last day such
Bank may lawfully continue to maintain Eurodollar Rate Loans and Eurodollar
Rate Drawings or, in the case of clause (d) below, on the day determined by
such Bank to be the last Business Day before the effective date of the
applicable restriction) into, and all pending requests for the making or
continuation of or conversion into Eurodollar Rate Loans or Eurodollar Rate
Drawings by such Bank shall be deemed requests for, Base Rate Loans or Base
Rate Drawings (as applicable), if:


 


(a)                                  on
or prior to the determination of an interest rate for a Eurodollar Rate Loan or
Eurodollar Rate Drawing for any Interest Period, the Agent determines that for any
reason appropriate information is not available to it for purposes of
determining the Adjusted Eurodollar Rate for such Interest Period;


 


(b)                                 on
or prior to the first day of any Interest Period for a Eurodollar Rate Loan or
Eurodollar Rate Drawing, such Bank determines that the Adjusted Eurodollar Rate
as determined by the Agent for such Interest Period would not accurately
reflect the cost to such Bank of making, continuing or converting into a
Eurodollar Rate Loan or Eurodollar Rate Drawing (as the case may be) for such
Interest Period;


 


(c)                                  at
any time such Bank determines that any Regulatory Change Enacted after the
Agreement Date makes it unlawful or impracticable for such Bank or its applicable
Lending Office to make, continue or convert into any Eurodollar Rate Loan or Eurodollar
Rate Drawing, or to comply with its obligations hereunder in respect thereof; or


 


(d)                                 such
Bank determines that, by reason of any Regulatory Change Enacted after the
Agreement Date, such Bank or its applicable Lending Office is restricted, directly
or indirectly, in the amount that it may hold of (i) a category of liabilities
that includes deposits by reference to which, or on the basis of which, the
interest rate applicable to Eurodollar Rate Loans or Eurodollar Rate Drawings
is directly or indirectly determined or (ii) the category of assets that
includes Eurodollar Rate Loans or Eurodollar Rate Drawings.


 


If, as a result of
this Section 9.01, any Loan or Unreimbursed Drawing of any Bank that would
otherwise be made or maintained as or converted into a Eurodollar Rate Loan or
Eurodollar Rate Drawing (as applicable) for any Interest Period is instead made
or maintained as or converted into a Base Rate Loan or Base Rate Drawing (as
applicable), then, unless the corresponding Loan or Unreimbursed Drawing (as
applicable) of each of the other Banks is also to be made or maintained as or
converted into a Base Rate Loan or Base Rate Drawing (as


 


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applicable), such Loan or
Unreimbursed Drawing (as applicable) shall be treated as being a Eurodollar
Rate Loan or Eurodollar Rate Drawing (as applicable) for such Interest Period
for all purposes of this Agreement (including the timing, application and
proration among the Banks of interest payments, conversions and prepayments)
except for the calculation of the interest rate borne by such Loan or Unreimbursed
Drawing (as applicable). The Agent shall promptly notify the Borrower and each
Bank of the existence or occurrence of any condition or circumstance specified
in clause (a) above, and each Bank shall promptly notify the Borrower and the
Agent of the existence or occurrence of any condition or circumstance specified
in clause (b), (c) or (d) above applicable to such Bank’s Loans and
Unreimbursed Drawings, but the failure by the Agent or such Bank to give any
such notice shall not affect such Bank’s rights hereunder.


 


Section 9.02.  Regulatory
Changes.  If in the determination of
any Bank or Issuing Bank (a) any Regulatory Change Enacted after the Agreement
Date shall directly or indirectly (i) reduce the amount of any sum received or
receivable by such Bank with respect to any Loan or Unreimbursed Drawing or the
return to be earned by such Bank on any Loan or Unreimbursed Drawing, (ii)
impose a cost on such Bank or any Affiliate of such Bank that is attributable
to (A) the making, funding or maintaining of, or such Bank’s commitment to
make, any Loan or Unreimbursed Drawing, or (B) participating in the issuance,
maintenance or funding of any Letter of Credit, (iii) increase the cost to such
Issuing Bank of issuing or maintaining any Letter of Credit, (iv) require such
Bank or any Affiliate of such Bank to make any payment on or calculated by
reference to the gross amount of any amount received by such Bank under any
Loan Document, (v) reduce, or have the effect of reducing, the rate of return
on any capital of such Bank or any Affiliate of such Bank that such Bank or
such Affiliate is required to maintain on account of any Loan or Unreimbursed
Drawing or such Bank’s commitment to make any Loan or to participate in the
issuance, maintenance or funding of any Letter of Credit, or (vi) reduce, or
have the effect of reducing, the rate of return on any capital of such Issuing
Bank or any Affiliate of such Issuing Bank that such Issuing Bank or such
Affiliate is required to maintain on account of any Letter of Credit or such
Issuing Bank’s commitment to issue any Letter of Credit, and (b) such
reduction, increased cost or payment shall not be fully compensated for by an
adjustment in the applicable rates of interest payable under the Loan
Documents, then the Borrower shall pay to such Bank or Issuing Bank (as the
case may be) such additional amounts as such Bank or Issuing Bank (as the case
may be) determines will, together with any adjustment in the applicable rates
of interest payable hereunder, fully compensate for such reduction, increased
cost or payment.  Such additional amounts
shall be due and payable, in the case of those applicable to prior periods,
within 15 days after request by such Bank or Issuing Bank (as the case may be)
for such payment and, in the case of those applicable to future periods, on the
dates specified, or determined in accordance with a method specified, by such
Bank or Issuing Bank (as the case may be); provided,
however, that if, pursuant to the Depositary Agreement, the Borrower
is not permitted to pay any such additional amounts to such Issuing Bank on any
such due date, the Borrower shall pay such additional amounts to such Issuing
Bank on the first date thereafter (but in no event later than the
next-scheduled Rent Payment Date) that the Borrower is permitted to pay such
additional amounts, provided, that,
in such case, all such additional amounts shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin from such due
date until paid in full, payable to such Issuing Bank on the date that such
additional amounts are paid.  Each Bank
and Issuing Bank will promptly notify the Borrower of any determination made by
it referred to in clauses (a) and (b) above, but the failure


 


63





















 


to give such notice shall
not affect such Bank’s or Issuing Bank’s (as the case may be) right to
compensation.


 


Section 9.03.  Capital
Requirements.  If, in the
determination of any Bank or Issuing Bank, any Regulatory Change relating to capital
adequacy Enacted after the Agreement Date requires such Bank or Issuing Bank,
or any Affiliate of such Bank or Issuing Bank, to maintain capital on account
of (i) any Loan or Unreimbursed Drawing, (ii) such Bank’s Commitment, (iii)
such Bank’s participation in the issuance, maintenance or funding of any Letter
of Credit, or (iv) such Issuing Bank’s issuance or maintenance of any Letter of
Credit or commitment to issue any Letter of Credit, in a greater amount than
such Bank, Issuing Bank or Affiliate would otherwise have to maintain on
account of such Loan, Unreimbursed Drawing, Commitment, participation or Letter
of Credit, as applicable, then, upon request by such Bank or Issuing Bank (as
the case may be), the Borrower shall from time to time thereafter pay to such
Bank or Issuing Bank (as the case may be) such additional amounts as such Bank
or Issuing Bank (as the case may be) determines will fully compensate for any
reduction in the rate of return on the capital that such Bank, Issuing Bank or Affiliate
is so required to maintain on account of such Loan, Unreimbursed Drawing,
Commitment, participation or Letter of Credit, as applicable.  Such additional amounts shall be due and
payable, in the case of those applicable to prior periods, within 15 days after
request by such Bank or Issuing Bank (as the case may be) for such payment and,
in the case of those relating to future periods, on the dates specified, or
determined in accordance with a method specified, by such Bank or Issuing Bank
(as the case may be); provided, however, that
if, pursuant to the Depositary Agreement, the Borrower is not permitted to pay
any such additional amounts to such Issuing Bank on any such due date, the
Borrower shall pay such additional amounts to such Issuing Bank on the first
date thereafter (but in no event later than the next-scheduled Rent Payment
Date) that the Borrower is permitted to pay such additional amounts, provided, that, in such case, all such
additional amounts shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin from such due date until paid in
full, payable to such Issuing Bank on the date that such additional amounts are
paid.


 


Section 9.04.  Funding Losses.
 The Borrower shall pay to each Bank,
within five Business Days after any request therefor, such amount or amounts as
such Bank determines are necessary to compensate it for any loss, cost or
reasonable expense (but not including loss of anticipated profits) incurred by
it as a result of (a) any payment, prepayment or conversion of a Eurodollar
Rate Loan or Eurodollar Rate Drawing on a date other than the last day of an
Interest Period therefor or (b) a Eurodollar Rate Loan or Eurodollar Rate
Drawing for any reason not being made or converted, or any payment of principal
thereof or interest thereon not being made, on the date therefor determined in
accordance with the applicable provisions of this Agreement.  At the election of such Bank, and without
limiting the generality of the foregoing, but without duplication, such
compensation on account of losses may include an amount equal to the excess of
(i) the interest that would have been received from the Borrower under this
Agreement on any amounts to be reemployed during an Interest Period or its
remaining portion over (ii) the interest component of the return that such Bank
determines it could have obtained had it placed such amount on deposit in the
interbank Dollar market selected by it for a period equal to such Interest
Period or its remaining portion.  If,
pursuant to the Depositary Agreement, the Borrower is not permitted to pay any
such amounts to any Bank on the date that such payment is due and payable
pursuant to the first sentence of this Section 9.04, the Borrower shall
pay such amounts to such


 


64





















 


Bank on the first date
thereafter (but in no event later than the next-scheduled Rent Payment Date)
that the Borrower is permitted to pay such amounts, provided, that, in such case, all such amounts shall bear
interest at a rate per annum equal
to the Base Rate plus the
Applicable Margin from such due date until paid in full, payable to such Bank
on the date that such amounts are paid.


 


Section 9.05.  Certain
Determinations; Survival.  (a) In
making the determinations contemplated by Section 9.01, Section 9.02
and Section 9.03, each Bank and Issuing Bank may make such estimates,
assumptions, allocations and the like that such Bank or Issuing Bank (as the
case may be) in good faith determines to be appropriate, and such Bank’s or
Issuing Bank’s (as the case may be) selection thereof in accordance with this Section 9.05,
and the determinations made by such Bank or Issuing Bank (as the case may be)
on the basis thereof, shall be final, binding and conclusive upon the Borrower,
except, in the case of such determinations, for manifest errors in computation
or transmission.  Each Bank and Issuing
Bank shall furnish to the Borrower upon request a certificate outlining in
reasonable detail the computation of any amounts claimed by it under Section 9.02
and Section 9.03 and the assumptions underlying such computations.  So long as any such request by the Borrower is
made within five Business Days after such Bank or Issuing Bank first requests
payment of such amounts pursuant to Section 9.02 or Section 9.03 (as
the case may be), the Borrower shall not be required to pay such amounts until
it has received such certificate.


 


(b)                                 The
Borrower’s obligations under this Article 9 shall survive the repayment of
all other amounts owing to the Lenders, the Agents and the Issuing Banks under
the Loan Documents and the termination of the Commitments.  If and to the extent that the obligations of
the Borrower under this Article 9 are unenforceable for any reason, the
Borrower agrees to make the maximum contribution to the payment and
satisfaction thereof which is permissible under applicable law.


 


Section 9.06.  Change of Lending
Office.  If an event occurs with
respect to a Lending Office of any Bank that obligates the Borrower to pay any
amount under Section 2.13, makes operable the provisions of clause (c) or
(d) of Section 9.01 or entitles such Bank to make a claim under Section 2.13,
Section 9.02 or Section 9.03, such Bank shall, if requested by the
Borrower, use reasonable efforts to designate another Lending Office or
Offices, the designation of which will reduce the amount the Borrower is so
obligated to pay, eliminate such operability or reduce the amount such Bank is
so entitled to claim, provided that
such designation would not, in the sole and absolute discretion of such Bank,
be disadvantageous to such Bank in any manner or contrary to such Bank’s
policies.  Each Bank may at any time and
from time to time change any Lending Office and shall give notice of any such
change to the Agent and the Borrower.  Except
in the case of a change in Lending Offices made at the request of the Borrower,
the designation of a new Lending Office by any Bank shall not obligate the
Borrower to pay any amount to such Bank under Section 2.13, make operable the
provisions of clause (c) or (d) of Section 9.01 or entitle such Bank to
make a claim under Section 2.13 or Section 9.02 if such obligation,
the operability of such clause or such claim results solely from such
designation and not from a Regulatory Change Enacted thereafter.


 


Section 9.07.  Replacement of
Bank in Respect of Increased Costs.  (a) Within 15 days after receipt by the
Borrower of written notice from any Bank (an “Affected Bank”) (i)
claiming


 


65





















 


payment of additional
amounts under Section 2.13, Section 9.02 or Section 9.03, or
(ii) claiming that it is unable or unlawful for it to make Eurodollar Rate
Loans or Eurodollar Rate Drawings as set forth in Section 9.01, the
Borrower may, if no Event of Default then exists, at its option, notify the
Agent and such Affected Bank of its intention to replace the Affected Bank.  The Borrower, with the consent of the Agent
(which consent shall not be unreasonably withheld), may obtain, at the Borrower’s
expense, a replacement bank (“Replacement Bank”) for the Affected Bank,
which Replacement Bank must be reasonably satisfactory to the Agent and
satisfactory to the Issuing Bank in its sole discretion (other than any Issuing
Bank that is also the Affected Bank). The Affected Bank must promptly sell and
assign its Loans, Unreimbursed Drawings and Commitments to such Replacement
Bank for an amount equal to the principal balance of all Loans and Unreimbursed
Drawings held by the Affected Bank and all accrued interest and fees with
respect thereto through the date of such sale, provided
that the Borrower shall have reimbursed such Affected Bank for the
additional amounts, increased costs and any other amounts that it is entitled
to receive under this Agreement through the date of such sale and assignment.


 


(b)                                 Notwithstanding
the foregoing, the Borrower shall not have the right to obtain a Replacement
Bank if the Affected Bank rescinds its demand for increased costs or additional
amounts within 15 days following its receipt of the Borrower’s notice of
intention to replace such Affected Bank.  Furthermore, if the Borrower gives a notice of
intention to replace and does not so replace such Affected Bank within 70 days
thereafter, the Borrower’s rights to replace the Affected Bank as a result of
claims based upon the events given rise to such claim referred to in such
written notice shall terminate.  The
Borrower shall promptly pay all increased costs or additional amounts
previously demanded by such Affected Bank and shall continue to pay immediately
upon receipt of an invoice therefor all such increased costs and amounts
incurred during any period after such written notice through the date of such
assignment.


 


ARTICLE 10


 


THE AGENT


 


Section 10.01.  Appointment and
Powers.  Each Bank and Issuing Bank
hereby irrevocably appoints and authorizes Calyon, and Calyon hereby agrees, to
act as the agent for and representative (within the meaning of Section 9-102(a)(72)
of the Uniform Commercial Code) of such Bank and Issuing Bank under the Loan
Documents with such powers as are delegated to the Agent and the Secured Party
by the terms thereof, together with such other powers as are reasonably
incidental thereto.  The Agent’s duties
shall be purely ministerial and it shall have no duties or responsibilities
except those expressly set forth in the Loan Documents and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against the Agent.  The Agent shall not
be required under any circumstances to take any action that, in its judgment,
(a) is contrary to any provision of the Loan Documents or Applicable Law or (b)
would expose it to any Liability or expense against which it has not been
indemnified to its satisfaction.  The
Agent shall not, by reason of its serving as the Agent, be a trustee or other
fiduciary for any Bank.


 


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Section 10.02.  Limitation on
Agent’s Liability.  Neither the Agent
nor any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them under or
in connection with the Loan Documents, except for its or their own gross
negligence, willful misconduct or knowing violations of law.  The Agent shall not be responsible to any Bank
or Issuing Bank for (a) any recitals, statements, representations or warranties
contained in the Loan Documents or in any certificate or other document
referred to or provided for in, or received by any of the Banks or Issuing
Banks under, the Loan Documents, (b) the validity, effectiveness or
enforceability of the Loan Documents or any such certificate or other document,
(c) the value or sufficiency of the Collateral, (d) the satisfaction of any
condition set forth in Article 4 or elsewhere in any Loan Document, other
than to confirm receipt of items expressly required to be delivered to the
Agent or (e) any failure by the Borrower to perform any of its obligations
under the Loan Documents.  The Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact so long as the
Agent was not grossly negligent in selecting or directing such agents or
attorneys-in-fact.  The Agent shall be
entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telecopier, telegram or cable)
believed by it to be genuine and correct and to have been signed or given by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the Agent.
 As to any matters not expressly provided
for by the Loan Documents, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Loan Documents in accordance
with instructions signed by the Required Banks, and such instructions of the
Required Banks and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks.


 


Section 10.03.  Defaults.  The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than the non-payment
to it of principal of or interest on Loans) unless the Agent has received
notice from a Bank or the Borrower specifying such Default and stating that
such notice is a “Notice of Default.” In the event that the Agent has knowledge
of such a non-payment or receives such a notice of the occurrence of a Default,
the Agent shall give prompt notice thereof to the Banks.  In the event of any Default, the Agent shall
(a) in the case of a Default that constitutes an Event of Default, take any or
all of the actions referred to in the first sentence of Section 8.02 if so
directed by the Required Banks and (b) in the case of any Default, take such
other action with respect to such Default as shall be reasonably directed by
the Required Banks.  Unless and until the
Agent shall have received such directions, in the event of any Default, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interests of the Banks.


 


Section 10.04.  Rights as a Bank.
 Each Person acting as the Agent that is
also a Bank shall, in its capacity as a Bank, have the same rights and powers
under the Loan Documents as any other Bank and may exercise the same as though
it were not acting as the Agent, and the term “Bank” or “Banks” shall include
such Person in its individual capacity.  Each
Person acting as the Agent (whether or not such Person is a Bank) and its
Affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with the Borrower and its Affiliates as if it were not acting as the
Agent, and such Person and its Affiliates may accept fees and other
consideration


 


67





















 


from the Borrower and its
Affiliates for services in connection with the Loan Documents or otherwise
without having to account for the same to the Banks.


 


Section 10.05.
 Indemnification.
 The Banks agree to indemnify the Agent
(to the extent not reimbursed by the Borrower hereunder), ratably on the basis
of the respective Percentages of the Banks, for any and all Liabilities,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on, incurred
by or asserted against the Agent (including the costs and expenses that the
Borrower is obligated to pay hereunder) in any way relating to or arising out
of the Loan Documents or any other documents contemplated thereby or referred
to therein or the transactions contemplated thereby or the enforcement of any
of the terms thereof or of any such other documents, provided that no Bank shall be liable for any of the
foregoing to the extent (a) they are subject to the indemnity contemplated by
the last sentence of Section 11.09(b) or (b) they arise from the gross
negligence or willful misconduct of the Agent.


 


Section 10.06.  Non-Reliance on
Agent and Other Banks.  Each Bank
agrees that it has made and will continue to make, independently and without
reliance on the Agent or any other Bank, and based on such documents and
information as it deems appropriate, its own credit analysis of the Borrower,
its own evaluation of the Collateral and its own decision to enter into the
Loan Documents and to take or refrain from taking any action in connection
therewith.  The Agent shall not be
required to keep itself informed as to the performance or observance by the
Borrower of the Loan Documents or any other document referred to or provided
for therein or to inspect the properties or books of the Borrower or any AEE
Entity or the Collateral.  Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Agent under the Loan Documents, the Agent shall
have no obligation to provide any Bank with any information concerning the
business, status, operation, property or condition (financial or otherwise) of
the Borrower or any AEE Entity, the Loan Documents or the Collateral that may
come into the possession of the Agent or any of its Affiliates.


 


Section 10.07.  Execution and
Amendment of Loan Documents on Behalf of the Banks.  Each Bank and Issuing Bank hereby authorizes
the Agent to execute and deliver, in the name of and on behalf of such Bank and
Issuing Bank, (a) the Pledge Agreement and (b) all UCC financing and
continuation statements and other documents the filing or recordation of which
are, in the determination of the Agent, necessary or appropriate to create,
perfect or maintain the existence or perfected status of the Security Interest.
 The Agent shall consent to any amendment
of any term, covenant, agreement or condition of the Pledge Agreement, or to
any waiver of any right thereunder, if, but only if, the Agent is directed to
do so in writing by the Required Banks; provided,
however, that (i) the Agent shall not be required to consent to any
such amendment or waiver that affects its rights or duties and (ii) the Agent
shall not, unless directed to do so in writing by each Bank, (A) consent to any
assignment by the Borrower of any of its rights or obligations under any such
agreement or (B) release any Collateral from the Security Interest, except as
required or contemplated by the Loan Documents.


 


Section 10.08.  Resignation of the
Agent.  The Agent may at any time
give notice of its resignation to the Banks and the Borrower.  Upon receipt of any such notice of
resignation, the Required Banks may, after consultation with the Borrower,
appoint a successor Agent which shall be acceptable to the Borrower, in its
reasonable judgment.  If no successor
Agent shall have


 


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been so appointed by the
Required Banks and shall have accepted such appointment within 30 days after
the retiring Agent’s giving of notice of resignation, then the retiring Agent
may, on behalf of the Banks and after consultation with the Borrower, appoint a
successor Agent which shall be a bank with an office in New York, New York
having a combined capital and surplus of at least $500,000,000 or an Affiliate
of any such bank, which Affiliate shall be reasonably acceptable to the
Borrower.  Upon the acceptance by any
Person of its appointment as a successor Agent, (a) such Person shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties
and obligations of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations as Agent under the Loan Documents
and (b) the retiring Agent shall promptly transfer all Collateral within its
possession or control to the possession or control of the successor Agent and
shall execute and deliver such notices, instructions and assignments as may be
necessary or desirable to transfer the rights of the Agent with respect to the
Collateral to the successor Agent.  After
any retiring Agent’s resignation as Agent, the provisions of this Article 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.


 


ARTICLE 11


 


MISCELLANEOUS


 


Section 11.01.  Notices and
Deliveries.  (a)
 Notices and Materials
Other than Collateral.  Except as
provided in

Section 10.01(b):


 


(i)                                     Manner
of Delivery.  All notices,
communications and materials (including all Information) to be given or
delivered pursuant to the Loan Documents shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing (which shall include telecopy transmissions). Notices under Section 2.02,
Section 2.03(c), Section 2.05, Section 2.07, Section 3.01, Section 3.02,
Section 3.04(e) and Section 8.02 may be by telephone, promptly, in
the case of each notice other than one under Section 8.02, confirmed in
writing.  In the event of a discrepancy
between any telephonic notice and any written confirmation thereof, such
written confirmation shall be deemed the effective notice except to the extent
that the Agent has acted in reliance on such telephonic notice.


 


(ii)                                  Addresses.
 All notices, communications and
materials to be given or delivered pursuant to the Loan Documents shall be
given or delivered at the following respective addresses and telecopier and
telephone numbers and to the attention of the following individuals or
departments:


 


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(A)                              if
to the Borrower, to it at:


 


AES Eastern
Energy, L.P.


7725 Lake Road


Barker, New York
14012


Telecopier No.
(716)  795-3654


Telephone No.
(716)  795-9501


Attention:                          Amy
Conley, Chief Financial Officer


 


(B)                                if
to the Agent, to it at:


 


Calyon New York
Branch


1301 Avenue of the
Americas


New York, New York
10019


Telecopier No.:
(212) 261-3421


Telephone No.:
(212) 261-7888


Attention:                          Ted
Vandermel


(Credit
Contact)


Justine
Ventrelli


(Operations)


 


(C)                                if
to any Bank (including in its capacity as an Issuing Bank), to it at the
address or telex, telecopier or telephone number and to the attention of the
individual or department, set forth below such Bank’s name under the heading “Notice
Address” on Annex A or, in the case of a Bank that becomes a Bank
pursuant to an assignment set forth under the heading “Notice Address” in the
Notice of Assignment given to the Borrower and the Agent with respect to such
assignment;


 


or at such other
address or telecopier or telephone number or to the attention of such other
individual or department as the party to which such information pertains may
hereafter specify for such purpose in a notice specifically captioned “Notice
of Change of Address” given to (x) if the party to which such information
pertains is the Borrower, the Agent and each Bank, (y) if the party to which
such information pertains is the Agent, the Borrower and each Bank and (z) if
the party to which such information pertains is a Bank, the Borrower and the
Agent.


 


(iii)                               Effectiveness.  Each notice and communication and any material
to be given or delivered pursuant to the Loan Documents shall be deemed so
given or delivered (A) if sent by registered or certified mail, postage
prepaid, return receipt requested, on the fifth Business Day after such notice,
communication or material, addressed as above provided, is delivered to a
United States post office and a receipt therefor is issued thereby, (B) if sent
by any other means of physical delivery, when such notice, communication or
material is delivered to the appropriate address as above provided, (C) if sent
by telecopier, when such notice, communication or material is transmitted to
the appropriate telecopier number as above provided and is received at such
number and (D) if given by


 


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telephone, when
communicated to the individual or any member of the department specified as the
individual or department to whose attention notices, communications and
materials are to be given or delivered, or, in the case of notice by the Agent
to the Borrower under Section 8.02 given by telephone as above provided,
if any individual or any member of the department to whose attention notices,
communications and materials are to be given or delivered is unavailable at the
time, to any other officer or employee of the Borrower, except that (x) notices
of a change of address, telecopier or telephone number or individual or
department to whose attention notices, communications and materials are to be
given or delivered shall not be deemed given until received and (y) notices,
communications and materials to be given or delivered to the Agent, any Bank or
any Issuing Bank pursuant to Section 2.02, Section 2.03(c), Section 2.05,
Section 2.07, Section 2.12(b), Article 3 and Article 7
shall not be deemed given or delivered until received by the officer of the
Agent, such Bank or such Issuing Bank responsible, at the time, for the
administration of the Loan Documents.


 


(iv)                              Reasonable
Notice.  Any requirement under
Applicable Law of reasonable notice by the Agent, the Banks or the Issuing
Banks to the Borrower of any event in connection with, or in any way related
to, the Loan Documents or the exercise by the Agent, the Banks or the Issuing
Banks of any of their rights thereunder shall be met if notice of such event is
given to the Borrower in the manner prescribed above at least ten days before
(A) the date of such event or (B) the date after which such event will occur.


 


(b)                                 Collateral.  Until the Agent shall otherwise specify, all
Collateral to be delivered to the Agent pursuant to the Loan Documents
consisting of instruments, securities, chattel paper, letters of credit or
documents shall be delivered to the Agent at the Agent’s Office either by hand
delivery or by registered or certified mail, postage prepaid, return receipt
requested, in either case insured in an amount not less than the greater of the
aggregate face amount and the aggregate fair market value of the Collateral so
being delivered.  All other Collateral to
be delivered to the Agent pursuant to the Loan Documents shall be delivered to
such Person, at such address, by such means and in such manner as the Agent may
designate.


 


Section 11.02.  Expenses;
Indemnification.  Whether or not any
Extensions of Credit are made hereunder, the Borrower shall:


 


(a)                                  pay
or reimburse the Agent, each Bank and each Issuing Bank for all transfer,
documentary, stamp and similar taxes, and all recording and filing fees and
taxes payable in connection with, arising out of, or in any way related to, the
execution, delivery and performance of the Loan Documents or the making of the
Extensions of Credit;


 


(b)                                 pay
or reimburse the Agent for all reasonable costs and expenses (including fees
and disbursements of legal counsel, appraisers, accountants and other experts
employed or retained by the Agent) incurred by the Agent in connection with, or


 


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arising out of, or
in any way related to (i) the negotiation, preparation, execution, delivery and
syndication of (A) the Loan Documents and (B) whether or not executed, any
waiver, amendment or consent thereunder or thereto, (ii) the administration of
and any operations under the Loan Documents, (iii) consulting with respect to
any matter in any way arising out of, related to, or connected with, the Loan
Documents, including (A) the protection or preservation of the Collateral, (B)
the protection, preservation, exercise or enforcement of any of the rights of
the Agent, the Banks or the Issuing Banks in, under or related to the
Collateral or the Loan Documents or (C) the performance of any of the
obligations of the Agent, the Banks or the Issuing Banks under or related to
the Loan Documents, (iv) protecting or preserving the Collateral or (v)
protecting, preserving, exercising or enforcing any of the rights of the Agent,
the Banks or the Issuing Banks in, under or related to the Collateral or the
Loan Documents, including defending the Security Interest as a valid,
perfected, first priority security interest in the Collateral subject only to
Permitted Liens;


 


(c)                                  pay
or reimburse each Bank for all reasonable costs and expenses (including fees
and disbursements of legal counsel and other experts employed or retained by
such Bank) incurred by such Bank in connection with, arising out of, or in any
way related to (i) consulting during a Default with respect to (A) the
protection, preservation, exercise or enforcement of any of its rights in,
under or related to the Collateral or the Loan Documents or (B) the performance
of any of its obligations under or related to the Loan Documents or (ii)
protecting, preserving, exercising or enforcing during a Default any of its
rights in, under or related to the Collateral or the Loan Documents; provided, however, that the Agent and each
Bank shall exercise reasonable efforts to select one common legal counsel for
each jurisdiction and other common experts except to the extent that the Agent
or any Bank deems in its reasonable judgment that the use of common legal
counsel or other experts would prejudice its interests; and


 


(d)                                 indemnify
and hold each Indemnified Person harmless from and against all losses
(including judgments, penalties and fines) suffered, and pay or reimburse each Indemnified
Person for all reasonable costs and expenses (including fees and disbursements
of legal counsel and other experts employed or retained by such Indemnified
Person) incurred, by such Indemnified Person in connection with, arising out of,
or in any way related to (i) any Loan Document Related Claim (whether asserted
by such Indemnified Person or the Borrower or any other Person), including the
prosecution or defense thereof and any litigation or proceeding with respect
thereto (whether or not, in the case of any such litigation or proceeding, such
Indemnified Person is a party thereto), (ii) any actual or alleged presence or
release of any Hazardous Substance on or from any property owned or operated by
the Borrower or any of its Affiliates, or any Environmental Conditions related
in any way to the Borrower or any of its Affiliates, or (iii) any
investigation, governmental or otherwise, arising out of, related to, or in any
way connected with, the Loan Documents or the relationships established
thereunder, except that the foregoing indemnity shall not be applicable to any
loss suffered by any Indemnified Person to the extent such loss is determined
by a judgment of a court that is binding on the Borrower and such Indemnified
Person, final and not subject to review on appeal, to be the result of acts or
omissions on the part of such Indemnified Person constituting (x) willful
misconduct or (y) gross negligence.


 


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Section 11.03.  Amounts Payable
Due upon Request for Payment.  All
amounts payable by the Borrower under Section 11.02 and under the other
provisions of the Loan Documents shall, except as otherwise expressly provided,
be immediately due upon request for the payment thereof.


 


Section 11.04.  Remedies of the
Essence.  The various rights and
remedies of the Agent, the Banks and the Issuing Banks under the Loan Documents
are of the essence of those agreements, and the Agent, the Banks and the
Issuing Banks shall be entitled to obtain a decree requiring specific
performance of each such right and remedy.


 


Section 11.05.  Rights Cumulative.
 Each of the rights and remedies of the
Agent, the Banks and the Issuing Banks under the Loan Documents shall be in
addition to all of their other rights and remedies under the Loan Documents and
Applicable Law, and nothing in the Loan Documents shall be construed as
limiting any such rights or remedies.


 


Section 11.06.  Amendments;
Waivers.  Any term, covenant,
agreement or condition of the Loan Documents may be amended, and any right
under the Loan Documents may be waived, if, but only if, such amendment or
waiver is in writing and is signed by (a) in the case of an amendment or waiver
with respect to the Loan Documents referred to in Section 10.07, the
Agent, (b) in the case of an amendment or waiver with respect to any other Loan
Document, (i) the Required Banks, (ii) if the rights and duties of the Agent
are affected thereby, by the Agent, and (iii) if the rights and duties of any
Issuing Bank are affected thereby, by such Issuing Bank, and (c) in the case of
an amendment with respect to any Loan Document, by the Borrower; provided, however, that no amendment shall
be effective, unless in writing and signed by each Bank affected thereby, to
the extent it changes the amount of such Bank’s Commitment; and, provided, further, that no amendment or
waiver shall be effective, unless in writing and signed by each Bank, to the
extent it (A) reduces the principal of or the rate of interest on any Bank’s
Loans, Unreimbursed Drawings or Note or the fees payable to any Bank hereunder,
(B) postpones any date fixed (otherwise than as a result of a prepayment
pursuant to Section 2.05) for any payment of principal of or interest on
any Bank’s Loans, Unreimbursed Drawings or Note or the fees payable to such
Bank hereunder, (C) amends Section 2.14, this Section 11.06 or any
other provision of this Agreement requiring the consent or other action of all
of the Banks, (D) eliminates or reduces the voting rights of any Bank (E)
reduces any percentage specified in the definition of Required Banks or (F)
releases all or substantially all of the Collateral.  Unless otherwise specified in an amendment or
waiver, an amendment or waiver under the Loan Documents shall be effective only
in the specific instance and for the specific purpose for which given.  By entering into an amendment with, or giving
a waiver under, a section of the Loan Documents, the Banks shall not be
deemed to have, or to have intended to have, (1) waived any rights that they,
or any of them, then or thereafter may have under any other provisions of the
Loan Documents and (2) if such amendment or waiver was occasioned by a
particular fact or facts, accepted that fact or those facts for any other
purpose or Section of the Loan Documents, including Section 5.23 of
this Agreement, so that, for purposes of Section 5.23, if such fact or
facts has had or could have, either alone, or together with other facts, a
Materially Adverse Effect, such Materially Adverse Effect shall be a change or
event subject to Section 5.23, notwithstanding such amendment or waiver.  No election not to exercise, failure to
exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of the Agent, any Bank or
any Issuing Bank under the Loan Documents


 


73





















 


or Applicable Law, 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 of the Agent, any
Bank or any Issuing Bank under the Loan Documents or Applicable Law.


 


Section 11.07.  Set-Off;
Suspension of Payment and Performance.  The Agent, each Bank and each Issuing Bank is
hereby authorized by the Borrower, at any time and from time to time, without
notice, (a) during any Event of Default, to set-off against, and to appropriate
and apply to the payment of, the Liabilities of the Borrower under the Loan
Documents (whether owing to such Person or to any other Person that is the
Agent, a Bank or an Issuing Bank and whether matured or unmatured, fixed or
contingent or liquidated or unliquidated), any and all Liabilities owing by
such Person or any of its Affiliates to the Borrower (whether payable in
Dollars or any other currency, whether matured or unmatured and, in the case of
Liabilities that are deposits, whether general or special, time or demand and
however evidenced and whether maintained at a branch or office located within
or without the United States) and (b) during any Default, to suspend the
payment and performance of such Liabilities owing by such Person or its
Affiliates in an amount equal to the amount then due and payable under the Loan
Documents and, in the case of Liabilities that are deposits, to the extent
necessary, to return as unpaid for insufficient funds any and all checks and
other items drawn against such deposits.  The Agent, such Bank or such Issuing Bank
shall provide the Borrower with written notice of the set-off, provided, that the failure of the Agent,
such Bank or such Issuing Bank to provide such notice will not effect their
rights under this Agreement.


 


Section 11.08.  Sharing of
Recoveries.  (a) Each Bank agrees
that, if, for any reason, including as a result of (i) the exercise of any
right of counterclaim, set-off, banker’s lien or similar right, (ii) its claim
in any applicable bankruptcy, insolvency or other similar law being deemed
secured by a Debt owed by it to the Borrower, including a claim deemed secured
under Section 506 of the Bankruptcy Code, or (iii) the allocation of
payments by the Agent or the Borrower in a manner contrary to the provisions of
Section 2.14, such Bank shall receive payment of a proportion of the
aggregate amount due and payable to it hereunder as principal of or interest on
the Loans or Unreimbursed Drawings or fees that is greater than the proportion
received by any other Bank in respect of the aggregate of such amounts due and
payable to such other Bank hereunder, then the Bank receiving such
proportionately greater payment shall purchase participations (which it shall
be deemed to have done simultaneously upon the receipt of such payment) in the
rights of the other Banks hereunder so that all such recoveries with respect to
such amounts due and payable hereunder (net of costs of collection) shall be pro rata; provided, that if all or part
of such proportionately greater payment received by the purchasing Bank is
thereafter recovered by or on behalf of the Borrower from such Bank, such
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such Bank to the extent of such recovery,
but without interest (unless the purchasing Bank is required to pay interest on
the amount recovered to the Person recovering such amount, in which case the
selling Bank shall be required to pay interest at a like rate). So long as the
purchasing Bank has not advised it to the contrary, each selling Bank may
assume, for purposes of Section 11.09(b), that no Tax is required to be
withheld or deducted by the Borrower from, or is otherwise payable by the
Borrower in connection with, any payment by the Borrower to or for the account
of such Bank under the Loan Documents.  The
Borrower expressly consents to the foregoing arrangements and agrees that any
holder of a participation in any rights hereunder so purchased or acquired
pursuant to this Section 11.08(a) shall, with respect to such
participation, be entitled


 


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to all of the rights of a
Bank under Section 2.13, Section 9.02, Section 9.03, Section 9.04,
Section 9.05, Section 11.02, Section 11.07 (subject to any
condition imposed on a Bank hereunder with respect thereto, including delivery
of the forms and certificates required under Section 2.13(a)(iv)) and may
exercise any and all rights of set-off with respect to such participation as fully
as though the Borrower were directly indebted to the holder of such
participation for Loans in the amount of such participation.


 


(b)                                 Each
Bank agrees to exercise any right of counterclaim, set-off, banker’s lien or
similar right that it may have in respect of the Borrower in a manner so as to
apportion the amount subject to such exercise, on a pro rata basis, between (i) obligations of the Borrower
for amounts subject to the sharing provisions of Section 11.08(a) and (ii)
other Liabilities of the Borrower.


 


Section 11.09.  Assignments and
Participations.


 


(a)                                  Assignments.  (i) The Borrower
may not assign any of its rights or obligations under the Loan Documents
without the prior written consent of (A) in the case of the Loan Documents
referred to in Section 10.07, the Agent and (B) in the case of any of the
other Loan Documents, each Bank, and no assignment of any such obligation shall
release the Borrower therefrom unless the Agent or each Bank, as applicable,
shall have consented to such release in a writing specifically referring to the
obligation from which the Borrower is to be released.


 


(ii)                                  Each
Bank may from time to time assign any or all of its rights and obligations
under the Loan Documents to one or more Persons; provided that, except in the case of the grant of an
assignment to a Federal Reserve Bank (which may be made without condition or
restriction), no such assignment shall be effective unless (A) the assignment
is consented to by (unless an Event of Default specified in Section 16(g)
or 16(h) of the Lease exists) the Agent, (B) the assignment is consented to by
each Issuing Bank, (C) the assignment is (1) to a Bank or an Eligible Assignee
or an Affiliate of a Bank or an Eligible Assignee and (2) consented to by the
Borrower, which consent shall not be unreasonably withheld or delayed (provided, that such consent by the
Borrower shall not be required (x) for any assignment to a Bank or an Affiliate
of a Bank or (y) during the existence of an Event of Default), (D) in the case
of a partial assignment, after giving effect thereto, the aggregate amount of
the Commitment and the outstanding principal amount of the Loans and
Unreimbursed Drawings of both the assignor and the assignee shall be not less
than $5,000,000, (E) the assignment shall involve the assignment of a fixed
percentage of all of the assignor’s rights and obligations under the Loan
Documents, (F) a Notice of Assignment with respect to the assignment, duly
executed by the assignor and the assignee, shall have been given to the
Borrower and the Agent, (G) in the case of an assignment of a Registered Note,
such Registered Note shall have been surrendered for registration of assignment
duly endorsed by (or accompanied by a written instrument of assignment duly
executed by) the Registered Holder and such assignment shall have been recorded
on the Register and (H) except in the case of an assignment by the Bank that is
the Agent, the Agent shall have been paid an assignment fee of $3,500. Upon any
effective assignment, the assignor Bank


 


75





















 


shall be released
from the obligations so assigned and, in the case of an assignment of all of
its Loans, Unreimbursed Drawings and Commitment, shall cease to be a Bank.  In the event of any effective assignment by a
Bank, the Borrower shall, against (except in the case of a partial assignment)
receipt of the existing Note of the assignor Bank, issue a new Note to the
assignee Bank.


 


(iii)                               Notwithstanding anything
to the contrary contained herein, any Bank (a “Granting Bank”) may grant
to a special purpose funding vehicle (an “SPC”), identified as such in
writing from time to time by the Granting Bank to the Agent and the Borrower,
the option to fund all or any part of any Loan that such Granting Bank would
otherwise be obligated to fund pursuant to this Agreement; provided that (A) nothing herein shall
constitute a commitment by any SPC to make any Loan, and (B) nothing herein
shall excuse any Granting Bank from its obligations hereunder.  The funding of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Bank to the same extent, and as
if, such Loan were funded 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 for so long as, and to the
extent, the Granting Bank provides such indemnity or makes such payment.  In furtherance of the foregoing, each Bank
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.  In addition, notwithstanding anything to the
contrary contained in this Section 11.09(a)(iii), any SPC may, with prior
notice to, but without the prior written consent of, the Borrower and the Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Bank or to any financial institutions
(consented to by the Borrower and the Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans.  This Section 11.09(a)(iii)
may not be amended without the prior written consent of each Granting Bank, all
or any part of whose Loans are being funded by an SPC at the time of such
amendment.  Notwithstanding the foregoing
provisions of this Section 11.09(a)(iii), (1) an SPC shall not be deemed to
be a Bank and shall have no rights under this Agreement except as provided in
this Section 11.09(a)(iii), and in particular, but not by way of
limitation, shall have no rights to compensation for increased costs or other
payments pursuant to Section 2.13, Section 9.02 or Section 9.03,
(2) the Granting Bank’s obligations under this Agreement (including its
Commitment to the Borrower hereunder) shall remain unchanged, (3) the Granting
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (4) the Granting Bank shall remain the holder
of any Notes for all purposes of this Agreement, (5) the Borrower, the Agent,
the Issuing Banks and the other Banks shall continue to deal solely and
directly with the Granting Bank in connection with such Granting Bank’s rights
and obligations under this Agreement, and (6) the Granting Bank


 


76





















 


shall indemnify
and hold the Borrower and its Affiliates harmless 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 incurred or shall arise as a result of any grant to an SPC contemplated
hereunder.


 


(b)                                 Participations.
 Each Bank may from time to time sell or
otherwise grant participations in any or all of its rights and obligations
under the Loan Documents without the consent of the Borrower, the Agent, any
Issuing Bank or any other Bank.  In the
event of any such grant by a Bank of a participation, such Bank’s obligations
under the Loan Documents to the other parties thereto shall remain unchanged,
such Bank shall remain solely responsible for the performance thereof, and the
Borrower, the Agent, the Issuing Banks and the other Banks may continue to deal
solely and directly with such Bank in connection with such Bank’s rights and
obligations thereunder.  A Bank may not
grant to any holder of a participation the right to require such Bank to take
or omit to take any action under the Loan Documents, except that a Bank may
grant to any such holder the right to require such holder’s consent to (i)
reduce the principal of or the rate of interest on such Bank’s Loans or
Unreimbursed Drawings or the fees payable to such Bank hereunder, (ii) postpone
any date fixed for any payment of principal of or interest on such Bank’s Loans
or Unreimbursed Drawings or the fees payable to such Bank hereunder, (iii)
permit any Loan Party to assign any of its obligations under the Loan Documents
to any other Person or (iv) release any Collateral from the Security Interest
except as required or contemplated by the Loan Documents.  Each holder of a participation in any rights
under the Loan Documents, if and to the extent the applicable participation
agreement so provides, shall, with respect to such participation, be entitled
to all of the rights of a Bank as fully as though it were a Bank and may
exercise any and all rights of set-off with respect to such participation as
fully as though the Borrower were directly indebted to the holder of such
participation for Loans and Unreimbursed Drawings in the amount of such
participation; provided, however, that
no holder of a participation shall be entitled to any amounts that would
otherwise be payable to it under Section 2.13, Section 9.02 or Section 9.03
with respect to its participation unless such amounts would have been payable
to the Bank that granted such participation if such participation had not been
granted.  Each Bank selling or granting a
participation, including a participation sold pursuant to Section 11.08,
shall indemnify the Borrower and the Agent for any Taxes and Liabilities that
they may sustain as a result of such Bank’s failure to withhold and pay any
Taxes applicable to payments by such Bank to its participant in respect of such
participation.


 


Section 11.10.  Governing Law.
 The rights and duties of the Borrower,
the Agent, the Banks and the Issuing Banks under this Agreement and the Notes
(including matters relating to the Maximum Permissible Rate), and the other
Loan Documents, shall pursuant to New York General Obligations Law Section 5-1401,
be governed by the law of the State of New York.


 


Section 11.11.  Judicial
Proceedings: Waiver of Jury Trial.  Any
judicial proceeding brought against the Borrower with respect to any Loan
Document Related Claim may be brought in any court of competent jurisdiction in
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof (each, a “Chosen
Court”) and, by execution and delivery of this Agreement, the Borrower (a)
accepts, generally and unconditionally, the nonexclusive jurisdiction of such
Chosen Court and irrevocably agrees to be bound by any judgment rendered
thereby in connection with any Loan


 


77





















 


Document Related Claim
and (b) irrevocably waives any objection it may now or hereafter have as to the
venue of any such proceeding brought in such a court or that such a court is an
inconvenient forum.  The Borrower hereby
waives personal service of process and consents that service of process upon it
may be made by certified or registered mail, return receipt requested, at its
address specified or determined in accordance with the provisions of Section 11.01(a)(ii),
and service so made shall be deemed completed on the third Business Day after
such service is deposited in the mail.  Nothing
herein shall affect the right of the Agent, any Bank, any Issuing Bank or any
other Indemnified Person to serve process in any other manner permitted by law
or shall limit the right of the Agent, any Bank, any Issuing Bank or any other
Indemnified Person to bring proceedings against the Borrower in the courts of
any other jurisdiction.  THE BORROWER,
THE AGENT, EACH BANK AND EACH ISSUING BANK HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING ANY LOAN DOCUMENT RELATED CLAIM.


 


Section 11.12.  LIMITATION OF
LIABILITY.  NEITHER THE AGENT NOR THE
BANKS NOR THE ISSUING BANKS NOR ANY OTHER INDEMNIFIED PERSON SHALL HAVE ANY
LIABILITY WITH RESPECT TO, AND THE BORROWER HEREBY WAIVES, RELEASES AND AGREES
NOT TO SUE FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL, AND, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, PUNITIVE DAMAGES SUFFERED BY THE BORROWER IN
CONNECTION WITH ANY LOAN DOCUMENT RELATED CLAIM.


 


Section 11.13.  Process Agent.
 The Borrower hereby agrees that service
of all writs, process and summonses in any such suit, action or proceeding
brought in the State of New York may be made upon CT Corporation, presently
located at 111 Eighth Avenue, New York, New York 10011, U.S.A. (the “Process
Agent”), and the Borrower hereby confirms and agrees that the Process Agent
has been duly and irrevocably appointed as its agent and true and lawful
attorney-in-fact in its name, place and stead to accept such service of any and
all such writs, process and summonses, and agrees that the failure of the
Process Agent to give any notice of any such service of process to the Borrower
shall not impair or affect the validity of such service or of any judgment
based thereon.


 


Section 11.14.  Severability of
Provisions.  Any provision of the
Loan Documents that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  To the extent permitted by
Applicable Law, the Borrower hereby waives any provision of Applicable Law that
renders any provision of the Loan Documents prohibited or unenforceable in any
respect.


 


Section 11.15.  Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.


 


Section 11.16.  Survival of
Obligations.  Except as otherwise
expressly provided therein, the rights and obligations of the Borrower, the
Agent, the Banks, the Issuing Banks and the other


 


78





















 


75 Indemnified Persons
under the Loan Documents shall survive the Repayment Date and the termination
of the Security Interest.


 


Section 11.17.  Entire Agreement.
 This Agreement, the Notes and the other
Loan Documents embody the entire agreement among the Borrower, the Agent, the
Banks and the Issuing Banks relating to the subject matter hereof and supersede
all prior agreements, representations and understandings, if any, relating to
the subject matter hereof.


 


Section 11.18.  Successors and
Assigns.  All of the provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.


 


Section 11.19.  No Fiduciary
Relationship Established By Loan Documents.  The relationship between the Borrower and the
Banks is that of DEBTOR and CREDITOR.  The
Loan Documents are not intended to, and do not, establish a FIDUCIARY
relationship, nor does a FIDUCIARY relationship otherwise exist, between the
Borrower on the one hand, and the Agent, the Banks and the Issuing Banks, on
the other hand.  The parties hereto have
dealt at arm’s length in negotiating the Loan Documents.


 


Section 11.20.  No Recourse to Affiliates.
 This Agreement is solely and exclusively
among the Borrower, the Agent, the Banks and the Issuing Banks, and any
obligations created herein shall be the sole obligations of the parties hereto.
 No party shall have recourse to any
parent, subsidiary, affiliate, director or officer, as such, of any other party
for performance of said obligations unless the obligations are assumed in
writing by the Person against whom recourse is sought.


 


Section 11.21.  Confidential
Information.  Notwithstanding anything
to the contrary contained in this Agreement, each party to any Loan Document
agrees that all documents, agreements or other information received by it
pursuant to this Agreement or any other Loan Document that was, at the time of
its delivery, identified in writing by any party hereto as being confidential
will be held by such party in confidence in accordance with such party’s
customary procedures for handling confidential information.  It is understood that each party to any Loan
Document consistent with any such procedures, may disclose such confidential
information, or portions thereof:


 


(i)                                     in
the case of any Bank, to any bona fide permitted prospective transferee or
participant in connection with any contemplated assignment or grant of a participation;
provided, that such transferee or
participant (as the case may be) is aware of the confidential nature of such
information in accordance with the terms of this Section 11.21;


 


(ii)                                  to
the extent necessary or appropriate to comply with the request of, or as
otherwise customarily disclosed to, any Governmental Entity or representatives
thereof;


 


(iii)                               to any Related Party of
such Person and those of any Subsidiary or Affiliate of such Person;


 


79





















 


(iv)                              to
the extent necessary or appropriate to comply with any subpoena or other court
process or in connection with any litigation or legal proceeding but only after
giving each party hereto the opportunity to obtain an appropriate protective
order;


 


(v)                                 to
such Person’s independent auditors and accountants, counsel, and other
professional advisers in the course of their respective duties;


 


(vi)                              to
the extent necessary to comply with any Applicable Law;


 


(vii)                           in the enforcement of such
Person’s rights, as applicable, hereunder, or any other Loan Document during
the continuance of an Event of Default; and


 


(viii)                        which is, or after delivery to
such Person becomes, otherwise publicly known or generally available to the
public other than as a result of a violation of this Section 11.21 by such
Person.


 


Section 11.22.  Registered Notes.
 A Bank that is a Non-US Bank and that
has complied with Section 2.13(d)(i)(A) may have its Notes issued as
Registered Notes, and for this purpose the Agent shall cause to be maintained a
Register.  Once issued, Registered Notes
may not be exchanged for Notes that are not Registered Notes and the ownership
of Registered Notes, and of the Loans and Unreimbursed Drawings evidenced
thereby, may be transferred only in accordance with the provisions of Section 11.09(a)(ii)(G).


 


Section 11.23.  USA PATRIOT Act.
 Each Bank subject to the Act hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title 111 of Publ. L. 107-56 (signed into law October 26,2001)) (the “Act”),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Bank to identify the Borrower in
accordance with the Act.


 


Section 11.24.  J. Aron Letters of
Credit


 


Notwithstanding
the limitation that each Letter of Credit have an expiration date not longer
than one year after the issuance thereof as set forth in the definition of
Letter of Credit, it is hereby agreed that any Letter of Credit issued in favor
of J. Aron and Company that has an expiration date prior to November 1,
2007 may contain the following provision: “Documents must be presented not
later than (insert expiry date) or in the event of a force majeure interrupting
our business, within thirty (30) days after resumption of our business,
whichever is later”.


 


[The remainder of this page has been
intentionally left blank.]


 


80





















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their
duly authorized officers all as of the Agreement Date.


 


 


	
   

  	
  AES EASTERN ENERGY,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By: AES NY, L.L.C., its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin R. Pierce

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin R. Pierce 

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


AMENDED AND
RESTATED CREDIT AGREEMENT


 





















 


	
   

  	
  CALYON NEW YORK BRANCH,

  as Agent and Issuing Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn W. Muscosky

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Glenn W. Muscosky

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nina Eshoo

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Nina Eshoo 

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
						



 





















 


	
   

  	
  CALYON NEW YORK BRANCH,

  as Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn W. Muscosky

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Glenn W. Muscosky

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nina Eshoo

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Nina Eshoo

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  Agreement Date: October 26,
  2004

  
						



 





















 


ANNEX A


 


	
  Name
  of Bank

  	
   

  	
  Commitment

  Percentage

  	
   

  	
  Notice Address

  	
   

  	
  Domestic Lending Office

  	
   

  	
  Eurodollar Lending

  Office

  	
   

  
	
  Calyon New York

  Branch

  	
   

  	
  100

  	
  %

  	
  Calyon New York

  Branch

  1301 Avenue of the

  Americas

  New York, NY 10019

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Credit Contact

  Ted Vandermel

  212 261 7888

  212 261 3421 (fax)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Operations Contact

  Justine Ventrelli

  212 261 7886

  212 261 3421 (fax)

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


Schedule 2.02


 


NOTICE OF BORROWING


 


Calyon
New York Branch, as Agent


1301
Avenue of the Americas


New
York, New York 10019


Attention:


 


Date:               ,


 


Gentlemen:


 


Reference is made to the Amended and Restated Credit
Agreement, dated as of October 26, 2004, among AES Eastern Energy, L.P.,
the Banks listed on the signature pages thereof, the Issuing Banks from
time to time parties thereto, and Calyon New York Branch, as Agent (as amended,
supplemented or otherwise modified from time to time, the “Credit Facility”;
the terms defined therein being used herein as therein defined). The
undersigned hereby gives notice pursuant to Section 2.02 of the Credit
Facility of its request to have the following Loans made to it on [insert
requested date of borrowing]:


 


	
  Type
  of Loan

  	
   

  	
  Amount

  	
   

  	
  Interest Period*

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 










*                 if
applicable


 





















 


The undersigned, on behalf of the Borrower, represents and warrants
that (a) the borrowing requested hereby complies with the requirements of
the Credit Facility, (b) attached to this Notice of Borrowing is a Funding
Date Certificate complying with the requirements of the Depositary Agreement
and the Credit Facility and (c) except to the extent set forth on Annex A
hereto, (i) each Loan Document Representation and Warranty is true and
correct on and as of the date hereof and (except to the extent the undersigned
gives notice to the Banks to the contrary prior to 5:00 p.m. on the
Business Day before the requested date for the making of the Loans) will be
true and correct at and as of the time the Loans are made, in each case both
with and without giving effect to the Loans and the application of the proceeds
thereof, and (ii) no Default has occurred and is continuing as of the date
hereof or would result from the making of the Loans or from the application of
the proceeds thereof if the Loans were made on the date hereof, and (except to
the extent the undersigned gives notice to the Banks to the contrary prior to
5:00 p.m. on the Business Day before the requested date for the making of
the Loans) no Default will have occurred and be continuing at the time the
Loans are to be made or would result from the making of the Loans or from the
application of the proceeds thereof.


 


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  AES NY, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


2





















 


Schedule 2.03(c)(iv)


 


NOTICE OF CONVERSION OR CONTINUATION


 


Calyon
New York Branch, as Agent


1301
Avenue of the Americas


New
York, New York 10019


Attention:


 


 


Date:               ,


 


Gentlemen:


 


Reference is made to the Amended and Restated Credit Agreement, dated
as of October 26, 2004, among AES Eastern Energy, L.P., the Banks listed
on the signature pages thereof, the Issuing Banks from time to time parties
thereto, and Calyon New York Branch, as Agent (as amended, supplemented or
otherwise modified from time to time, the “Credit Facility”; the terms defined
therein being used herein as therein defined). The undersigned hereby gives
notice pursuant to Section 2.03(c)(iv) of the Credit Facility of its
desire to convert or continue the Loans specified below into or as Loans of the
Types and in the amounts specified below on [insert date of conversion or
continuation]:


 


	
  Loans to be Converted or Continued

  	
   

  	
  Converted or Continued Loans

  	
   

  
	
  Type
  of Loan

  	
   

  	
  Last Day of 

  Current Interest 

  Period

  	
   

  	
  Amount

  	
   

  	
  Type of Loan

  	
   

  	
  Amount

  	
   

  	
  Interest

  Period*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


The undersigned represents and warrants that conversions and
continuations requested hereby comply with the requirements of the Credit
Facility.


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  AES NY, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 










*                 if
applicable


 





















 


Schedule 2.05(a)


 


NOTICE OF PREPAYMENT


 


Calyon
New York Branch, as Agent


1301
Avenue of the Americas


New
York, New York 10019


Attention:


 


 


Date:           ,


 


Gentlemen:


 


Reference is made to the Amended and Restated Credit Agreement, dated
as of October 26, 2004, among AES Eastern Energy, L.P., the Banks listed
on the signature pages thereof, the Issuing Banks from time to time
parties thereto, and Calyon New York Branch, as Agent (as amended, supplemented
or otherwise modified from time to time, the “Credit Facility”; the terms
defined therein being used herein as therein defined). The undersigned hereby
gives notice pursuant to Section 2.05(a) of the Credit Facility that
it will prepay the Loans specified below on [insert date of prepayment]:


 


	
  Type
  of Loan

  	
   

  	
  Last Day of Current

  Interest Period *

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


The undersigned represents and warrants that the prepayment set forth
herein complies with the requirements of the Credit Facility.


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  AES NY, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 










*                 if
applicable


 





















 


Schedule 2.05(c)


 


NOTICE OF CLEAN-UP PERIOD


 


Calyon New York Branch, as Agent


1301 Avenue of the Americas


New York, New York 10019


Attention:


 


 


Date:                 ,


 


Gentlemen:


 


Reference is made to the Amended and Restated Credit Agreement, dated as
of October 26, 2004, among AES Eastern Energy, L.P., the Banks listed on
the signature pages thereof, the Issuing Banks from time to time parties
thereto, and Calyon New York Branch, as Agent (as amended, supplement or
otherwise modified from time to time, the “Credit Facility”; the terms defined
therein being used herein as therein defined). The undersigned hereby gives
notice pursuant to Section 2.05(c) of the Credit Facility of the
commencement of a Clean-Up Period on                                               .


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  AES NY, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


Schedule 2.13(d)


 


NON-US BANK CERTIFICATE


 


AES
Eastern Energy, L.P.


7725
Lake Road


Barker,
New York 14012


 


 


Calyon
New York Branch, as Agent


1301
Avenue of the Americas


New
York, New York 10019


Attention:


 


 


Gentlemen:


 


Reference is made to the Amended and Restated Credit Agreement, dated
as of October 26, 2004, among AES Eastern Energy, L.P., the Banks listed
on the signature pages thereof, the Issuing Banks from time to time
parties thereto, and Calyon New York Branch, as Agent (as amended, supplement
or otherwise modified from time to time, the “Credit Facility”). Terms used
herein that are defined in such Credit Facility are used with the meanings
therein ascribed to them.


 


The undersigned hereby (a) certifies to the Borrower and the Agent
that it (i) is a Non-US Bank and (ii) is entitled to submit an
Internal Revenue Service Form [W-8BEN] [W-8ECI]* and (b) agrees
to indemnify and defend the Borrower and the Agent from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages, and
expenses of any kind arising out of, resulting from, or in any way connected
with the certification made pursuant to the foregoing clause (a) being
incorrect.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [Bank]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 










*                 Insert as
applicable.


 





















 


Schedule 3.04(e)


 


NOTICE OF CONVERSION OF BASE RATE DRAWING


 


Calyon
New York Branch, as Agent


1301
Avenue of the Americas


New
York, New York 10019


Attention:


 


 


Date:                  ,


 


Gentlemen:


 


Reference is made to the Amended and Restated Credit Agreement, dated
as of October 26, 2004, among AES Eastern Energy, L.P., the Banks listed
on the signature pages thereof, the Issuing Banks from time to time
parties thereto, and Calyon New York Branch, as Agent (as amended, supplemented
or otherwise modified from time to time, the “Credit Facility”; terms defined
therein being used herein as therein defined). The undersigned hereby gives
notice pursuant to Section 3.04(e) of the Credit Facility of its
desire to convert the following Base Rate Drawing(s) into a Eurodollar Rate
Drawing in the amounts specified below on [insert date of conversion]:


 


	
  Base Rate Drawing(s) to be Converted

  	
   

  	
  Converted Eurodollar Drawing

  
	
  Date
  of Drawing

  	
   

  	
  Amount

  	
   

  	
  Amount

  	
   

  	
  Interest Period

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


The undersigned represents and warrants that the conversion requested
hereby complies with the requirements of the Credit Facility.


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  AES NY, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


Schedule 5.05


 


GOVERNMENTAL ACTIONS


 


(See Schedule 5.15)


 





















 


Schedule 5.06


 


MATERIAL LITIGATION


 


1.                                       On June 25, 2003, AES Somerset filed a
complaint against Niagara Mohawk Power Corporation (“NIMO”) with the Federal
Energy Regulatory Commission (the “FERC”). The complaint involves outstanding
station service charges for the period April 2000 to May 2003. AES
Somerset has calculated that the outstanding charges owed are $290,000, while
NIMO has calculated that the outstanding charges are $3.6 million. In December 2003,
FERC, in the Somerset and Nine Mile orders, reiterated its 2001 ruling that
independent power plants can net station service power. NIMO appealed the ruling.
Somerset received a favorable FERC ruling in 2004; it is highly likely,
however, that Niagara Mohawk will appeal the matter to the DC Circuit Court of
Appeals. As of December 31, 2003, AES Somerset has accrued approximately
$1.6 million for these charges.


 





















 


Schedule 5.09


 


UTILITY REGULATION


 


1.                                       AES Eastern Energy, L.P. and AEE2, L.L.C. are
subject to “lightened regulation” pursuant to that certain “Order Providing for
Lightened Regulation”, Case 99-E-0148, issued April 23, 1999
by the New York State Public Service Commission.


 





















 


Schedule 5.13


 


ERISA MATTERS


 


None


 





















 


Schedule 5.15


 


ENVIRONMENTAL MATTERS


 


1.                                       By letter dated May 25, 2000, the New
York State Department of Environmental Conservation (“NYSDEC”) issued a Notice
of Violation (“NOV”) to the New York State Electric & Gas Corporation
(“NYSEG”) for violations of the federal Clean Air Act and the New York
Environmental Conservation Law at the Greenidge and Westover plants related to
NYSEG’s alleged failure to undergo an air permitting review and obtain a permit
for alleged air emissions increases due to plant modifications made during the
1980s and 1990s. Pursuant to the Asset Purchase Agreement, AEE has agreed that
it will assume the responsibility for the NOV, subject to a reservation of AEE’s
right to assert any applicable exception to its contractual undertaking to
assume preexisting environmental liabilities. In addition, AEE received an
information request letter from the New York State Attorney General on October 14,
1999 and a subpoena from the NYDEC on January 13, 2000 seeking detailed
operating and maintenance history for the Westover and Greenidge Plants. AEE
has provided the requested information to the Attorney General and NYSDEC, and
there is a potential that AEE may receive a NOV for alleged on-going violations
in connection with the alleged failure of the plant to obtain appropriate
permits for past plant modifications.


 


2.                                       On April 14, 2000, AEE received a
request for information pursuant to Section 114 of the Clean Air Act from
the U.S. Environmental Protection Agency (“EPA”) seeking detailed operating and
maintenance history data for the Cayuga and Somerset Plants. This information
was sought in connection with EPA’s investigation of coal-fired electric power
generators that are suspected of undertaking modifications in the past without
undergoing an air permitting review. AEE has provided the requested documentation
to the EPA. In addition, AEE received a subpoena from the NYSDEC on January 13,
2000 requesting similar information for the Cayuga and Somerset plants. AEE has
provided the requested information to the NYSDEC.


 


3.                                       The Somerset, Cayuga, Westover and Greenidge
plants is required to meet an opacity limit. In the past, several of these
plants exceeded these limits. This was a common problem at coal-fired
electricity generating stations, and the NYSDEC has initiated an enforcement
action against several utilities, including NYSEG. In January 2000, we
received a draft consent order from the NYSDEC that alleges violations of the opacity
emission limitations in the air permits for Cayuga, Westover, and Greenidge occurring
since these plants were purchased from NYSEG. The draft consent order would
require us to prepare an opacity compliance plan and would impose penalties for
opacity violations occurring after May 14, 1999, the date of the
acquisition. AES NY,


 





















 


L.L.C.
also received notice from NYSEG that NYSEG has received a draft consent order
from the NYSDEC seeking penalties primarily for opacity violations occurring
prior to May 14, 1999. In the notice, NYSEG asserts that it will seek
indemnification from AES NY, L.L.C. for any penalties, attorney fees, and
related costs that it incurs in connection with this matter.


 


4.                                       AEE voluntarily disclosed to the NYSDEC and
EPA on November 27, 2002 that NOx exceedances appeared to have occurred on
October 30 and 31 and November 1-8 and 10 of 2002. The
exceedances were discovered through an audit by plant personnel of the Plants’
NOx Reasonably Available Control Technology (RACT) tracking system which
monitors NOx emissions at all the Plants subject to AEE’s NOx RACT Plan. AEE
believes that it has taken all reasonable, good faith efforts to assess and
correct the exceedances. Immediately upon the discovery of the exceedances, the
Selective Catalytic Reduction System (SCR) at the Somerset Plant was activated
to reduce NOx emissions. Emission data indicates that the system had already
returned to a compliant operation by the time the error was discovered. The EPA
has decided to defer to the NYSDEC for review of the self-disclosure letter and
technical issues.


 


5.                                       AEE voluntarily disclosed to the NYSDEC in January 2003
that the Cayuga Plant had inadvertently burned synfuel (coal with a latex
binder applied), which it is not permitted to burn. AEE had entered into an
agreement with a supplier to purchase coal. It received approximately one 9,000-ton
train per month from April 24, 2001 to December 27, 2002. In January 2003,
AEE became aware that the product the Cayuga Plant had been receiving was synfuel.
AEE has suspended all shipments from that supplier until a resolution could be
reached. AEE has reviewed the emission and operation data which showed there
was no adverse effect to air quality with respect to applicable permit
emissions limits attributable to burning the material.


 


6.                                       AES Creative Resources L.P. (“ACR”) has
assumed responsibility for the Weber ash disposal site; however, AEE2, L.L.C.,
has contributed one-half of the closure costs for the Weber ash disposal site
based on the amount of ash disposed at the site from Westover and Greenidge,
which are owned by AEE2, L.L.C., compared to the amount disposed from the
Hickling and Jennison plants which are owned by ACR.


 


7.                                       Natural groundwater conditions present at the
Somerset site make it very difficult to distinguish between landfill leachate
and naturally occurring substances in the groundwater. Substances that are
typically considered indicators of leachate infiltration into groundwater from
ash monofill operations, namely sulfates, iron and manganese, are also
naturally occurring in the groundwater around and beneath the Area 1 section of
the landfill located on the Somerset plant site. NYSEG commissioned independent
consultants to perform groundwater testing using sophisticated geochemical fingerprinting
techniques, which distinguish the major ions of a water sample. NYSEG’s


 





















 


consultants
have shown, to the satisfaction of the Public Service Commission, that there
had been no material release of leachate from Area 1 into the groundwater.


 


8.                                       Cayuga has seen concentrations of certain
analytical parameters above established action levels in groundwater monitoring
wells down gradient from the ash disposal area. Remedies are being discussed
with the NYSDEC. Actions may include operational changes or capping the
existing landfill, construction of a new landfill cell, or a combination of
these actions.


 


9.                                       In an area adjacent to the Lockwood ash
disposal site, AEE’s environmental consultant reported that approximately 500
to 700 drums of abrasives were disposed in the early 1970s and covered with
ash. AEE has budgeted $520,000 to conduct a site investigation and remove the
drums. In addition, groundwater sampling in this area and around the Lockwood
ash disposal site indicates that some monitoring wells have parameters which
exceed state regulatory limits.


 


10.                                 The Somerset plant received approval from
NYPSC to construct a new landfill cell at the plant. That approval remains
subject to appeal.


 





















 


Schedule 5.24


 


ADDITIONAL MATERIAL ADVERSE FACTS


 


None


 





















 


Schedule 7.01(a)


 


AES EASTERN ENERGY, L.P.


 


CERTIFICATE AS TO FINANCIAL STATEMENTS AND
DEFAULTS


 


I,                                ,
[Title] of AES Eastern Energy, L.P., a Delaware limited partnership (the “Borrower”),
hereby state, pursuant to Section [7.01(a)] [7.0l(b)] of the Amended and Restated
Credit Agreement, dated as of October     , 2004,
among AES Eastern Energy, L.P. (the “Borrower”), the Banks named therein, the
Issuing Banks party thereto from time to time and Calyon New York Branch, as
Agent and Issuing Bank (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”; the terms defined or incorporated by
reference therein being used herein as therein defined), that:


 


(a)                                  I have made, or caused to be made under my
supervision, a review of the Credit Agreement, the other Loan Documents and the
Operative Documents; and


 


(b)                                 such review has not disclosed the existence
during the fiscal [quarter] [year] ending                 ,
200  , (and I do not have knowledge of the existence as of the date
of this certificate) of any condition or event constituting a Lease Material
Default or Lease Event of Default or an Event of Loss or an Event of Default
[or, if any such condition or event existed or exists, specifying the nature
thereof, the period of existence thereof and what action the Borrower has taken
or proposes to take with respect thereto].


 


and
I hereby certify, pursuant to such Section [7.01(a)] [7.01(b)], that


 


1.                                       (a)                                  The accompanying [unaudited] [audited] consolidated
and consolidating financial statements of the Borrower and its Consolidated
Subsidiaries as at                                  and
for the [quarterly] [annual] accounting period ending                    ,
20  , are complete and correct and present fairly, in accordance with
GAAP (except for changes therein or departures therefrom described below that
have been approved in writing by Messrs.                                     ,
the Borrower’s current independent certified public accountants), the
consolidated and consolidating financial position of the Borrower and its
Consolidated Subsidiaries as at the end of such quarter, and the consolidated
and consolidating results of operations and cash flows for such [quarter]
[year], and for the elapsed portion of the fiscal year ended with the last day
of such quarter, in each case on the basis presented and subject only to normal
year-end auditing adjustments] [year].


 


(b)                                 Except as disclosed or reflected in such
financial statements, as at
                                  ,
neither the Borrower nor any Subsidiary had any Liability, contingent or otherwise,
or any unrealized or anticipated loss, that, singly or in the aggregate, has
had or might have a Materially Adverse Effect on the Borrower and its
Consolidated Subsidiaries taken as a whole.


 





















 


2.                                       (a)                                  The changes in and departures from GAAP are
as follows:


 


All
such changes have been approved in writing by Messrs.                                             .


 


[(b)                             Attached as Annex A are [unaudited] [audited]
consolidated and consolidating financial statements of the Borrower and the
Consolidated Subsidiaries as at                                 and
for the [quarterly] [annual] accounting period ending                        ,
20   , which have been prepared in accordance with GAAP without
giving effect to the changes referred to in Paragraph 2(a) of this
Certificate or any previous Certificate. Such financial statements are complete
and correct and present fairly, in accordance with GAAP, the consolidated and
consolidating financial position of the Borrower and the Consolidated
Subsidiaries as at the end of such quarter, and the consolidated and
consolidating results of operations and cash flows for such [quarter] [year],
and for the elapsed portion of the fiscal year ending with the last day of such
quarter, in each case on the basis presented and subject only to normal
year-end auditing adjustments] [year].


 


3.                                       There follow reasonably detailed calculations
required to establish whether or not the Borrower was in compliance with the
financial covenants contained in Section 6.01 of the Credit Agreement.


 


4.                                       Based on an examination sufficient to enable
me to make an informed statement, no Default exists, including, in particular,
any such arising under the provisions of Article 6 of the Credit
Agreement, except the following:


 


[If none such exist, insert “None”; if any do
exist, specify the same by Section, give the date the same occurred, and the
steps being taken by the Borrower or a Subsidiary with respect thereto.]


 


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 










 


*                                        Paragraph (b) should be included in, and
Annex A attached to, the Certificate only if changes from Generally Accepted
Accounting Principles are specified in Paragraph 2(a) of this or any
previous Certificate.


 


2





















 


Schedule 7.02(a)


 


BASE FINANCIAL STATEMENTS


 


1.                                       The Borrower’s condensed consolidated balance
sheet as at June 30, 2004 and the related condensed consolidated
statements of income, cash flows and changes in partners’ capital for the
six-month period ended June 30, 2004, in each case contained in the
Borrower’s Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2004 as filed with the Securities and Exchange Commission
on August 12, 2004.


 


2.                                       The Borrower’s consolidated balance sheet as
at December 31, 2003 and the related consolidated statements of income,
cash flows and changes in partners’ capital for the fiscal year ended December 31,
2003, in each case contained in the Borrower’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2003 as filed with the Securities
and Exchange Commission on March 16, 2004.


 





















 


Schedule 8.01(g)


 


CERTAIN EVENTS OF DEFAULT


 


Attached to this Schedule 8.01(g) is Section 16 of the
Facility Lease Agreement (Kintigh A-1), dated as of May 14, 1999,
between Kintigh Facility Trust A-1 and AEE.


 





















 


SECTION 16


 


EVENTS OF DEFAULT


 


Any of the following events shall constitute a “Lease Event of Default”
hereunder (whether any such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or
regulation of any Governmental Entity):


 


(a)                                  The Lessee shall fail to make any payment of
Basic Rent (other than Deferrable Payments, but only to the extent provided in Section 3.4),
or Termination Value, in each case within 5 Business Days after the same shall become
due.


 


(b)                                 The Lessee shall fail to make any payment of
Supplemental Rent (other than Termination Value and, unless the Owner
Participant shall have declared a default with respect thereto, Excepted
Payments) after the same shall have become due and such failure shall have
continued for a period of 30 days after receipt by the Lessee of written notice
of such failure from the Owner Participant, the Lessor or the Indenture
Trustee; provided, however, that, in the case of any failure to make an
indemnity payment (or any portion thereof or interest thereon), if sufficient
available funds are not then on deposit in the Indemnity Account for such payment,
then the period within which to remedy such failure shall be extended up to a
date five (5) days following the date such funds are on deposit in the
Indemnity Account for the payment of such indemnity (or portion thereof or
interest thereon) in accordance with the Depositary Agreement.


 


(c)                                  The Lessee shall fail to maintain insurance
in the amounts and on the terms set forth in Section 11.


 


(d)                                 The Lessee shall fail to perform or observe
any covenant, obligation or agreement to be performed or observed by it under
this Lease or any other Operative Document, including without limitation any
covenant made by the Lessee herein or in Section 5 of the Participation
Agreement with respect to any AEE Entity (other than any covenant, obligation
or agreement contained in the Tax Indemnity Agreement or Section 5.12 of
the Participation Agreement or any covenant, obligation or agreement referred
to in clause (a), (b), (c), or (e) of this Section 16) in any
material respect, which shall continue unremedied for 30 days after receipt by
the Lessee of written notice thereof by the Lessor or the Indenture Trustee;
provided, however, that if such condition cannot be remedied within 30


 





















 


days, then the period within which to remedy such failure shall be
extended up to an additional 180 days, so long as the Lessee diligently pursues
such remedy and such condition is reasonably capable of being remedied within
such additional 180-day period.


 


(e)                                  The Lessee shall fail to perform or observe
in any material respect its obligations set forth in Section 6 of the
Participation Agreement.


 


[Missing p. 2 — will be supplied tomorrow (Thursday)]


 


(i)                                     AES shall cease to own or control, directly
or indirectly, at least 51% of the voting and economic interests in the Lessee,
which interests shall be free and clear of all Liens; or


 


(ii)                                  AES shall cease to own or control, directly
or indirectly, at least 51% of the voting and economic interests in AES NY,
which interests shall be free and clear of all Liens; or


 


(iii)                               AES shall cease to own or control, directly
or indirectly, 51% of the voting and economic interests in AES NY3, which
interests shall be free and clear of Liens; or AES NY3 shall cease to own or
control, directly or indirectly, 100% of the voting and economic interests in
Somerset Railroad, which interests shall be free and clear of all Liens other
than any Lien created in connection with the Rail Credit Facility or any
facility replacing, refunding or refinancing the Rail Credit Facility; or


 


(iv)                              the Lessee shall cease to own and control,
directly or indirectly, 100% of the voting and economic interests in each of
the AEE Subsidiaries, which interests shall be free and clear of all Liens,
other than any Lien created in connection with the Working Capital Facility or
any facility replacing, refunding or refinancing the Working Capital Facility
and any other Liens securing Permitted Secured Indebtedness.


 


(l)                                     The Lessee shall fail (i) to cause the
Rent Reserve Account to be funded in an amount at least equal to the Rent
Reserve Account Required Balance either through amounts available pursuant to a
Payment Undertaking Agreement, through amounts on deposit in the Rent Reserve
Account or through a combination thereof, on three consecutive Rent Payment
Dates (after giving effect to the payment of Basic Rent (other than Deferrable
Payments) on such dates) or (ii) at any time after the payment in full of
the Lessor Notes, to cause the Additional Liquidity Account to be funded in
accordance with the Depositary Agreement in an amount at least equal to the
Additional


 





















 


Liquidity
Required Balance, on three consecutive Rent Payment Dates (after giving effect
to the payment of Basic Rent (other than Deferrable Payments) on such dates).


 


(m)                               The certificate of formation, operating
agreement or partnership agreement or such other organizational document of
AEE, AES NY or AES NY3, as applicable, shall be amended, changed, modified or
supplemented in any material respect.


 





















 


Schedule 11.09(a)


 


NOTICE OF ASSIGNMENT


 


AES Eastern Energy, L.P.


7725 Lake Road


Barker, New York 14012


 


 


Calyon
New York Branch, as Agent


1301
Avenue of the Americas


New
York, New York 10019


Attention:


 


 


Date:                  ,


 


 


Gentlemen:


 


Reference is made to the Amended and Restated Credit Agreement, dated
as of October 26, 2004, among AES Eastern Energy, L.P., the Banks listed
on the signature pages thereof, the Issuing Banks from time to time
parties thereto, and Calyon

New York Branch, as Agent (as amended, supplemented or otherwise modified from
time to time, the “Credit Facility”; terms defined therein being used herein as
therein defined). The undersigned hereby give notice pursuant to Section 11.09(a) of
the Credit Facility that [insert name of Assignor] (the “Assignor”) has made
the following assignment to [insert name of Assignee] (the “Assignee”):


 


Rights and Obligations Assigned:


 


 


Effective Date of Assignment:


 


 


[The Assignee’s Lending Offices and address for notices are as follows:


Domestic Lending Office:


 


Eurodollar Lending Office:


 


Notice Address:]*


 





















 


The Assignor hereby requests that the Agent [and the Borrower] consent
to the assignment described above by signing a copy of this letter in the space
provided below and returning it to the Assignor. Such consent shall release the
Assignor from all of the obligations described above as having been assigned to
the Assignee.


 


	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Assignment
  and release consented to:

  	
   

  
	
   

  	
   

  
	
  Calyon
  New York Branch*,

  	
   

  
	
  as
  Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  AES
  Eastern Energy, L.P.**,

  	
   

  
	
  as
  Borrower

  	
   

  
	
   

  	
   

  
	
  By:
  AES NY, L.L.C., its general partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
							



 










*                 Omit
if the Assignee is a Bank.


**          Only when required pursuant to Section 11.09.


 





















 


EXHIBIT
A


 


AES EASTERN ENERGY, L.P.


 


PROMISSORY NOTE


 


Date: October     ,
2004


 


FOR VALUE RECEIVED, AES EASTERN ENERGY, L.P. (the “Borrower”) hereby promises
to pay to the order of                                   
(the “Bank”), for the account of its applicable Lending Office, the unpaid
principal amount of each Loan made by such Bank under the Credit Agreement
referred to below, on the dates and in the amounts specified in the Credit
Agreement, and to pay interest on the principal amount of each such Loan on the
dates and at the rates specified in Section 2.03 of such Credit Agreement.
All payments due to the Bank hereunder shall be made to the Bank at the place,
in the type of money and funds and in the manner specified in Section 2.11
of such Credit Agreement. Capitalized terms used herein have the meaning
assigned thereto in the Credit Agreement.


 


Each holder hereof is authorized to endorse on the grid attached
hereto, or on a continuation hereof, each Loan of the Bank and each payment
with respect thereto.


 


Presentment, demand, protest, notice of dishonor and notice of intent
to accelerate are hereby waived by the undersigned.


 


This Promissory Note evidences Loans made under, and is entitled to the
benefits of, the Amended and Restated Credit Agreement, dated as of October 26,
2004, among the Borrower, the Banks listed on the signature pages thereof,
the Issuing Banks from time to time parties thereto, and Calyon New York
Branch, as Agent, as the same may be amended from time to time (the “Credit
Agreement”). Reference is made to the Credit Agreement, as so amended, for
provisions relating to the prepayment and the acceleration of the maturity
hereof. This Promissory Note is also entitled to the benefits of the Pledge
Agreement.


 


This Promissory Note shall, pursuant to New York General Obligations
Law Section 5-1401, be governed by the law of the State of New York.


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  AES NY, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


GRID


 


PROMISSORY NOTE


 


 


	
  Date

  	
   

  	
  Amount of Loan

  	
   

  	
  Amount of

  Principal Repaid

  	
   

  	
  Notation Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


2





















 


EXECUTION COPY


 


AMENDED AND
RESTATED LLC MEMBERSHIP INTEREST PLEDGE AGREEMENT


 


Dated as of October 26, 2004


 


Amended and Restated LLC Membership Interest Agreement dated as of October 26,
2004 by and between AES EASTERN ENERGY, L.P., a Delaware limited partnership
(the “Pledgor”) and CALYON NEW YORK BRANCH (the “Secured Party”).


 


R E  C  I  T  A
L  S:


 


WHEREAS, the Pledgor is the legal and beneficial owner of, and has good
and marketable title to the Collateral (as defined below);


 


WHEREAS, the Pledgor entered into the LLC Membership Interest Pledge
Agreement dated as of April 10, 2001 between the Borrower and Union Bank
of California, N.A. (“Union Bank”) (the “Original Pledge Agreement”);


 


WHEREAS, the Secured Party, immediately prior to the execution and
delivery of the Credit Agreement on the Agreement Date, has purchased the
outstanding loans (“Existing Loans”) made under the Existing Credit
Facility by each of Union Bank and Citibank, N.A. (“Citi”) as the bank
parties thereto (Union Bank and Citi, collectively, the “Transferor Banks”)
and the Unreimbursed Drawings owed to each of the Transferor Banks and has
assumed all of the rights and obligations of the Transferor Banks under the
Existing Credit Facility including the Commitments of each Transferor Bank;


 


WHEREAS, the Secured Party has agreed to replace Union Bank as agent
under the Existing Credit Facility and as secured party under the Original
Pledge Agreement;


 


WHEREAS, concurrently with the execution and delivery of this Agreement
on the Agreement Date, the Existing Credit Facility is being amended and
restated in its entirety;


 


In consideration of the execution and delivery of the Credit Agreement,
Pledgor hereby agrees with Secured Party, to amend and restate the Original
Pledge Agreement in its entirety as follows (with certain terms used herein
being defined in Article 6):


 


ARTICLE 1.


 


SECURITY INTEREST


 


Section 1.01.                             Grant of Security Interest.  To
secure the payment, observance and performance of the Secured Obligations, the
Pledgor hereby pledges and assigns the Collateral to the Secured Party, and
grants to the Secured Party a continuing security interest in, and a continuing
lien upon, the Collateral.


 


Section 1.02.                             Validity and Priority of Security Interest.  The
Pledgor agrees that (a) the Security Interest shall at all times be valid,
perfected and enforceable against the Pledgor and all third parties, in
accordance with the terms hereof, as security for the Secured Obligations, and


 





















 


(b) the
Collateral shall not at any time be subject to any Lien, other than a Permitted
Lien, that is prior to, on a parity with or junior to the Security Interest,
except that, unless a Termination Event exists that results in termination of
the Depositary Agreement, this Section 1.02 shall not require the
continuation of the perfection of the Security Interest in any amounts paid by
the Pledgor or AEE2 to the Depositary Agent in accordance with the terms of the
Depositary Agreement. The requirement of this Section 1.02 that the
Security Interest at all times be perfected shall be complied with only to the
extent that the Secured Party shall have obtained control of the Collateral or
a Uniform Commercial Code financing statement shall have been filed with
respect thereto.


 


Section 1.03.                             Maintenance of Status of Security Interest Collateral
and Rights.  (a) Required Action. The Pledgor
shall take all actions, including the action specified on Schedule 1.03,
that may be necessary or desirable, or that the Secured Party may request, so
as at all times (i) to maintain the validity, perfection, enforceability
and priority of the Security Interest in the Collateral in conformity with the
requirements of Section 1.02, (ii) to protect and preserve the
Collateral and (iii) to protect and preserve, and to enable the exercise
or enforcement of, the rights of the Secured Party therein and hereunder and
under the other Collateral Documents.


 


(b)                                 Authorized Action.  The
Secured Party is hereby authorized to file or record financing statements and
other filing or recording documents or instruments with respect to the
Collateral without the signature of the Pledgor in such form and in such
offices as the Secured Party determines appropriate to perfect the security
interest of the Secured Party under this Agreement. The Pledgor hereby ratifies
and authorizes the filing by the Secured Party of any financing statement with
respect to the Collateral made prior to the date hereof. A carbon, photographic,
electronic or other reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.


 


(c)                                  Delivery of Collateral.  All
certificates and instruments, if any, representing or evidencing the Collateral
shall be delivered to and held by or on behalf of the Secured Party pursuant
hereto and shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Secured
Party.


 


Section 1.04.                             Evidence of Status of Security Interest.  The
Pledgor shall from time to time, upon the reasonable request of the Secured Party,
deliver to the Secured Party (a) such file search reports from such
Uniform Commercial Code and other filing and recording offices and (b) such
opinions of counsel relating to the Collateral, the attachment and perfection
of the Security Interest and otherwise to this Agreement, as the Secured Party
may request.


 


Section 1.05.                             Pledgor Remains Obligated: Secured Party Not
Obligated.  The grant by the Pledgor to the Secured Party
of the Security Interest shall not (a) relieve the Pledgor of any Liability
to any Person under or in respect of any of the Collateral or (b) impose
on the Secured Party any such Liability or any Liability for any act or
omission on the part of the Pledgor relative thereto.


 


2





















 


ARTICLE 2.


 


CERTAIN REPRESENTATIONS AND
WARRANTIES


 


Section 2.01.   Representations
and Warranties.  The Pledgor
represents and warrants as follows:


 


(a)           None of the Collateral of the Pledgor has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject;


 


(b)           The pledge, assignment and delivery of the Collateral, together with
duly executed instruments of transfer signed in blank, pursuant to this
Agreement will create a valid first priority lien on and a first priority
perfected security interest in the Collateral pledged by the Pledgor and the
proceeds thereof (subject to the provisions of Section 9-315 of the
Uniform Commercial Code), securing the payment of the Secured Obligations.


 


(c)           The Questionnaire is, as of the Agreement Date, complete and correct in
all material respects.


 


(d)           The Pledgor is the legal and beneficial owner of, and has good and
marketable title to (and has full right and authority to pledge and assign),
the Collateral purported to be pledged and assigned by it hereunder, free and
clear of any Lien, except for any Permitted Liens. No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except (i) such as may have
been filed in favor of the Secured Party relating to this Agreement and (ii) a
financing statement that names Union Bank, as secured party, which financing
statement will be assigned promptly on or after the date hereof pursuant to a
properly completed UCC-3 financing statement that has been delivered to the
Pledgor.


 


(e)           Each LLC Agreement, true and complete copies of which have been
furnished to the Secured Party, has been duly authorized, executed and
delivered by the Pledgor, has not been amended or otherwise modified (except (i) for
any such amendments or modifications prior to the Closing Date or (ii) to
the extent otherwise permitted hereunder or under any other Loan Document), is
in full force and effect and is the legal, valid and binding obligation of, and
enforceable against, the Pledgor in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditor’s right generally, and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law). There exists no default under any LLC Agreement by the
Pledgor.


 


ARTICLE 3.


 


CERTAIN COVENANTS


 


Section 3.01.  
Certain Matters Relating to Preservation of Status of Security
InterestChief Executive Office, Change of Name, Identity, Etc.. The Pledgor
will not (i) change the location of its chief executive office or chief
place of business from that specified in the


 


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Questionnaire, or (ii) change its name, identity, corporate
structure or jurisdiction of organization without giving the Secured Party
sixty (60) days’ prior notice thereof in each instance.


 


(b)           Other Financing Statements.  Except
with respect to Permitted Liens, the Pledgor shall not file, or suffer to be on
file, or authorize or permit to be filed or to be on file, in any jurisdiction,
any financing statement or like instrument with respect to the Collateral in
which the Secured Party is not named as the sole secured party.


 


(c)           The Pledgor covenants and agrees that:


 


(i)            Without the prior written consent of the
Secured Party, the Pledgor will not sell, assign, transfer, pledge or otherwise
dispose of or encumber any of its rights in or to the Collateral or any
interest therein, except that this Section shall not be deemed to prohibit
or otherwise restrict the payment of any amounts by the Pledgor or AEE2 to the Depositary
Agent in accordance with the terms of the Depositary Agreement.


 


(ii)           The Pledgor will, upon obtaining any
additional Capital Securities of any Issuer as required under Section 3.05(b),
promptly (and in any event within five (5) Business Days) deliver to the
Secured Party a Pledge Amendment, duly executed by such Pledgor, in
substantially the form of Schedule 3.01(d)(ii) hereto (a “Pledge
Amendment”). The Pledgor hereby authorizes the Secured Party to attach each
Pledge Amendment to this Agreement and agrees that all Capital Securities
listed on any Pledge Amendment delivered to Lender shall for all purposes
hereunder be considered Collateral.


 


(iii)          The Pledgor will not, without the written
consent of the Agent (such consent not to be unreasonably withheld), take any
action to amend, alter or change any Issuer’s LLC Agreement or other governing
document or permit any Issuer to repeal its LLC Agreement or other governing
document.


 


(iv)          The Pledgor covenants and agrees that it will
cause each Issuer to comply in all material respects with all the terms and
limitations contained in such Issuer’s LLC Agreement or other governing
document.


 


(d)           The Pledgor shall remain liable under the contracts and agreements
included in the Collateral (including each LLC Agreement) to the extent set
forth therein, and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Agreement had not been
executed. The exercise by the Secured Party of any of its rights hereunder
shall not release the Pledgor from any of its duties or obligations under any
such contracts or agreements included in the Collateral.


 


(e)           The Pledgor shall (i) maintain each LLC Agreement in full force
and effect, (ii) enforce each LLC Agreement in accordance with its terms,
and (iii) take all such action to such end as may from time to time be
reasonably requested by the Secured Party.


 


(f)            The Pledgor shall pay when due all taxes,
fees and assessments imposed on or with respect to the Collateral or in
connection with any of the transactions contemplated by this Agreement, except
to the extent the validity thereof is being contested in good faith by


 


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appropriate
proceedings for which adequate reserves in accordance with GAAP have been set
aside by the Pledgor.


 


Section 3.02.   No
Amendments, Etc., of Collateral.  Subject
to Section 3.05(b), the Pledgor shall not enter into or permit to exist
any restriction with respect to the transferability of or any rights under or
in respect of the Collateral, other than restrictions arising under the Loan
Documents and restrictions on transfer contained in the LLC Agreements (as in
effect on the date hereof).


 


Section 3.03.   Ownership
and Defense of Collateral.  The
Pledgor shall at all times (a) have good title to, and be the sole owner
of, each asset that is Collateral, free of (i) in the case of any
Collateral that is a financial asset, any adverse claim (as defined in Section 8-102(a)(l)
of the Uniform Commercial Code), and (ii) in the case of any Collateral
that is an instrument, any claim referred to in Section 3-305(1) of
the Uniform Commercial Code, and (b) defend the Collateral against the
claims and demands of all third Persons, except that this Section 3.03
shall not apply to (x) for only so long as such Lien is a Permitted Lien, the
interest in the Collateral and the claims and demands of a holder of a
Permitted Lien, or (y) Collateral to which Section 1.02 does not apply.


 


Section 3.04.  Status of
Collateral.  (a) The Pledgor
represents, warrants and agrees that (i) so long as any Securities are
Collateral, such Collateral is and shall be (A) duly authorized and
validly issued and fully paid and non-assessable and (B) except for such
registration as may be required under the Securities Act as a result of a
public offering or sale of such Collateral, freely saleable without limit, or
registration or qualification, under Applicable Law and (ii) as of the
Agreement Date, the shares or other units of the Capital Securities listed on Schedule 3.04
represent all of the outstanding shares or other units of such Capital
Securities.


 


(b)           The Pledgor agrees that it will take all steps necessary, including the
purchase of additional shares or other units of Capital Securities of the
Issuers, so that such shares or other units of Capital Securities that are
Collateral are all of the outstanding shares or other units of Capital
Securities of the Issuers.


 


Section 3.05.   Certain
Rights of Secured Party and Pledgor.  (a) Upon the occurrence and during the
continuance of a Termination Event, the Secured Party may, and is hereby
authorized to, transfer into or register in its name or the name of its nominee
any or all of the Collateral. The Pledgor shall promptly give the Secured Party
copies of all notices and other communications received by the Pledgor with
respect to any Collateral registered in the name of the Pledgor.


 


(b)           Upon the occurrence and during the continuance of a Termination Event,
the Secured Party, after a notice to the Pledgor that it intends to exercise
its rights under this Section 3.05(b), may, from time to time, in its own
or the Pledgor’s name, exercise any and all rights, powers and privileges with
respect to the Collateral, and with the same force and effect, as could the
Pledgor.


 


(c)           Unless and until the Secured Party exercises its rights under Section 3.05(b),
the Pledgor may, with respect to any of the Collateral, if the Pledgor shall
have given the Secured


 


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Party
not less than five (5) Business Days’ written notice thereof, vote and
give consents, ratifications and waivers with respect thereto, except to the
extent that any such would (A) be for a purpose that would constitute or
result in a Default or (B) in the sole judgment of the Secured Party,
detract from the value thereof as Collateral, and from time to time, upon
request from the Pledgor, the Secured party shall deliver to the Pledgor
suitable proxies so that the Pledgor may cast such votes, consents,
ratifications and waivers. Each such request from the Pledgor shall constitute
a Representation and Warranty by the Pledgor hereunder that no Default exists
or would result therefrom.


 


Section 3.06.   Payments
Under Depositary Agreement. (a) During the absence of any Termination
Event, the Pledgor shall be entitled to receive and retain all cash
Distributions paid by AEE2 in respect of the Securities. Upon the occurrence
and during the continuance of a Termination Event, the Secured Party may
notify, or request the Pledgor to notify, AEE2 to make all Distributions and
other payments in respect of the Collateral directly to the Secured Party,
except to the extent that AEE2 is required to make payments to the Depositary
Agent in accordance with the terms of the Depositary Agreement. Unless a
Termination Event is continuing, the Pledgor shall deliver to the Depositary
Agent in accordance with, and to the extent required under, the Depositary
Agreement all cash Distributions received by the Pledgor. The Pledgor shall
immediately deliver to the Secured Party (to hold as Collateral) all non-cash
Distributions made by AEE2 in the identical form received with any necessary
endorsements or with appropriate stock or bond powers duly executed in blank.


 


(b)           Upon the occurrence and during the continuance of a Termination Event,
the Pledgor shall (i) receive and hold all Distributions in trust for the
Secured Party, (ii) not commingle any Distributions that it is required to
hold in trust with any of its other funds or property and (iii) immediately
deliver all Distributions that it is required to hold in trust to the Secured
Party in the identical form received with any necessary endorsements or with
appropriate stock or bond powers duly executed in blank.


 


ARTICLE 4.


 


TERMINATION EVENTS


 


Upon the occurrence and during the continuance of a Termination Event,
and in each such case:


 


Section 4.01.   Application
of Proceeds.  Subject to rights of
the Depositary Agent prior to the occurrence of a Termination Event, all cash
proceeds received by the Secured Party upon any sale of, collection of, or
other realization upon, all or any part of the Collateral and all cash held by
the Secured Party as Collateral shall, subject to the Secured Party’s right to
continue to hold the same as cash Collateral, be applied as follows:


 


First:  To
the payment of all reasonable out-of-pocket costs and expenses incurred in
connection with the sale of or other realization upon the Collateral, including
attorneys’ fees and disbursements;


 


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Second:  To
the payment of the Secured Obligations owing to the Agent in such order as the
Agent may elect (with the Pledgor remaining liable for any deficiency);


 


Third:  To
the payment of the other Secured Obligations in such order as the Required
Banks may elect (with the Pledgor remaining liable for any deficiency); and


 


Fourth:  To
the extent of the balance (if any) of such proceeds, to the payment to the
Pledgor, subject to Applicable Law and to any duty to pay such balance to the
holder of any subordinate Lien in the Collateral.


 


Section 4.02.   General
Remedies.  (a) Power of Sale.
The Secured Party (i) may sell the Collateral in one or more parcels at
public or private sale, at any of its offices or elsewhere, for cash, on credit
or for future delivery, and at such price or prices and upon such other terms
as it may deem commercially reasonable, (ii) shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given, and
(iii) may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Secured Party shall give Pledgor at least ten (10) days’ prior written
notice of the Secured Party’s intention to make any sale of any Collateral
specifying the time such disposition is to be made and, if such disposition is
a public sale, specifying the place of such sale, and the Pledgor agrees that
any such notice shall constitute reasonable notification.


 


(b)           Foreclosure.  The Secured Party, instead of
exercising the power of sale conferred upon it by Section 4.02(a) and
Applicable Law, may proceed by a suit or suits at law or in equity to foreclose
the Security Interest and sell the Collateral, or any portion thereof, under a
judgment or a decree of a court or courts of competent jurisdiction.


 


(c)           Receiver.  The Secured Party may obtain
the appointment of a receiver of the Collateral and the Pledgor consents to and
waives any right to notice of such appointment.


 


Section 4.03.   Other
Remedies.  (a) Secured Party’s
Rights with Respect to Proceeds and Other Collateral. All payments and
other deliveries received by or for the account of the Secured Party from time
to time pursuant to Section 3.06, together with the proceeds of all other
Collateral from time to time held by or for the account of the Secured Party
(whether as a result of the exercise by the Secured Party of its rights under Section 4.02(a) or
(b) or otherwise) may, at the election of the Secured Party, (i) be
held by the Secured Party, or any Person designated by the Secured Party to
receive or hold the same, as Collateral, (ii) be or continue to be applied
as provided in Section 4.01 or (iii) be disposed of as provided in Section 4.02(a) or
(b).


 


(b)           Enforcement by Secured Party. The Secured Party may, without notice to
the Pledgor and at such time or times as the Secured Party in its sole
discretion may determine, exercise any or all of the Pledgor’s rights in, to
and under, or in any way connected with or related to, any or all of the
Collateral, including (i) demanding and enforcing payment and performance
of, and exercising any or all of the Pledgor’s rights and remedies with respect
to the collection, enforcement or prosecution of, any or all of the Collateral
Obligations, in each case by legal proceedings or otherwise, (ii) settling,
adjusting, compromising, extending, renewing, discharging and releasing any or
all of, and any legal proceedings brought to collect or enforce


 


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any
or all of, the Collateral Obligations and (iii) preparing, filing and
signing the name of the Pledgor on (A) any proof of claim or similar
document to be filed in any bankruptcy or similar proceeding involving any
Issuer and (B) any notice of lien, assignment or satisfaction of lien, or
similar document in connection with any Collateral Obligation.


 


(c)           Adjustments.  The Secured Party may settle
or adjust disputes and claims directly with each Issuer for amounts and on
terms that the Secured Party considers advisable and in all such cases only the
net amounts received by the Secured Party in or as payment of such amounts,
after deduction of reasonable out-of-pocket costs and expenses of collection,
including reasonable attorneys’ fees and expenses, shall be subject to the
other provisions of this Agreement.


 


ARTICLE 5.


 


MISCELLANEOUS


 


Section 5.01.   Expenses
of Pledgor’s Agreements and Duties.  The
terms, conditions, covenants and agreements to be observed or performed by the
Pledgor under the Collateral Documents shall be observed or performed by it at
its sole cost and expense.


 


Section 5.02.   Secured
Party’s Right to Perform on Pledgor’s Behalf.  If the Pledgor shall fail to observe or
perform any of the terms, conditions, covenants and agreements to be observed
or performed by it under the Collateral Documents, the Secured Party may (but
shall not be obligated to) do the same or cause it to be done or performed or
observed, either in its name or in the name and on behalf of the Pledgor, and
the Pledgor hereby authorizes the Secured Party so to do.


 


Section 5.03.   Secured
Party’s Right to Use Agents and to Act in Name of Pledgor.  The Secured Party may exercise its rights and
remedies under the Collateral Documents through an agent or other designee and,
in the exercise thereof, the Secured Party or any such other Person may act in
its own name or upon the occurrence and during the continuance of a Termination
Event in the name and on behalf of the Pledgor.


 


Section 5.04.  No
Interference: Compensation or Expense.  The Secured Party may exercise its rights and
remedies under the Collateral Documents (a) without resistance or
interference by the Pledgor, (b) without payment of any kind to the
Pledgor and (c) for the account, and at the expense, of the Pledgor.


 


Section 5.05.   Limitation
of Secured Party’s Obligations with Respect to Collateral.  (a) The Secured Party shall have no
obligation to protect or preserve any Collateral or to preserve rights
pertaining thereto other than the obligation to use reasonable care in the
custody and preservation of any Collateral in its actual possession. The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of any Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Secured Party accords
its own property. The Secured Party shall be relieved of all responsibility for
any Collateral in its possession upon surrendering it, or tendering surrender
of it, to the Pledgor.


 


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(b)           Nothing contained in the Collateral Documents shall be construed as
requiring or obligating the Secured Party, and the Secured Party shall not be
required or obligated, to (i) make any demand, or to make any inquiry as
to the nature or sufficiency of any payment received by it, or to present or
file any claim or notice or take any action, with respect to any Collateral
Obligation or any other Collateral or the monies due or to become due
thereunder or in connection therewith, (ii) ascertain or take action with
respect to calls, conversions, exchanges, maturities, tenders, offers or other
matters relating to any Collateral, whether or not the Secured Party has or is
deemed to have knowledge or notice thereof, (iii) take any necessary steps
to preserve rights against any prior parties with respect to any Collateral or (iv) notify
the Pledgor of any decline in the value of any Collateral.


 


Section 5.06.  Rights of
Secured Party Under Uniform Commercial Code and Applicable Law.  The Secured Party shall have, with respect to
the Collateral, in addition to all of its rights and remedies under the Collateral
Documents, (a) the rights and remedies of a secured party under the
Uniform Commercial Code, whether or not the Uniform Commercial Code would
otherwise apply to the Collateral in question, and (b) the rights and
remedies of a secured party under all other Applicable Law.


 


Section 5.07.   Waivers
of Rights Inhibiting Enforcement.  The
Pledgor waives (a) any claim that, as to any part of the Collateral, a
public sale, should the Secured Party elect so to proceed, is, in and of
itself, not a commercially reasonable method of sale for such Collateral, (b) the
right to assert in any action or proceeding between it and the Secured Party
any offsets or counterclaims that it may have, (c) except as otherwise
provided in any of the Collateral Documents, to the extent permitted by
Applicable Law, notice or judicial hearing in connection with the Secured Party’s
taking possession or disposition of any of the Collateral, including any and
all prior notice and hearing for any prejudgment remedy or remedies and any
such right that the Pledgor would otherwise have under the U.S. Constitution or
any statute of the United States or of any state, and all other requirements as
to the time, place and terms of sale or other requirements with respect to the
enforcement of the Secured Party’s rights hereunder, (d) all rights of
redemption, appraisement, valuation, stay and extension or moratorium and (e) all
other rights the exercise of which would, directly or indirectly, prevent,
delay or inhibit the enforcement of any of the rights or remedies under the
Collateral Documents or the absolute sale of the Collateral, now or hereafter
in force under any Applicable Law, and the Pledgor, for itself and all who may
claim under it, insofar as it or they now or hereafter lawfully may, hereby
waive the benefit of all such laws and rights.


 


Section 5.08.   Power of
Attorney.  (a) In addition to
the other powers granted to the Secured Party by the Pledgor under the
Collateral Documents, the Pledgor hereby appoints the Secured Party, and any
other Person that the Secured Party may designate, as the Pledgor’s
attorney-in-fact to act, in the name, place and stead of the Pledgor in any way
in which the Pledgor itself could do, with respect to each of the following: (i) upon
the occurrence and during the continuance of a Termination Event, endorsing the
Pledgor’s name on (A) any checks, notes, acceptances, money orders, drafts
or other forms of payment, (B) any securities, instruments, documents,
notices, or other documents or agreements relating to the Collateral, (C) schedules
and assignments of Collateral Obligations and (D) notices of assignment,
UCC-1 financing statements and other public records; (ii) taking any
actions or exercising any rights, powers or privileges that the Pledgor is entitled
to take or exercise and that, under the terms of any of the


 


9





















 


Collateral
Documents, the Secured Party is authorized to take or exercise; (iii) upon
the occurrence and during the continuance of an Event of Default, doing or
causing to be done any or all things necessary or, in the determination of the
Secured Party, desirable to observe or perform the terms, conditions, covenants
and agreements to be observed or performed by the Pledgor under the Collateral
Documents and otherwise to carry out the provisions of the Collateral
Documents; and (iv) upon the occurrence and during the continuance of a
Termination Event, notifying the post office authorities to change the address
for delivery of the Pledgor’s mail to an address designated by the Secured
Party, and receiving, opening and disposing of all mail addressed to the
Pledgor (with all mail not constituting, evidencing or relating to the
Collateral to be forwarded by the Secured Party to the Pledgor). The Pledgor
hereby ratifies and approves all acts of said attorney-in-fact.


 


(b)           To induce any third Person to act under this Section 5.08, the
Pledgor hereby agrees that any third Person receiving a duly executed copy or
facsimile of this Agreement may act under this Section 5.08, and that the
termination of this Section 5.08 shall be ineffective as to such third
Person unless and until actual notice or knowledge of such termination shall
have been received by such third Person, and the Pledgor, on behalf of itself
and its successors and assigns, hereby agrees to indemnify and hold harmless
any such third Person from and against any and all claims that may arise
against such third Person by reason of such third Person having relied on the
provisions of this Section 5.08.


 


Section 5.09.   Termination of Security Interest.  The Security Interest and all of the Pledgor’s
obligations under Articles 1, 3 and 4 shall terminate upon the later to occur
of (a) the indefeasible repayment in full in cash, to the extent due, and,
to the extent not due, the satisfaction or securing, in a manner acceptable to
the Secured Party, of the Secured Obligations, and (b) the termination of
the Commitments and the termination or expiration of all Letters of Credit.


 


Section 5.10.   Governing
Law.  This Agreement and the rights
and duties of the Pledgor, the Secured Party and the other Principals under the
Collateral Documents (including matters relating to the Maximum Permissible
Rate) shall, pursuant to New York General Obligations Law Section 5-1401,
be governed by the law of the State of New York, except to the extent that the
validity or perfection of the Security Interest, or remedies hereunder, in
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of New York.


 


Section 5.11.   LIMITATION OF LIABILITY.  NEITHER THE SECURED PARTY NOR ANY OTHER
PRINCIPAL SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND THE PLEDGOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE FOR:


 


(a)           ANY LOSS OR DAMAGE SUSTAINED BY THE PLEDGOR, OR ANY LOSS, DAMAGE,
DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL, THAT MAY OCCUR
AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO, ANY
EXERCISE OF ANY RIGHT OR REMEDY UNDER THE COLLATERAL DOCUMENTS, EXCEPT FOR ANY
SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE EXTENT THAT THE SAME IS
DETERMINED BY A JUDGMENT OF A COURT THAT IS BINDING ON THE PLEDGOR AND SUCH
PRINCIPAL, FINAL AND NOT SUBJECT TO REVIEW ON APPEAL, TO BE


 


10





















 


THE
RESULT OF ACTS OR OMISSIONS ON THE PART OF SUCH PRINCIPAL CONSTITUTING (i) WILLFUL
MISCONDUCT OR (ii) GROSS NEGLIGENCE; OR


 


(b)           ANY SPECIAL, INDIRECT OR CONSEQUENTIAL, AND, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, PUNITIVE DAMAGES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH ANY COLLATERAL DOCUMENT RELATED CLAIM.


 


Section 5.12.   Counterparts. This Agreement and each
other Collateral Document may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
were upon the same instrument.


 


Section 5.13.   Entire
Agreement. This Agreement embodies the entire agreement among the Pledgor
and the Secured Party relating to the subject matter hereof and supersedes all
prior agreements, representations and understandings, if any, relating to the
subject matter hereof.


 


Section 5.14.   Successors
and Assigns. All of the provisions of this Agreement and each other
Collateral Document shall be binding on and inure to the benefit of the parties
hereto and thereto and their respective successors and assigns; provided, however, that the Pledgor may not assign any of its rights or
obligations under this Agreement or any other Collateral Document without the
prior written consent of the Secured Party and the other Principals.


 


Section 5.15.   Delivery
of Opinions Authorized. The Pledgor hereby acknowledges and agrees that
each Person that has rendered or may render an opinion, report or similar
communication, including legal opinions and accountant’s reports, to any Person
in connection with the Collateral Documents, has been and is hereby authorized
and directed to so deliver such opinion, report or communication.


 


ARTICLE 6.


 


INTERPRETATION


 


Section 6.01.   Definitional
Provisions. (a) Certain Terms Defined by
Reference. Except where the context clearly indicates a different meaning,
all terms defined in Article 1, 8 or 9 of the Uniform Commercial Code, as
such definitions may be amended from time to time, are used herein with the
meanings therein ascribed to them. In addition, the terms “collateral” and “security
interest”, when capitalized, have the meanings specified in subsection (b) below
and the term “deposit account” includes an account evidenced by a certificate of
deposit. Capitalized terms used but not defined herein shall have the meaning
set forth in the Credit Agreement.


 


(b)           Other Defined Terms. For purposes of this Agreement:


 


“Agreement”
means this Agreement, including all schedules, annexes and exhibits hereto.


 


“Agreement Date” means the date set forth as such on the last
signature page hereof.


 


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“Collateral” means the Pledgor’s right, title and interest in
each of the following, in each case whether now or hereafter existing or now
owned or hereafter acquired by the Pledgor:


 


(i)            all Securities;


 


(ii)           the limited liability company agreement or
operating agreement (as the case may be) of each Issuer identified in Schedule 3.04
(each such agreement, as it may be amended, supplemented, restated or otherwise
modified from time to time, being referred to herein as an “LLC Agreement”)
and all limited liability company membership interests of the Pledgor in such
Issuer, including (A) all rights of the Pledgor as a member of such Issuer
and all rights to receive distributions, cash, instruments and other property
from time to time received, receivable or otherwise distributed under or
pursuant to such LLC Agreement, (B) all rights of the Pledgor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to such
LLC Agreement, (C) all claims of the Pledgor for damages arising out of or
for breach of or default under such LLC Agreement, (D) the right of the
Pledgor to terminate such LLC Agreement, to perform and exercise consensual or
voting rights thereunder and to compel performance and otherwise exercise all
remedies thereunder, (E) all rights of the Pledgor, whether as a member of
such Issuer or otherwise, to all property and assets of such Issuer (whether
real property, inventory, equipment, contract rights, accounts, receivables,
general intangibles, securities, instruments, chattel paper, documents, choses
in action, or otherwise), and (F) certificates or instruments evidencing
an ownership or membership interest in such Issuer or its assets;


 


(iii)          all rights (contractual and otherwise and
whether constituting accounts, general intangibles, investment property or
financial assets) constituting, arising under, connected with, or in any way related
to, any or all Collateral;


 


(iv)          all claims (including the right to sue or
otherwise recover on such claims) (A) to items referred to in the
definition of Collateral, (B) under warranties relating to any of the
Collateral, and (C) against third parties that in any way arise under or
out of or are related to or connected with any or all of the Collateral; and


 


(v)           all products and proceeds of Collateral in
whatever form (including proceeds that constitute property of the types
described above). The inclusion of “proceeds” of Collateral in the definition
of “Collateral” shall not be deemed a consent by the Secured Party to any sale
or other disposition of any Collateral not otherwise specifically permitted by
the terms hereof.


 


“Collateral
Document Related Claim” means any claim (whether civil, criminal or
administrative and whether arising under any Applicable Law, including any “environmental”
or similar law, or sounding in tort, contract or otherwise) in any way arising
out of, related to, or connected with (i) the Collateral Documents, (ii) the
relationships established thereunder, (iii) the exercise of any right or
remedy available thereunder or under Applicable Law or (iv) the
Collateral, whether such claim arises or is asserted before or after the Agreement
Date or before or after the release of the Security Interest.


 


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“Collateral
Documents” means (i) this Agreement and (ii) all other
agreements, documents and instruments related to, arising out of, or in any way
connected with, (A) this Agreement, (B) any other agreement, document
or instrument referred to in this clause (ii), or (C) any of the
transactions contemplated by this Agreement or any such other agreement,
document or instrument, in each case whether now or hereafter executed.


 


“Collateral Obligation” means a Liability that constitutes or
arises in connection with any Collateral and includes any such Liability
constituting or arising under any Security.


 


“Credit Agreement” means the Amended and Restated Credit
Agreement, dated as of the date hereof, among the Pledgor, the Banks and
Issuing Banks listed on the signature pages thereof and from time to time
parties thereto, and Calyon New York Branch, as Agent.


 


“Distributions” means Ordinary Distributions and Extraordinary
Distributions.


 


“Extraordinary Distributions” means (in each case whether or not
in cash) all dividends, interest, principal payments and other distributions
and other payments (including cash and securities payable in connection with
calls, conversions, stock splits, redemptions and the like) on or in respect
of, and all proceeds (including cash and securities receivable in connection
with tender or other offers) of, Collateral other than Ordinary Distributions.


 


“Issuer” means each of AEE2, AES Cayuga and AES Somerset.


 


“LLC Agreement” has the meaning assigned to such term in clause (ii) of
the definition of “Collateral” contained in this Section 6.01 (b).


 


“Ordinary Distributions” means cash dividends to the extent paid
out of retained earnings, and interest paid in cash, in each case with respect
to Collateral, except to the extent that any such dividend is made in
connection with partial or total liquidation or a reduction of capital or any
such interest is penalty interest, or, in each case, to the extent the same is
not in the ordinary course.


 


“Permitted Lien” means (i) a Lien consented to in writing
by the Secured Party but only if the Secured Party shall not have requested the
discharge thereof, (ii) a Lien created in favor of the Secured Party under
the Collateral Documents, and (iii) any other Permitted Lien (as defined
in Appendix A) to the extent expressly permitted under, and as described in, Section 6.05(a) of
the Credit Agreement.


 


“Pledge Amendment” has the meaning ascribed to that term in Section 3.01(c)(ii) hereto.


 


“Pledgor” means AES Eastern Energy, L.P., a Delaware limited
partnership.


 


“Principals” means all Persons that are, or at any time were,
the Secured Party, the Agent, a Bank, an Issuing Bank and any other Indemnified
Person.


 


“Questionnaire” means the Questionnaire in the form attached
hereto as Schedule 6.01 executed and delivered by the Pledgor to
the Secured Party in connection with this Agreement.


 


13





















 


“Representation and Warranty” means each representation or
warranty made pursuant to or under (i) Article 2, Article 3 or
any other provision of this Agreement, (ii) any of the other Collateral
Documents or (iii) any amendment to, or waiver of rights under, this
Agreement or under any of the other Collateral Documents, whether or not, in
the case of any representation or warranty referred to in clause (i), (ii) or
(iii) of this definition (except in each case, to the extent otherwise
expressly provided), the information that is the subject matter thereof is within
the knowledge of the Pledgor.


 


“Security” means (i) each security (A) listed on Schedule 3.04
and (B) acquired by the Pledgor pursuant to its obligations under Section 3.04(b),
(ii) each security, whether or not listed on Schedule 3.04,
issued by an Issuer in the possession of (A) the Secured Party, (B) the
Pledgor or (C) a Person acting on behalf of the Secured Party or who has
acknowledged that it holds such security for the Secured Party, and (iii) each
security, whether or not listed on Schedule 3.04, of the same class
or series issued by an Issuer and delivered to or for the account of the
Pledgor by the Secured Party or any such Person for a purpose contemplated by Section 9-312(g) of
the Uniform Commercial Code.


 


“Secured
Obligations”means all Liabilities of the Pledgor owing to, or in favor or
for the benefit of, or purporting to be owing to, or in favor or for the
benefit of, the Principals under the Loan Documents to which the Pledgor is a
party, in each case (i) whether now existing or hereafter arising or
acquired and (ii) whether owing to, or in favor or for the benefit of, or
purporting to be owing to, or in favor or for the benefit of, Persons that are
Principals as of the Agreement Date or that become Principals by reason of any
succession or assignment at any time thereafter, and including, without
limitation, all Loan Document Related Claims to the extent that the Pledgor is
or may be obligated to indemnify the Secured Party, the Banks or the Issuing
Banks therefor pursuant to the Credit Agreement or any other Loan Document; but
in no event shall the principal amount of the Secured Obligations exceed
$50,000,000.


 


“Secured Party” means the Agent, acting both on its own behalf
as Agent and as the agent for and representative (within the meaning of Section 9-102(a)(72)
of the Uniform Commercial Code) of the other Principals.


 


“Security Interest” means the pledges and assignments to the
Secured Party of, the continuing security interest of the Secured Party in, and
the continuing lien of the Secured Party upon, the Collateral intended to be
effected by the terms of this Agreement or any of the other Collateral
Documents.


 


“Termination Event” means (i) the termination of all Leases
or (ii) the Secured Party notifies the Pledgor that pursuant to Section 8.02
of the Credit Agreement the Commitments have terminated and the Secured Party
has elected to exercise remedies under this Agreement.


 


Section 6.02.   Other
Interpretative Provisions. (a) Except as
otherwise specified herein, all references herein (i) to any Person shall
be deemed to include such Person’s successors and assigns, (ii) to any
Applicable Law defined or referred to herein shall be deemed references to such
Applicable Law as the same may have been or may be amended or supplemented from
time to time and (iii) to any Loan Document or Contract defined or
referred to herein shall be deemed references to such Loan Document or Contract
(and, in the case of any instrument, any other


 


14





















 


instrument
issued in substitution therefor) as the terms thereof may have been or may be
amended, supplemented, waived or otherwise modified from time to time (subject
to any restrictions on such amendments, supplements, waivers or modifications
set forth herein or in any other Loan Document).


 


(b)           When used in this Agreement, the words “herein”, “hereof and “hereunder”,
and words of similar import, shall refer to this Agreement as a whole and not
to any particular provision of this Agreement, and the words “Article”, “Section”,
“Schedule” and “Exhibit” shall refer to Articles, Sections of, and Schedules
and Exhibits to, this Agreement unless otherwise specified.


 


(c)           Whenever the context so requires, the neuter gender includes the
masculine or feminine, the masculine gender includes the feminine, and the
singular number includes the plural, and vice versa.


 


(d)           Any item or list of items set forth following the word “including”, “include”
or “includes” is set forth only for the purpose of indicating that, regardless
of whatever other items are in the category in which such item or items are “included”,
such item or items are in such category, and shall not be construed as
indicating that the items in the category in which such item or items are “included”
are limited to such items or to items similar to such items.


 


(e)           Each power of attorney, license and other authorization in favor of the
Secured Party or any other Person granted by or pursuant to this Agreement
shall be deemed to be irrevocable and coupled with an interest.


 


(f)            Except as otherwise indicated, any reference
herein to the “Collateral”, the “Secured Obligations”, the “Loan Documents”,
the “Collateral Documents”, the “Principals”, the “Issuers” or any other
collective or plural term shall be deemed a reference to each and every item
included within the category described by such collective or plural term, so
that (i) a reference to the “Collateral”, the “Secured Obligations”, the “Principals”
or the “Issuers” shall be deemed a reference to any or all of the Collateral,
the Secured Obligations, the Principals or the Issuers, as the case may be, and
(ii) a reference to the “obligations” of the Pledgor under the “Loan
Documents” or the “Collateral Documents” shall be deemed a reference to each
and every obligation under each and every Loan Document or Collateral Document,
as the case may be, whether any such obligation is incurred under one, some or
all of the Loan Documents or the Collateral Documents, as the case may be.


 


(g)           Except where the context clearly indicates a different meaning,
references in this Agreement to Securities and other types of property means
the same to the extent they constitute Collateral.


 


Section 6.03.  Representations and Warranties. All
Representations and Warranties shall be deemed made (a) in the case of any
Representation and Warranty contained in this Agreement at the time of its
initial execution and delivery, except where otherwise stated herein, at and as
of the Agreement Date, (b) in the case of any Representation and Warranty
contained in this Agreement or any other Loan Document at the time any Loan is
made, except where otherwise stated therein, at and as of such time and (c) in
the case of any particular Representation and


 


15





















 


Warranty,
wherever contained, at such other time or times as such Representation and
Warranty is made or deemed made in accordance with the provisions of this
Agreement or the document pursuant to, under or in connection with which such
Representation and Warranty is made or deemed made.


 


Section 6.04.   Captions.
Captions to Articles, Sections and subsections of, and Annexes, Schedules and
Exhibits to, the Collateral Documents are included for convenience of reference
only and shall not constitute a part of the Collateral Documents for any other
purpose or in any way affect the meaning or construction of any provision of
the Collateral Documents.


 


16





















 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers all as of the Agreement Date.


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
  By:
  AES NY, L.L.C., as general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Kevin R. Pierce

  	
   

  
	
   

  	
  Name:

  	
  Kevin
  R. Pierce

  
	
   

  	
  Title:

  	
  Vice
  President

  
					



 


AMENDED AND RESTATED LLC MEMBERSHIP INTEREST PLEDGE AGREEMENT


 





















 


	
   

  	
  CALYON
  NEW YORK BRANCH,

  
	
   

  	
  as
  Secured Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Glenn W. Muscosky

  	
   

  
	
   

  	
  Name:

  	
  Glenn W. Muscosky

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Nina Eshoo

  	
   

  
	
   

  	
  Name:

  	
  Nina Eshoo

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  Agreement
  Date: October 26, 2004

  
						



 





















 


Schedule 1.03 


 


SCHEDULE OF REQUIRED ACTION


 


Pursuant to, and without thereby limiting, its obligations under Section 1.03,
the Pledgor hereby agrees that it will:


 


1.             (A)          Deliver to the Secured Party certificates
evidencing Securities either (i) in bearer form or (ii) if such
Security is in registered form, either (a) registered in the name of the Secured
Party, (b) indorsed to the Secured Party or in blank by an effective
endorsement or (c) accompanied by blank stock or bond powers.


 


(B)           Deliver to the Secured Party UCC-3 Financing Statements in form and
substance satisfactory to the Secured Party.


 


2.             Upon the occurrence and during the
continuance of any Termination Event, to the extent that the same is
Collateral: hold all money, checks, notes, drafts and other payments received
by the Pledgor or any of its agents that constitute Collateral, in trust for
the Secured Party, not commingle the same with any other property of the
Pledgor and, within five (5) Business Days (or such shorter period as the
Secured Party may specify in writing to the Pledgor) after receipt, cause the
same to be delivered to the Secured Party.


 


3.             At all times (a) mark its books and records
as may be necessary or appropriate to evidence, protect and perfect the
Security Interest and (b) cause its financial statements to reflect the
Security Interest in Collateral with respect to which perfection is not
effected by public filing or recording.


 





















 


Schedule 3.0l(c)(ii) 


 


PLEDGE AMENDMENT


 


Additional Capital
Securities


 


	
   

  	
   

  	
  Class

  	
   

  	
  Number of Shares 

  (or other Units)

  	
   

  	
   

  
	
   

  	
   

  	
  or

  	
   

  	
  or

  	
   

  	
  % of Outstanding

  
	
  Issuer

  	
   

  	
  Series

  	
   

  	
  Principal Amounts

  	
   

  	
  Class or Series

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


Schedule 3.04


 


SHARES OF THE CAPITAL SECURITIES


 


	
  Issuer

  	
   

  	
  Debt or 

  Equity

  	
   

  	
  Certificated or

  Uncertificated

  	
   

  	
  Class or

  Series

  	
   

  	
  LLC

  Agreement

  	
   

  	
  Number of

  Shares/Units or

  Principal Amount 

  Owned

  	
   

  	
  Percent of

  Outstanding

  Class or Series

  	
   

  
	
  AEE2,
  L.L.C.

  	
   

  	
  Equity

  	
   

  	
  Certificated

  	
   

  	
  Common Shares

  	
   

  	
  Amended
  and Restated Limited Liability Company Agreement dated as of May 4, 1999

  	
   

  	
  10

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES
  Cayuga, L.L.C.

  	
   

  	
  Equity

  	
   

  	
  Certificated

  	
   

  	
  Common Shares

  	
   

  	
  Amended
  and Restated Limited Liability Company Agreement dated as of March 9,
  2001

  	
   

  	
  10

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES
  Somerset, L.L.C.

  	
   

  	
  Equity

  	
   

  	
  Certificated

  	
   

  	
  Common Shares

  	
   

  	
  Amended
  and Restated Limited Liability Company Agreement dated as of March 9,
  2001

  	
   

  	
  10

  	
   

  	
  100

  	
  %

  



 





















 


Schedule 6.01


 


LLC MEMBERSHIP INTEREST

PLEDGE AGREEMENT QUESTIONNAIRE


 


The
undersigned (the “Pledgor”) is entering into an Amended and Restated LLC
Membership Interest Pledge Agreement (the “Pledge Agreement”)
with Calyon New York Branch, as Secured Party. In connection with the Pledge
Agreement, the Pledgor is required to answer the following questions:


 


1.             What is the Pledgor’s exact complete name?


 


 


AES Eastern Energy, L.P


 


 


2.             Has the Pledgor ever changed its name? If so,
state each other name the Pledgor has had.


 


No.


 


 


3.             Does the Pledgor do business under any other
name? If so, state each such name.


 


No.


 





















 


4.             Has the Pledgor changed its identity or legal
structure in any way within the past five years? Changes in legal structure
would include incorporation of a partnership or sole proprietorship,
reincorporation in a different state, mergers, consolidations and acquisitions.
If any such change has taken place, indicate the nature of such change and give
the names of each corporation or other entity that was incorporated, merged or
consolidated with or acquired by the Pledgor in such transaction (including
each name under which each such corporation or entity has done business) and
the address of each place of business of each such corporation or entity
immediately prior to such incorporation, merger, consolidation or acquisition
and within four months prior to the date of this Questionnaire.


 


No.


 


 


 


5.             State the complete address (including the
county) of the Pledgor’s place of business or, if the Pledgor has more than one
place of business, its chief executive office and, if different from its place
of business or chief executive office, of the location where the Pledgor keeps
its books and records relating to its accounts or contract rights.


 


 


7725 Lake Road


 


Barker, New York 14012


 


6.             Has the Pledgor’s place of business or chief
executive office been located at any other address (including that of any
independent computer service firm or the like) during the past four months? If
so, specify each such address (including the county).


 


No.


 


 


7.             State the complete address (including the
county) of each other place of business that the Pledgor presently has:


 


	
  AES
  Cayuga, L.L.C.

  	
   

  	
  AES
  Somerset, L.L.C.

  
	
   

  	
   

  	
   

  
	
  228
  Cayuga Drive

  	
   

  	
  7725
  Lake Road

  
	
   

  	
   

  	
   

  
	
  Lansing,
  NY 14882

  	
   

  	
  Barker,
  NY 14012

  



 





















 


 


8.             State the complete address (including the county)
of each place of business that the Pledgor has had in the past four months,
other than those listed in the answers to questions 5, 6, and 7.


 


 


9.             State the following information, in each case
as of the Agreement Date, with respect to each security that is to be
Collateral on the Agreement Date


 


	
  Issuer

  	
   

  	
  Debt or

  Equity

  	
   

  	
  Certificated or

  Uncertificated

  	
   

  	
  Class or

  Series

  	
   

  	
  LLC
  Agreement

  	
   

  	
  Number
  of

  Shares/Units

  or Principal

  Amount

  Owned

  	
   

  	
  Percent
  of

  Outstanding

  Class or

  Series

  	
   

  
	
  AEE2,
  L.L.C. 

  	
   

  	
  Equity

  	
   

  	
  Certificated

  	
   

  	
  Common Shares

  	
   

  	
  Amended
  and Restated Limited Liability Company Agreement, dated as of May 4,
  1999

  	
   

  	
  10

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES
  Cayuga, LLC

  	
   

  	
  Equity

  	
   

  	
  Certificated

  	
   

  	
  Common Shares

  	
   

  	
  Amended
  and “Restated-Limited Liability Company Agreement, dated as of March 9,
  2001

  	
   

  	
  10

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AES
  Somerset, L.L.C.

  	
   

  	
  Equity

  	
   

  	
  Certificated

  	
   

  	
  Common Shares

  	
   

  	
  Amended
  and Restated Limited Liability Company Agreement, dated as of March 9,
  2001

  	
   

  	
  10

  	
   

  	
  100

  	
  %

  



 





















 


The
Pledgor hereby certifies that its answers to the foregoing questions are
complete and correct and confirms that such answers constitute representations
and warranties under the Pledge Agreement.


 


 


Date:
October 26, 2004


 


	
   

  	
  Pledgor:

  
	
   

  	
   

  
	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By: AES NY, L.L.C., as general
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kevin R. Pierce

  	
   

  
	
   

  	
  Name:

  	
  Kevin
  R. Pierce

  
	
   

  	
  Title:

  	
  Vice
  President

  
					



 





















 


EXECUTION COPY


 


ISSUING
BANK AGREEMENT


 


ISSUING BANK AGREEMENT, dated as of October 26, 2004 between AES
EASTERN ENERGY, L.P., a Delaware limited partnership (the “Borrower”), and
CALYON NEW YORK BRANCH (the “New Issuing Bank”).


 


PRELIMINARY STATEMENTS


 


(1)           The Borrower has entered into the Amended and Restated Credit
Agreement, dated as of October 26, 2004 (said Agreement, as amended,
supplemented, restated or otherwise modified from time to time, being the “Credit Agreement”), with
certain Banks named therein and from time to time parties thereto (the “Banks”),
certain letter of credit issuing banks from time to time parties thereto, and Calyon
New York Branch, as Agent. Unless otherwise defined herein, capitalized terms
used herein shall have the meaning assigned to such terms in the Credit
Agreement.


 


(2)           Pursuant to Section 3.01 of the Credit Agreement, the Borrower may
from time to time identify and arrange for one or more of the Banks to act as
an Issuing Bank thereunder and issue one or more Letters of Credit (as defined
below). The Borrower desires to designate the New Issuing Bank as an Issuing
Bank under the Credit Agreement. Subject to the terms and conditions hereof and
of the Credit Agreement, the New Issuing Bank has agreed to act as an Issuing
Bank and to issue Letters of Credit from time to time at the request of and for
the account of the Borrower in an aggregate stated amount not to exceed
$35,000,000 (such amount referred to herein as the “Commitment”) at any
one time outstanding.


 


NOW, THEREFORE, in consideration of the premises and in order to induce
the New Issuing Bank to issue Letters of Credit from time to time, the parties
hereto agree as follows:


 


ARTICLE I

DEFINITIONS


 


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):


 


“Beneficiary” means, with respect to
any Letter of Credit, the beneficiary of such Letter of Credit.


 


“Commitment” has the meaning assigned to that term in
Preliminary Statement (2) hereof.


 


“Commitment Termination Date” has the meaning assigned to that
term in Section 3.01 hereof.


 


“Letter of Credit”
means a “Letter of Credit” (as such term is defined in the Credit Agreement)
issued by the New Issuing Bank, in form and substance satisfactory to the New
Issuing Bank, the Borrower and the Agent.


 





















 


“Stated Expiration Date” means, with respect to any Letter of Credit,
the stated expiration date of such Letter of Credit as designated by the
Borrower in the applicable Request for Issuance; provided, that
except as provided in Section 11.24 of the Credit Agreement, the Stated
Expiration Date of each Letter of Credit shall in no event be later than the
date that is the earlier of (i) the one year anniversary of the issuance
of such Letter of Credit and (ii) five Business Days prior to the Maturity
Date.


 


SECTION 1.02.    Computation of Time Periods. Computation of a period of time from a specified date to
a later specified date shall be made in accordance with the Credit Agreement.


 


SECTION 1.03.  Accounting Terms. All accounting terms not specifically defined
herein or in the Credit Agreement shall be construed in accordance with
generally accepted United States accounting principles as in effect as of the
date hereof consistently applied, except as otherwise stated herein.


 


ARTICLE II

THE CREDIT AGREEMENT


 


SECTION 2.01.    Credit Agreement.   (a) The parties hereto acknowledge and agree that this Agreement
is an “Issuing Bank Agreement” under the Credit Agreement, and that the parties
hereto shall be entitled to the rights and remedies, and bound by the
obligations, accorded to the parties in interest to an “Issuing Bank Agreement”
as so provided in the Credit Agreement. The parties hereto hereby further
acknowledge and agree that the Agent and the Banks are intended third-party
beneficiaries hereof and are entitled (acting through the Agent, in the case of
the Banks) to the rights and benefits accorded hereunder.


 


(b)           The New Issuing Bank hereby acknowledges and agrees that it is an “Issuing
Bank” under the Credit Agreement, that, by its execution and delivery hereof,
it is deemed a party to the Credit Agreement as if it were a signatory thereof
in such capacity and that it assumes all obligations, and acquires all rights
and remedies, of an “Issuing Bank” under the Credit Agreement.


 


(c)           In the event of any conflict between the terms of this Agreement and
the terms of the Credit Agreement (unless such conflict arises solely as a
result of an amendment to the Credit Agreement made after the date hereof
without the written consent of the New Issuing Bank thereto), the terms of the
Credit Agreement shall control and such conflicting terms hereunder shall be of
no force or effect.


 


ARTICLE III


AMOUNT AND TERMS OF THE LETTERS

OF CREDIT


 


SECTION 3.01.   The Letters
of Credit. The New Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue each Letter of Credit to the
Beneficiary designated therefor by the Borrower pursuant to the applicable
Request for Issuance on any Business Day during the period from the date hereof
to and including the date that occurs ten Business Days immediately preceding
the Maturity Date (the “Commitment Termination Date”), in an


 


2





















 


aggregate
stated amount not to exceed the amount of the Commitment less the aggregate
stated amount of all previously issued and outstanding Letters of Credit, and
expiring on or before the Stated Expiration Date.


 


SECTION 3.02.   Issuing the Letters of Credit. Each Letter of Credit
shall be issued pursuant to Section 3.02 of the Credit Agreement.


 


SECTION 3.03.  Letter of Credit Fees. The Borrower agrees to
pay to the New Issuing Bank for its own account those fees set forth in that
certain fee letter agreement, dated the date hereof, between the Borrower and
the New Issuing Bank, which fee letter agreement is incorporated herein by
reference for the benefit of the New Issuing Bank. In addition, the Borrower
agrees to pay to the New Issuing Bank the customary charges of the New Issuing
Bank for opening, drawings under, amendments to, and transfers of each Letter
of Credit.


 


SECTION 3.04.  Payments and Computations. The Borrower shall make
each payment hereunder not later than 12:00 noon (New York, New York time) on
any day when due in U.S. Dollars. Any such payment shall be made to the Agent
for the account of the New Issuing Bank at the Agent’s office set forth in Section 11.01
of the Credit Agreement. The Borrower hereby authorizes the New Issuing Bank,
if and to the extent payment is not made when due hereunder, to charge from
time to time against any or all of the Borrower’s accounts with the New Issuing
Bank any amount so due. Computations of the fees hereunder shall be made by the
New Issuing Bank on the basis of a year of 360-days for the actual number of
days (including the first day but excluding the last day) elapsed.


 


SECTION 3.05.  Extension of the Stated Expiration Date. At least 30 days but
not more than 90 days before the Stated Expiration Date of each Letter of
Credit, and in any event no later than five Business Days prior to the
Commitment Termination Date, the Borrower may request the New Issuing Bank in
writing (with a copy of each such request to the Agent) to extend the Stated
Expiration Date of such Letter of Credit for purposes of this Agreement and
such Letter of Credit to any date not later than the earlier of (i) the
one year anniversary of the Stated Expiration Date and (ii) the date that
occurs five Business Days prior to the Maturity Date (except as otherwise
provided in Section 11.24 of the Credit Agreement). If the Borrower shall
make such a request, the New Issuing Bank shall, within five Business Days
after its receipt of such request, notify the Borrower in writing whether or
not the New Issuing Bank consents to such request and, if the New Issuing Bank
does so consent, the conditions of such consent (including, without limitation,
conditions relating to legal documentation and the consent of the Beneficiary
thereof). If the New Issuing Bank shall not so notify the Borrower, the New
Issuing Bank shall be deemed not to have consented to such request. Any such
extension shall be effective only if and when made in accordance with Articles
3 and 4 of the Credit Agreement.


 


ARTICLE IV

CONDITIONS OF ISSUANCE


 


SECTION 4.01.   Conditions Precedent to Issuance of Each
Letter of Credit. The obligation of the New Issuing Bank to issue
each Letter of Credit is subject to the satisfaction of the applicable
conditions precedent set forth in Article 4 of the Credit Agreement.


 


3





















 


ARTICLE V

REPRESENTATIONS AND WARRANTIES


 


SECTION 5.01.   Representations and Warranties of the
Borrower. The Borrower hereby represents and warrants
for the benefit of the New Issuing Bank that the representations and warranties
of the Borrower set forth in Article 5 of the Credit Agreement are true
and correct in all material respects on the date hereof, on each date of
issuance of a Letter of Credit and on each date on which any of the material
terms or conditions of a Letter of Credit are modified, as if made on and as of
such date.


 


ARTICLE VI

MISCELLANEOUS


 


SECTION 6.01.   Amendments, Etc. No amendment or waiver
of any provision of this Agreement, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing, signed by the New Issuing Bank and the Borrower and consented to by
the Agent on behalf of the Required Banks.


 


SECTION 6.02.   Notices, Etc. All notices and other
communications provided for hereunder shall be made in accordance with Section 11.01
of the Credit Agreement and sent, if to the New Issuing Bank, at its address
set forth on the signature page hereof.


 


SECTION 6.03.   No Waiver; Remedies. No failure on the part of the New Issuing
Bank to exercise, and no delay in exercising, any right hereunder or under the
Credit Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein and therein provided are cumulative and not exclusive of any remedies
provided by law.


 


SECTION 6.04.   Costs, Expenses and Taxes. The Borrower agrees to pay on demand (a) the
reasonable fees and expenses of counsel to the New Issuing Bank in connection
with the preparation, execution, delivery and administration of this Agreement
and any other documents that may be delivered in connection with this Agreement
and any proposed modification, amendment or consent relating to this Agreement
and with respect to advising the New Issuing Bank as to its rights and
responsibilities under this Agreement and (b) all costs and expenses
(including reasonable counsel fees and expenses) in connection with (i) the
enforcement of this Agreement and such other documents that may be delivered in
connection with this Agreement (whether through negotiations, legal proceedings
or otherwise) and (ii) any action or proceeding relating to a court order,
injunction, or other process or decree restraining or seeking to restrain the
New Issuing Bank from paying any amount under any Letter of Credit.
Notwithstanding the foregoing, if, pursuant to the Depositary Agreement, the
Borrower is not permitted to pay any such fees, costs or expenses to the New
Issuing Bank promptly after demand therefor by the New Issuing Bank, the
Borrower shall pay such fees, costs and expenses on the first date thereafter
(but in no event later than the next-scheduled Rent Payment Date) that the
Borrower is permitted to pay such fees, costs and expenses, provided, that, in such case, all such fees, costs and expenses shall
bear interest at a rate per annum equal to the Base Rate plus the Applicable
Margin from the date of such demand until paid in full, payable to the New
Issuing Bank on the date that such fees, costs and expenses are paid. In
addition, the Borrower shall pay any and all stamp and other taxes and fees


 


4





















 


payable or determined to be payable in connection with the execution
and delivery of this Agreement or any Letter of Credit or any such other
documents, and agree to save the New Issuing Bank harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.


 


SECTION 6.05.  Binding Effect. This Agreement shall
become effective when it shall have been executed by the Borrower and the New
Issuing Bank and consented to in writing by the Agent (for itself as Agent and
on behalf of the Banks); and thereafter shall be binding upon and inure to the
benefit of the Borrower, the New Issuing Bank, the Agent, the Banks and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Banks, and the New Issuing Bank shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of the Required Banks and the Borrower, which consent shall not be
unreasonably withheld or delayed.


 


SECTION 6.06.   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 6.07.   WAIVER OF JURY TRIAL. EACH OF THE NEW ISSUING
BANK AND THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY LETTER OF CREDIT, OR ANY OTHER INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.


 


SECTION 6.08.   Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. The New Issuing Bank (i) irrevocably submits to the non-exclusive
jurisdiction of any New York State court or Federal court sitting in New York
City in any action arising out of this Agreement or any Letter of Credit, (ii) agrees
that all claims in such action may be decided in such court, (iii) waives,
to the fullest extent it may effectively do so, the defense of an inconvenient
forum and (iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be enforced in other
jurisdictions. Nothing herein shall affect the right of any party to serve
legal process in any manner permitted by law or affect its right to bring any
action in any other court.


 


SECTION 6.09.   Headings. Section headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.


 


SECTION 6.10.   Execution in Counterparts. This Agreement may be
executed and consented to in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed or
consented to shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument.


 


5





















 


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


 


	
   

  	
  AES
  EASTERN ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  AES NY, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kevin R. Pierce

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin R. Pierce

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


ISSUING BANK AGREEMENT


 





















 


	
   

  	
  CALYON
  NEW YORK BRANCH,

  
	
   

  	
  as
  New Issuing Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Glenn W. Moscosky

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Glenn W. Moscosky

  	
   

  
	
   

  	
   

  	
  Title:
  

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Nina Eshoo 

  	
   

  
	
   

  	
  Name:
  Nina Eshoo 

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  1301
  Avenue of the Americas

  
	
   

  	
  New
  York, New York 10019

  
	
   

  	
   

  
	
   

  	
  Attention:
  Letter of Credit Department

  



 





















 


	
  Consented to as of the
  date first

  above written:

  
	
   

  
	
  CALYON
  NEW YORK BRANCH,

  
	
  as
  Agent on behalf of the Banks

  
	
   

  
	
   

  
	
  By

  	
  /s/
  Glenn W. Muscosky

  	
   

  
	
   

  	
  Name:

  	
  Glenn W. Muscosky

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Nina Eshoo

  	
   

  
	
   

  	
  Name:

  	
  Nina
  Eshoo

  
	
   

  	
  Title:

  	
  Managing
  Director

  
							



 





















 


EXHIBIT
D


 


[FORM OF]


IRREVOCABLE STANDBY LETTER OF CREDIT


NO.              


 


[Date]


 


[Name of Beneficiary]


[Address]


[Address]


 


	
  Attention:

  	
   

  	
  [Name]

  
	
   

  	
   

  	
  [Title]

  



 


Dear Sirs:


 


1.             We hereby establish in your favor the [Name
of the Issuing Bank] (the “Bank”) Irrevocable Standby Letter of Credit No.
(this “Letter of Credit”), which
shall be effective immediately and expire as set forth herein, wherein you are
hereby irrevocably authorized to draw on this Letter of Credit, for the account
of AES Eastern Energy, L.P., a Delaware limited partnership (the “Company”),
available by your drafts at sight upon the terms and conditions hereinafter set
forth, in an aggregate amount not exceeding $                                 (                                          U.S.
Dollars) (the “Stated Amount”).


 


2.             Funds under this Letter of Credit are
available to you against your sight draft(s) drawn on us, stating on their
face: “Drawn under [Name of the Issuing Bank] Irrevocable Standby Letter of
Credit No.                       dated                     ,
20  ” accompanied by your written certificate purportedly signed by
your authorized officer in the form of Exhibit A hereto. Drafts and
certificates hereunder shall be dated the date of presentation and shall be presented
at our office located at, [Address of the Issuing Bank], Attention:                     (or
at such other office as we may designate by written notice to you).
Presentation of such drafts and certificates shall be presented in originals
for drawings under this Letter of Credit.


 


3.             We hereby agree that each draft drawn under
and in compliance with the terms of this Letter of Credit will be duly honored
by us upon due delivery of the documents as specified if presented as specified
on or before the Expiration Date (as defined below). If a presentation in respect
of payment is made by you hereunder at or prior to 11:00 A.M., [Insert
Appropriate Time Zone] time, on a business day on or prior to the Expiration
Date, and provided that the documents so presented conform to the terms and
conditions hereof, payment shall be made to you of the amount specified, in
immediately available funds, not later than 3:00 P.M., [Insert Appropriate Time
Zone] time, on the next succeeding business day. If a presentation in respect


 





















 


of payment is made by you hereunder after 11:00 A.M., [Insert
Appropriate Time Zone] time, on a business day on or prior to the Expiration
Date, and provided that the documents so presented conform to the terms and
conditions hereof, payment shall be made to you of the amount specified, in
immediately available funds, not later than 3:00 P.M., [Insert Appropriate Time
Zone] time, on the second succeeding business day (notwithstanding that such
business day may be after the Expiration Date). As used herein, “business
day” shall mean
a day on which banks in the city in which our principal office is located are
not required or authorized by law or executive order to remain closed and on
which trading on the New York Stock Exchange, Inc. is not closed.


 


4.             Partial drawings are permitted. Drawings in
respect of payments hereunder honored by us shall not, in the aggregate, exceed
the Stated Amount. Each drawing honored by the Bank hereunder shall pro tanto reduce the Stated Amount. In no
event shall amounts drawn and paid by us hereunder be reinstated.


 


5.             Upon the payment to you of the amount
specified in a sight draft(s) drawn hereunder, we shall be fully discharged of
our obligation under this Letter of Credit with respect to such sight draft(s),
and we shall not thereafter be obligated to make any further payments under
this Letter of Credit in respect of such sight draft(s) to you or any other
person.


 


6.             This Letter of Credit shall expire at 5:00
P.M., [Insert Appropriate Time Zone] time, on the earlier to occur (such
earlier date being the “Expiration Date”) of (i)                       ,
20    (the “Stated Expiration Date”) and (ii) the date you surrender
this Letter of Credit for cancellation. In no event shall (any drawing
hereunder be presented after the Stated Expiration Date.


 


7.             This Letter of Credit is subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (the “UCP 500”). This
Letter of Credit shall be deemed to be made under the laws of the State of New
York, including Article 5 of the Uniform Commercial Code, and shall, as to
matters not governed by the UCP 500, be governed by and construed in accordance
with the laws of the State of New York.


 


8.             Communications (other than drawings) with
respect to this Letter of Credit shall be in writing and shall be addressed to
us at [Address of the Issuing Bank], Attention:                             (or
at such other office as we may designate by written notice to you) or by facsimile
transmission received by us at (      )          -             (or
at such other number as we may designate by written notice to you) specifically
referring to the number of this Letter of Credit.


 


9.             This Letter of Credit sets forth in full our
undertaking, and such undertaking shall not in any way be modified, amended,
amplified or limited by reference to any document, instrument or agreement
referred to herein, except only the exhibit hereto (but not any document referred
to therein) and the sight draft(s); and any such reference shall not be deemed
to incorporate herein by reference any document, instrument or agreement except
as set forth above.


 


2





















 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF THE ISSUING BANK]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


3





















 


EXHIBIT A TO

LETTER OF CREDIT


 


[CERTIFICATE OF DRAWING]


(Default under Agreement)


 


The undersigned, a duly authorized officer of [Name of the Beneficiary]
(the “Beneficiary”), hereby certifies, represents and warrants to [Name of the
Issuing Bank] (the “Bank”), with reference to [Name of the Issuing Bank]
Irrevocable Standby Letter of Credit No.
                ,
dated                           ,
20   , issued by the Bank in favor of the Beneficiary (the “Letter
of Credit”) (any capitalized term used herein and not defined shall have its
respective meaning as set forth in the Letter of Credit) that:


 


1.     [Name of the Applicable AEE Entity] has
failed to pay the Beneficiary in accordance with the terms and provisions of
one or more agreements between [Name of the Applicable AEE Entity] and
Beneficiary (“the Agreement”) (i) for the purchase, sale and/or exchange of
electric power, capacity, ancillary services or other related commodities, or
(ii) in connection with the use and/or operation of [Name of Applicable AEE
Entity’s] power generating facilities.


 


2.     The Beneficiary hereby certifies that, (i)
pursuant to the Agreement, as a result of the failure described in paragraph 1
above, [Name of the Applicable AEE Entity] is obligated to pay damages (“Damages”)
to the Beneficiary in the amount of USD
                 (                        and                  U.S.
Dollars); (ii) Beneficiary has made all demands for payment of the Damages as
required under the Agreement, but the Damages remain unpaid as of the date of
this Certificate; and (iii) Beneficiary is entitled to be paid the Damages as
of the date of this Certificate.


 


3.     The Beneficiary hereby draws upon the Letter
of Credit in an amount equal to the Damages required to be paid by [Name of AEE
Entity] to Beneficiary pursuant to the Agreement in the sum of USD
                          (                    and                     U.S.
Dollars).


 


4.     The amount of the sight draft(s) accompanying
this Certificate does not exceed the remaining Stated Amount of the Letter of
Credit.


 


IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
Certificate as of the      day of                   ,
20   .


 


	
   

  	
  [NAME
  OF BENEFICIARY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


4





















 


EXECUTION COPY


 


BANK
ASSIGNMENT


 


BANK ASSIGNMENT, dated as of October 26, 2004, among (i) UNION
BANK OF CALIFORNIA, N.A. (“Union Bank”) and CITIBANK, N.A. (“Citi”)
as Banks party to the Credit Agreement referred to below (Union Bank and Citi,
collectively, the “Transferor Banks”) and (ii) CALYON NEW YORK BRANCH
(the “Purchasing Bank”).


 


W I T N E S S E T H:


 


WHEREAS, this Bank Assignment is being executed and delivered in
accordance with Section 11.09(a)(ii) of the $35,000,000 Credit Agreement,
dated as of April 10, 2001, among AES Eastern Energy, L.P (the “Borrower”),
the Banks named therein or that have become party thereto subsequent to such
date, the Letter of Credit Issuing Banks named therein or that have become
party thereto subsequent to such date and Union Bank, as Agent (as from time to
time amended, supplemented or otherwise modified in accordance with the terms
thereof, the “Credit Agreement”; terms defined therein being used herein
as therein defined);


 


WHEREAS, the Purchasing Bank wishes to become a Bank party to the
Credit Agreement; and


 


WHEREAS, each Transferor Bank is selling its Loans and Unreimbursed
Drawings, and assigning its Commitment under the Credit Agreement to the
Purchasing Bank;


 


WHEREAS, the Purchasing Bank is willing to purchase the Loans and
Unreimbursed Drawings from each Transferor Bank and, assume the Commitment of
each Transferor Bank;


 


NOW, THEREFORE, the parties hereto hereby agree as follows:


 


1.             From and after the Transfer Effective Date
(as hereinafter defined), the Purchasing Bank shall be a Bank party to the
Credit Agreement for all purposes thereof and each Transferor Bank shall cease
to be a Bank party thereto and the Purchasing Bank shall assume the Commitment
of each Transferor Bank thereunder. The “Transfer Effective Date” shall
mean the date as of which: (a) each Transferor Bank shall have received, in
immediately available funds, an amount equal to the sum of (i) the aggregate
principal amount of such Bank’s Loans outstanding and Unreimbursed Drawings on
such date plus (ii) all interest, fees and other amounts accrued and
outstanding (whether or not then due and payable) as of such date under the
Credit Agreement for the account of such Transferor Bank (including, without limitation,
any expenses incurred by such Transferor Bank as a consequence of any
prepayment made in connection with this Bank Assignment of any Eurodollar Rate
Loan on a day which is not the expiration date of the Interest Period with
respect thereto); (b) each Issuing Bank Agreement shall have been terminated
including, the Issuing Bank Agreement dated as of April 10, 2001 between
the Borrower and Union Bank and (c) Union Bank, as the Issuing Bank thereunder,
shall have been paid, in immediately available funds, all amounts owed to Union
Bank by the Borrower thereunder as a result of such termination or otherwise.


 


2.             Effective on the Transfer Effective Date,
each Transferor Bank hereby irrevocably sells, assigns and transfers to the
Purchasing Bank, without recourse and (except as


 





















 


set
forth elsewhere herein) without representation or warranty, and the Purchasing
Bank hereby irrevocably purchases, takes and assumes from each Transferor Bank,
all of such Transferor Bank’s Loans, Unreimbursed Drawings and Commitments
under the Credit Agreement, together with all instruments, documents and
collateral security pertaining thereto.


 


3.             From and after the Transfer Effective Date,
all principal, interest, fees and other amounts that would otherwise be payable
to or for the account of any Transferor Bank pursuant to the Credit Agreement
and the other Loan Documents shall, instead, be payable to or for the account
of the Purchasing Bank.


 


4.             On or prior to the Transfer Effective Date,
each Transferor Bank shall deliver its Note to the Purchasing Bank.


 


5.             Each of the parties to this Bank Assignment
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Bank Assignment.


 


6.             By executing and delivering this Bank
Assignment, the Purchasing Bank confirms that it satisfies the requirements of
an Eligible Assignee and each Transferor Bank and the Purchasing Bank confirm
to and agree with each other, the Agent and the Banks as follows: (i) other
than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned hereby free and clear of any adverse claim, none
of the Transferor Banks make any representation or warranty or assumes any
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit Agreement
or any other instrument or document furnished pursuant thereto; (ii) none of
the Transferor Banks makes any representation or warranty or assumes any
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other document delivered in connection therewith or any
other instrument or document furnished pursuant thereto; (iii) the Purchasing
Bank confirms that it has received a copy of the Credit Agreement, the Loan Documents
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Bank Assignment; and
(iv) the Purchasing Bank will, independently and without reliance upon the
Agent, any Transferor Bank or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any other document delivered in connection therewith.


 


7.             Each of the parties hereto agrees that, upon
the Transfer Effective Date, Union Bank shall cease to be the Agent and shall
be discharged from its duties and obligations under the Credit Agreement and
the other Loan Documents as the Agent.


 


8.             By its execution hereof, the Agent hereby
agrees to waive the requirement for payment of the assignment fee set forth in Section 11.09(a)(ii)(H)
of the Credit Agreement in connection with this Bank Assignment.


 


2





















 


9.             THIS BANK ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


10.           This Bank Assignment may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.


 


3





















 


IN WITNESS WHEREOF, the parties hereto have caused this Bank Assignment
to be executed by their respective duly authorized officers as of the date set
forth above.


 


 


	
   

  	
  CALYON
  NEW YORK BRANCH, as Purchasing

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn W. Muscosky

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Glenn
  W. Muscosky

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nina Eshoo

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Nina
  Eshoo

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
  CITIBANK,
  N.A., as Transferor Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION
  BANK OF CALIFORNIA, N.A., as

  Transferor Bank and Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


IN WITNESS WHEREOF, the parties hereto have caused this Bank Assignment
to be executed by their respective duly authorized officers as of the date set
forth above.


 


 


	
   

  	
  CALYON
  NEW YORK BRANCH, as Purchasing

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIBANK,
  N.A., as Transferor Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sarah Terner

  	
   

  
	
   

  	
   

  	
  Name:

  	
  SARAH TERNER

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  388 Greenwich/21st Fl.

  (212) 816-8663

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION
  BANK OF CALIFORNIA, N.A., as

  Transferor Bank and Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
							



 





















 


IN WITNESS WHEREOF, the parties hereto have caused this Bank Assignment
to be executed by their respective duly authorized officers as of the date set
forth above.


 


 


	
   

  	
  CALYON
  NEW YORK BRANCH, as Purchasing

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CITIBANK,
  N.A., as Transferor Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION
  BANK OF CALIFORNIA, N.A., as

  Transferor Bank and Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chad Canfield

  	
   

  
	
   

  	
   

  	
  Name:
  Chad Canfield

  
	
   

  	
   

  	
  Title:
  Vice President

  



 





















 


ACKNOWLEDGED AND AGREED:


 


AES
EASTERN ENERGY, L.P.


 


By:
AES NY, L.L.C., as general partner


 


 


	
  By

  	
  /s/ Kevin R. Pierce

  	
   

  
	
  Name:

  	
  Kevin
  R. Pierce

  	
   

  
	
  Title:

  	
  Vice
  President