EX-10.1






Exhibit 10.1




EXECUTION VERSION






 

 








AMENDED AND RESTATED CREDIT AGREEMENT




dated as of August 15, 2008




among




TRANS-ALLEGHENY INTERSTATE LINE COMPANY,

as Borrower,




THE LENDERS PARTY HERETO FROM TIME TO TIME,




CITIBANK, N.A.,

as Administrative Agent,




UNION BANK OF CALIFORNIA, N.A.,

as Collateral Agent,




BNP PARIBAS,

as Issuing Bank,




CITIGROUP GLOBAL MARKETS INC. and BNP PARIBAS SECURITIES CORP.,

as Joint Lead Arrangers and Joint Book Managers,




THE BANK OF NOVA SCOTIA,

as Syndication Agent,




and




BANK OF AMERICA, N.A.,

as Documentation Agent




 






Senior Secured Credit Facilities

$530,000,000 Construction Facility

$20,000,000 Revolving Facility




 

 






 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE I.

DEFINITIONS
	Section 1.01	 	Defined Terms
	 	 	2	 
	Section 1.02	 	Terms Generally
	 	 	34	 
	Section 1.03	 	Interrelationship with Existing Credit Agreement
	 	 	35	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE II.

THE CREDITS
	 	 	 	 	 
	 	 	 	 
	Section 2.01	 	Commitments
	 	 	35	 
	Section 2.02	 	Loans and Borrowings Generally
	 	 	36	 
	Section 2.03	 	Requests for Borrowings
	 	 	37	 
	Section 2.04	 	Letters of Credit
	 	 	37	 
	Section 2.05	 	Funding of Borrowings
	 	 	42	 
	Section 2.06	 	Interest Elections
	 	 	43	 
	Section 2.07	 	Termination and Reduction of Commitments; Excluded Portions
	 	 	44	 
	Section 2.08	 	Repayment of Loans Generally; Evidence of Debt
	 	 	45	 
	Section 2.09	 	Repayment of Construction Loans and Revolving Loans
	 	 	46	 
	Section 2.10	 	Prepayment of Loans
	 	 	47	 
	Section 2.11	 	Fees
	 	 	48	 
	Section 2.12	 	Interest
	 	 	49	 
	Section 2.13	 	Alternate Rate of Interest
	 	 	49	 
	Section 2.14	 	Increased Costs
	 	 	50	 
	Section 2.15	 	Break Funding Payments
	 	 	51	 
	Section 2.16	 	Taxes
	 	 	52	 
	Section 2.17	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	53	 
	Section 2.18	 	Mitigation Obligations
	 	 	55	 
	Section 2.19	 	Incremental Facilities
	 	 	56	 
	Section 2.20	 	Siting Approval
	 	 	57	 
	Section 2.21	 	Illegality
	 	 	58	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE III.

REPRESENTATIONS AND WARRANTIES
	 	 	 	 	 
	 	 	 	 
	Section 3.01	 	Organization; Power and Authority
	 	 	58	 
	Section 3.02	 	Authorization
	 	 	58	 
	Section 3.03	 	Disclosure and Projections
	 	 	59	 
	Section 3.04	 	Subsidiaries
	 	 	59	 
	Section 3.05	 	Financial Statements
	 	 	59	 
	Section 3.06	 	No Conflict
	 	 	60	 
	Section 3.07	 	Governmental Approvals
	 	 	60	 
	Section 3.08	 	Litigation; Compliance with Laws
	 	 	60	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	Section 3.09	 	Taxes
	 	 	61	 
	Section 3.10	 	Title to Properties; Possession Under Leases
	 	 	61	 
	Section 3.11	 	Permits: Intellectual Property
	 	 	61	 
	Section 3.12	 	Siting of Additional Facilities
	 	 	62	 
	Section 3.13	 	ERISA
	 	 	62	 
	Section 3.14	 	Use of Proceeds
	 	 	62	 
	Section 3.15	 	Liens
	 	 	62	 
	Section 3.16	 	Investment Company Act
	 	 	62	 
	Section 3.17	 	FPA
	 	 	62	 
	Section 3.18	 	Environmental Matters; Hazardous Materials
	 	 	62	 
	Section 3.19	 	Senior Debt
	 	 	63	 
	Section 3.20	 	Solvency
	 	 	63	 
	Section 3.21	 	Employee Matters
	 	 	64	 
	Section 3.22	 	Collateral
	 	 	64	 
	Section 3.23	 	Single Purpose Entity; Separateness
	 	 	64	 
	Section 3.24	 	Major Project Contracts; No Default
	 	 	65	 
	Section 3.25	 	Broker’s Fees
	 	 	65	 
	Section 3.26	 	Ownership of Equity Interests
	 	 	65	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE IV.

CONDITIONS PRECEDENT TO CERTAIN EVENTS
	 	 	 	 	 
	 	 	 	 
	Section 4.01	 	Closing Date
	 	 	65	 
	Section 4.02	 	Conditions Precedent to Each Credit Event
	 	 	69	 
	Section 4.03	 	Conditions Precedent to Completion
	 	 	71	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE V.

AFFIRMATIVE COVENANTS
	 	 	 	 	 
	 	 	 	 
	Section 5.01	 	Information Delivery
	 	 	72	 
	Section 5.02	 	Compliance with Laws; Applicable Permits
	 	 	74	 
	Section 5.03	 	Maintenance of Insurance
	 	 	74	 
	Section 5.04	 	Operation of the Project
	 	 	75	 
	Section 5.05	 	Taxes
	 	 	75	 
	Section 5.06	 	Maintenance of Existence
	 	 	75	 
	Section 5.07	 	Senior Debt
	 	 	76	 
	Section 5.08	 	Environmental Law
	 	 	76	 
	Section 5.09	 	Maintenance of Records
	 	 	76	 
	Section 5.10	 	Use of Proceeds and Project Revenues
	 	 	76	 
	Section 5.11	 	Site Visits; Access to Property
	 	 	77	 
	Section 5.12	 	Preservation of Rights; Further Assurances
	 	 	77	 
	Section 5.13	 	Certain Regulatory Matters
	 	 	78	 
	Section 5.14	 	Separate Existence
	 	 	79	 
	Section 5.15	 	FERC Filings
	 	 	79	 
	Section 5.16	 	Solvency of Construction Contractor
	 	 	79	 
	Section 5.17	 	Construction of the Project
	 	 	79	 
	Section 5.18	 	Equity Commitments
	 	 	79	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	Section 5.19	 	U.S.A. Patriot Act
	 	 	79	 
	Section 5.20	 	Application of Loss Proceeds
	 	 	80	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE VI.

NEGATIVE COVENANTS
	 	 	 	 	 
	 	 	 	 
	Section 6.01	 	Transactions with Affiliates
	 	 	80	 
	Section 6.02	 	No Liquidation, Merger or Consolidation
	 	 	81	 
	Section 6.03	 	Liens
	 	 	81	 
	Section 6.04	 	Indebtedness
	 	 	81	 
	Section 6.05	 	Business Activities
	 	 	81	 
	Section 6.06	 	Sale of Assets
	 	 	81	 
	Section 6.07	 	Reallocation of Assets
	 	 	81	 
	Section 6.08	 	Distributions
	 	 	82	 
	Section 6.09	 	Contingent Liabilities
	 	 	82	 
	Section 6.10	 	Investments
	 	 	82	 
	Section 6.11	 	Fiscal Year, Name, Location and EIN
	 	 	82	 
	Section 6.12	 	Other Agreements
	 	 	82	 
	Section 6.13	 	Amendments to Major Project Contracts and Certain Other Agreements
	 	 	83	 
	Section 6.14	 	ERISA
	 	 	83	 
	Section 6.15	 	Regulations
	 	 	83	 
	Section 6.16	 	Amendments to Project Budget; Project Schedule
	 	 	83	 
	Section 6.17	 	Accounts
	 	 	83	 
	Section 6.18	 	Hazardous Materials
	 	 	84	 
	Section 6.19	 	Other Expenditures; Separately Financed Facilities
	 	 	84	 
	Section 6.20	 	Organizational Documents
	 	 	84	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE VII.

EVENTS OF DEFAULT
	 	 	 	 	 
	 	 	 	 
	Section 7.01	 	Events of Default
	 	 	84	 
	Section 7.02	 	Remedies
	 	 	87	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE VIII.

THE AGENTS
	 	 	 	 	 
	 	 	 	 
	Section 8.01	 	Appointment and Authority
	 	 	88	 
	Section 8.02	 	Each Agent in its Individual Capacity
	 	 	88	 
	Section 8.03	 	Duties of Agents; Exculpatory Provisions
	 	 	89	 
	Section 8.04	 	Reliance by Agents
	 	 	91	 
	Section 8.05	 	Delegation of Duties
	 	 	91	 
	Section 8.06	 	Resignation of Administrative Agent
	 	 	91	 
	Section 8.07	 	Resignation of Collateral Agent
	 	 	92	 
	Section 8.08	 	Non-Reliance on Administrative Agent, Collateral Agent and Other Lender Parties
	 	 	93	 
	Section 8.09	 	No Other Duties, etc
	 	 	94	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	Section 8.10	 	Withholding Tax
	 	 	94	 
	 	 	 	 	 
	 	 	 	 
	
ARTICLE IX.

MISCELLANEOUS
	 	 	 	 	 
	 	 	 	 
	Section 9.01	 	Notices
	 	 	95	 
	Section 9.02	 	Survival of Agreement
	 	 	96	 
	Section 9.03	 	Binding Effect
	 	 	96	 
	Section 9.04	 	Successors and Assigns
	 	 	96	 
	Section 9.05	 	Expenses; Indemnity
	 	 	99	 
	Section 9.06	 	Right of Set-off
	 	 	101	 
	Section 9.07	 	APPLICABLE LAW
	 	 	101	 
	Section 9.08	 	Waivers; Amendment
	 	 	101	 
	Section 9.09	 	Dominion Joint Venture
	 	 	103	 
	Section 9.10	 	Interest Rate Limitation
	 	 	103	 
	Section 9.11	 	Entire Agreement
	 	 	104	 
	Section 9.12	 	WAIVER OF JURY TRIAL
	 	 	104	 
	Section 9.13	 	Severability
	 	 	104	 
	Section 9.14	 	Counterparts
	 	 	104	 
	Section 9.15	 	Headings
	 	 	104	 
	Section 9.16	 	Jurisdiction; Consent to Service of Process
	 	 	104	 
	Section 9.17	 	Confidentiality; Treatment of Information
	 	 	105	 
	Section 9.18	 	Communications
	 	 	107	 
	Section 9.19	 	Posting of Communication
	 	 	109	 
	Section 9.20	 	Release of Liens
	 	 	109	 
	Section 9.21	 	U.S.A. Patriot Act
	 	 	110	 
	Section 9.22	 	Limitation of Recourse
	 	 	110	 
	Section 9.23	 	Separateness of the Borrower from Sponsor and its Subsidiaries
	 	 	110	 






 









 






Exhibits, Schedules and Appendices




	 	 	 
	Exhibit A

	 	Form of Assignment and Acceptance
	Exhibit B-1

	 	Form of Borrowing Request
	Exhibit B-2

	 	Form of Interest Election Request
	Exhibit C

	 	Form of Notice of L/C Activity
	Exhibit D

	 	Form of Subordination Terms
	Exhibit E-1

	 	Form of Construction Note
	Exhibit E-2

	 	Form of Revolving Note
	Exhibit F

	 	Form of Certificate of Non-U.S. Lender
	Exhibit G

	 	Form of Solvency Certificate
	Exhibit H-1

	 	Form of Insurance Consultant’s Certificate
	Exhibit H-2

	 	Form of Independent Engineer’s Certificate
	 
	 	 
	Schedule 1.01(a)

	 	Additional Facilities
	Schedule 1.01(b)

	 	Existing Indebtedness and Existing Liens
	Schedule 1.01(c)

	 	Knowledge
	Schedule 1.01(d)

	 	Allocated Loan Amounts
	Schedule 2.01

	 	Commitments
	Schedule 3.07

	 	Governmental Approvals
	Schedule 3.15

	 	Liens
	Schedule 3.18

	 	Environmental Matters
	Schedule 5.03

	 	Insurance
	Schedule 9.01

	 	Notice Addresses
	 
	 	 
	Appendix I

	 	Project Budget
	Appendix II

	 	Project Schedule
	Appendix III

	 	Base Case Projections







 












 





     AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 15, 2008 (this “Agreement”),
among TRANS-ALLEGHENY INTERSTATE LINE COMPANY, a Maryland and Virginia corporation (the
“Borrower”), the LENDERS party hereto from time to time, CITIBANK, N.A., as administrative
agent for the Lenders (in such capacity, together with any successor administrative agent appointed
pursuant to the provisions of Section 8.06, the “Administrative Agent”), UNION BANK
OF CALIFORNIA, N.A., as the collateral agent (in such capacity, together with any successor
collateral agent appointed pursuant to the provisions of Section 8.07, the “Collateral
Agent”), BNP PARIBAS, as issuing bank (in such capacity, together with any successor issuing
bank appointed pursuant to the provisions of Section 2.04(i), the “Issuing Bank”),
CITIGROUP GLOBAL MARKETS INC. and BNP PARIBAS SECURITIES CORP., as joint lead arrangers and joint
book managers (in such capacity, the “Arrangers”), THE BANK OF NOVA SCOTIA, as syndication
agent (in such capacity, the “Syndication Agent”), and BANK OF AMERICA, N.A., as
documentation agent (in such capacity, the “Documentation Agent”).



WITNESSETH:




     WHEREAS, the Borrower desires to (i) develop, construct, acquire, maintain, own and operate an
approximately 185 mile 500-kV transmission line (excluding an approximately one mile portion to be
built and owned by Virginia Electric and Power Company (“Dominion”) on an existing
right-of-way over the Appalachian National Scenic Trail (the “Appalachian Trail”)) from a
new substation in western Pennsylvania to a point of interconnection with Dominion in Virginia
(including transformers, substations, radial lines, and other equipment and facilities), (ii) own a
50% interest in the Jointly Owned Segment (as defined below) (collectively with the transmission
line referred to in clause (i), the “TrAIL Transmission Line”) and (iii) develop,
construct, acquire, maintain, own and operate certain other electric transmission projects (as more
fully defined herein the “Additional Facilities,” and together with the TrAIL Transmission
Line and the West Virginia Facility (as defined below), the “Project”);



     WHEREAS, to finance certain costs related to the Project, the Borrower entered into a
Promissory Note in the principal amount of $10,000,000 dated December 18, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Existing Credit Agreement”) in
favor of Citibank, N.A. as the lender thereunder (in such capacity, the “Existing Lender”);



     WHEREAS, in order to continue to finance the development, construction, acquisition,
maintenance, ownership and operation of the Project, the Borrower has requested the Lenders to
extend, and the Lenders have agreed to extend, certain credit facilities to the Borrower in an
aggregate amount not to exceed $550,000,000, consisting of (a) a construction loan facility in an
aggregate principal amount of $530,000,000 and (b) a revolving loan facility with an aggregate
stated amount of $20,000,000;



     WHEREAS, Allegheny Energy Transmission, LLC, a Delaware limited liability company (the
“Pledgor”), the owner of 100% of the Equity Interests in the Borrower, has agreed to secure
all of the Borrower’s Obligations by granting to the Collateral Agent, for the benefit of the
Secured Parties, a first priority lien on 100% of its Equity Interests in the Borrower;



 









 





     WHEREAS, Allegheny Energy, Inc. a Maryland corporation and the indirect owner of 100% of the
Equity Interests in the Borrower (the “Sponsor”), has agreed to contribute cash to the
Borrower to fund a portion of the Project Costs pursuant to the Equity Commitment Agreement; and



     WHEREAS, in connection with the further extensions of credit described above, it is the intent
of the parties hereto that this Agreement amend and restate in its entirety the Existing Credit
Agreement;



     NOW, THEREFORE, the Lenders are willing to extend the credit described above to the Borrower
on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree
as follows:



AGREEMENT:




ARTICLE I.

DEFINITIONS




     Section 1.01 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:



     “Activities” means a wide range of financial services and businesses, including
investment management, financing, securities trading, corporate and investment banking and
research.



     “Additional Equity Amount” has the meaning assigned to such term within the definition
of “Separately Financed Facility.”



     “Additional Facilities” means the electric transmission projects described on
Schedule 1.01(a) and any Qualifying Additional Facilities.



     “Adjusted LIBOR” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal
to (a) LIBOR in effect for such Interest Period, divided by (b) one minus the LIBOR Reserve
Percentage (expressed as a decimal) applicable to such Interest Period.



     “Administrative Agent” has the meaning assigned to such term in the introductory
paragraph of this Agreement.



     “Administrative Questionnaire” means an Administrative Questionnaire in a form
provided by the Administrative Agent.



     “Affiliate” means, when used with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is
under common Control with the Person specified.



     “Agent Fees” has the meaning assigned to such term in Section 2.11(e).



     “Agent Parties” has the meaning assigned to such term in Section 9.18(b).



2









 





     “Agents” means the Administrative Agent and the Collateral Agent.



     “Agent’s Group” has the meaning assigned to such term in Section 8.02(b).



     “Agreement” has the meaning assigned to such term in the introductory paragraph of
this Agreement.



     “Allocated Jointly Owned Segment Loan Amount” means the amount of Loans identified as
the “Allocated Jointly Owned Segment Loan Amount” on Schedule 1.01(d), which is the amount
of Loans available to be applied for the development, construction and acquisition of the Jointly
Owned Segment.



     “Allocated Loan Amount” means the Allocated Prexy Loan Amount, the Allocated Mt. Storm
Loan Amount, the Allocated Meadow Brook Loan Amount, the Allocated Virginia Loan Amount or the
Allocated Jointly Owned Segment Loan Amount, as applicable.



     “Allocated Meadow Brook Loan Amount” means the amount of Loans identified as the
“Allocated Meadow Brook Loan Amount” on Schedule 1.01(d), which is the amount of Loans
available to be applied for the development, construction and acquisition of the Meadow Brook
Segment.



     “Allocated Mt. Storm Loan Amount” means the amount of Loans identified as the
“Allocated Mt. Storm Loan Amount” on Schedule 1.01(d), which is the amount of Loans
available to be applied for the development, construction and acquisition of the Mt. Storm Segment.



     “Allocated Prexy Loan Amount” means the amount of Loans identified as the “Allocated
Prexy Loan Amount” on Schedule 1.01(d), which is the amount of Loans available to be
applied for the development, construction and acquisition of the Prexy Segment.



     “Allocated Virginia Loan Amount” means the amount of Loans identified as the
“Allocated Virginia Loan Amount” on Schedule 1.01(d), which is the amount of Loans
available to be applied for the development, construction and acquisition of the Virginia Segment.



     “Alternate Virginia Segment” means the portion of the TrAIL Transmission Line located
exclusively in Virginia that runs from, but excluding, the existing Meadow Brook Substation to a
to-be-determined point of interconnection with Dominion.



     “Appalachian Trail” has the meaning assigned to such term in the recitals to this
Agreement.



     “Applicable Margin” means:



     (a) during the period beginning on the Closing Date until the fifth anniversary thereof, (i)
with respect to any Eurodollar Loan, 1.875% per annum, and (ii) with respect to any Base Rate Loan, .875% per annum, and



3









 





     (b) from and after the fifth anniversary of the Closing Date, (i) with respect to any
Eurodollar Loan, 2.00% per annum, and (ii) with respect to any Base Rate Loan, 1.00% per annum.



     “Applicable Permit” means at any time any Permit that is (a) necessary to be obtained
by or on behalf of the Borrower at such time in light of the stage of development, construction or
operation of the Project to enable the Borrower to construct, test, operate, maintain, repair, own
its interest in, or use the Project as contemplated by the Transaction Documents, enter into any
Transaction Document or consummate and/or perform any transaction or obligation contemplated hereby
or thereby or (b) necessary so that none of the Lenders or any other Secured Party may be deemed by
any Governmental Authority to be subject to regulation under the FPA or PUHCA 2005 or under any
state laws or regulations respecting the rates of, or the financial or organizational regulation
of, electric utilities solely as a result of the Borrower’s development, construction, ownership,
operation or control of the Project.



     “Approved Electronic Communication” means each notice, demand, communication,
information, document and other material that any Loan Party is obligated to, or otherwise chooses
to, provide electronically to either Agent pursuant to any Financing Document or the transactions
contemplated therein, including (a) any supplement, joinder or amendment to the Pledge Agreement
and any other written agreement or instrument delivered or required to be delivered in respect of
any Financing Document or the transactions contemplated therein and (b) any financial statement,
financial and other report, notice, request, certificate and other informational material;
provided that “Approved Electronic Communications” shall exclude (i) any notice delivered
pursuant to Section 2.10 and any other notice relating to the payment of any principal or
other amount due under any Financing Document prior to the scheduled date therefor and (ii) all
notices of any Default or Event of Default.



     “Approved Electronic Platform” has the meaning assigned to such term in Section
9.19(a).



     “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course and that is administered or managed by a Lender, an Affiliate of a Lender or an
entity or an Affiliate of an entity that administers or manages a Lender.



     “Approved Jointly Owned Segment Limit” means the $0 of Loans available to be applied
for the development, construction, and acquisition of the Jointly Owned Segment prior to receipt of
Siting Approval for the Jointly Owned Segment.



     “Approved Limit” means the Approved Prexy Limit, the Approved Mt. Storm Limit, the
Approved Meadow Brook Limit, the Approved Virginia Limit or the Approved Jointly Owned Segment
Limit, as applicable.



     “Approved Meadow Brook Limit” means the $107,000,000 of Loans available to be applied
for the development, construction, and acquisition of the Meadow Brook Segment prior to receipt of
Siting Approval for the Meadow Brook Segment.



4









 





     “Approved Mt. Storm Limit” means the $128,000,000 of Loans available to be applied for
the development, construction, and acquisition of the Mt. Storm Segment prior to receipt of Siting
Approval for the Mt. Storm Segment.



     “Approved Prexy Limit” means the $110,000,000 of Loans available to be applied for the
development, construction, and acquisition of the Prexy Segment prior to receipt of Siting Approval
for the Prexy Segment.



     “Approved Virginia Limit” means the $34,000,000 of Loans available to be applied for
the development, construction, and acquisition of the Virginia Segment prior to receipt of Siting
Approval for the Virginia Segment.



     “Arrangers” has the meaning assigned to such term in the introductory paragraph of
this Agreement.



     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee, and accepted by the Administrative Agent and the Borrower (if required by
such assignment and acceptance), in the form of Exhibit A or such other form as shall be
approved by the Administrative Agent.



     “AT Section” means the transmission facilities to be owned by Dominion (or an
Affiliate of Dominion) which will connect the Proposed Virginia Segment and the Jointly Owned
Segment.



     “Available Unused Commitment” means, with respect to:




     (a) a Construction Lender, at any time of determination, an amount equal to the amount
by which (i) the Construction Commitment of such Construction Lender at such time exceeds
(ii) the aggregate principal amount of the Construction Loans funded by such Construction
Lender at or prior to such time; and




     (b) a Revolving Lender, at any time of determination, an amount equal to the amount by
which (i) the Revolving Commitment of such Revolving Lender at such time exceeds (ii) the
sum of (x) the aggregate principal amount of such Revolving Lender’s Revolving Loans
outstanding, and (y) such Revolving Lender’s aggregate Facility Percentage of any L/C
Exposure at such time.



     “Base Rate” means, for any day, a fluctuating rate of interest per annum equal to the
higher of (a) the rate of interest publicly announced from time to time by the Administrative Agent
as its base rate and (b) 0.5% per annum above the Federal Funds Effective Rate in effect from time
to time.



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



     “Base Rate Loan” means any Loan (including Base Rate Revolving Loans) bearing interest
at a rate determined by reference to the Base Rate in accordance with the provisions of Article
II.



5









 





     “Base Rate Revolving Borrowing” means a Borrowing comprised of Base Rate Revolving
Loans.



     “Base Rate Revolving Loan” means any Revolving Loan bearing interest at a rate
determined by reference to the Base Rate in accordance with the provisions of Article II.



     “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.



     “Borrower” has the meaning assigned to such term in the introductory paragraph of this
Agreement.



     “Borrowing” means a group of Loans of a single Type under a single Credit Facility and
made on a single date and, in the case of Eurodollar Loans, as to which a single Interest Period is
in effect.



     “Borrowing Minimum” means with respect to any Construction Borrowing or Revolving
Borrowing, $2,000,000.



     “Borrowing Multiple” means with respect to any Construction Borrowing or Revolving
Borrowing, $1,000,000.



     “Borrowing Request” means a request by the Borrower in accordance with the terms of
Section 2.03 and substantially in the form of Exhibit B-1.



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



     “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP and, for purposes
hereof, the amount of such obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.



     “Change in Law” means (a) the adoption of any law, rule or regulation after the
Closing Date, (b) any change in law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the Closing Date or (c) compliance by any Lender or
Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
that funds or books its Loan hereunder or any Issuing Bank that issues a Letter of Credit hereunder
or by such Lender’s or Issuing Bank’s holding company, if any) with any written request, guideline
or directive (whether or not having the force of law but if not having the force of law, then being
one with which the relevant party would customarily comply) of any Governmental Authority made or
issued after the Closing Date.



6









 





     “Charges” has the meaning assigned to such term in Section 9.10.



     “CIAC Affiliate” has the meaning assigned to such term in Section 6.01.



     “Class of Lenders” means the Revolving Lenders, the Construction Lenders and the New
Construction Lenders of each Series of New Construction Loans, each as a separate class of Lenders.



     “Closing Date” means August 15, 2008, and “Closing” means the making of the
initial Loans and any other applicable Credit Event on the Closing Date hereunder.



     “Code” means the Internal Revenue Code of 1986, as amended from time to time.



     “Collateral” has the meaning assigned to such term in the Pledge Agreement.



     “Collateral Agent” has the meaning assigned to such term in the introductory paragraph
of this Agreement.



     “Commitment Fee” has the meaning assigned to such term in Section 2.11(a).



     “Commitments” means (a) with respect to any Lender, such Lender’s Construction
Commitment, New Construction Commitment or Revolving Commitment and (b) with respect to any Issuing
Bank, its L/C Issuing Commitment.



     “Communications” has the meaning assigned to such term in Section 9.18(a)(i).



     “Completion” means the satisfaction of the conditions set forth in Section
4.03.



     “Construction Availability Period” means the period from the Closing Date up to but
excluding the earliest of (a) Maturity Date, (b) the date of termination of the Construction
Commitments, and (c) 180 days following the date Completion is achieved.



     “Construction Borrowing” means a Borrowing comprised of Construction Loans or New
Construction Loans.



     “Construction Commitment” means, with respect to each Lender, the commitment of such
Lender to make Construction Loans pursuant to Section 2.01(a), expressed as a Dollar amount
representing the maximum aggregate permitted amount of such Lender’s Construction Loans hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.07 and (b)
reduced or increased from time to time pursuant to assignments by or to such Lender under
Section 9.04. The initial Dollar amount of each Lender’s Construction Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Construction Commitment, as applicable. The aggregate amount of the
Construction Commitments on the date hereof is $530,000,000.



     “Construction Contract” means the Alliance Agreement for Engineering, Construction and
Project Management, dated as of February 28, 2007, between the Borrower and the Construction
Contractor (as amended, supplemented or otherwise modified from time to time).



7









 





     “Construction Contractor” means Kenny Construction Company.



     “Construction Facility” means the Construction Commitments and the Construction Loans
made hereunder.



     “Construction Lender” means a Lender with a Construction Commitment or with
outstanding Construction Loans.



     “Construction Loan Class” means (i) when used in reference to Lenders, the
Construction Lenders and the New Construction Lenders of each Series of New Construction Loans, as
separate classes of Lenders, (ii) when used in reference to Commitments, the Construction
Commitments and each Series of New Construction Commitments, as separate classes of Commitments,
and (iii) when used in reference to Loans, the Construction Loans and each Series of New
Construction Loans, as separate classes of Loans.



     “Construction Loans” means the construction loans made by the Lenders to the Borrower
pursuant to Section 2.01(a).



     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ownership of
voting securities, by contract or otherwise; the verb “Control” and the adjectives
“Controlling” and “Controlled” shall have meanings correlative thereto.



     “CPCN” means a Certificate of Public Convenience and Necessity issued by a
Governmental Authority with jurisdiction over siting of a portion of the Project.



     “Credit Event” has the meaning assigned to such term in Section 4.02.



     “Credit Event Date” means the date of a Credit Event.



     “Credit Facilities” means the Construction Facility, the New Construction Facility and
the Revolving Facility.



     “CWIP” means amounts expended or invested in connection with construction work in
progress, i.e. amounts expended or invested in Project facilities that have not yet gone into
service or become operational.



     “Debt Service Coverage Ratio” means, for any period, the ratio of (a) the excess of
all revenues received by the Borrower (for the avoidance of doubt, excluding any equity
contributions received by the Borrower or any debt incurred by the Borrower) during such period
over all operation and maintenance expenses (excluding depreciation) and capital expenditures paid
by the Borrower during such period to (b) the sum of all scheduled interest, premium (if any),
scheduled principal and fees payable during such period in respect of all Indebtedness of the
Borrower.



     “Debt to Equity Ratio” means, as of any date of determination, the ratio of (a) the
aggregate outstanding principal amount of all Loans and, without duplication, other Indebtedness of
the type described in clauses (a) and (b) of the definition of “Indebtedness” outstanding as of



8









 







such date to (b) the sum of (i) all equity contributions theretofore made by the Sponsor or
any of its Affiliates to the Borrower and retained by the Borrower or applied to the payment of
Project Costs and (ii) all Project Receipt Payments retained by the Borrower or applied to the
payment of Project Costs; provided that (A) $129,940,628 of equity contributions made to
the Borrower prior to the Closing Date and used, or held by the Borrower and available, to develop
the Project, which equity contributions are evidenced by documentation reasonably acceptable to the
Arrangers, shall be included in the calculation of such ratio (provided that if any such
contributed amounts are returned to the Sponsor or any Affiliate thereof at any time, such returned
amounts shall be deducted from the amount of equity contributions used in such calculation pursuant
to this clause (b)(ii)(A)), and (B) any equity contributed (or any Project Receipt Payments
applied) in connection with any Separately Financed Facility or any Excluded Portion (from and
after the date that such portion of the Project has been designated as an Excluded Portion) shall
be excluded from the calculation of such ratio.



     “Default” means any event or condition that upon notice, lapse of time or both would
constitute an Event of Default.



     “Defaulting Lender” means any Lender with respect to which a Lender Default is in
effect.



     “Distributions” means, with respect to any period (computed without duplication), any
distributions, dividends, credits or transfers of any kind to the extent received or available to
be received by the Pledgor, the Sponsor or any other Affiliate of Borrower, from the Borrower,
other than payments pursuant to the Services Agreement or the Tax Allocation Agreement or in
connection with any Permitted Affiliate Transaction.



     “Documentation Agent” has the meaning assigned to such term in the introductory
paragraph of this Agreement.



     “Dollars” or “$” means lawful money of the United States of America.



     “Dominion” has the meaning assigned to such term in the recitals to this Agreement.



     “Dominion Direct Agreement” has the meaning assigned to such term in Section
5.12(c).



     “Dominion/TrAILCo Agreement” means the Memorandum of Understanding, effective as of
May 15, 2007, between the Borrower and Dominion (as the same may be amended from time to time in
accordance with this Agreement) and any subsequent definitive documentation between the Borrower
and Dominion relating to the Jointly Owned Segment.



     “Eligible Assignee” shall mean (i) any Lender, (ii) an Affiliate of any Lender or
(iii) any other Person approved as an “Eligible Assignee” by the Administrative Agent, the Borrower
and, in the case of an assignee of any Revolving Loans or Revolving Commitments, the Issuing Bank
(each such approval not to be unreasonably withheld, conditioned or delayed).



     “Eminent Domain Proceeds” means all amounts and proceeds received by or on behalf of
the Borrower or the Collateral Agent in respect of an Event of Eminent Domain.



9









 





     “Environment” means ambient and indoor air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface strata or sediment,
natural resources such as flora and fauna or as otherwise defined in any Environmental Law.



     “Environmental Claim” means any and all actions, suits, demands, demand letters,
claims, liens, notices of non-compliance or violation, notices of liability or potential liability,
investigations, proceedings, consent orders or consent agreements relating in any way to any
Environmental Law or the Release of, or human exposure to, any Hazardous Material.



     “Environmental Law” means, collectively, all federal, state or local laws, including
common law, ordinances, regulations, rules, codes, orders, judgments or other requirements or rules
of law that relate to (a) the prevention, abatement or elimination of pollution, or the protection
of the Environment, natural resources or human health (to the extent relating to exposure to
Hazardous Materials or occupational safety), or natural resource damages, and (b) the use,
generation, handling, treatment, storage, disposal, Release, transportation or regulation of or
exposure to Hazardous Materials, including the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. §§ 9601 et seq., the Endangered Species Act, 16 U.S.C. §§ 1531
et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act, 42 U.S.C. §§ 6901 et seq., the Clean Air Act, 42 U.S.C. §§ 7401 et seq., the
Clean Water Act, 33 U.S.C. §§ 1251 et seq., the Toxic Substances Control Act, 15 U.S.C. §§
2601 et seq., the Emergency Planning and Community Right to Know Act, 42 U.S.C. §§ 11001
et seq., each as amended, and their state or local counterparts or equivalents.



     “Equity Commitment” has the meaning assigned to such term in the Equity Commitment
Agreement.



     “Equity Commitment Agreement” means the Equity Commitment Agreement, dated as of the
date hereof, between the Sponsor and the Collateral Agent.



     “Equity Contributions” has the meaning assigned to such term in the Equity Commitment
Agreement.



     “Equity Interests” of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests in (however
designated) equity of such Person, including any capital stock (including preferred stock), any
limited or general partnership interest and any limited liability company membership interest.



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



     “ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member
of the controlled group of the Borrower, the Sponsor, or any of the Sponsor’s subsidiaries, or
under common control with the Borrower, the Sponsor, or any of the Sponsor’s subsidiaries, within
the meaning of Section 414 of the Code.



     “ERISA Event” means (a) (i) the occurrence of a reportable event, within the meaning
of Section 4043(c) of ERISA, with respect to any Plan unless the 30-day notice requirement with
respect to such event has been waived by the PBGC or (ii) the requirements of Section 4043(b)



10









 







of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of
ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30
days; (b) the application for a minimum funding waiver in accordance with Section 412(c) of the
Code with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of the Sponsor or any of its Subsidiaries or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by the Borrower, the
Sponsor or any of the Sponsor’s Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (f) a lien has been imposed under Section 302(f) of ERISA with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan, provided, however, that the occurrence of the event or
condition described in Section 4042(a)(4) of ERISA shall be an ERISA Event only if the PBGC has
notified the Borrower, the Sponsor, any Subsidiary of the Sponsor or any ERISA Affiliate that it
intends to institute proceedings to terminate a Plan pursuant to such Section.



     “Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board, as
in effect from time to time.



     “Eurodollar” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBOR in accordance with the provisions of Article II.



     “Eurodollar Borrowing” means a Borrowing comprised of Eurodollar Loans.



     “Eurodollar Loan” means a Loan (including Eurodollar Revolving Loans) bearing interest
at a rate determined by reference to the Adjusted LIBOR in accordance with the provisions of
Article II.



     “Eurodollar Revolving Loan” means any Revolving Loan bearing interest at a rate
determined by reference to the Adjusted LIBOR in accordance with the provisions of Article
II.



     “Event of Default” has the meaning assigned to such term in Section 7.01.



     “Event of Eminent Domain” means any compulsory transfer or taking or transfer under
threat of compulsory transfer or taking of any material part of the Collateral or the Project by
any Governmental Authority that is reasonably anticipated to last (or has lasted) for more than 150
consecutive days, unless such transfer or taking is being contested by the Borrower in good faith
by appropriate proceedings.



     “Excluded Portion” means all or any identified portion of the Prexy Segment, the
Virginia Segment or the Jointly Owned Segment with respect to which the Borrower has



11









 







certified, and the Independent Engineer has confirmed, (a) that the completion of such portion is
not necessary to make any other portion of the Project (other than another Excluded Portion) Used
and Useful; provided that, if the Borrower identifies the Jointly Owned Segment as an
Excluded Portion, then the Virginia Segment shall not be subject to the requirement that it be Used
and Useful, (b) that the failure by the Borrower to complete construction of such portion of the
Project on or before the seventh anniversary of the Closing Date could not reasonably be expected
to have a material adverse effect upon the business, operations, properties, assets or condition
(financial or otherwise) of the Borrower and (c) as to (i) the aggregate amount of Loan proceeds
that have been applied with respect to such Excluded Portion and (ii) if the Jointly Owned Segment
is designated as an Excluded Portion, the aggregate amount of Loan proceeds that have been applied
to any portion of the Proposed Virginia Segment (except to the extent such portion of the Proposed
Virginia Segment is used as part of the Alternate Virginia Segment) (such amount, the “Excluded
Portion Loan Amount”).



     “Excluded Portion Loan Amount” has the meaning assigned to such term in the definition
of “Excluded Portion.”



     “Excluded Taxes” means, with respect to any Secured Party or any other recipient of
any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States of America or by
the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office (or other fixed place of business) is located or, in the
case of any Lender or Issuing Bank, in which its applicable lending office is located, (b) any
branch profits tax or any similar tax that is imposed by any jurisdiction described in clause (a)
above, (c) other than in the case of an assignee pursuant to a request by the Borrower under
Section 2.18, any withholding tax that is in effect and would apply to amounts payable
hereunder to such Secured Party at the time such Secured Party becomes a party hereto (or
designates a new lending office), except to the extent that such Secured Party or other recipient
(or its assignor, if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.16(a) or Section 2.16(c), and (d) any withholding taxes
attributable to such Secured Party’s or such other recipient’s failure or inability (other than as
a result of a Change in Law) to comply with Section 2.16(e) or Section 2.16(f);
provided, however, that the term “Excluded Taxes” shall not include any taxes that
are imposed or otherwise due as a result of any action undertaken by one or more of such Secured
Parties to collect funds due hereunder or under any other Financing Document or enforce or exercise
its rights or pursue any remedy provided hereunder or under any other Financing Document.



     “Existing Credit Agreement” has the meaning assigned to such term in the recitals to
this Agreement.



     “Existing Indebtedness” means the Indebtedness outstanding on the Closing Date and
described on Schedule 1.01(b).



     “Existing Lender” has the meaning assigned to such term in the recitals to this
Agreement.



12









 





     “Existing Liens” means the Liens outstanding on the Closing Date and described on
Schedule 1.01(b).



     “Facility Percentage” means at any time, (a) with respect to any Revolving Lender, the
percentage of the total Revolving Commitments at such time represented by such Lender’s Revolving
Commitment at such time, (b) with respect to any Construction Lender, the percentage of the total
Construction Commitments represented by such Lender’s Construction Commitment at such time and (c)
with respect to any New Construction Lender, the percentage of the total New Construction
Commitments represented by such Lender’s New Construction Commitment at such time. If the relevant
Commitments have terminated or expired, the Facility Percentages shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments pursuant to Section
9.04.



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



     “Fees” means the Commitment Fee, the L/C Participation Fees, the Fronting Fees, the
L/C Processing Fees and the Agent Fees.



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



     “Financial Model” means the financial model prepared by the Borrower and delivered to
the Arrangers and the Lenders prior to the Closing Date, including the “Base Case Projections”
included therein which projections are attached hereto as Appendix III.



     “Financial Officer” of any Person means the Chief Financial Officer, principal
accounting officer, Treasurer, Assistant Treasurer or Controller of such Person.



     “Financing Documents” means this Agreement, any Letters of Credit, the Pledge
Agreement, the Kenny Direct Agreement, the ServiceCo Direct Agreement, the Dominion Direct
Agreement (if any), any promissory note issued under Section 2.08(e), the Equity Commitment
Agreement and the PJM Letter.



     “FPA” means the Federal Power Act, as amended, including the implementing regulations
thereunder.



     “Fronting Fees” has the meaning assigned to such term in Section 2.11(d)(i).



     “Funds Flow Memorandum” means the memorandum, dated August 14, 2008 delivered by the
Borrower to the Arrangers (and acceptable to the Arrangers) with respect to the disbursement of
Loan proceeds to be made on the Closing Date.



13









 





     “GAAP” means generally accepted accounting principles in effect from time to time in
the United States, applied on a consistent basis, subject to the provisions of Section
1.02(g).



     “Governmental Authority” means any federal, state or local governmental agency,
authority, instrumentality or regulatory or legislative body.



     “Governmental Rule” means, with respect to any Person, any law, rule, regulation,
ordinance, order, code, treaty, judgment, decree, directive, or, to the extent having the force or
effect of law, guideline, policy or similar form of decision of any Governmental Authority binding
on such Person.



     “Guarantee” of or by any Person (the “guarantor”) means (a) any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness (whether arising by virtue of partnership arrangements, by agreement to keep well, to
purchase assets, goods, securities or services, to take or pay or otherwise) or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of such Indebtedness,
(ii) to purchase or lease property, securities or services for the purpose of assuring the owner of
such Indebtedness of the payment thereof, (iii) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness, (iv) entered into for the purpose of assuring in any other manner
the holders of such Indebtedness of the payment thereof or to protect such holders against loss in
respect thereof (in whole or in part) or (v) as an account party in respect of any letter of credit
or letter of guarantee issued to support such Indebtedness, or (b) any Lien on any assets of the
guarantor securing any Indebtedness (or any existing right, contingent or otherwise, of the holder
of Indebtedness to be secured by such a Lien) of any other Person, whether or not such Indebtedness
is assumed by the guarantor; provided, however, that the term “Guarantee” shall not
include endorsements for collection or deposit, in either case in the ordinary course of business,
or customary and reasonable indemnity obligations in effect on the Closing Date or contained in any
Project Contract or entered into in connection with any acquisition or disposition of assets
permitted under this Agreement.



     “Hazardous Materials” means all pollutants, contaminants, wastes, chemicals,
materials, substances and constituents, including explosive or radioactive substances or petroleum
or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls or
radon gas, of any nature, in each case subject to regulation by any Governmental Authority or which
can give rise to liability under any Governmental Rule.



     “Hedging Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions.



14









 





     “Hedging Indebtedness” of any Person means all payments that such Person would be
required to make under outstanding Hedging Agreements in the event of an early termination thereof
on the date the Indebtedness of such Person is being determined in respect of such Hedging
Agreements (such payments in respect of any such Hedging Agreements with a counterparty being
calculated subject to and in accordance with any netting provisions in such Hedging Agreements).



     “Increased Amount Date” has the meaning assigned to such term in Section
2.19(a).



     “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such Person, (d) all obligations
of such Person issued or assumed as the deferred purchase price of property or services (other than
trade liabilities and intercompany liabilities incurred in the ordinary course of business and
maturing within 365 days after the incurrence thereof), (e) all Guarantees by such Person of
Indebtedness of others, (f) all Capital Lease Obligations of such Person, (g) all Hedging
Indebtedness of such Person, and (h) the principal component of all obligations, contingent or
otherwise, of such Person (i) as an account party in respect of letters of credit (other than any
letters of credit, bank guarantees or similar instruments in respect of which a back-to-back letter
of credit has been issued under or as permitted by this Agreement) and (ii) in respect of bankers’
acceptances. The Indebtedness of any Person shall include the Indebtedness of any partnership in
which such Person is a general partner, other than to the extent that the instrument or agreement
evidencing such Indebtedness expressly limits the liability of such Person in respect thereof.



     “Indemnified Taxes” means all Taxes other than Excluded Taxes.



     “Indemnitee” has the meaning assigned to such term in Section 9.05(b).



     “Independent Engineer” means R.W. Beck, Inc. or another nationally recognized
engineering consultant selected by the Administrative Agent and reasonably acceptable to the
Borrower.



     “Independent Engineer’s Report” means the report entitled “Independent Engineer’s
Report, TrAIL Transmission Line and Certain Other Facilities,” dated August 15, 2008, delivered by
the Independent Engineer, including all exhibits, appendices and any other attachments thereto.



     “Information” means all information received from the Borrower, the Pledgor or the
Sponsor or any of their respective Subsidiaries relating to the Project, the Borrower, the Pledgor
or the Sponsor or any of their respective Subsidiaries or any of their respective businesses, other
than any such information that (a) is available to the Secured Parties on a nonconfidential basis
prior to disclosure by the Borrower, the Pledgor or the Sponsor or any of their respective
Subsidiaries, (b) has been independently developed by such Secured Party without violating
Section 9.17 or (c) was available to such Secured Party from a third party having, to such
Person’s knowledge, no obligations of confidentiality to the Borrower, the Pledgor or the Sponsor.




15












 





     “Information Memorandum” means the Confidential Information Memorandum, dated July 17,
2008, as modified or supplemented prior to the Closing Date.



     “Insolvent” means, with
respect to any Person:




     (a) such Person (i) is generally not paying, or admits in writing its inability to pay,
its debts as they become due, (ii) voluntarily commences any proceeding, files, or consents
by answer or otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition under the U.S. Bankruptcy Code, as now constituted or
hereafter amended, or any other federal, state or foreign bankruptcy, insolvency,
receivership or similar law, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii)
consents to the institution of, or fails to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in clause (b) below, (iv) files an answer
admitting the material allegations of a petition filed against it in any such proceeding,
(v) makes an assignment for the benefit of its creditors, (vi) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (vii) is adjudicated as insolvent or
to be liquidated, or (viii) takes corporate action for the purpose of effecting any of the
foregoing; or




     (b) an involuntary proceeding has been commenced or an involuntary petition has been
filed in a court of competent jurisdiction seeking (i) relief in respect of such Person or
of a substantial part of the property or assets of such Person, under the U.S. Bankruptcy
Code, as now constituted or hereafter amended, or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such Person or for a
substantial part of the property or assets of such Person or (iii) the winding-up or
liquidation of such Person, and in each case such proceeding or petition shall continue
undismissed or unstayed for a period of 60 consecutive days or an order or decree approving
or ordering any of the foregoing shall be entered and shall remain unvacated or unstayed for
a period of 60 consecutive days.



     “Insurance Consultant” means Moore-McNeil, LLC or another nationally recognized
insurance consultant selected by the Administrative Agent and reasonably acceptable to the
Borrower.



     “Insurance Consultant’s Report” means the report entitled “Insurance Report issued in
connection with the TrAIL Transmission Line and Additional Facilities,” dated August 11, 2008,
delivered by the Insurance Consultant, including all exhibits, appendices and any other attachments
thereto.



     “Insurance Proceeds” means all casualty insurance (excluding general liability,
delayed completion or business interruption) proceeds received by or on behalf of the Borrower or
the Collateral Agent in respect of an event which causes any material part of the Project to be
damaged, destroyed or rendered unfit for normal use for any reason whatsoever.



16









 





     “Interest Election Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.06.



     “Interest Payment Date” means (a) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Loan with an Interest Period of more than three months’ duration, each day that would
have been an Interest Payment Date had successive Interest Periods of three months’ duration been
applicable to such Loan and, in addition, the date of any refinancing or conversion of such Loan
with or to a Loan of a different Type, and (b) with respect to any Base Rate Loan, the last
Business Day of each calendar quarter.



     “Interest Period” means, as to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing or on the last day of the immediately preceding Interest Period applicable
to such Borrowing, as applicable, and ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter (or 9 or 12 months, if at the time of the relevant Borrowing, all Lenders make
interest periods of such length available), as the Borrower may elect, or the date any Eurodollar
Borrowing is converted to a Base Rate Borrowing in accordance with Section 2.06 or repaid
or prepaid in accordance with Sections 2.08, 2.09 or 2.10;
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day. Interest shall accrue from and
including the first day of an Interest Period to but excluding the last day of such Interest
Period.



     “Interim Equity Contribution” has the meaning assigned to such term in the Equity
Commitment Agreement.



     “Issuing Bank” has the meaning assigned to such term in the introductory paragraph of
this Agreement and each other Lender hereafter designated as an Issuing Bank.



     “Jointly Owned Segment” means the portion of the TrAIL Transmission Line located
exclusively in Virginia that runs for approximately 30 miles from the southeastern boundary of the
Appalachian Trail and ends at a point of interconnection with Dominion, which portion shall be 50%
owned by TrAILCo and 50% owned by Dominion.



     “Kenny Direct Agreement” means the Direct Agreement, dated as of the Closing Date,
among Construction Contractor, the Collateral Agent and the Borrower.



     “Knowledge” means, with respect to any Person, the actual knowledge of officers of
such Person listed on Schedule 1.01(c) or any of their successors.



     “L/C Disbursement” means a payment or disbursement made by an Issuing Bank pursuant to
a Letter of Credit, including, for the avoidance of doubt, a payment or disbursement made by an
Issuing Bank pursuant to a Letter of Credit upon or following the reinstatement of such Letter of
Credit.



17









 





     “L/C Exposure” means at any time (a) the sum of (i) the aggregate undrawn amount of
all Letters of Credit outstanding at such time and (ii) the aggregate principal amount of all L/C
Disbursements that have not yet been reimbursed (including by way of a Revolving Borrowing) at such
time less (b) any cash collateral posted by the Borrower pursuant to Section 2.04(j). The
L/C Exposure of any Revolving Lender at any time shall mean its Facility Percentage of the
aggregate L/C Exposure at such time.



     “L/C Issuing Commitment” means, with respect to each Issuing Bank, the commitment of
such Issuing Bank to issue Letters of Credit pursuant to Section 2.04, expressed as a
Dollar amount, as such commitment may be (a) ratably reduced from time to time upon any reduction
in the Revolving Commitments pursuant to Section 2.07 and (b) reduced or increased from
time to time pursuant to assignments by or to such Issuing Bank under Section 9.04. The
amount of each Issuing Bank’s L/C Issuing Commitment as of the Closing Date is set forth in
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Issuing Bank
shall have assumed its L/C Issuing Commitment, as applicable. The aggregate amount of L/C Issuing
Commitments on the Closing Date is $20,000,000.



     “L/C Participation Fee” has the meaning assigned such term in Section 2.11(c).



     “L/C Processing Fees” has the meaning assigned to such term in Section
2.11(d)(ii).



     “L/C Reimbursement Obligation” means the Borrower’s obligation to repay L/C
Disbursements as provided in Sections 2.04(e) and (f).



     “Legal Requirements” means, as to any Person, any requirement under a Permit, and any
Governmental Rules, in each case applicable to or binding upon such Person or any of its properties
or to which such Person or any of its properties is subject.



     “Lender” means each financial institution listed on Schedule 2.01 and any
other Person that becomes a “Lender” hereunder pursuant to Section 2.19 or Section
9.04.



     “Lender Default” means (a) the refusal (which has not been retracted) of a Lender to
make available its portion of any Borrowing, to acquire participations in a Letter of Credit
pursuant to Section 2.04(d) or to fund its portion of any unreimbursed payment under
Section 2.04(e), or (b) a Lender having notified in writing the Borrower and/or the
Administrative Agent that it does not intend to comply with its obligations under Section
2.04 or 2.05.



     “Lender Party” means each Lender and each Issuing Bank.



     “Letter of Credit” means any letter of credit issued pursuant to Section 2.04.



     “LIBOR” means in relation to any Eurodollar Borrowing:




     (a) the applicable Screen Rate; or




     (b) if no Screen Rate is available for the Interest Period of that Eurodollar
Borrowing, the arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Administrative Agent at its request quoted by Citicorp North America,



18









 







Inc. to leading banks in the London interbank market, as of 11:00 a.m. London time, on
the Quotation Day for the offering of deposits in Dollars and for a period comparable to the
Interest Period for that Eurodollar Borrowing.



     “LIBOR Reserve Percentage” for any Interest Period for all Eurodollar Borrowings
comprising part of the same Borrowing means the reserve percentage applicable two Business Days
before the first day of such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect to any other category
of liabilities that includes deposits by reference to which the interest rate on Eurodollar
Borrowings is determined) having a term equal to such Interest Period.



     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
hypothecation, pledge, encumbrance, charge or security interest in or on such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.



     “Loans” means the Construction Loans, the New Construction Loans and the Revolving
Loans.



     “Loan Party” means any of the Borrower, the Pledgor or the Sponsor.



     “Loss Proceeds” means any Insurance Proceeds and Eminent Domain Proceeds.



     “Major Project Contracts” means (a) the Construction Contract, (b) the Transmission
Owners Agreement, (c) the Service Agreement, (d) the Dominion/TrAILCo Agreement and (e) any other
contract or agreement relating to the TrAIL Transmission Line that provides for payments to be made
(or is reasonably expected to result in payments to be made) by or to the Borrower in the aggregate
in excess of $3,000,000 in any year or $5,000,000 within any 3 year period; provided, in
the case of this clause (e), that such contracts or agreements shall not constitute Major Project
Contracts to the extent that such contracts or agreements relate to (i) real property transactions
(i.e. easements and real property acquisitions) or (ii) Owner Procured Materials (as defined in the
Construction Contract).



     “Major Project Participants” means each of the counterparties to the Major Project
Contracts; provided that no party to the Transmission Owners Agreement other than PJM shall
be a Major Project Participant.



     “Margin Stock” has the meaning assigned to such term in Regulation U.



     “Material Adverse Effect” means a material adverse effect upon (a) the business,
operations, properties, assets or condition (financial or otherwise) of the Borrower, (b) the
validity or priority of the liens on the Collateral, (c) the ability of the Borrower to perform its
material obligations under the Financing Documents to which it is a party, including the



19









 







Borrower’s ability to achieve Completion of the Project other than any Excluded Portion prior
to the seventh anniversary of the Closing Date, (d) the material rights or remedies of the Lenders
under any of the Financing Documents or (e) the validity or enforceability of any of the Financing
Documents.



     “Materiality Threshold” has the meaning assigned to such term in Section
7.01(g).



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



     “Maximum Debt to Equity Ratio” means (a) prior to Completion, a maximum Debt to Equity
Ratio of the Borrower of 2:1 and (b) from and after Completion, a maximum Debt to Equity Ratio of
the Borrower of 1:1.



     “Maximum Rate” has the meaning assigned to such term in Section 9.10.



     “Meadow Brook Segment” means the portion of the TrAIL Transmission Line located in
West Virginia and Virginia that runs from, but excluding, the existing Mt. Storm Substation to and
including the existing Meadow Brook Substation.



     “Meadow Brook Substation” means the existing electrical substation owned by The
Potomac Edison Company, an Affiliate of the Borrower, forming a part of the Meadow Brook Segment
and located approximately seven miles south of Winchester, Virginia.



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



     “Mt. Storm Segment” means the portion of the TrAIL Transmission Line located in
Pennsylvania and West Virginia that runs from and including the new 502 Junction Substation (as
described in the Independent Engineer’s Report), including a new 502 Junction Tap (as described in
the Independent Engineer’s Report), to and including the existing Mt. Storm Substation.



     “Mt. Storm Substation” means the existing electrical substation owned by Dominion
forming a part of the Mt. Storm Segment and located approximately 13 miles northeast of Thomas,
West Virginia.



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



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



20









 





     “Net Available Amount” means, with respect to any Loss Proceeds, such proceeds net of
the related reasonable and documented out-of-pocket costs and expenses (if any) and, if applicable,
reasonable transaction costs (including legal and accounting fees and expenses, and taxes paid or
payable as a result thereof), incurred by the Borrower in connection with the collection,
enforcement, negotiation, consummation, settlement, administration or other activity related to the
receipt or collection of Loss Proceeds.



     “New Construction Facility” means the New Construction Commitments and the New
Construction Loans made hereunder, if any.



     “New Construction Loan” has the meaning assigned to such term in Section
2.19(c).



     “New Construction Commitments” has the meaning assigned to such term in Section
2.19(a).



     “New Construction Lender” has the meaning assigned to such term in Section
2.19(a).



     “Non-Consenting Lender” has the meaning assigned to such term in Section
9.08(d).



     “Non-U.S. Lender” has the meaning assigned to such term in Section 2.16(e).



     “Notice of L/C Activity” means a request by the Borrower in accordance with the terms
of Section 2.04 and substantially in the form of Exhibit C.



     “Obligations” means obligations of the Borrower from time to time arising in respect
of the payment of (i) principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and
(ii) all other monetary obligations, including L/C Reimbursement Obligations, fees, costs, expenses
and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the
Loan Parties to the Secured Parties, or that are otherwise payable to any Secured Party, in each
case under this Agreement or any other Financing Document.



     “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property, intangible or mortgage recording taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, the Financing Documents.



     “Participant” has the meaning assigned to such term in Section 9.04(c)(i).



     “PBGC” means the Pension Benefit Guaranty Corporation (or any successor) referred to
and defined in ERISA.



21









 





     “Permits” means any and all franchises (if any), licenses, permits, approvals,
notifications, certifications, registrations, authorizations, exemptions, qualifications and other
rights, privileges and approvals required under any Governmental Rule.



     “Permitted Affiliate Transaction” has the meaning assigned to such term in Section
6.01.



     “Permitted Debt” means:




     (a) Indebtedness incurred under the Financing Documents, as in effect on the Closing
Date or as amended in accordance with the terms thereof;




     (b) Indebtedness that is pari passu with (or junior to) the Indebtedness under the
Financing Documents and is incurred to finance capital expenditures required by any
applicable Legal Requirement;




     (c) Indebtedness incurred in connection with the acquisition by the Borrower in the
ordinary course of business of property or equipment which Indebtedness is solely for the
purpose of financing such acquisition, construction or improvement of any such property or
equipment (and which may include extensions, renewals or replacement of any of the foregoing
for the same or a lesser amount) provided that such Indebtedness is unsecured or is
secured solely by Liens permitted pursuant to clause (g) of the definition of Permitted
Liens, in an aggregate amount not in excess of $10,000,000 at any one time outstanding;




     (d) trade accounts payable or other similar Indebtedness arising or incurred in the
ordinary course of business (but not for borrowed money) and




          (i) not more than 90 days past due, or




          (ii) being contested in good faith and by appropriate proceedings;




     (e) Indebtedness permitted in connection with any Permitted Refinancing;




     (f) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety
bonds, financial assurances and completion guarantees and similar obligations in each case
provided in the ordinary course of business, including those incurred to secure health,
safety and environmental obligations in the ordinary course of business; provided
such Indebtedness shall not exceed $10,000,000 in the aggregate at any time;




     (g) Indebtedness in respect of Hedging Indebtedness; provided that such Hedging
Indebtedness shall not exceed (i) $75,000,000 in the aggregate at any time plus (ii) an
additional amount of Hedge Indebtedness, on an unsecured basis, if a Governmental Authority
requires the Borrower to incur such additional amount, so long as such additional amount
does not exceed $75,000,000 in the aggregate at any time;




     (h) unsecured intercompany Indebtedness; provided that (i) such Indebtedness
shall not exceed $25,000,000 in the aggregate at any time and (ii) such Indebtedness is



22









 







subordinated to all Indebtedness arising under the Financing Documents pursuant to the
terms set forth in Exhibit D; and




     (i) additional unsecured Indebtedness of the Borrower in an aggregate principal amount
not to exceed $15,000,000 at any one time outstanding.




“Permitted Investments” means:




     (a) direct obligations of (or obligations guaranteed by) the United States of America
or any agency or instrumentality thereof maturing within one year from the date of
acquisition;




     (b) commercial paper maturing within 270 days from the date of acquisition and rated at
least “P-1” (or the equivalent grade) by Moody’s or at least “A-1” (or the equivalent grade)
by S&P;




     (c) certificates of deposit, demand deposits, eurodollar deposits, bankers’ acceptances
and time deposits maturing within one year from the acquisition thereof issued or guaranteed
by or placed with any domestic office of any commercial bank organized under the laws of the
United States of America or any State thereof that has a combined capital and surplus and
undivided profits of not less than $500,000,000;




     (d) fully collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) and entered into with a financial institution satisfying
the criteria described in clause (c); and




     (e) mutual funds or trust funds that invest solely in securities described in clauses
(a) through (d) above (provided such securities may have remaining maturities of up
to 13 months while being held by the applicable mutual fund).




“Permitted Liens” means:




     (a) the rights and interests of the Secured Parties as provided in the Financing
Documents and the Security Documents;




     (b) Liens for Taxes not yet due and payable or that are being contested and reserved
against as provided under Section 5.05;




     (c) materialmen’s, mechanics’, workers’, repairmen’s, employees’ or other like Liens,
arising in the ordinary course of business or in connection with the construction of the
Project or any Separately Financed Facility, which Liens (i) do not materially detract from
the value of the Project or any Separately Financed Facility, as applicable, or materially
impair the use, development, construction, acquisition, maintenance, ownership or operation
thereof, (ii) are for amounts not yet due or (iii) are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been made in accordance with
GAAP;



23









 






     (d) Liens arising out of judgments or awards so long as (i) an appeal or proceeding for
review is being prosecuted in good faith and for the payment of which adequate reserves,
bonds or other security reasonably acceptable to the Administrative Agent have been provided
or are fully covered by insurance (subject to customary deductibles or self-insurance) or
(ii) such judgment or award has not otherwise resulted in an Event of Default pursuant to
Section 7.01(i);




     (e) Liens securing Indebtedness incurred in connection with any Permitted Refinancing
(which Liens shall only apply to the Equity Interests of the Borrower held by the Pledgor,
shall be pari passu with the Liens granted to the Secured Parties under the Financing
Documents and shall otherwise be subject to documentation in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent);




     (f) easements, rights-of-way, restrictions (including zoning restrictions), trackage
rights, minor defects or irregularities in title, restrictions on use of Real Property and
other similar encumbrances or Liens that, in the aggregate, do not interfere in any material
respect with the value of, or the Borrower’s ability to develop, construct, acquire,
maintain, own or operate the Project or any Separately Financed Facility;




     (g) purchase money Liens upon or in real property or equipment acquired or held by the
Borrower in the ordinary course of business securing the purchase price of such property or
equipment or to secure Indebtedness incurred solely for the purpose of financing the
acquisition, construction or improvement of any such property or equipment to be subject to
such Liens, or Liens existing on any such property or equipment at the time of acquisition
(other than any such Liens created in contemplation of such acquisition that do not secure
the purchase price), or extensions, renewals or replacement of any of the foregoing for the
same or a lesser amount; provided, however, that no such Lien shall extend
to or cover any property other than the property or equipment being acquired, constructed or
improved, and no such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed or replaced;
provided, further, that the aggregate principal amount of the Indebtedness
secured by Liens permitted by this clause (g) shall not exceed $10,000,000 at any time
outstanding;




     (h) Liens, deposits or pledges to secure statutory obligations or for purposes of like
general nature in the ordinary course of its business, not to exceed $10,000,000 in the
aggregate at any time, and with any such Lien to be released within 270 days of its
attachment;




     (i) Liens related to land restoration or replanting not to exceed $500,000 at any time;




     (j) Liens granted to counterparties under Hedging Agreements to secure Hedging
Indebtedness, provided that the amount secured shall not exceed $75,000,000, so long
as (i) each such counterparty is a Lender at the time the applicable Lien is granted to it,
which Lien shall be permitted to remain in effect for so long as such counterparty remains a
Lender, and (ii) such Liens shall be pari passu with the Liens granted to the



24









 







Secured Parties under the Financing Documents and shall otherwise be subject to
documentation in form and substance reasonably satisfactory to the Administrative Agent and
the Collateral Agent; and




     (k) Liens not otherwise permitted hereunder so long as the aggregate outstanding
principal amount of the obligations secured thereby does not exceed $7,500,000 at any time.



     “Permitted Pre-Construction Expenditures” means equity funds received by the Borrower
from the Sponsor and spent by the Borrower on design, engineering, permitting and similar
pre-construction development costs for any project or facility not constituting a part of the
Project and on which construction has not commenced, which expenditures shall not at any time
exceed, in the aggregate, the lesser of (a) the unused contingency in the Project Budget at such
time and (b) $50,000,000 at any time outstanding of expenditures. To the extent that any such
expenditures were made with respect to a project that subsequently qualifies as a Separately
Financed Facility and such expenditures are included in the Additional Equity Amount with respect
to such Separately Financed Facility, such expenditures shall no longer be counted as Permitted
Pre-Construction Expenditures.



     “Permitted Refinancing” means the long-term refinancing of all or any portion of the
Loans; provided that (a) the amount of Indebtedness incurred in connection with such
refinancing does not exceed the lesser of (i) the principal amount being refinanced (plus any
outstanding interest, reasonable fees, brokerage costs, and other costs and expenses incurred in
connection with such refinancing) and (ii) the maximum amount that would permit the Borrower to
comply with the Maximum Debt to Equity Ratio; (b) the scheduled maturity date of such refinancing
Indebtedness shall be no earlier than the Maturity Date; (c) the guarantees and security, if any,
for such Indebtedness shall not be greater than that for the Credit Facilities and Indebtedness
incurred in connection with such refinancing ranks, as to security and payment, pari passu with or
junior to the Credit Facilities; (d) no mandatory prepayment, covenant and default provision
applicable to such refinancing Indebtedness or, if applicable, the related security or guarantees
of such refinancing Indebtedness shall be, taken as a whole, materially more favorable to the
refinancing lenders than the terms that are applicable to the Revolving Facility, the Construction
Facility or the New Construction Facility; (e) after giving effect to the incurrence of such
refinancing Indebtedness, such refinancing Indebtedness could not reasonably be expected to have a
Material Adverse Effect; (f) after giving effect to the incurrence of such refinancing
Indebtedness, no Default or Event of Default shall have occurred and be continuing; (g) a
Responsible Officer of the Borrower shall have certified to the Lenders its compliance with the
foregoing; and (h) the Administrative Agent shall have received a true and correct copy of all
documents evidencing such refinancing Indebtedness on the date of the incurrence thereof;
provided that none of clauses (a) through (h) shall apply if such Permitted Refinancing
refinances all of the Loans and simultaneously with the closing of such Permitted Refinancing all
of the Loans are repaid, all of the Commitments are terminated and all outstanding Letters of
Credit are either returned to the Issuing Bank or are cancelled.



     “Person” means any natural person, corporation, business trust, joint venture,
association, company, partnership, limited liability company, individual or family trust, or
Governmental Authority.



25









 





     “PJM” means PJM Interconnection, L.L.C.



     “PJM Letter” means that certain Letter, dated August 15, 2008, from the Borrower to
PJM and the Collateral Agent, Re: Transmission Owners Agreement.



     “Plan” means a Single-Employer Plan or a Multiple Employer Plan.



     “Pledge Agreement” means the Pledge Agreement, dated as of the date hereof, between
the Pledgor and the Collateral Agent.



     “Pledgor” has the meaning assigned to such term in the recitals to this Agreement.



     “Prexy Segment” means the portion of the TrAIL Transmission Line located exclusively
in Pennsylvania that runs from and including the new Prexy Substation (as described in the
Independent Engineer’s Report) to, but excluding, the new 502 Junction Substation (as described in
the Independent Engineer’s Report), including approximately 15 miles of new 138 kV radial
transmission lines.



     “Professional Services Agreement” means the Professional Services Agreement, dated as
of July 11, 2007, between the Borrower and the Independent Engineer.



     “Project” has the meaning assigned to such term in the recitals to this Agreement.



     “Project Budget” means a budget setting forth all reasonably expected Project Costs
through Completion, which budget is attached hereto as Appendix I.



     “Project Contracts” means the Major Project Contracts and each other contract or
agreement related to the development, construction, acquisition, maintenance, ownership or
operation of the Project, between the Borrower and any other Person.



     “Project Costs” means, collectively, (a) development, construction, acquisition,
maintenance, operation and other costs in connection with the TrAIL Transmission Line, (b)
development, construction, acquisition, maintenance, operation and other costs in connection with
the Additional Facilities of not more than $220,000,000 (to be allocated among Additional
Facilities generally as set forth on Schedule 1.01(a) hereto), (c) costs incurred in
connection with implementing the West Virginia Settlement, (d) costs incurred in connection with
the issuance of, or compliance with, any CPCN, including costs incurred in connection with any
modification of the West Virginia Settlement after the Closing Date, if and to the extent the West
Virginia Settlement or any such modification is approved by the West Virginia PSC, or in connection
with implementing the terms of any settlements with interested parties in respect of legal actions
taken or threatened by such parties relating to any CPCN, provided that, in the case of
clause (d), (i) such costs are not material, (ii) the incurrence of such costs will not materially
adversely affect the Borrower or the Project and (iii) the Borrower reasonably expects that such
costs will be recoverable under its FERC-approved tariff and (e) fees and expenses incurred, and
interest accrued, in connection with the Credit Facilities (to the extent not included in clauses
(a), (b), (c) or (d) above).



26









 





     “Project Equity Commitment” has the meaning assigned to such term in the Equity
Commitment Agreement.



     “Project Receipt Payments” means any revenues or other amounts (including any payments
reflecting a return on CWIP) the Borrower receives in cash less any operating costs incurred in
connection therewith.



     “Project Schedule” means a schedule setting forth the expected schedule and milestones
for construction of the Project through Completion, which schedule is attached hereto as
Appendix II.



     “Projections” means the projections of the Borrower included in the Information
Memorandum and any other financial projections, estimates, opinions, evaluations, forecasts or
other forward-looking statements (including the Financial Model) furnished to the Lenders and
Agents by, or as directed by, the Borrower prior to the Closing Date.



     “Proposed Virginia Segment” means the portion of the TrAIL Transmission Line located
exclusively in Virginia that runs from, but excluding, the existing Meadow Brook Substation to a
point approximately 300 feet from the western boundary of the Appalachian Trail.



     “Prudent Utility Practice” means, as to the Project or any Separately Financed
Facility, those practices, methods and standards that, in the exercise of reasonable and prudent
judgment by an electric utility company designing, installing, constructing and operating
high-voltage, interstate electric transmission lines and related facilities in the United States,
based on the facts known or which reasonably should have been known at the time a decision was
made, would have been expected to efficiently accomplish the desired result in a manner that: (a)
is consistent with Legal Requirements and standards generally utilized in projects similar to the
Project or any Separately Financed Facility, as applicable, without requiring a level of care
higher than that necessary to efficiently accomplish the desired result, even if some in the
industry employ a higher standard; (b) makes due consideration for reliability, safety and
protection of equipment; and (c) is consistent with manufacturers’ recommendations and warranties.



     “PUHCA 2005” means the Public Utility Holding Company Act of 2005, as amended, and all
rules and regulations adopted thereunder.



     “Qualifying Additional Facilities” means equipment and facilities which meet the
following criteria:



     (a) the development and construction of such equipment or facility is a PJM directed, approved
or authorized project;



     (b) the costs associated with such equipment or facilities are recoverable by the Borrower
under a FERC-approved tariff;



     (c) the Borrower (i) has obtained all approvals, including any CPCN, that individually or in
the aggregate are material for the then current stage of construction of such equipment or
facilities and all such approvals are final and binding and in full force and effect and (ii)
reasonably expects to obtain all other approvals that will be required in connection with



27









 







the development, construction, acquisition, maintenance, ownership or operation of the
equipment or facilities on or prior to the date on which such approvals will be required in
connection therewith;



     (d) prior to spending any funds, or committing to spend any funds, on such equipment and
facilities, the Borrower has certified that such equipment and facilities are technologically
feasible and can be completed for the amount budgeted therefor, which amount includes a reasonable
contingency and, when aggregated with all amounts budgeted for other Qualifying Additional
Facilities, does not exceed $48,000,000;



     (e) the Independent Engineer has verified the items certified by the Borrower as described in
the preceding clause (d); and



     (f) the Sponsor has made an equity contribution to the Borrower in an amount equal to 50% of
the costs of such equipment and facilities.



     “Quotation Day” means, in relation to any period for which an interest rate is to be
determined, two Business Days before the first day of such period.



     “Real Property” means all right, title and interest of the Borrower in and to any and
all parcels of real property owned, leased or operated by the Borrower together with all
improvements and appurtenant fixtures, equipment, personal property, easements and other property
and rights incidental to the ownership, lease or operation thereof.



     “Register” has the meaning assigned to such term in Section 2.08(c).



     “Regulation U” means Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.



     “Regulation X” means Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.



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



     “Release” means any release, placing, spilling, leaking, seepage, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or depositing
in, into or onto the Environment.



     “Required Class Lenders” means (i) with respect to the Revolving Facility, at any
time, Revolving Lenders having Revolving Loans outstanding and Available Unused Commitments that
taken together represent more than 50% of the sum of all Revolving Loans outstanding and the total
Available Unused Commitments of all Revolving Lenders at such time and (ii) the Required
Construction Class Lenders.



     “Required Construction Class Lenders” means (i) with respect to the Construction
Facility, at any time, Construction Lenders having Construction Loans outstanding and Available



28









 







Unused Commitments that taken together represent more than 50% of the sum of all Construction
Loans outstanding and the total Available Unused Commitments of all Construction Lenders at such
time and (ii) with respect to the New Construction Facility, at any time, New Construction Lenders
having a Series of New Construction Loans outstanding that together represent more than 50% of the
sum of all New Construction Loans of that Series.



     “Required Lenders” means, at any time, Lenders having Loans outstanding, L/C Exposures
(if applicable), and Available Unused Commitments that taken together represent more than 50% of
the sum of all Loans outstanding, L/C Exposures (if applicable), and the total Available Unused
Commitments at such time. The Loans, L/C Exposures (if applicable) and Available Unused Commitment
of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.



     “Responsible Officer” of any Person means any executive officer or Financial Officer
of such Person and any other officer or similar official thereof responsible for the administration
of the obligations of such Person in respect of this Agreement.



     “Restricting Information” has the meaning assigned to such term in Section
9.17(b).



     “Revolving Availability Period” means the period from the Closing Date to but
excluding the earlier of (a) the Maturity Date and (b) the date of termination of the Revolving
Commitments.



     “Revolving Borrowing” means a Borrowing comprised of Revolving Loans.



     “Revolving Commitment” means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans pursuant to Section 2.01(b), expressed as a Dollar amount
representing the maximum aggregate permitted amount of such Lender’s Revolving Facility Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.07
and (b) reduced or increased from time to time pursuant to assignments by or to such Lender under
Section 9.04. The initial Dollar amount of each Lender’s Revolving Commitment is set forth
on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Revolving Commitment, as applicable. The aggregate amount of the Revolving
Commitments on the date hereof is $20,000,000.



     “Revolving Facility” means the Revolving Commitments and the extensions of credit made
hereunder by the Revolving Lenders.



     “Revolving Facility Exposure” means, at any time, the sum of (a) the aggregate
principal amount of the Revolving Loans outstanding at such time, and (b) the L/C Exposure at such
time. The Revolving Facility Exposure of any Revolving Lender at any time shall be the sum of (a)
the aggregate principal amount of such Revolving Lender’s Revolving Loans outstanding at such time
and (b) such Revolving Lender’s Facility Percentage of the L/C Exposure at such time.



     “Revolving Lender” means a Lender with a Revolving Commitment or with outstanding
Revolving Loans.



29









 





     “Revolving Loans” means the revolving loans made by the Lenders to the Borrower
pursuant to Section 2.01(b).



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



     “Screen Rate” means, in relation to LIBOR, the British Bankers’ Association Interest
Settlement Rate per annum for deposits in Dollars for the relevant Interest Period, displayed on
Page 3750 on the Dow Jones Markets Service. If the agreed page is replaced or service ceases to be
available, the Administrative Agent may specify another page or service displaying the appropriate
rate after consultation with the Borrower and the Lenders.



     “Secured Parties” means, collectively, the Lenders, any Issuing Bank, the
Administrative Agent and the Collateral Agent.



     “Secured Party Appointment Period” has the meaning assigned to such term in
Section 8.06.



     “Security Documents” means the Pledge Agreement and each of the security agreements
and other instruments and documents executed and delivered pursuant to the Pledge Agreement or
Section 5.12.



     “Segments” means the Prexy Segment, the Mt. Storm Segment, the Meadow Brook Segment,
the Virginia Segment, the Jointly Owned Segment and the Additional Facilities.



     “Separately Financed Facility” means an electric transmission project not constituting
part of the Project that meets the following criteria:




     (a) the development and construction of such project is a PJM directed, approved or
authorized project;




     (b) the costs associated with such project are recoverable by the Borrower under a
FERC-approved tariff;




     (c) either the Sponsor is obligated to make Equity Contributions to the Borrower in an
amount equal to the Additional Equity Amount pursuant to the Equity Commitment Agreement or
the Sponsor has entered into a supplement to the Equity Commitment Agreement obligating the
Sponsor to make Equity Contributions to the Borrower in an amount equal to the Additional
Equity Amount;




     (d) subject to clause (c) above, the Borrower (i) has obtained all Permits, including
any CPCN, that individually or in the aggregate are material for the then current stage of
construction of such project and all such approvals are final and binding and in full force
and effect and (ii) reasonably expects to obtain all other approvals that will be required
in connection with the development, construction, acquisition, maintenance, ownership or
operation of the project on or prior to the date on which such approvals will be required in
connection therewith;



30









 






     (e) the Borrower has certified, prior to the commencement of construction with respect
to such project, that such project is technologically feasible and can be completed for the
amount budgeted therefor, which amount includes a reasonable contingency (such amount,
including such contingency, the “Additional Equity Amount” with respect to such
project, and all Additional Equity Amounts together, the “Total Additional Equity
Amount”); provided that, in calculating the “Additional Equity Amount” for such
project, if any project has previously been designated as a Separately Financed Facility and
the development and construction of such Separately Financed Facility has been completed at
a cost less than the Additional Equity Amount attributed to such Separately Financed
Facility, the amount of such difference (or a portion thereof), if verified by the
Independent Engineer, may be subtracted (no more than once in the case of any subtracted
amount) from the amount of budgeted costs for such project in such calculation;
provided further that in the event the development and construction costs of
such project reach the Additional Equity Amount attributed to such project, the Borrower may
effect an increase to such Additional Equity Amount by (i) following the certification
procedures set forth in this paragraph (e) and the following paragraph (f) in respect of the
additional costs (including reasonable contingency) budgeted for completing the construction
of such project, (ii) demonstrating that such project, taking into account such additional
costs, continues to meet the criteria for a “Separately Financed Facility” set forth in
paragraphs (a), (b), (d), (g) and (h) of this definition and (iii) procuring an Equity
Contribution from the Sponsor to the Borrower in an amount equal to such additional costs in
accordance with paragraph (c) of this definition;




     (f) the Independent Engineer has verified the items certified by the Borrower as
described in the preceding clause (e);




     (g) all costs and expenses relating to the development, construction and acquisition of
such project are paid with equity contributions made to the Borrower by the Sponsor or its
Affiliates; and




     (h) after giving effect to such project being a Separately Financed Facility, and after
giving effect to any increase to an Additional Equity Amount pursuant to the foregoing
paragraph (e), the Total Additional Equity Amount does not exceed $250,000,000.



     “Series” has the meaning assigned to such term in Section 2.19(c).



     “Service Agreement” means the Service Agreement, dated as of October 31, 2006, between
ServiceCo and the Borrower as the same may be amended from time to time in accordance with this
Agreement.



     “ServiceCo” means Allegheny Energy Service Corporation, a Maryland corporation.



     “ServiceCo Direct Agreement” means the Direct Agreement, dated as of the Closing Date,
between ServiceCo and the Collateral Agent.



     “SFF Equity Commitment” has the meaning assigned to such term in the Equity Commitment
Agreement.



31









 





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



     “Siting Approval” means that:



     (a) with respect to any Segment (excluding the Additional Facilities), either (i) the state
public utility commission of each state in which such Segment is located has issued a final and
binding order, which order is not subject to any restraining order or stay, approving the siting
and construction of such portion of the TrAIL Transmission Line subject to its jurisdiction
(through a CPCN or other similar applicable state public utility commission authorization) on terms
and conditions reasonably acceptable to the Administrative Agent or (ii) FERC has issued an order
issuing a construction permit pursuant to Section 216(b) (or other applicable section) of the FPA
providing for siting and construction of such Segment in any state in which such Segment is located
for which a state siting order has not been obtained; and



     (b) with respect to the Proposed Virginia Segment and the Jointly Owned Segment, (i) the
Virginia SCC has issued a final and binding order, which order is not subject to any restraining
order or stay, approving the siting and construction of the AT Section (through a CPCN or other
similar applicable state public utility commission authorization) on terms and conditions
reasonably acceptable to the Administrative Agent or (ii) FERC has issued an order issuing a
construction permit pursuant to Section 216(b) (or other applicable section) of the FPA providing
for siting and construction of the AT Section, provided that if the Virginia SCC approves
the Alternate Virginia Segment as the Virginia Segment, then this clause (b) shall not be
applicable.



     “Sponsor” has the meaning assigned to such term in the recitals to this Agreement.



     “Subsidiary” means, with respect to any Person, any corporation, partnership, limited
liability company, association or other business entity of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the ordinary voting power or
more than 50% of the general partnership interests are, at the time any determination is being
made, directly or indirectly, owned, Controlled or held by such Person.



     “Syndication Agent” has the meaning assigned to such term in the introductory
paragraph of this Agreement.



     “Tax Allocation Agreement” means the Tax Allocation Agreement, dated as of July 31,
2003, by and between Allegheny Energy, Inc. and its Subsidiaries, as amended effective as of
October 24, 2007, as the same may be further amended from time to time in accordance with this
Agreement.



     “Taxes” means any and all present or future taxes, levies, imposts, duties (including
stamp duties), assessments, deductions, withholdings or other similar charges (including ad



32









 




valorem charges) imposed by any Governmental Authority and any and all liabilities
(including fines, interest , penalties or additions to tax) related thereto.




     “Termination Event” means an event described in Section 4042(a) of ERISA.



     “Total Additional Equity Amount” has the meaning assigned to such term within the
definition of “Separately Financed Facility.”



     “TrAIL Transmission Line” has the meaning assigned to such term in the recitals to
this Agreement.



     “TrAILCo Accounts” means (a) (i) the demand deposit account owned by and in the name
of the Borrower maintained by PNC Bank N.A., account number 1019793316 (the “TrAILCo Operating
Account”), (ii) the demand deposit account owned by and in the name of the Borrower maintained
by PNC Bank, N.A., account number 1019802331, (iii) the demand deposit account owned by and in the
name of the Borrower maintained by PNC Bank, N.A., account number 1019802323 and (iv) the demand
deposit account owned by and in the name of the Borrower maintained by PNC Bank, N.A., account
number 1019802315; and (b) any of up to three additional bank accounts to be owned by the Borrower
and maintained by a Lender (provided that the Borrower shall provide the account number of
each such account and the name of the Lender where such account is maintained to the Collateral
Agent and the Administrative Agent prior to depositing any funds in such account).



     “TrAILCo Operating Account” has the meaning assigned to such term in the definition of
“TrAILCo Accounts.”



     “Transaction Documents” means the Financing Documents and the Major Project Contracts.



     “Transactions” means, collectively, (a) the development, construction, acquisition,
maintenance, operation and ownership of the Project as contemplated by the Transaction Documents,
(b) the execution, delivery and performance by the Borrower of the Financing Documents to which it
is a party, (c) the Borrowings hereunder, the issuance of the Letters of Credit and the use of
proceeds of each of the foregoing, (d) the execution, delivery and performance of the Equity
Commitment Agreement by the Sponsor, and (e) the granting of the Liens pursuant to the Security
Documents.



     “Transmission Owners Agreement” means the Consolidated Transmission Owners Agreement,
dated as of December 15, 2005, among PJM, the Borrower and the other transmission owner
participants of PJM, as the same may be amended from time to time in accordance with its terms.



     “Type,” when used in respect of any Loan or Borrowing, refers to the Rate by reference
to which interest on such Loan or on the Loans comprising such Borrowing is determined. For
purposes hereof, the term “Rate” shall include the Adjusted LIBOR and the Base Rate.



     “UCC” means the Uniform Commercial Code as in effect in the applicable state of
jurisdiction.



33









 





     “U.S. Bankruptcy Code” means Title 11 of the United States Code, as amended, or any
similar federal or state law for the relief of debtors.



     “U.S.A. Patriot Act” means, the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56
(signed into law on October 26, 2001).



     “Used and Useful” means, with respect to a given facility, portion of the Project or
Segment, that such facility, portion of the Project or Segment has gone, or upon Completion will
go, into commercial operation and is providing, or upon Completion will provide, necessary services
to the Borrower’s transmission customers, or is otherwise providing, or upon Completion will
provide, necessary reliability support for the interconnected transmission grid.



     “Virginia SCC” means the Commonwealth of Virginia State Corporation Commission.



     “Virginia Segment” means either the Proposed Virginia Segment or the Alternate
Virginia Segment, whichever is selected by the Virginia SCC.



     “West Virginia Facility” means the facility to be constructed and owned by the
Borrower in West Virginia, as more fully described in paragraph 6.d. of the West Virginia
Settlement, if and to the extent such settlement is approved by the West Virginia PSC.



     “West Virginia PSC” means the Public Service Commission of West Virginia.



     “West Virginia Settlement” means that certain Joint Stipulation and Agreement for
Settlement, dated April 15, 2008, among the Borrower, the Consumer Advocate Division of the West
Virginia PSC, the Staff of the West Virginia PSC and the West Virginia Energy Users Group, as such
settlement is in effect on the date of this Agreement.



     “Withdrawal Liability” has the meaning assigned to such term in Part I of Subtitle E
of Title IV of ERISA.



     Section 1.02 Terms Generally. Except as otherwise expressly provided, the following rules of interpretation shall apply
to this Agreement and the other Financing Documents:



          (a) the definitions set forth or referred to in Section 1.01 shall apply equally to
both the singular and plural forms of the terms defined;



          (b) whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms;



          (c) the words “include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”;



          (d) all references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the
context shall otherwise require;



34









 





          (e) except as otherwise expressly provided herein, any reference in this Agreement to any
Financing Document shall mean such document as amended, restated, supplemented or otherwise
modified from time to time;



          (f) a reference to any statute or regulation shall be deemed to include all statutes or
regulations amending, supplementing or replacing the same from time to time, and a reference to a
statute shall be deemed to include all regulations issued or otherwise applicable under such
statute; and



          (g) except as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to time; provided
that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to
any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP
or in the application thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or after such change in GAAP
or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.



     Section 1.03 Interrelationship with Existing Credit Agreement.



          (a) As stated in the preamble and the recitals hereof, this Agreement is intended to amend and
restate the provisions of the Existing Credit Agreement and (x) all of the terms and provisions of
the Existing Credit Agreement shall continue to apply for the period prior to the date of this
Agreement, including any determinations of payment dates, interest rates, Events of Default or any
amount that may be payable to the Administrative Agent or the Existing Lender (or its assignees or
replacements), and (y) the obligations under the Existing Credit Agreement shall from and after the
date hereof continue to be owing in accordance with, and subject to, the terms of this Agreement.
As to all periods occurring on or after the date of this Agreement, all of the terms and conditions
set forth in the Existing Credit Agreement shall be of no further force and effect, it being
understood that all obligations of the Borrower under the Existing Credit Agreement shall be
governed by this Agreement from and after the date hereof.



          (b) The parties hereto acknowledge and agree that all Existing Indebtedness, including
principal, interest, fees, costs, reimbursable expenses and indemnification obligations accruing or
arising under or in connection with the Existing Credit Agreement which remain unpaid and
outstanding as of the date hereof shall be deemed to be outstanding and payable as an Obligation
under this Agreement.



ARTICLE II.

THE CREDITS




     Section 2.01 Commitments.



35









 





          (a) Subject to the terms and conditions set forth herein, each Construction Lender agrees to
make Construction Loans to the Borrower, in each case from time to time during the Construction
Availability Period in an aggregate principal amount that will not result in (i) such Lender’s
Construction Loans exceeding such Lender’s Construction Commitment or (ii) the aggregate amount of
all Construction Loans exceeding the total Construction Commitments of all Lenders. Immediately
prior to the effectiveness of this Agreement, the Borrower owed to the Existing Lender, under the
Existing Credit Agreement, an aggregate amount equal to $10,059,689.48 (including accrued and
unpaid interest), which amount is hereby deemed to be a Construction Loan made by Citibank, N.A.
hereunder in its capacity as a Lender.



          (b) Subject to the terms and conditions set forth herein, each Revolving Lender agrees to make
Revolving Loans to the Borrower, in each case from time to time during the Revolving Availability
Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving
Facility Exposure exceeding such Lender’s Revolving Commitment or (ii) the total Revolving Facility
Exposure of all Lenders exceeding the total Revolving Commitments of all Lenders.



          (c) Within the foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and re-borrow Revolving Loans. Amounts repaid or prepaid in respect of
Construction Loans may not be re-borrowed.



     Section 2.02 Loans and Borrowings Generally.



          (a) Each Loan shall be made as part of a Borrowing consisting of Loans under the same Credit
Facility and of the same Type made by the Lenders ratably in accordance with their respective
Commitments under the applicable Credit Facility; provided, however, that (i)
Revolving Loans shall be made by the Revolving Lenders ratably in accordance with their respective
Facility Percentages on the date such Loans are made hereunder, (ii) Construction Loans shall be
made by the Construction Lenders ratably in accordance with their respective Facility Percentages
on the date such Loans are made hereunder, and (iii) the New Construction Loans shall be made by
the New Construction Lenders ratably in accordance with their respective Facility Percentages on
the date such Loans are made hereunder. The failure of any Lender to make any Loan required to be
made by it shall not relieve any other Lender of its obligations hereunder; provided that
the Commitments of the Lenders are several and no Lender shall be responsible for any other
Lender’s failure to make Loans as required.



          (b) Subject to Section 2.13, each Borrowing shall be comprised entirely of Base Rate
Loans or Eurodollar Loans as the Borrower may request in accordance herewith.



          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of the applicable Borrowing Multiple
and not less than the applicable Borrowing Minimum; provided that a Eurodollar Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the applicable
Commitment or that is required to finance the reimbursement of an L/C Disbursement as contemplated
by Section 2.04(e). At the time of each Base Rate Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of the applicable Borrowing Multiple and not less
than the applicable Borrowing Minimum; provided that a Base



36









 







Rate Borrowing may be in an aggregate amount that is equal to the entire unused balance of the applicable Commitment or that is
required to finance the reimbursement of an L/C Disbursement as contemplated by Section
2.04(e). Borrowings of more than one Type and under more than one Credit Facility may be
outstanding at the same time; provided that there shall not at any time be more than a
total of (i) ten Eurodollar Borrowings outstanding under the Construction Facility and the New
Construction Facility, collectively, and (ii) five Eurodollar Borrowings outstanding under the
Revolving Facility.



          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.



     Section 2.03 Requests for Borrowings.



     To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 p.m., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case of a Base Rate
Borrowing (including a Base Rate Revolving Borrowing to finance the reimbursement of an L/C
Disbursement as contemplated by Section 2.04(e)), not later than 12:00 p.m., New York City
time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Borrowing Request signed by the Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with Section 2.02:




          (i) whether the requested Borrowing is a Revolving Borrowing or a Construction
Borrowing;




          (ii) the aggregate amount of the requested Borrowing;




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




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




          (v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto.


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a
Base Rate Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.




     Section 2.04 Letters of Credit.



37









 





          (a) General. Subject to the terms and conditions set forth herein, the Borrower may
request the issuance of Letters of Credit for its own account in a form reasonably acceptable to
the applicable Issuing Bank, at any time and from time to time during the Revolving Availability
Period and prior to the date that is five Business Days prior to the Maturity Date. Letters of
Credit may be issued solely for the purposes set forth in Section 5.10. In the event of
any inconsistency between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, an Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.



          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal (other than an automatic renewal in
accordance with paragraph (c) of this Section) or extension of an outstanding Letter of Credit),
the Borrower shall hand deliver or telecopy (or transmit by other electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank) to the applicable
Issuing Bank and the Administrative Agent (one Business Day in advance of the requested date of
issuance, amendment, renewal or extension) a Notice of L/C Activity requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day),
the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and
such other information as shall be necessary to issue, amend, renew or extend such Letter of
Credit. If requested by the applicable Issuing Bank, the Borrower also shall submit a Letter of
Credit application on such Issuing Bank’s standard form in connection with any request for a Letter
of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment, renewal or extension,
(i) the total Revolving Facility Exposure of all Lenders shall not exceed the total Revolving
Commitments of all Lenders and (ii) the aggregate available amount of all Letters of Credit issued
by any Issuing Bank shall not exceed such Issuing Bank’s L/C Issuing Commitment.



          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date;
provided that any Letter of Credit with a one-year tenor may provide for the automatic renewal thereof for
additional one-year periods (which, in no event, shall extend beyond the date referred to in clause
(ii) of this paragraph (c)).



          (d) Lender Participations. By the issuance of a Letter of Credit (or an amendment to
a Letter of Credit increasing the amount thereof) and without any further action on the part of the
applicable Issuing Bank or the Revolving Lenders, such Issuing Bank hereby grants to each Revolving
Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such
Letter of Credit equal to such Revolving Lender’s Facility Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and



38









 







unconditionally agrees to pay to the Administrative Agent in Dollars, for the account of the applicable Issuing Bank, such Revolving
Lender’s Facility Percentage of each L/C Disbursement made by such Issuing Bank not reimbursed by
the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any circumstance
whatsoever (other than circumstances arising from the gross negligence or willful misconduct of the
applicable Issuing Bank), including any amendment, renewal or extension of any Letter of Credit or
the occurrence and continuation of a Default or reduction or termination of the Revolving
Commitments, and that each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.



          (e) Reimbursement of L/C Disbursements. If the applicable Issuing Bank shall make any
L/C Disbursement, the Borrower shall reimburse such L/C Disbursement by paying to the
Administrative Agent an amount equal to such L/C Disbursement in Dollars, not later than 5:00 p.m.,
New York City time, on the Business Day immediately following the date the Borrower receives notice
under paragraph (g) of this Section of such L/C Disbursement; provided that the Borrower
may, subject to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 that such payment be financed with a Revolving Borrowing in an equivalent
amount and, to the extent so financed, the Borrower’s L/C Reimbursement Obligation shall be
discharged and replaced by the resulting Revolving Borrowing. If the Borrower fails to reimburse
any L/C Disbursement when due, then the Administrative Agent shall promptly notify the applicable
Issuing Bank and each other Revolving Lender of the applicable L/C Disbursement, the payment then
due from the Borrower and, in the case of a Revolving Lender, such Lender’s Facility Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent in Dollars, its Facility Percentage of the payment then due from the Borrower,
in the same manner as provided in Section 2.05 with respect to Loans made by such Lender
(and Section 2.05 shall apply, mutatis mutandis, to the payment obligations
of the Revolving Lenders), and the Administrative Agent shall promptly pay to the applicable
Issuing Bank in Dollars, the amounts so received by it from the Revolving Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank
or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse
such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any
payment made by a Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any L/C Disbursement (other than
the funding of a Revolving Borrowing as contemplated above) shall not constitute a Loan and shall
not relieve the Borrower of its L/C Reimbursement Obligation with respect to such L/C Disbursement.



          (f) Reimbursement Obligations Absolute. The obligation of the Borrower to reimburse
L/C Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under
any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,



39









 







fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by
the applicable Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit (iv) any amendment or waiver
of or any consent to departure from all or any terms of any of the Transaction Documents, (v) the
existence of any claim, setoff, defense or other right which the Borrower may have at any time
against the beneficiary of such Letter of Credit (or any Persons for whom such beneficiary may be
acting), the applicable Issuing Bank, the Administrative Agent, any Lender or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby, by any other
Transaction Document or by any unrelated transaction, (vi) any breach of contract or dispute among
or between the Borrower, the applicable Issuing Bank, the Administrative Agent, any Lender or any
other Person, (vii) any non-application or misapplication by the beneficiary of the Letter of
Credit of the proceeds of any L/C Disbursement or any other act or omission of such beneficiary in
connection with such Letter of Credit, (viii) any failure to preserve or protect any Collateral,
any failure to perfect or preserve the perfection of any Lien thereon, or the release of any of the
Collateral securing the performance or observance of the terms of this Agreement or any of the
other Financing Documents, (ix) the failure of any Revolving Lender to make a Revolving Loan as
contemplated by Section 2.04(e) or (x) any other event or circumstance whatsoever, whether
or not similar to any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s
obligations hereunder; provided that, in each case, payment by the applicable Issuing Bank
shall not have constituted gross negligence or willful misconduct. Neither the Administrative
Agent, the Lenders nor any Issuing Bank, nor any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication under or relating to
any Letter of Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond the control of such
Issuing Bank, except in the case of the applicable Issuing Bank and its Related Parties, to the
extent resulting from the gross negligence or willful misconduct of such Person. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the applicable Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of Credit.



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



40









 





          (h) Interim Interest. If an Issuing Bank shall make any L/C Disbursement, then,
unless the Borrower shall reimburse such L/C Disbursement (including by the making of a Revolving
Borrowing) in full on the date such L/C Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such L/C Disbursement is made to but excluding
the date that the Borrower reimburses such L/C Disbursement at the rate per annum then applicable
to Base Rate Revolving Loans or Eurodollar Revolving Loans, at the election of the Borrower;
provided that if such L/C Disbursement is not reimbursed by the Borrower when due pursuant
to paragraph (e) of this Section, then Section 2.12(c) shall apply. Interest accrued
pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e)
of this Section to reimburse such Issuing Bank shall be for the account of such Revolving Lender to
the extent of such payment.



          (i) Replacement of an Issuing Bank. An Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall
pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.11. From and after the effective date of any such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the replaced Issuing Bank under this Agreement
with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall require. After the replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of such Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement but shall not be required to
issue additional Letters of Credit.



          (j) Cash Collateralization. If any Event of Default shall occur and be continuing,
(i) in the case of an Event of Default described in Section 7.01(h), on the Business Day,
or (ii) in the case of any other Event of Default, on the third Business Day, in each case
following the date on which the Borrower receives notice from the Administrative Agent (or, if the
maturity of the Loans has been accelerated, Revolving Lenders with L/C Exposure representing
greater than 50% of the total L/C Exposure) demanding the deposit of cash collateral pursuant to
this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in Dollars in cash equal to the total L/C Exposure as of such date plus any
accrued and unpaid interest thereon; provided that, upon the occurrence of any Event of
Default with respect to the Borrower described in Section 7.01(h), the obligation to
deposit such cash collateral shall become effective immediately, and such deposit shall become
immediately due and payable in Dollars, without demand or other notice of any kind. The Borrower
also shall deposit cash collateral pursuant to this paragraph as and to the extent required by
Section 2.10(b). Each such deposit pursuant to this paragraph or pursuant to Section
2.10(b) shall be held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Borrower under this Agreement. The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal, over such account.
Other than any interest earned on the investment of such deposits, which investments shall be



41









 







made at the option and sole discretion of (i) for so long as an Event of Default shall be continuing,
the Administrative Agent and (ii) at any other time, the Borrower, in each case, in Permitted
Investments and at the risk and expense of the Borrower, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse each Issuing Bank for L/C
Disbursements for which such Issuing Bank has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for
the L/C Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to
the consent of Revolving Lenders with L/C Exposure representing greater than 50% of the total L/C
Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of Default have been cured or
waived. If the Borrower is required to provide an amount of cash collateral hereunder pursuant to
Section 2.10(b), such amount (to the extent not applied as aforesaid) shall be returned to
the Borrower as and to the extent that, after giving effect to such return, the Borrower would
remain in compliance with Section 2.10(b) and no Event of Default shall have occurred and
be continuing.



          (k) Additional Issuing Banks. From time to time, the Borrower may by notice to the
Administrative Agent designate up to two Revolving Lenders (in addition to BNP Paribas) that agree
(in their sole discretion) to act in such capacity and are reasonably satisfactory to the
Administrative Agent as Issuing Banks. Each such additional Issuing Bank shall execute a
counterpart of this Agreement in such capacity upon the approval of the Administrative Agent (which
approval shall not be unreasonably withheld) and shall thereafter be an Issuing Bank hereunder for
all purposes.



          (l) Reporting. Unless otherwise requested by the Administrative Agent, each Issuing
Bank shall (i) provide to the Administrative Agent copies of any notice received from the Borrower
pursuant to Section 2.04(b) no later than the next Business Day after receipt thereof and
(ii) report in writing to the Administrative Agent (who shall in turn promptly provide notice of
same to all Lenders in accordance with Section 9.18(b)) (A) on or prior to each Business
Day on which such Issuing Bank expects to issue, amend, renew or extend any Letter of Credit, the
date of such issuance, amendment, renewal or extension, and the aggregate face amount of the
Letters of Credit to be issued, amended, renewed or extended by it and outstanding after giving
effect to such issuance, amendment, renewal or extension occurred (and whether the amount
thereof changed), and such Issuing Bank shall be permitted to issue, amend, renew or extend such
Letter of Credit if the Administrative Agent shall not have advised such Issuing Bank that such
issuance, amendment renewal or extension would not be in conformity with the requirements of this
Agreement, (B) on each Business Day on which such Issuing Bank makes any L/C Disbursement, the date
of such L/C Disbursement and the amount of such L/C Disbursement and (C) on any other Business Day,
such other information as the Administrative Agent shall reasonably request, including prompt
verification of such information as may be requested by the Administrative Agent.



     Section 2.05 Funding of Borrowings.



42









 





          (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds, in Dollars, by 1:00 p.m., New York City time, to
the account of the Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to the TrAILCo Operating Account;
provided that Revolving Borrowings made to finance the reimbursement of L/C Disbursements
as provided in Section 2.04(e) shall be remitted by the Administrative Agent to the
applicable Issuing Bank.



          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand (without duplication) such corresponding amount with
interest thereon, for each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the greater of (x) the Federal Funds Effective Rate and (y) a rate reasonably
determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation, or (ii) in the case of the Borrower, the interest rate applicable to Base Rate Loans
under the applicable Credit Facility. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender’s Loan included in such Borrowing.



     Section 2.06 Interest Elections.



          (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect, in the case
of a Borrowing, to convert such Borrowing to a different Type or to continue such Borrowing
and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.



          (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in the form of Exhibit B-2.



43









 





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




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




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




          (iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing; and




          (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election.


If any such Interest Election Request made by the Borrower requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration.




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



          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period, the Borrower shall be
deemed to have converted such Borrowing to a one-month Interest Period Eurodollar Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the written request (including a request through
electronic means) of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing, (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to a Base Rate Borrowing at the end of the Interest Period applicable thereto.



     Section 2.07 Termination and Reduction of Commitments; Excluded Portions.



          (a) Unless previously terminated in accordance with the terms of this Agreement, each of the
Revolving Commitments and the Construction Commitments shall terminate on the Maturity Date.



          (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments under
the Revolving Credit Facility and the Construction Facility; provided that (i) each
reduction of the Commitments under any such Credit Facility shall be in an amount that is an
integral multiple of $1,000,000 and not less than $2,000,000 (or, if less, the remaining amount of
the applicable Commitments), (ii) (A) the Borrower shall not terminate or reduce the



44









 







Revolving Commitments if, after giving effect to any concurrent prepayment of Revolving Loans in accordance
with Section 2.10, the Revolving Facility Exposure of all Lenders would exceed the total
Revolving Commitments of all Lenders and (B) the Borrower shall not terminate or reduce the
Construction Commitments if, after giving effect to any concurrent prepayment of Construction Loans
in accordance with Section 2.10, the aggregate principal amount of Construction Loans of
all Lenders outstanding would exceed the total Construction Commitments of all Lenders and (iii)
the Borrower shall not terminate or reduce any Commitment in respect of any such Credit Facility
if, after giving effect thereto, the funds available thereunder, together with the remaining
available amount of the Project Equity Commitment (excluding the Total Additional Equity Amount),
would not reasonably be expected to be sufficient to fund all remaining Project Costs through
Completion.



          (c) At its option, the Borrower may designate all or any portion of any of the Prexy Segment,
the Virginia Segment and the Jointly Owned Segment to be an Excluded Portion; provided that
the Borrower may not designate any portion of the Project as an Excluded Portion if the Borrower
borrowed Loans in an amount exceeding the Approved Limit for any Segment within which such portion
of the Project is located. If the Borrower so designates all or any portion of the Prexy Segment,
the Virginia Segment or the Jointly Owned Segment as an Excluded Portion, then the aggregate
Construction Commitments for all Lenders shall be reduced by an amount equal to the Allocated Loan
Amount for such Segment less the Excluded Portion Loan Amount; provided that if less than
all of any Segment is designated as an Excluded Portion, then such reduction shall be made in
proportion to the amount budgeted for such Excluded Portion relative to the Allocated Loan Amount
for such Segment (as certified by the Borrower and confirmed by the Independent Engineer).



          (d) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
Commitments under paragraph (b) of this Section or any reduction required pursuant to paragraph (c)
of this Section, at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly following receipt of
any such notice, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to
this paragraph (d) shall be irrevocable; provided that a notice of termination of
Commitments delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of Commitments shall be permanent. Each
reduction of Commitments under the Revolving Facility or the Construction Facility shall be made
ratably among the Lenders holding such Commitments in accordance with their respective Facility
Percentage of such Commitments.



     Section 2.08 Repayment of Loans Generally; Evidence of Debt.



          (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for
the account of each Revolving Lender, the then unpaid principal amount of each Revolving Loan on
the Maturity Date, (ii) to the Administrative Agent for the account of each Construction Lender,
the then unpaid principal amount of each Construction Loan on the Maturity Date, and (iii) to the
Administrative Agent for the account of each New



45









 







Construction Lender, the then unpaid principal amount of each New Construction Loan on the Maturity Date.



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



          (c) The Administrative Agent, on behalf of the Borrower, shall maintain a register (the
“Register”) in which it shall record (i) the names and addresses of the Lenders and the
Commitments of each Lender, (ii) the amount of each Loan made hereunder, the Credit Facility and
Type thereof and the Interest Period (if any) applicable thereto, (iii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to each Lender hereunder
and (iv) any amount received by the Administrative Agent hereunder for the account of the Lenders
and each Lender’s share thereof.



          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement. The Borrower and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower and any Lender at any reasonable time and from
time to time upon reasonable prior notice.



          (e) Any Lender may request that Loans made by it to the Borrower be evidenced by a promissory
note substantially in the form of Exhibit E-1 or Exhibit E-2, as applicable. In such event, the Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender and in the applicable form. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory notes in such
form payable to the payee named therein.



     Section 2.09 Repayment of Construction Loans and Revolving Loans.



          (a) All Loans shall be due and payable on the Maturity Date.



          (b) Mandatory prepayments of Loans made pursuant to Section 2.10(b) shall be applied
(i) first, on a pro rata basis, to any outstanding Construction Loans and New
Construction Loans, and the Construction Commitments and New Construction Commitments shall be
reduced in an amount corresponding to such mandatory prepayment and (ii) second, on a pro
rata basis, other than mandatory prepayments made pursuant to Section 2.10(b)(i),
to any outstanding Revolving Loans, and the Revolving Commitments shall be reduced in an amount
corresponding to such mandatory prepayment. Loans required to be prepaid pursuant to Section
2.10(b) may not be re-borrowed.




46












 





          (c) Voluntary prepayments of Loans made pursuant to Section 2.10(a) shall be applied
as directed by the Borrower.




          (d) Prior to any repayment of any Borrowing under any Credit Facility hereunder, the Borrower
shall select the Borrowing or Borrowings under the applicable Credit Facility to be repaid and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not
later than 2:00 p.m., New York City time, (i) in the case of a Base Rate Borrowing, one Business
Day before the scheduled date of such repayment and (ii) in the case of a Eurodollar Borrowing,
three Business Days before the scheduled date of such repayment. Each repayment of a Borrowing
shall be applied to the Loans included in the repaid Borrowing such that each Lender receives its
Facility Percentage of such repayment. Repayments of Borrowings shall be accompanied by accrued
interest on the amount repaid.




     Section 2.10 Prepayment of Loans.



          (a) Voluntary Prepayments. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, without premium or penalty (but subject
to Section 2.15), in an aggregate principal amount that is an integral multiple of the
Borrowing Multiple and not less than the Borrowing Minimum or, if less, the amount outstanding,
subject to prior notice in accordance with Section 2.09(d).




          (b) Mandatory Prepayments. The Borrower shall make the following mandatory
prepayments:





          (i) If at any time prior to the Maturity Date the Debt to Equity Ratio exceeds the
Maximum Debt to Equity Ratio, then the Borrower shall have seven Business Days either (x) to
obtain an Equity Contribution in an amount sufficient to cause the Debt to Equity Ratio to
be equal to or less than the Maximum Debt to Equity Ratio or (y) to prepay Loans in
accordance with Section 2.09(b) in an amount required to cause the Debt to Equity
Ratio to be equal to or less than the Maximum Debt to Equity Ratio.




          (ii) If the Borrower is required to prepay Loans pursuant to Section 5.20 in
connection with its receipt of any Loss Proceeds, then the Borrower shall apply such amount
to the prepayment of Loans in accordance with Section 2.09(b).




          (iii) In the event of any termination of all the Revolving Commitments, the Borrower
shall, on the date of such termination, repay or prepay all its outstanding Revolving Loans
and terminate all its outstanding Letters of Credit or cash collateralize such Letters of
Credit in accordance with Section 2.04(j). If as a result of any partial reduction
of the Revolving Commitments, the aggregate Revolving Facility Exposure would exceed the
aggregate Revolving Commitments of all Revolving Lenders after giving effect thereto, then
the Borrower shall, on the date of such reduction, repay or prepay Revolving Loans and/or
cash collateralize Letters of Credit in an amount sufficient to eliminate such excess.




          (iv) In the event of any termination of all the Construction Commitments, the Borrower
shall, on the date of such termination, repay or prepay all its outstanding Construction
Loans. If as a result of any partial reduction of the



47









 







Construction Commitments, the
aggregate amount of all Construction Loans outstanding would exceed the aggregate
Construction Commitments of all Construction Lenders after giving effect thereto, then the
Borrower shall, on the date of such reduction, repay or prepay Construction Loans in an
amount sufficient to eliminate such excess.




          (v) The Borrower shall, on the date of receipt of any proceeds of any Permitted
Refinancing, repay the Loans with all of such proceeds (net of the portion of such proceeds
used to pay fees and other transaction costs), and if all the Loans have been repaid, cash
collateralize outstanding Letter of Credit Obligations, if any, with such net proceeds.



     Section 2.11 Fees.



          (a) The Borrower agrees to pay to each Lender (other than any Defaulting Lender), through the
Administrative Agent, in arrears on the last Business Day of each calendar quarter in each year,
and on the Maturity Date, a commitment fee (the “Commitment Fee”) on the daily amount of
the Available Unused Commitment of such Lender during such quarter (or other period commencing with
the Closing Date or ending with the Maturity Date) at the rate of (i) prior to such time as the
Borrower has used 50% of the available Commitments to draw loans under the Credit Facilities, .50%
per annum and (ii) thereafter, .375% per annum.




          (b) The Commitment Fee shall be computed on the basis of the actual number of days elapsed in
a year of 360 days. The Commitment Fee due to each Lender shall begin to accrue on the Closing
Date and shall cease to accrue on the date on which the last of the Commitments of such Lender
shall be terminated as provided herein.




          (c) The Borrower agrees to pay to each Revolving Lender (other than any Defaulting Lender),
through the Administrative Agent, in arrears on the last Business Day of each calendar quarter in
each year, and on the date on which the Revolving Commitments of all the Lenders shall be
terminated as provided herein, a fee (a “L/C Participation Fee”) on such Lender’s Facility
Percentage of the daily aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during such quarter (or shorter period commencing with the Closing
Date or ending with the date on which the last of the Revolving Commitments shall be terminated) at
a rate per annum equal to the Applicable Margin for Eurodollar Revolving Loans effective for each
day in such period. All L/C Participation Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.




          (d) The Borrower agrees to pay directly to each Issuing Bank, for its own account, the
following fees and other amounts:





          (i) a fronting fee in an amount separately agreed upon by the Borrower and such Issuing
Bank (each a “Fronting Fee”); and




          (ii) such documentary and processing charges for any issuance, amendment, transfer or
payment of Letters of Credit as are in accordance with such Issuing Bank’s standard schedule
for such charges and as in effect at the time of such issuance, amendment, transfer or
payment, as the case may be (collectively, the “L/C Processing Fees”).



48









 





          (e) The Borrower agrees to pay to each Agent, for the account of such Agent, the fees set
forth in any fee letter between such Agent and the Borrower (the “Agent Fees”) and to pay
to the Arrangers the other fees set forth therein.




          (f) All Fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent for distribution, if and as appropriate, among the Lenders, except that
Fronting Fees and L/C Processing Fees shall be paid directly to the applicable Issuing Banks and
the Agent Fees shall be paid directly to the applicable Agent. Once paid none of the Fees shall be
refundable under any circumstances.




     Section 2.12 Interest.



          (a) The Borrower shall pay interest on the unpaid principal amount of each Base Rate Loan made
to the Borrower at the Base Rate plus the Applicable Margin.




          (b) The Borrower shall pay interest on the unpaid principal amount of each Eurodollar Loan
made to the Borrower at the Adjusted LIBOR for the Interest Period in effect for such Eurodollar
Loan plus the Applicable Margin.




          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any Fees or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, the Borrower shall pay interest on such overdue amount, after as
well as before judgment, at a rate per annum equal to (x) in the case of overdue principal of any
Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section or (y) in the case of any other amount, 2% plus the rate applicable to Base Rate Loans
as provided in paragraph (a) of this Section; provided that this paragraph (c) shall be
subject to Section 9.10.




          (d) Accrued interest on each Loan shall be payable by the Borrower in arrears (i) on each
Interest Payment Date for such Loan, (ii) in the case of Revolving Loans, upon termination of all
Revolving Commitments and on the Maturity Date, (iii) in the case of Construction Loans, upon the
termination of all Construction Commitments and on the Maturity Date and (iv) in the case of New
Construction Loans, on the Maturity Date; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of a Base Rate Revolving Loan prior to the end of
the Revolving Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion.




          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the “Base Rate” shall be computed on the basis of a year of 365
days (or 366 days in a leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).




     Section 2.13 Alternate Rate of Interest. If prior to the commencement of any Interest Period for a
Eurodollar Borrowing:



49









 





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



          (b) the Administrative Agent is advised by the Required Lenders under the applicable Credit
Facility that the Adjusted LIBOR or LIBOR, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and such Borrowing
shall be converted to a Base Rate Borrowing on the last day of the Interest Period applicable
thereto, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be
made as a Base Rate Borrowing.




     Section 2.14 Increased Costs.



          (a) If any Change in Law shall:





          (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve or other requirement reflected in the Adjusted LIBOR) or
Issuing Bank; or




          (ii) impose on any Lender or Issuing Bank any other condition affecting this Agreement
or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein
(except, in each case, for Taxes);


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) to the
Borrower or to increase the cost to such Lender or Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such
Lender or Issuing Bank hereunder (whether of principal, interest or otherwise) (except, in each
case, for Taxes), then the Borrower shall pay to such Lender or Issuing Bank, as applicable,
such additional amount or amounts as will compensate such Lender or Issuing Bank, as applicable,
for such additional costs incurred or reduction suffered.




          (b) If any Lender or Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or
Issuing Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding company, if
any, as a consequence of this Agreement or any of the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level
below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding
company would have achieved but for such Change in Law (taking into consideration such Lender’s or
such Issuing Bank’s policies and the policies of such



50









 






Lender’s or such Issuing Bank’s holding
company with respect to capital adequacy), then from time to time the Borrower shall pay to such
Lender or such Issuing Bank, as applicable, such additional amount or amounts as will compensate
such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any
such reduction suffered.




          (c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary
to compensate such Lender or Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or Issuing Bank, as applicable, the
amount shown as due on any such certificate within 10 days after receipt thereof.




          (d) Promptly after any Lender or any Issuing Bank has determined that it will make a request
for increased compensation pursuant to this Section, such Lender or Issuing Bank shall notify the
Borrower thereof. Failure or delay on the part of any Lender or Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing
Bank’s right to demand such compensation; provided that the Borrower shall not be required
to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or Issuing Bank, as
applicable, notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or Issuing Bank’s intention to claim compensation therefor; and
provided, further, that if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180-day period referred to above shall be extended to include
the period of retroactive effect thereof.




     Section 2.15 Break Funding Payments. In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (b) the conversion of any Eurodollar Loan other than (i) on the
last day of the Interest Period applicable thereto or (ii) pursuant to Section 2.21, (c)
the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto, except any such notice deemed ineffective pursuant to Section
2.13, or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to Section
2.18, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event. Such loss, cost
or expense to any Lender shall be the excess, if any, of (i) the amount of interest which
would have accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBOR that would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue a Eurodollar Loan, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount
for such period at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for deposits in Dollars of a comparable amount and period from other
banks in the Eurodollar market. Any Lender claiming break funding costs shall deliver a
certificate to the Borrower setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section and such amount or amounts shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such certificate within
10 days after receipt thereof.



51









 





     Section 2.16 Taxes.



          (a) Any and all payments by or on account of any obligation of the Borrower under any
Financing Document shall be made free and clear of and without deduction or withholding for any
Indemnified Taxes (including Other Taxes); provided that if by law any Indemnified Taxes
(including Other Taxes) are required to be deducted or withheld from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required deductions (including
deductions or withholdings applicable to Indemnified Taxes (including Other Taxes) payable under
this Section) any Secured Party receives an amount equal to the sum it would have received had no
such deductions or withholdings for Indemnified Taxes (including Other Taxes) been made, (ii) the
Borrower shall make such deductions or withholdings and (iii) the Borrower shall timely pay or
cause to be paid the full amount deducted or withheld to the relevant Governmental Authority in
accordance with applicable law.




          (b) In addition, the Borrower shall pay or cause to be paid any Other Taxes payable on account
of any obligation of the Borrower and upon the execution, delivery or enforcement of, or otherwise
with respect to, the Financing Documents, to the relevant Governmental Authority in accordance with
applicable law.




          (c) The Borrower shall indemnify or cause to be indemnified each Secured Party, within 30 days
after written demand therefor, for the full amount of any Indemnified Taxes (including Other Taxes)
paid by such Secured Party on or with respect to any payment by or on account of any obligation of
the Borrower under any Financing Document (including Indemnified Taxes (including Other Taxes)
imposed or asserted on or attributable to amounts payable under this Section) and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability and setting forth in reasonable detail
the calculation for such payment or liability delivered to the Borrower by a Lender or an Issuing
Bank, or by the Administrative Agent on its own behalf, on behalf of another Agent or on behalf of
a Lender or an Issuing Bank, shall be conclusive absent manifest error of any such Lender or the
Issuing Bank, the
Administrative Agent or such other Agent. Notwithstanding anything herein to the contrary, no
Secured Party shall be indemnified for any Indemnified Taxes (including Other Taxes) incurred more
than 180 days prior to the date that such Lender or Issuing Bank, as applicable, notifies the
Borrower of its liability for such Indemnified Taxes (including Other Taxes).




          (d) As soon as practicable after any payment of Indemnified Taxes (including Other Taxes) and
in any event within 30 days of such payment being due by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.




          (e) Each Lender, Agent or Issuing Bank that is not a “U.S. Person” as defined in Section
7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver (to the extent such Lender,
Agent or Issuing Bank is legally able to do so) to the Borrower and the Administrative Agent (or,
in the case of a Participant, to the Lender from which the related participation shall



52









 






have been
purchased) two copies of U.S. Internal Revenue Service Form W-8BEN (claiming benefits under an
applicable treaty), Form W-8ECI or Form W-8IMY, as applicable (together with any necessary
attachments), or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding
tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a
statement substantially in the form of Exhibit F and a Form W-8BEN, or any subsequent
versions thereof or successors thereto, properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments by the Borrower under this Agreement and any other Financing Document. Such forms shall
be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement.
In addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender (to the extent it is legally
able to do so).




          (f) Each Lender, Agent or Issuing Bank that is a “U.S. Person” as defined in Section
7701(a)(30) of the Code agrees to complete and deliver to the Borrower and the Administrative Agent
a duly completed and executed copy of U.S. Internal Revenue Service Form W-9 (or any successor
form) establishing that such Lender, Agent or Issuing Bank is not subject to U.S. backup
withholding tax.




          (g) If any Secured Party determines, in good faith and in its sole discretion, that it has
received a refund of any Taxes in respect of or calculated with reference to Indemnified Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Indemnified Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of such Secured Party (including any Taxes imposed
with respect to such refund) as determined by such Secured Party in good faith and in its sole
discretion, and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided that the Borrower, upon the request of
such Secured Party, agrees to repay as soon as reasonably practicable (not to exceed 30 days) the
amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to such Secured
Party in the event such Secured Party is required to repay such refund to such Governmental
Authority. This Section shall not be construed to require any Secured Party to make available its
tax returns (or any other information relating to its Taxes which it deems confidential or
burdensome to disclose) to the Borrower or any other Person.




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



          (a) Unless otherwise specified, the Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of L/C Disbursements, or of
amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to
3:00 p.m., New York City time, on the date when due, in immediately available funds, without
condition or deduction for any defense, recoupment, set-off or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent to the applicable



53









 






account designated to
the Borrower by the Administrative Agent, except payments to be made directly to the applicable
Issuing Bank as expressly provided herein and except that payments pursuant to Sections
2.14, 2.15, 2.16 and 9.05 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof,
and any such payments not so distributed by the Administrative Agent within one Business Day of
receipt thereof shall bear interest, payable by the Administrative Agent and not the Borrower, at a
rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate reasonably
determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation. If any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such extension. All
payments hereunder of (i) principal or interest in respect of any Loan, (ii) L/C Reimbursement
Obligations with respect to any Letter of Credit or (iii) any other amount due hereunder or under
any other Financing Document shall be made in Dollars. Any payment required to be made by the
Administrative Agent hereunder shall be deemed to have been made by the time required if the
Administrative Agent shall, at or before such time, have taken the necessary steps to make such
payment in accordance with the regulations or operating procedures of the clearing or settlement
system used by the Administrative Agent to make such payment.




          (b) If at any time insufficient funds are received by and available to the Administrative
Agent from the Borrower to pay fully all amounts of principal, unreimbursed L/C Disbursements,
interest and fees then due from the Borrower hereunder, such funds shall be applied (i)
first, towards payment of interest and Fees then due from the Borrower hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest and Fees then due to
such parties, and (ii) second, towards payment of principal and unreimbursed L/C
Disbursements then due from the Borrower hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed L/C Disbursements then due to such
parties.




          (c) If any Lender shall, by exercising any right of set-off or counterclaim, through the
application of any proceeds of Collateral or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in L/C Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans and participations
in L/C Disbursements and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in L/C Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on their respective Loans
and participations in L/C Disbursements; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph (c) shall not be construed to apply to
any payment made by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in L/C



54









 






Disbursements to any assignee or
participant, other than to the Borrower (as to which the provisions of this paragraph (c) shall
apply).




          (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
applicable Issuing Bank hereunder that the Borrower shall not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders or the applicable Issuing Bank, as
applicable, the amount due. In such event, if the Borrower has not in fact made such payment, then
each of the Lenders or the applicable Issuing Bank, as applicable, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the greater of (i) the Federal
Funds Effective Rate and (ii) a rate reasonably determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.




          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(d), 2.05 or 2.17(d), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received
by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid.




     Section 2.18 Mitigation Obligations.



          (a) If any Lender or Issuing Bank requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or Issuing Bank or any Governmental
Authority for the account of any Lender or Issuing Bank pursuant to Section 2.16, then such
Lender or Issuing Bank shall use reasonable efforts to designate a different lending
office for funding or booking its Loans or issuing its Letters of Credit hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the
reasonable judgment of such Lender or Issuing Bank, such designation or assignment (a) would
eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as
applicable, in the future and (b) would not subject such Lender or Issuing Bank to any material
unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or Issuing
Bank in any material respect. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender or Issuing Bank in connection with any such designation or assignment.




          (b) If any Lender or Issuing Bank requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or Issuing Bank or any Governmental
Authority for the account of any Lender or Issuing Bank pursuant to Section 2.16, or if any
Lender defaults in its obligation to fund Loans hereunder, or any Issuing Bank defaults in its
obligation to issue Letters of Credit hereunder, then, so long as no Event of Default has occurred
and is continuing, the Borrower may, at its sole expense and effort, elect to replace such Lender
or Issuing Bank as a Lender or Issuing Bank party to this Agreement upon notice to such Lender or
such Issuing Bank, as applicable, and the Administrative Agent; provided that, concurrently
with such replacement, (i) an Eligible Assignee shall agree, as of such date, to



55









 






purchase for cash,
at 100% of the principal amount thereof, the Loans and other Obligations due to the Lender or
Issuing Bank being replaced pursuant to an Assignment and Acceptance (or other assignment
documentation acceptable to the Administrative Agent, in the case of a replacement Issuing Bank),
and to become a Lender or Issuing Bank for all purposes under this Agreement and to assume all
obligations of the Lender or Issuing Bank being replaced that are to be terminated as of such date,
(ii) in the case of an assignment resulting from a claim for compensation under Section
2.14 or payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments, and (iii) the Borrower or the Eligible
Assignee shall pay to such Lender or Issuing Bank being replaced on the day of such replacement all
interest, fees and other amounts then accrued but unpaid to such Lender or Issuing Bank, including
payments due to such Lender or Issuing Bank under Sections 2.14, 2.15 and
2.16, as applicable.




     Section 2.19 Incremental Facilities.



          (a) On or before the sixth anniversary of the Closing Date, the Borrower may, by written
notice to the Administrative Agent, elect to request the establishment of one or more New
Construction Commitments (the “New Construction Commitments”), in an amount not in excess
of $150,000,000 in the aggregate. Each such notice shall specify (i) the date (each, an
“Increased Amount Date”) on which the Borrower proposes that the New Construction
Commitments shall be effective, which shall be a date not less than 10 Business Days after the date
on which such notice is delivered to the Administrative Agent and (ii) the identity of each Lender
or other Person that is an Eligible Assignee (each, a “New Construction Lender”) to which
the Borrower proposes to allocate any portion of such New Construction Commitments and the amounts
of such allocations. Any Lender offered or approached to provide all or a portion of the New
Construction Commitments may elect or decline, in its sole discretion, to provide a New
Construction Commitment.




          (b) Each New Construction Commitment shall become effective as of the Increased Amount Date
applicable to it so long as each of the following conditions are satisfied:




               (i) Both before and immediately after giving effect to such New Construction Commitment, each
of the conditions set forth in Sections 4.02(b), 4.02(c), 4.02(d),
4.02(e) and 4.02(f) shall be satisfied (except that the condition set forth in
clause (i) of Section 4.02(f) does not need to be satisfied so long as such condition is
satisfied after giving such effect).



               (ii) Such New Construction Commitment shall be established in an amount not less than
$50,000,000 and the New Construction Commitments, in total, including such New Construction
Commitment, will not be established more than three times.



               (iii) Concurrently with such New Construction Commitment becoming effective, the Borrower
shall procure an Equity Contribution from the Sponsor that satisfies the requirements of Section
2.04 of the Equity Commitment Agreement.



               (iv) The Borrower shall provide to the Administrative Agent an updated Project Budget and, if
requested by the Administrative Agent, an updated Project



56









 







Schedule, in each case reasonably
satisfactory to the Administrative Agent in consultation with the Independent Engineer, reflecting
the use of proceeds of New Construction Loans, either prior to or within 30 days (or such longer
period as the Administrative Agent may consent to) following the Increased Amount Date for such New
Construction Commitment.



               (v) The interest rate margins applicable to the New Construction Loans made under such New
Construction Commitment will not be more than 0.25% higher than the corresponding interest rate
margins for the existing Construction Loans. All other terms of the New Construction Loans made
under such New Construction Commitment shall be identical to the terms of the existing Construction
Loans, except for any different terms as the Administrative Agent and the Borrower may agree to,
which terms will be set forth in the applicable supplement to this Agreement entered into pursuant
to this Section 2.19.



          (c) On any Increased Amount Date on which New Construction Commitments are effective, subject
to the satisfaction of the conditions set forth in Section 2.19(b), each New Construction
Lender shall make a Loan to the Borrower (a “New Construction Loan”) in an amount equal to
its New Construction Commitment. The New Construction Loans made by the New Construction Lenders
on such Increased Amount Date shall be designated as a series (a “Series”) of New
Construction Loans for all purposes of this Agreement. Each New Construction Lender of a Series
shall become a Lender hereunder with respect to the New Construction Commitment of such Series and
the New Construction Loans of such Series made pursuant thereto.




          (d) The New Construction Commitments shall be effected pursuant to one or more supplements to
this Agreement executed and delivered by the New Construction Lenders and the Administrative Agent,
each of which shall be recorded in the Register and each New Construction Lender shall be subject
to the requirements set forth in Section 2.16(e).




          (e) In addition to the requirements set forth in Section 5.10, the Borrower may only
apply the proceeds of the New Construction Loans to pay Project Costs relating to portions of the
Project (other than any Excluded Portion) in respect of which the Borrower will earn a return under
its FERC-approved tariff. The Borrower may not apply proceeds of the New Construction Loans to the
Jointly Owned Segment unless the conditions set forth in Section 4.02(g) are satisfied.




          (f) Each supplement entered into pursuant to this Section 2.19 may, without the
consent of any Lenders (other than the New Construction Lender under such supplement), effect such
amendments to this Agreement and the other Financing Documents as may be necessary or appropriate,
as determined by the Administrative Agent, to implement the provisions of this Section
2.19.




     Section 2.20 Siting Approval. If at any time the Borrower has not obtained Siting Approval for any
Segment for which there is an Allocated Loan Amount, then the Borrower shall not apply Loan
proceeds with respect to such Segment, or request that any Letters of Credit be issued in
connection with such Segment, such that the aggregate amount of Loan proceeds applied with respect
to such Segment together with the L/C Exposure of any such Letters of Credit issued in connection
with such Segment exceeds the Approved Limit for such Segment.



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     Section 2.21 Illegality. If any Lender reasonably determines that any Change in Law has made it
unlawful, or that any Governmental Authority has asserted after the Closing Date that it is
unlawful, for any Lender or its applicable lending office to make or maintain any Eurodollar Loans,
then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any
obligations of such Lender to make or continue Eurodollar Loans or to convert Base Rate Borrowings
to Eurodollar Borrowings, as the case may be, shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), convert all such Eurodollar Borrowings of such Lender to Base
Rate Borrowings, on the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not
lawfully continue to maintain such Loans. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted. The affected Lender agrees
to use reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the reasonable judgment of such Lender, such designation or assignment would
allow it to lawfully make or maintain such Eurodollar Loans and would not otherwise be
disadvantageous to such Lender in any material respect. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by such Lender in connection with any such designation or
assignment.



ARTICLE III.

REPRESENTATIONS AND WARRANTIES




     The Borrower makes the following representations and warranties to and in favor of the Secured
Parties as of the Closing Date, to the extent set forth in Section 4.01(l)(i), and as of
each other Credit Event Date, to the extent set forth in Section 4.02(c).



     Section 3.01 Organization; Power and Authority. The Borrower:



          (a) is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization;




          (b) is duly qualified to do business and in good standing in each jurisdiction in which such
qualification is required by law, except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect;




          (c) has the corporate power and authority to own or lease its properties and conduct its
business; and




          (d) has the requisite corporate power and authority to execute and deliver the Transaction
Documents to which it is a party and to perform the provisions thereof, including to own its
property and assets and to carry on its business as now conducted and as contemplated by the
Transaction Documents.




     Section 3.02 Authorization.



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          (a) The execution, delivery and performance of the Transaction Documents to which it is a
party has been duly authorized by all necessary corporate action on the part of the Borrower, and
each such Transaction Document constitutes a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at law).




          (b) To the Knowledge of the Borrower, each Major Project Contract has been validly executed
and delivered by each of the other parties thereto and that, as of the Closing Date, each Major
Project Contract is in full force and effect.




     Section 3.03 Disclosure and Projections.



          (a) The Information Memorandum fairly describes, in all material respects, the general nature
of the business and principal properties of the Borrower; the documents, certificates or other
writings delivered to the Arrangers and Lenders by or on behalf of the Borrower, including the
Information Memorandum (excluding (i) the term sheets included therein and (ii) the Projections),
taken as a whole, do not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein (taken as a whole) not materially misleading
in light of the circumstances under which they were made.




          (b) The pro forma financial statements included in the Information Memorandum and any
Projections delivered to the Arrangers and Lenders by or on behalf of the Borrower have been
prepared based upon good faith estimates and assumptions believed by the Borrower to be reasonable
at the time made (it being acknowledged that projections as to future events are not to be viewed
as facts and that the actual results during the period or periods covered may differ from the
projected results and such differences may be material).




          (c) Since December 31, 2007, there has been no change in the financial condition, operations,
business or properties of the Borrower except changes that individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.




          (d) As of the Closing Date, there is no fact known to the Borrower that could reasonably be
expected to have a Material Adverse Effect that has not been set forth in the Information
Memorandum, the Financing Documents or in the other documents, certificates and other writings
delivered by or on behalf of the Borrower to the Arrangers.




     Section 3.04 Subsidiaries. The Borrower has no Subsidiaries.



     Section 3.05 Financial Statements. The financial statements (including in each case the related
schedules and notes) delivered to the Administrative Agent pursuant to Section 4.01(i)
fairly present in all material respects the financial position of the Borrower, in each case, as of
their respective dates and the results of operations and cash flows for the respective periods then
ended and have been prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments and the absence of footnotes).



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     Section 3.06 No Conflict. The execution, delivery and performance by the Borrower of each of the
Financing Documents to which it is a party will not:



          (a) except as could not reasonably be expected to result in a Material Adverse Effect,
contravene, result in any breach of, or constitute a default under, any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Borrower is bound or by which the Borrower or any of its
respective properties may be bound or affected;




          (b) result in the creation of any Lien in respect of any property of the Borrower (other than
Permitted Liens);




          (c) conflict with or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or other Governmental Authority
applicable to the Borrower; or




          (d) except as could not reasonably be expected to result in a Material Adverse Effect, violate
any provision of any statute or other rule or regulation of any Governmental Authority applicable
to the Borrower.




     Section 3.07 Governmental Approvals. Except as set forth in Schedule 3.07, no consent,
approval or authorization of, or registration, filing or declaration with, notice to, or any other
action by, any Governmental Authority is required in connection with:



          (a) the execution, delivery or performance by the Borrower of the Financing Documents to which
it is a party; or




          (b) the consummation of the transactions contemplated under the Financing Documents.




     Section 3.08 Litigation; Compliance with Laws.



          (a) There are no actions (including regulatory actions), suits or proceedings pending or, to
the Knowledge of the Borrower, threatened against the Borrower or any property of the Borrower in
any court or before any arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.




          (b) The Borrower is not in default under any term of any agreement or instrument to which it
is a party or by which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or other Governmental Authority nor is in violation of any Legal Requirement (including
any state and federal energy laws and regulations) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.




          (c) Neither the Borrower nor, to the Knowledge of the Borrower, any of its Affiliates is in
violation of any laws relating to terrorism or money laundering, including



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Executive Order No.
13224 on Terrorist Financing, effective September 23, 2001, and the U.S.A. Patriot Act.




     Section 3.09 Taxes. The Borrower has filed, or caused to be filed (pursuant to the Tax Allocation
Agreement), all tax returns that are required to have been filed in respect of the Borrower, its
income or its trade or business in any jurisdiction, and has paid, or caused to be paid (pursuant
to the Tax Allocation Agreement), all taxes shown to be due and payable on such tax returns and all
other taxes and assessments levied upon it or its properties, assets, income or franchises (if
any), to the extent such taxes and assessments have become due and payable and before they have
become delinquent, except: (a) for any taxes and assessments (i) the amount of which is not
individually or in the aggregate material or (ii) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with respect to which the
Borrower has established adequate reserves in accordance with GAAP, or (b) where the failure to
file such tax returns or pay such taxes or assessments could not reasonably be expected to have a
Material Adverse Effect.



     Section 3.10 Title to Properties; Possession Under Leases. The Borrower has good and sufficient
interests in all its properties that individually or in the aggregate are material for the
construction, ownership and operation of the Project (other than any Excluded Portion) and that
either are (a) reflected in its most recent audited balance sheet or (b) purported to have been
acquired by the Borrower after said date (except as sold or otherwise disposed of as permitted
under the Financing Documents), in each case free and clear of any Liens other than the Permitted
Liens, except for any such properties material for the construction, ownership and operation of the
Jointly Owned Segment that are owned by Dominion in accordance with the Dominion/TrAILCo Agreement.



     Section 3.11 Permits: Intellectual Property.



          (a) The Borrower holds or possesses all licenses, permits, franchises (if any),
authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto,
that individually or in the aggregate are material for the then current stage of construction of
the Project (other than the Jointly Owned Segment), without known conflict with the rights of
others.




          (b) The Borrower or Dominion, as applicable (and, in the case of Dominion, subject to the
Knowledge of the Borrower), holds or possesses all licenses, permits, franchises (if any),
authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto,
that individually or in the aggregate are material for the then current stage of construction of
the Jointly Owned Segment, without known conflict with the rights of others.




          (c) To the Knowledge of the Borrower, there is no material violation by any Person of any
right of the Borrower with respect to any patent, copyright, service mark, trademark, trade name or
other right owned or used by the Borrower.





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     Section 3.12 Siting of Additional Facilities . No CPCN or other order or authorization from any state public utility commission, or any
order issuing a construction permit or similar siting or construction order from FERC is required
in connection with any of the Additional Facilities (other than any Qualifying Additional
Facilities).



     Section 3.13 ERISA.



          (a) No ERISA Event has occurred with respect to any Plan that has resulted in a material
liability which could reasonably be expected to have a Material Adverse Effect.




          (b) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for
each Plan filed with the Internal Revenue Service is complete and accurate, and since the date of
such Schedule B there has been no material adverse change which could reasonably be expected to
have a material adverse effect on such funding status.




          (c) Except as could not reasonably be expected to have a Material Adverse Effect, neither the
Borrower nor any ERISA Affiliate (i) has incurred any Withdrawal Liability to any Multiemployer
Plan, or (ii) has been notified by the sponsor of any Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA.




     Section 3.14 Use of Proceeds. The Borrower has applied the proceeds of the Loans solely as set forth in, and as permitted
under, Section 5.10; no part of the proceeds from the Loans will be used, directly or
indirectly, (a) for the purpose of buying or carrying any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (b) for any purpose otherwise in violation of, or inconsistent with,
Regulation U or Regulation X.



     Section 3.15 Liens. Except as set forth on Schedule 3.15, the Borrower has not agreed or consented to
cause or permit in the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien other than a Permitted
Lien.



     Section 3.16 Investment Company Act. The Borrower is not an “investment company” as defined in, or subject to regulation as an
“investment company” under, the Investment Company Act of 1940, as amended.



     Section 3.17 FPA. The Borrower is subject to FPA jurisdiction as a public utility. FERC has exclusive
jurisdiction over the rates, terms and conditions of service for transmission services provided by
the Borrower, and the Borrower is not subject to rate regulation by any state utility commission or
similar state regulatory agency.



     Section 3.18 Environmental Matters; Hazardous Materials. The Borrower has no Knowledge of any Environmental Claim or investigation nor has it
received any written notice of any Environmental Claim or investigation, and no proceeding has been
instituted raising any Environmental Claim or initiating any investigation against the Borrower or
otherwise related to any Real Property or, to the Knowledge of the Borrower, any real property
formerly owned, leased or operated by it, alleging any damage to the Environment or violation of
any



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Environmental Laws, except, in each case, such as could not reasonably be expected to result in
a Material Adverse Effect. Except as set forth on Schedule 3.18 or as could not reasonably
be expected to, individually or in the aggregate, result in a Material Adverse Effect,



          (a) the Borrower has no Knowledge of any facts that would reasonably be expected to give rise
to any claim, public or private, of violation of Environmental Laws or damage to the Environment
emanating from, occurring on or in any way related to Real Property or, to the Knowledge of the
Borrower, any other real property formerly owned, leased or operated by it;




          (b) the Borrower has not (i) treated, stored or disposed of any Hazardous Materials on any
Real Property or any other real property formerly owned, leased or operated by it and (ii) disposed
of any Hazardous Materials at any other property except in compliance with Environmental Law;




          (c) the Borrower is not conducting or funding any investigation, remediation, remedial action
or cleanup of any Hazardous Materials that may be present in the Environment on any Real Property
or any other real property; and




          (d) The Borrower (i) is in compliance with applicable Environmental Laws and (ii) has obtained
all Permits required under Environmental Laws for the current stage of construction or operation of
the Project and the Separately Financed Facilities.



The representations and warranties set forth in this Section 3.18 shall constitute the sole
and exclusive representations and warranties in this Agreement that address matters related to or
arising under Environmental Laws.




     Section 3.19 Senior Debt. All liabilities of the Borrower under the Credit Facilities constitute direct,
unconditional and general obligations of the Borrower and rank in right of payment either pari
passu or senior to all other Indebtedness of the Borrower.



     Section 3.20 Solvency. Immediately after giving effect to the transactions to occur on the Closing Date and
immediately following the occurrence of each other Credit Event:



          (a) the fair value of the assets of the Borrower, at a fair valuation, will exceed the debts
and liabilities, direct, subordinated, contingent or otherwise, of the Borrower;




          (b) the present fair saleable value of the property of the Borrower will be greater than the
amount that will be required to pay the probable liability of the Borrower on its debts and other
liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured;




          (c) the Borrower will be able to pay its debts and liabilities, direct, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured; and




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          (d) the Borrower will not have unreasonably small capital with which to conduct the business
in which it is engaged as such business is conducted at such time and is proposed to be conducted
in the future.




     Section 3.21 Employee Matters.



          (a) There are no strikes, work stoppages, or other labor disputes (including any complaints
before the National Labor Relations Board and any grievance or arbitration proceedings arising out
of or under any collective bargaining agreement) pending against the Borrower or, to the Knowledge
of the Borrower, threatened against the Borrower that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect.




          (b) The Borrower is not engaged in any unfair labor practice that could reasonably be expected
to have a Material Adverse Effect.




          (c) To the Borrower’s Knowledge, no union representation question exists with respect to its
employees and no union organization activity is taking place with respect to its employees that
could reasonably be expected to have a Material Adverse Effect.




     Section 3.22 Collateral. The provisions of the Pledge Agreement are effective to create, in favor of the Collateral
Agent for the benefit of the Secured Parties, a legal, valid and enforceable lien on and security
interest in all of the Collateral purported to be covered thereby, and all necessary and
appropriate recordings and filings have been made in all necessary and appropriate public offices,
and all other necessary and appropriate action has been taken, so that the Pledge Agreement creates
a perfected Lien on and security interest in all right, title, estate and interest of the Pledgor
in the Collateral secured thereby, prior and superior to all other liens other than Permitted
Liens.



     Section 3.23 Single Purpose Entity; Separateness.



          (a) The Borrower has not engaged in any activity other than the development, construction,
acquisition, maintenance, ownership and operation of the Project and any Separately Financed
Facilities and reasonably related activities, including activities required to comply with any
CPCN.




          (b) The Borrower has no outstanding Indebtedness other than the Existing Indebtedness which
will be repaid in full on the Closing Date (excluding the Existing Indebtedness under the Existing
Credit Agreement which shall remain in effect and be deemed to be a Construction Loan made
hereunder) and Permitted Debt, and is not a party to or bound by any material contract other than
the Transaction Documents and the Project Contracts to which it is a party.




          (c) The Borrower is not a general partner or a limited partner in any general or limited
partnership or a joint venturer in any joint venture, except as permitted under Section
6.05.




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          (d) The Borrower maintains separate bank accounts and separate books of account from the
Pledgor, the Sponsor and all other Persons. The separate liabilities of the Borrower are readily
distinguishable from the liabilities of the Pledgor, the Sponsor and all other Persons.




          (e) The Borrower conducts its own business, in all material respects, in its own name in a
manner not misleading to other Persons as to its identity.




          (f) None of the Pledgor, the Sponsor, or any other Affiliate of the Borrower guarantees any of
the obligations of the Borrower.




     Section 3.24 Major Project Contracts; No Default.



          (a) Copies of all Major Project Contracts, in each case as currently in effect, have been
delivered to the Administrative Agent by the Borrower. Except as has been previously disclosed in
writing to the Administrative Agent, as of the Closing Date, none of the Major Project Contracts
have been amended, modified or terminated (provided that with respect to the Transmission
Owners Agreement, this representation is made to the Borrower’s Knowledge only).




          (b) There has been no default by the Borrower or, to the Knowledge of the Borrower, any other
Major Project Participant under the Major Project Contracts (other than any such default that could
not reasonably be expected to have a Material Adverse Effect).




          (c) To the Knowledge of the Borrower, all representations and warranties made by each Major
Project Participant in the Major Project Contracts were true and correct
when made, except for any incorrect representation or warranty that could not reasonably be
expected to have a Material Adverse Effect.




     Section 3.25 Broker’s Fees. The Borrower is not required to pay and has not paid any finders or broker’s fees with
respect to the Loans, the Letters of Credit or any other extension of credit under the Financing
Documents.



     Section 3.26 Ownership of Equity Interests. The Equity Interests in the Borrower have been duly authorized and validly issued and are
fully paid and non-assessable. There is no existing option, warrant, call, right, commitment or
other agreement to which the Borrower is a party requiring, and there is no Equity Interest in the
Borrower outstanding which upon conversion or exchange would require, the issuance by the Borrower
of any additional Equity Interests in the Borrower or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase an Equity Interest in the
Borrower. 100% of the Equity Interests in the Borrower are owned by the Pledgor.



ARTICLE IV.

CONDITIONS PRECEDENT TO CERTAIN EVENTS




     Section 4.01 Closing Date. The effectiveness of this Agreement and the obligations of any Lender to make any initial
Loans or of any Issuing Bank to issue any Letter of Credit hereunder are subject to the
satisfaction on the Closing Date of each of the following conditions:



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          (a) Governing Documents. The Borrower shall have delivered, or caused to be delivered
to the Administrative Agent:





               (i) good standing certificates of the Borrower, the Pledgor and the Sponsor as of a
recent date from the Secretary of State of the state (or states) of such Person’s
incorporation or organization;




               (ii) a true and correct copy of any third party approvals or consents and any Permits,
if any, necessary for each of the Borrower, the Pledgor and the Sponsor to execute and
deliver the Financing Documents to which it a party and perform its obligations thereunder;




               (iii) a certificate of a Secretary or Assistant Secretary of each of the Borrower, the
Pledgor and the Sponsor dated the Closing Date and certifying (A) that attached thereto is a
true and correct copy of the articles of incorporation, by-laws, limited liability company
operating agreement or partnership agreement of such Person (which shall be in form and
substance reasonably satisfactory to the Arrangers), as in effect on the Closing Date and at
all times since the date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and correct copy of resolutions duly adopted by the appropriate governing
entity or body of such Person, authorizing the
execution, delivery and performance of the Transaction Documents to which such Person
is a party and, if applicable, the Borrowings hereunder and the granting of the Liens
contemplated to be granted by the Pledgor under the Pledge Agreement, and that such
resolutions have not been modified, rescinded or amended and are in full force and effect,
(C) that the certificate of incorporation, certificate of formation or other formation
documents of such Person have not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to clause (i) above, (D) as to
the incumbency and specimen signature of each officer executing any Financing Document and
(E) as to the absence of any pending proceeding for the dissolution or liquidation of such
Person or, to the knowledge of such Secretary or Assistant Secretary, threatening the
existence of such Person; and




               (iv) a certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate delivered pursuant to clause
(iii) above.



          (b) Financing Documents. The Administrative Agent shall have received duly authorized
and executed originals by the Borrower, the Pledgor and the Sponsor of (i) all of the Financing
Documents to which such Loan Party is a party and (ii) if requested by any Lender pursuant to
Section 2.08(e), a promissory note or notes conforming to the requirements of such Section.




          (c) Major Project Contracts. The Administrative Agent shall have received fully
executed and certified copies of each Major Project Contract in effect on the Closing Date, each of
which shall be in full force and effect and enforceable against each party thereto as of the
Closing Date.




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          (d) Project Schedule; Project Budget. The current Project Schedule and Project Budget
shall have been approved by the Arrangers (it being agreed that the Project Schedule and Project
Budget delivered to the Arrangers on July 31, 2008 are acceptable to the Arrangers) and the
Completion Bonus Date (as defined in the Construction Contract) shall be no later than June 1,
2011;




          (e) Collateral; Filings and Recordings.





               (i) The Collateral shall have been duly and validly pledged under the Pledge Agreement
to the Collateral Agent, for the benefit of the Secured Parties, and certificates
representing the Collateral, accompanied by instruments of transfer endorsed in blank, shall
have been delivered to the Collateral Agent.




               (ii) All UCC filings and other actions necessary or advisable to provide the Collateral
Agent, for the benefit of the Secured Parties, with a valid perfected security interest in
the Collateral shall have been completed; and




               (iii) The Administrative Agent shall have received:




                    (A) certified copies of requests for information or copies (Form UCC-11), or
equivalent reports, including reports of tax lien and judgment lien
searches, listing all effective financing statements and lien notices that name
the Borrower or the Pledgor as debtor and that are filed in the jurisdictions of
formation or organization of the Borrower and the Pledgor and any state in which the
Project or any Separately Financed Facility is located, together with copies of such
financing statements and lien notices, if any (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or Existing Liens); and




                    (B) evidence that all other actions necessary to perfect and protect the
security interests purported to be created by the Security Documents have been
taken.



          (f) Closing Certificates. The Administrative Agent shall have received (i) officers’
closing certificates for the Borrower, the Pledgor and the Sponsor, dated the Closing Date and
signed by a Responsible Officer of such Person, confirming compliance with the conditions precedent
set forth in Section 4.01(l), and (ii) a solvency certificate in the form of Exhibit
G, dated the Closing Date and signed by a Financial Officer of the Borrower.




          (g) Legal Opinions. The Administrative Agent shall have received, on behalf of itself
and the other Secured Parties, delivery of written legal opinions from each counsel to the
Borrower, the Pledgor, the Sponsor, ServiceCo and, to the extent obtainable by the Borrower using
commercially reasonable efforts, the Construction Contractor, which legal opinions shall in each
case be (i) in form and substance reasonably satisfactory to the Arrangers and their counsel, (ii)
dated the Closing Date, (iii) addressed to the Secured Parties and (iv) covering such matters
relating to the Transaction Documents and the Transactions as the Arrangers shall reasonably
request and which are customary for transactions of the type contemplated by the Transaction
Documents.




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          (h) Financial Model. The Administrative Agent shall have received the Financial Model
which includes “Base Case Projections” demonstrating a minimum Debt Service Coverage Ratio of 2.0x
for the Borrower.




          (i) Financial Statements. The Administrative Agent shall have received copies of (i)
the most recent available audited annual and unaudited quarterly financial statements of the
Borrower, the Sponsor and the Construction Contractor, in each case including a balance sheet and
related statements of income and cash flows, (ii) the pro forma balance sheet of
the Borrower as of June 30, 2008, prepared giving effect to the Transactions to occur on the
Closing Date as if the Transactions had occurred on June 30, 2008 and (iii) a sources and uses of
funds demonstrating that the Credit Facilities and Project Equity Commitment is sufficient to fund
all Project Costs; each certified as complete and accurate in all material respects by a
Responsible Officer of the Borrower.




          (j) Payments; Repayments of Existing Indebtedness and Release of Existing Liens. The
Borrower shall pay all closing costs and fees due on the Closing Date (including all amounts
payable under any fee letter between the Borrower and any Agent or Arranger) and shall have
provided for arrangements pursuant to which all Existing Indebtedness shall be paid off (excluding
the Existing Indebtedness under the Existing Credit Agreement which shall remain in effect and be
deemed to be a Construction Loan made hereunder) and all Existing
Liens (other than Permitted Liens) shall be released, in each case concurrently with the
initial Credit Event occurring on the Closing Date.




          (k) No Default or Event of Default. At the time of and immediately after giving
effect to the Transaction occurring on the Closing Date, no Event of Default or Default shall have
occurred and be continuing, as certified by a Responsible Officer of the Borrower.




          (l) Representations and Warranties. (i) All representations and warranties made by
the Borrower in Article III hereof shall be true and correct in all material respects on
and as of the Closing Date, (ii) all representations and warranties made by the Pledgor in the
Pledge Agreement shall be true and correct in all material respects on and as of the Closing Date,
and (iii) all representations and warranties made by the Sponsor in the Equity Commitment Agreement
shall be true and correct in all material respects on and as of the Closing Date, in each case as
certified by a Responsible Officer of the Borrower, the Pledgor or the Sponsor, as applicable.




          (m) Independent Consultants’ Reports. The Administrative Agent shall have received
(i) the Independent Engineer’s Report, together with a certificate of the Independent Engineer in
the form of Exhibit H-2 and (ii) the Insurance Consultant’s Report, together with a
certificate of the Insurance Consultant in the form of Exhibit H-1.




          (n) Insurance. (i) The Administrative Agent shall have received a binder or
certificates of insurance evidencing the existence of all insurance required to be maintained as of
the Closing Date by the Borrower or its Affiliate(s) for the benefit of the Borrower pursuant to
Schedule 5.03 and (ii) the Administrative Agent shall have received a certificate from a
Responsible Officer of the Borrower, dated as of the Closing Date, stating that such insurance is
in full force and effect and that all premiums then due and payable thereon have been paid.




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          (o) FERC. FERC shall have issued a final and binding order pursuant to Section 204 of
the FPA, authorizing the Borrower to issue securities and assume obligations and liabilities as
necessary to enter into this Agreement and borrow the aggregate amount available under the Credit
Facilities.




          (p) Applicable Permits. The Borrower shall have duly obtained or been assigned and
there shall be in full force and effect in the name of the Borrower, and not subject to any current
legal proceeding (including any Environmental Claim), waiting period or appeal or to any
unsatisfied condition that would reasonably be expected to allow material modification, expiration
or revocation of, and all applicable appeal periods shall have expired with respect to, all
material Applicable Permits required under applicable law to be obtained by the Borrower as of the
Closing Date for the then-current stage of development of the Project, except for any Permit the
failure of which to obtain could not reasonably be expected to have a Material Adverse Effect.
Such Applicable Permits shall not be subject to any restriction, condition, limitation or other
provision that could, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. With respect to any of the Permits not yet obtained, no facts or circumstances
exist, in the reasonable judgment of the Borrower, which indicate that any such Permit will not be
obtainable prior to the time that such Permit becomes an Applicable Permit.




          (q) Real Property.





               (i) The Borrower shall have obtained all real property rights that are material for the
then current stage of construction of the Project as contemplated by the Project Schedule as
of the Closing Date.




               (ii) The Administrative Agent shall have received maps reasonably acceptable to the
Arrangers of the planned route of the TrAIL Transmission Line, including the route of each
of the Proposed Virginia Segment, the Alternate Virginia Segment and the Jointly Owned
Segment, and the planned locations of the Additional Facilities.



          (r) U.S.A. Patriot Act. The Administrative Agent shall have received all
documentation and other information required by bank regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including the U.S.A. Patriot Act.




          (s) No Material Adverse Effect. Since December 31, 2007, (i) there has been no event
or occurrence which has resulted in, individually or in the aggregate, any Material Adverse Effect,
and (ii) there has been no material adverse effect upon (A) the business, operations, properties,
assets or condition (financial or otherwise) of the Sponsor or (B) the ability of the Sponsor to
perform its material obligations under the Equity Commitment Agreement.




          (t) West Virginia CPCN. The West Virginia PSC shall have issued a CPCN containing
terms and conditions reasonably satisfactory to the Arrangers.




     Section 4.02 Conditions Precedent to Each Credit Event. The obligations of any Lender to make Loans or any Issuing Bank to issue or extend any
Letter of Credit or increase the



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stated amount of any Letter of Credit hereunder, including with
respect to any Loans made or Letters of Credit issued on the Closing Date (each, a “Credit
Event”), are subject to the satisfaction on the date of such Credit Event of each of the
following conditions, in each case as applicable:



          (a) Borrowing Request; Notice of L/C Activity. ((i) If such Credit Event is a
Borrowing, the Administrative Agent shall have received a Borrowing Request as and when required by
Section 2.03, from the Borrower or (ii) if such Credit Event is the issuance of, extension
of, or increase in the stated amount of, a Letter of Credit, the applicable Issuing Bank and the
Administrative Agent shall have received a Notice of L/C Activity as and when required by
Section 2.04.




          (b) No Default or Event of Default. At the time of and immediately after giving
effect to such Credit Event, no Event of Default or Default shall have occurred and be continuing.




          (c) Representations and Warranties. All representations and warranties of the
Borrower set forth in Article III hereof shall be true and correct in all material respects
on and as
of the date of such Credit Event (other than an amendment, extension or renewal of a Letter of
Credit without any increase in the stated amount of such Letter of Credit) with the same effect as
though made on and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date).




          (d) No Material Adverse Effect. At the time of and immediately after giving effect to
such Credit Event, no Material Adverse Effect shall have occurred and be continuing.




          (e) FERC. (i) FERC shall have issued an order pursuant to Section 205 of the FPA
authorizing the recovery by the Borrower of 100% of all itemized pre-construction and construction
costs and further authorizing the Borrower to include 100% of payments for CWIP for the TrAIL
Transmission Line in the Borrower’s rate base and collect a return thereon pursuant to the
Borrower’s tariff (other than, in each case, to the extent such return on CWIP is to be paid to
Dominion in proportion to Dominion’s ownership of the Jointly Owned Segment), as and when such
costs are incurred, subject only to annual updates and true-ups or as otherwise required by FERC,
which order shall remain valid and binding and shall not have been overturned on rehearing or
appeal or through subsequent FERC action; and (ii) FERC shall not have made a final determination
that any material expenditure by the Borrower was not prudent and therefore cannot be recovered in
the Borrower’s transmission rate.




          (f) Expected Completion. The Borrower shall certify that (i) it has access to
sufficient funds to complete the Project (other than any Excluded Portion and the portion of the
Jointly Owned Segment to be financed by Dominion) and any Separately Financed Facility with respect
to which it has commenced construction and (ii) it reasonably expects to achieve Completion of the
Project (other than any Excluded Portion) prior to the seventh anniversary of the Closing Date.




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          (g) Loans applied to Jointly Owned Segment. If any portion of the advance of Loans
requested in connection with such Credit Event is to be applied to the Jointly Owned Segment, then,
on or prior to the date of such advance, (i) Dominion shall have certified to the Borrower or the
Lenders that Dominion has access to sufficient funds to finance its obligations under the
Dominion/TrAILCo Agreement in connection with the Jointly Owned Segment or (ii) the Borrower shall
have certified that, after making a diligent inquiry into the financial status of Dominion, the
Borrower has determined that Dominion has access to sufficient funds to finance Dominion’s
obligations under the Dominion/TrAILCo Agreement in connection with the Jointly Owned Segment.




     Section 4.03 Conditions Precedent to Completion. The Borrower shall be deemed to have achieved “Completion” of the Project when each
of the following conditions have been satisfied or waived:



          (a) Completion. All work (excluding punchlist items and work in respect of
non-material facilities identified by the Borrower for exclusion, subject to confirmation by the
Independent Engineer that such facilities are not material to the Project and that the Independent
Engineer is satisfied with such exclusion) on the Project (other than any Excluded Portion), shall
be complete and paid for (except to the extent of punchlist items and any unresolved disputes
that could not reasonably be expected to have a Material Adverse Effect) as certified to the
Administrative Agent by each of the Independent Engineer and a Responsible Officer of the Borrower,
it being agreed that the Borrower shall, at least 45 days prior to the date targeted by the
Borrower as the date of Completion, provide the Independent Engineer with all relevant
documentation requested by the Independent Engineer in connection with the Independent Engineer’s
preparations for making the foregoing certification.




          (b) Equity Commitments. All Equity Contributions required to be made by the Sponsor
shall have been made in accordance with the Equity Commitment Agreement as certified to the
Administrative Agent by a Responsible Officer of the Borrower.




          (c) Debt to Equity Ratio. The Debt to Equity Ratio shall not be in excess of 1:1 as
of the date of Completion as certified to the Administrative Agent by a Responsible Officer of the
Borrower.




          (d) Lien Releases. The Administrative Agent shall have received a duly executed
acknowledgement of payment and release of mechanics’ and materialmen’s liens, in form and substance
reasonably acceptable to the Administrative Agent, from the Construction Contractor and any other
Person providing design, engineering or construction services pursuant to any Major Project
Contract to which such Person is a party for all work, services and materials provided by the
Construction Contractor or such other Person for which the disbursement of funds has been
requested; provided, however, that such release may be conditioned upon receipt of
payment with respect to the work, services and materials to be paid for with the requested funds.




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ARTICLE V.

AFFIRMATIVE COVENANTS




     The Borrower covenants and agrees with each Secured Party that so long as this Agreement shall
remain in effect and until the Commitments have been terminated, the principal of and interest on
each Loan, all Fees and all other expenses or amounts payable under any Financing Document shall
have been paid in full and no Letter of Credit remains outstanding, the Borrower shall abide by the
following affirmative covenants; provided that any such covenants that would require action
by Dominion with respect to the Jointly Owned Segment shall be satisfied if the Borrower uses its
commercially reasonable efforts to enforce its rights with respect to such actions under the
Dominion/TrAILCo Agreement.



     Section 5.01 Information Delivery. The Borrower shall deliver to the Lenders:



          (a) beginning with the fiscal quarter ending September 30, 2008, within 60 days after the end
of each of the Borrower’s first three fiscal quarters, unaudited quarterly financial statements,
including a balance sheet and related statements of income and cash flows, showing the financial
position of Borrower as of the close of such fiscal quarter and the results of its operations
during such fiscal quarter and the then-elapsed portion of the fiscal year and setting forth in
comparative form the corresponding figures for the corresponding periods of the prior
fiscal year, all certified by a Financial Officer of the Borrower, on behalf of the Borrower,
as fairly presenting, in all material respects, the financial position and results of operations of
the Borrower in accordance with GAAP (subject to normal year-end audit adjustments and the absence
of footnotes);




          (b) within 120 days after the end of each fiscal year beginning with the fiscal year ending
December 31, 2008, audited annual financial statements, including a balance sheet, (including
owners’ equity) and related statements of income and cash flows, showing the financial position of
the Borrower as of the close of such fiscal year and the results of its operations during such year
and setting forth in comparative form the corresponding figures for the prior fiscal year, all
audited by PricewaterhouseCoopers or Deloitte Touche Tohmatsu or other independent public
accountants of recognized national standing reasonably acceptable to the Administrative Agent and
accompanied by an opinion of such accountants (which shall not be qualified in any material
respect) to the effect that such financial statements fairly present, in all material respects, the
financial position and results of operations of the Borrower in accordance with GAAP;




          (c) together with each delivery of financial statements, a certificate of a Financial Officer
of the Borrower certifying (i) that no Event of Default or Default has occurred and is continuing
or, if an Event of Default or Default has occurred and is continuing, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with respect thereto, (ii)
prior to Completion, as to the Debt to Equity Ratio in effect as of the date of such financial
statements and (iii) after Completion, the Debt Service Coverage Ratio for the 12 months (or, until
there have been 12 full months of operations, such shorter period of operation) ending on the last
day of the immediately preceding fiscal quarter, with such certificate containing the calculations
relating to the certification made under this clause (iii);




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          (d) promptly, and in any event within five Business Days after obtaining Knowledge thereof,
notice of any Default or Event of Default;




          (e) promptly, and in any event within five Business Days after obtaining Knowledge thereof,
notice of any ERISA Events;




          (f) promptly, and in any event within five Business Days of entering into a Major Project
Contract, a fully executed copy of such Major Project Contract entered into after the Closing Date;




          (g) promptly, and in any event within 30 days of receipt thereof, copies of any written notice
to the Borrower from any Governmental Authority relating to any Governmental Rule that could
reasonably be expected to have a Material Adverse Effect;




          (h) not later than 30 days prior to the first day of each fiscal year, a budget for such
fiscal year (which shall be consistent in all material respects with the form of the then current
Project Budget and each budget for any Separately Financed Facility);




          (i) promptly, information with respect to any litigation or proceeding filed against the
Borrower in which the amount involved is greater than $15,000,000 or injunctive or similar relief
is sought (except (i) to the extent such litigation or proceeding is with respect to the
determination of compensation due by the Borrower in connection with condemnation or eminent
domain proceedings and could not reasonably be expected to result in a Material Adverse Effect, or
(ii) to the extent such injunctive or similar relief could not reasonably be expected to result in
a Material Adverse Effect);




          (j) promptly following the end of each calendar quarter, a report detailing the status of
construction of the Project, including the projected date of Completion, details as to sources and
uses of funds for the Project and Separately Financed Facilities, and the total amount of Loan
proceeds applied to each Segment;




          (k) promptly, and in any event within 30 days of receipt thereof, copies of each ongoing
construction monitoring report delivered by the Independent Engineer (to be delivered by the
Independent Engineer approximately every six months pursuant to the Professional Services
Agreement);




          (l) promptly, and in any event within 15 days of receipt thereof, written notice from any
Major Project Participant of a default under any Major Project Contract;




          (m) promptly and in any event within five Business Days of obtaining Knowledge thereof, any
casualty, damage or loss to the Project, whether or not insured, through fire, theft, other hazard
or casualty, or any act or omission of the Borrower, its employees, agents, contractors,
consultants or representatives, or of any other Person, if such casualty, damage or loss is in
excess of $5,000,000 for any one such event or in the aggregate in any calendar year;




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          (n) promptly and in any event within five Business Days of obtaining Knowledge thereof, any
early cancellation or material change in the terms, coverage or amounts of any insurance required
under Section 5.03;




          (o) promptly and in any event within five Business Days of obtaining Knowledge thereof, any
termination or material amendment of any Major Project Contract, including any material change
order or request for any material change order under the Construction Contract;




          (p) promptly and in any event within five Business Days of obtaining Knowledge thereof, any
material event of force majeure asserted under any Major Project Contract;




          (q) promptly and in any event within five Business Days of obtaining Knowledge thereof, any
(i) fact, circumstance, condition or occurrence at, on or arising from any real property being used
by the Borrower in connection with the Project or any Separately Financed Facility that results in
any material noncompliance with any Environmental Law or any Release of Hazardous Materials on or
from any real property being used by the Borrower in connection with the Project or any Separately
Financed Facility that could, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect, and (ii) pending or, to the Borrower’s Knowledge, threatened,
Environmental Claim against the Borrower arising in connection with its occupying or conducting
operations on or at any real property being used by the Borrower in connection with the Project or
any Separately Financed Facility, in each case
which could, individually or in the aggregate, reasonably be expected to impose liability on
any Secured Party or have a Material Adverse Effect; and




          (r) with reasonable promptness, such other data and information in the possession of or
readily obtainable by the Borrower relating to the business, operations, affairs, financial
condition, assets or properties of the Borrower or relating to the ability of the Borrower to
perform its obligations under the Financing Documents as from time to time may be reasonably
requested by the Administrative Agent.




     Section 5.02 Compliance with Laws; Applicable Permits. The Borrower shall comply, and shall take commercially reasonable steps to cause the
Project to be constructed, operated and maintained in compliance, in all material respects, with
Governmental Rules to which it is subject, including state and federal energy laws and regulations,
and will obtain and maintain in effect all Permits necessary for the then-current stage of
construction of the Project, the ownership and control of, and transmission of electric energy
over, its properties or to the conduct of its businesses (including all reporting and compliance
requirements to FERC pursuant to the FPA and PUHCA), in each case to the extent necessary to ensure
that non-compliance with such Governmental Rules or failure to obtain or maintain in effect such
Permits could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; provided that in certain cases with respect to the Jointly Owned Segment
and where appropriate in accordance with Governmental Rules, Dominion instead of TrAILCo may obtain
and maintain such Permits.



     Section 5.03 Maintenance of Insurance.



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          (a) The Borrower shall, without cost to the Lenders, maintain, or cause to be maintained, with
financially sound and reputable insurers, insurance required pursuant to Schedule 5.03, in
the amounts and on the terms and conditions specified therein. If the Borrower fails to take out
or maintain (or cause to be taken out or maintained) the full insurance coverage required by this
Section, the Administrative Agent, upon 10 Business Days’ prior notice (unless the aforementioned
insurance would lapse within such period or has already lapsed, in which event notice shall not be
required) to the Borrower of any such failure, may (but shall not be obligated to) take out the
required policies of insurance and pay the premiums on the same. All amounts so advanced by the
Administrative Agent shall become Obligations and the Borrower shall forthwith pay such amounts to
the Administrative Agent, together with interest from the date of payment by the Administrative
Agent at the rate specified in Section 2.12(c).




          (b) The Borrower shall, within 20 days following each annual policy renewal date, deliver to
the Administrative Agent a certificate of a Responsible Officer of the Borrower, certifying that
(i) the insurance requirements of this Section 5.03 have been implemented and are being
complied with in all material respects, (ii) the Borrower has paid all insurance premiums then due
and payable, and (iii) the Borrower is in compliance in all material respects with the insurance
policies required to be maintained pursuant to this Section 5.03.




     Section 5.04 Operation of the Project. The Borrower shall maintain and keep, or cause to be maintained and kept, the Project, any
Separately Financed Facilities and its other properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in connection therewith may be
properly conducted at all times, and consistent in all material respects with all Applicable
Permits, this Agreement, the material provisions of the Major Project Contracts and Prudent Utility
Practice.



     Section 5.05 Taxes. The Borrower shall file, or cause to be filed, all tax returns required to be filed in any
jurisdiction in respect of the Borrower, its income or its trade or business, and shall pay and
discharge, or cause to be paid and discharged, all Taxes shown to be due and payable on such
returns, and all other Taxes imposed on it or any of its properties, assets, income or franchises
(if any), to the extent such Taxes have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have or might become a
Lien (other than a Permitted Lien) on properties or assets of the Borrower; provided that
(a) the Borrower need not pay any such Tax if the amount, applicability or validity thereof is
contested by the Borrower on a timely basis in good faith and in appropriate proceedings, and so
long as (i) the Borrower has established or caused to be established adequate reserves therefor in
accordance with GAAP on its books and (ii) any Tax determined to be due, together with any interest
or penalties thereon, is promptly paid after resolution of such contest, and (b) the Borrower’s
failure to file, or cause to be filed, such tax returns or to pay any such Tax shall not constitute
an Event of Default if the failure to file, or cause to be filed, or make payment of such Taxes in
the aggregate could not reasonably be expected to have a Material Adverse Effect.



     Section 5.06 Maintenance of Existence. The Borrower shall at all times preserve and keep in full force and effect its corporate
existence, and the Borrower shall at all times preserve and keep in full force and effect all
rights and franchises (if any) of the Borrower unless, in the good faith judgment of the Borrower,
the termination of or failure to preserve and keep in full



75









 







force and effect such right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.



     Section 5.07 Senior Debt. The Borrower shall ensure that, at all times, all liabilities of the Borrower under the Financing
Documents will rank in right of payment either pari passu or senior to all other Indebtedness of
the Borrower.



     Section 5.08 Environmental Law. To the extent required by applicable Environmental Laws, the Borrower shall conduct and complete
any investigation, study, sampling and testing and undertake any cleanup, removal, remediation or
other response necessary to remove and clean up all Hazardous Materials, except to the extent that
any failure to do so could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except, in each case, to the extent that the failure to do so could not,
either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect,
the Borrower shall, and take commercially reasonable steps to cause all
lessees and other Persons operating or occupying its properties and facilities to (i) comply with
all applicable Environmental Laws; (ii) obtain and renew, in a timely manner, all Permits required
under Environmental Laws for the then-current stage of construction or operation of the Project and
the Separately Financed Facilities; (iii) complete any investigation, study, sampling and testing
and undertake any clean up, removal, remediation or other response necessary to remove and clean up
Hazardous Materials, to the extent such actions are required under any applicable Environmental
Laws; and (iv) respond to any Environmental Claim involving or affecting the Project or the
Separately Financed Facilities.


The covenants set forth in this Section 5.08 shall constitute the sole and exclusive
covenants in Article V of this Agreement that address matters related to or arising under
Environmental Laws, except as may be set forth in Section 5.01(q).




     Section 5.09 Maintenance of Records. The Borrower shall keep proper books of record and accounts in which full, true and correct
entries will be made of its business transactions in accordance with and to the extent required by
GAAP.



     Section 5.10  Use of Proceeds and Project Revenues.



          (a) The Borrower shall apply the proceeds of each Loan solely (i) to pay costs and expenses on
the Closing Date in accordance with the Funds Flow Memorandum (including a Distribution permitted
by Section 6.08(a)), (ii) to pay Project Costs (other than with respect to any Excluded
Portion) in accordance with the Project Budget or (iii) to make Distributions permitted by
Section 6.08(c).




          (b) With respect to any Segment for which there is an Allocated Loan Amount, the Borrower
shall not apply Loan proceeds in excess of the Allocated Loan Amount for such Segment;
provided that the Borrower may apply the Allocated Loan Amount for any Segment (other than
an Excluded Portion) that has obtained, or is not required to obtain, Siting Approval to another
Segment (other than an Excluded Portion) that has obtained, or is not required to obtain, Siting
Approval but may not apply such Allocated Loan Amount to any Segment for which an Approved Limit
remains in effect due to such Segment not receiving Siting Approval.




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          (c) The Borrower shall not apply any Loan proceeds to any costs related to any Excluded
Portion from and after the date that such portion of the Project has been designated as an Excluded
Portion.




          (d) The Borrower shall use Letters of Credit solely (i) to support the Borrower’s obligations
under any Project Contract (other than with respect to any Excluded Portion), and (ii) for other
purposes in connection with the construction and operation of the Project (other than any Excluded
Portion).




          (e) The Borrower shall apply the proceeds of cash Equity Contributions made to satisfy the
Sponsor’s Project Equity Commitment solely to pay Project Costs.




          (f) The Borrower shall not apply Loan proceeds in excess of $147,000,000 to the Additional
Facilities.




     Section 5.11 Site Visits; Access to Property.



          (a) The Borrower shall permit the representatives of any Lender (including the Administrative
Agent, the Collateral Agent and the Independent Engineer) (i) if no Default or Event of Default
then exists, at the expense of such Lender and upon reasonable prior notice to the Borrower, to
visit the principal executive office of the Borrower, to discuss the affairs, finances and accounts
of the Borrower with the Borrower’s officers, and (with the consent of the Borrower, which consent
will not be unreasonably withheld and provided the Borrower has been given the opportunity to
participate in such discussions) its independent public accountants, and (with the consent of the
Borrower, which consent will not be unreasonably withheld) to visit the other offices and
properties of the Borrower, during normal business hours as may be requested in writing (provided
that such visits shall be limited to once per year); and (ii) if a Default or Event of Default then
exists, at the expense of the Borrower and, upon reasonable prior notice to the Borrower to visit
and inspect any of the offices or properties of the Borrower, to examine its books of account,
records, reports and other papers, to make copies and extracts therefrom, and to discuss its
affairs, finances and accounts with the Borrower’s officers and independent public accountants
(provided the Borrower has been given the opportunity to participate in such discussions), all at
such times and as often as may be requested.




          (b) In addition to the visitation rights granted pursuant to Section 5.11(a) above,
the Borrower shall permit the Independent Engineer such access to the Project as may be reasonably
requested by the Independent Engineer in its efforts to fulfill its obligations under the
Professional Services Agreement and shall reasonably cooperate with the Independent Engineer in all
material respects in connection with the Independent Engineer’s performance of its regular duties
under such agreement.




     Section 5.12 Preservation of Rights; Further Assurances.



          (a) The Borrower shall (i) perform and observe all of its covenants and obligations contained
in each Major Project Contract to which it is a party, and (ii) enforce against each party to each
Major Project Contract each material covenant or obligation in such Major Project Contract in
accordance with its terms, except where the failure to perform, observe or take action or enforce
could not reasonably be expected to result in a Material Adverse Effect.




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          (b) The Borrower shall (i) do, execute, acknowledge and deliver all such other acts,
agreements, instruments and assurances as the Collateral Agent, the Administrative Agent or any
Lender may reasonably require (including the execution of additional security instruments or
documents to further perfect the Collateral Agent’s lien on the Collateral) and (ii) take such
other steps as may be reasonably necessary or that the Administrative Agent may reasonably require
to render fully valid and enforceable under all applicable laws the rights, liens and
priorities of the Secured Parties with respect to all Collateral (including any cash
collateral provided pursuant to Section 2.04(j)) or intended to be so furnished, in each
case in such form and at such times as shall be reasonably satisfactory to the Administrative
Agent, and pay all reasonable fees and expenses (including reasonable attorneys’ fees) incident to
compliance with this Section.




          (c) In connection with the entering into the definitive documentation relating to the
development and construction of the Jointly Owned Segment (if any), the Borrower will make
commercially reasonable efforts to obtain from Dominion a direct agreement (any such agreement, the
“Dominion Direct Agreement”) among Dominion, the Borrower and the Collateral Agent which
relates to the Collateral Agent’s right to foreclose on the equity interests in the Borrower and to
cure defaults under the Dominion/TrAILCo Agreement and provides adequate arrangements to facilitate
the uninterrupted operation of the Borrower following any such foreclosure.




          (d) If the Jointly Owned Segment will be constructed, the Borrower shall take commercially
reasonable efforts to cause the definitive documentation relating to the development and
construction of the Jointly Owned Segment to include contractual provisions that provide that the
Borrower is authorized to take over Dominion’s obligations with respect to the design, engineering
and construction of the Jointly Owned Segment if Dominion abandons, indefinitely defers or
otherwise suspends for a material period the development and construction of the Jointly Owned
Segment.




     Section 5.13 Certain Regulatory Matters.



          (a) The Borrower shall take all commercially reasonable actions necessary to obtain, prior to
the in-service date for the TrAIL Transmission Line, final approval under Section 205 of the FPA of
rates for the recovery of transmission costs consistent with the rate structure which FERC
pre-approved in its prior orders (116 FERC ¶ 61,058 (2006) and 118 FERC ¶ 61,042 (2007)).




          (b) The Borrower shall take all commercially reasonable actions necessary (i) to secure from
each of the state public utility commissions of Pennsylvania, West Virginia and Virginia a final
and binding order approving the siting and construction of the portion(s) of the TrAIL Transmission
Line subject to its jurisdiction (through a CPCN or other similar applicable state public utility
commission authorization) on terms and conditions reasonably acceptable to the Lenders and (ii) to
defend and maintain each such order, unless, in either case, such order is required solely in
respect of an Excluded Portion. To the extent that any state public utility commission has not
issued an order approving the siting and construction of the TrAIL Transmission Line subject to
that state public utility commission’s jurisdiction by April 5, 2009, the Borrower will take all
commercially reasonable actions necessary to secure a FERC order



78









 






issuing a construction permit
pursuant to Section 216(b) (or other applicable section) of the FPA and FERC’s implementing
regulations thereunder providing for siting and construction of the TrAIL Transmission Line (other
than any Excluded Portion); provided that if the United States Department of Energy
retracts, suspends or otherwise alters its determination of a national
interest electric transmission corridor such as to exclude some or all of the counties through
which the TrAIL Transmission Line is anticipated to run, then such April 5, 2009 deadline shall be
extended (but not shortened) to the date that is 30 days following the first date on which the
Borrower has the legal right to secure such an order from FERC.




     Section 5.14 Separate Existence. The Borrower shall comply with its organizational documents, including the “separateness”
provisions contained therein and shall (a) maintain entity records and books of account separate
from those of any other entity which is an Affiliate of the Borrower, (b) not commingle its funds
or assets with those of any other entity which is an Affiliate of the Borrower and (c) cause the
members of its board of directors or other analogous governing body to hold all appropriate
meetings or to act through written consent or as otherwise permitted by applicable Governmental
Rule to authorize and approve the Borrower’s actions, and to hold such meetings and/or take such
other actions separate from those of the meetings or such other actions of other entities;
provided that other than with respect to the separateness provisions mentioned above, any
such compliance shall be qualified to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.



     Section 5.15 FERC Filings. The Borrower shall submit an annual informational filing to FERC that will include annual
updates providing a detailed accounting of transfers between CWIP and “Plant in Service” consistent
with the electric plant accounts detailed in FERC’s Uniform System of Accounts, as required by
paragraph 59 of the hearing order in Docket No. ER-07 562, 119 FERC ¶ 61,219 (2007), and will
otherwise comply with any other requirements imposed by FERC in such order.



     Section 5.16 Solvency of Construction Contractor. If the Construction Contractor becomes Insolvent, then the Borrower shall (a) until a
replacement contractor reasonably satisfactory to the Administrative Agent is engaged, perform, or
cause an Affiliate to perform, the functions of the Construction Contractor under the Construction
Contract and (b) within 180 days of the occurrence of such Construction Contractor becoming
Insolvent, enter into a replacement construction contract in form and substance reasonably
satisfactory to the Administrative Agent and with a replacement contractor reasonably satisfactory
to the Administrative Agent.



     Section 5.17 Construction of the Project. The Borrower shall cause Completion to occur on or before the Maturity Date.



     Section 5.18 Equity Commitments. The Borrower shall cause the Sponsor to fund its Equity Commitment as and to the extent
required under the Equity Commitment Agreement.



     Section 5.19 U.S.A. Patriot Act. The Borrower shall provide the Secured Parties with all information necessary for the
Secured Parties to comply with the U.S.A. Patriot Act.




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     Section 5.20 Application of Loss Proceeds. If the Borrower receives any Loss Proceeds,
then the Borrower shall cause the Net Available Amount of all such Loss Proceeds to be deposited
into the TrAILCo Operating Account. If such Net Available Amount exceeds $5,000,000, then the
Borrower shall (a) within 10 Business Days of receipt thereof, provide the Administrative Agent
with written notice as to whether the Borrower elects to apply such proceeds to rebuild, restore or
replace the portion of the Project affected by the event giving rise to such Loss Proceeds and (b)
(i) if the Borrower has elected not to rebuild, restore or replace such portion of the Project, the
Borrower shall, within 5 Business Days of making such election, apply such Net Available Amount to
the prepayment of Loans in accordance with Section 2.09(b) or (ii) if the Borrower has elected to
rebuild, restore or replace such portion of the Project, the Borrower shall commence applying such
Net Available Amount to such restoration or rebuilding within 360 days of receipt of such funds.



ARTICLE VI.

NEGATIVE COVENANTS




     The Borrower covenants and agrees with each Secured Party that so long as this Agreement shall
remain in effect and until the Commitments have been terminated, the principal of and interest on
each Loan, all Fees and all other expenses or amounts payable under any Financing Document shall
have been paid in full and no Letter of Credit remains outstanding, the Borrower shall abide by the
following negative covenants; provided that any such covenants that would require action or
inaction by Dominion with respect to the Jointly Owned Segment shall be satisfied if the Borrower
uses its commercially reasonable efforts to enforce its rights with respect to such actions or
inactions under the Dominion/TrAILCo Agreement.



     Section 6.01 Transactions with Affiliates. The Borrower shall not enter into, directly or indirectly, any transaction or material
group of related transactions (including the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate of the Borrower, except (a) in the
ordinary course of the Borrower’s business and on fair and reasonable terms no less favorable to
the Borrower than would be obtainable in a comparable arm’s-length transaction with a Person that
is not an Affiliate of the Borrower, except where FERC, any state public utility commission or any
other Governmental Authority with jurisdiction over the Borrower, any Affiliate of the Borrower or
the Project requires that such transaction be on different terms, (b) as may otherwise be required
by any order, rule or regulation issued or promulgated by FERC, any state public utility commission
or any other Governmental Authority with jurisdiction over the Borrower, any Affiliate of the
Borrower or the Project, (c) in connection with providing funds to an Affiliate (for purposes of
this Section 6.01(c), a “CIAC Affiliate”) to reconfigure or otherwise perform work
to that CIAC Affiliate’s equipment or assets as necessary or advisable in connection with the
Borrower’s construction of the Project, on fair and reasonable terms no less favorable to the
Borrower than would be obtainable in a comparable arm’s-length transaction with a Person that is
not an Affiliate of the Borrower, (d) any tax indemnity agreement between the Borrower and a CIAC
Affiliate pursuant to which the Borrower agrees to indemnify the CIAC Affiliate for any taxes,
interest or penalties that the CIAC Affiliate incurs in connection with entering into a transaction
with the Borrower of the type described in the foregoing clause
(c) or (e) any lease of all or a portion of the West Virginia Facility to an Affiliate of the
Borrower; provided that the amount of costs recovered by the Borrower in connection with
the West Virginia Facility under its FERC-approved tariff plus



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the amount of lease payments it receives under such lease equals substantially the same recovery of costs the Borrower would have
received under its FERC-approved tariff if such lease of the West Virginia Facility had not
occurred (each such transaction permitted pursuant to clauses (a), (b). (c), (d) or (e), a
“Permitted Affiliate Transaction”).



     Section 6.02 No Liquidation, Merger or Consolidation. The Borrower shall not consolidate with or merge with any other corporation or convey,
transfer or lease substantially all of its assets in a single transaction or series of transactions
to any Person.



     Section 6.03 Liens. The Borrower shall not create, assume, incur or suffer to exist any Lien upon or with
respect to any property or asset of the Borrower, whether now owned or acquired after the Closing
Date, except Permitted Liens.



     Section 6.04 Indebtedness. The Borrower shall not create, assume, incur or suffer to exist any Indebtedness, except
Permitted Debt.



     Section 6.05 Business Activities. The Borrower shall not (a) enter into any business or activities other than the development,
construction, operation, maintenance and ownership of the Project and, to the extent permitted
pursuant to Section 6.19, any Separately Financed Facility and, in each case, activities
reasonably related thereto, including activities required to comply with any CPCN, (b) create,
acquire or suffer to exist any Subsidiary or (c) enter into any partnership or joint venture;
provided that the Borrower may develop, construct, acquire, maintain, own and operate the
Jointly-Owned Segment with Dominion or any Affiliate thereof and enter into a partnership or joint
venture with Dominion or any Affiliate of Dominion in connection therewith.



     Section 6.06 Sale of Assets. The Borrower shall not sell, transfer, lease (including in connection with any
sale-leaseback arrangement) or otherwise dispose of any of its assets, except for (a) sales,
transfers, leases or other disposals made in the ordinary course of business (including disposals
of assets that are damaged, worn out, uneconomic, obsolete or no longer used or useful) and other
sales, transfers, leases or disposals not to exceed $10,000,000 in any calendar year (but any such
sale, transfer, lease or disposition shall exclude the Borrower’s allocation of transmission
capacity in the Project), (b) sales, transfers, leases and other disposals made pursuant to the
Dominion/TrAILCo Agreement and solely relating to the Jointly Owned Segment, (c) sales, transfers,
leases or disposals of the type described in clause (b) of the definition of “Permitted Affiliate
Transaction” or (d) leases of the type described in clause (e) of the definition of
“Permitted Affiliate Transaction”; provided that, in the case of clause (c), the
Borrower has certified that such asset disposition, when taken together with all other asset
dispositions made pursuant to such clause, will not materially and adversely impact the Project
Budget or Project Schedule (such certification to be subject to review by the Independent Engineer
in connection with its construction monitoring).



     Section 6.07 Reallocation of Assets. The Borrower shall not reallocate any resources from the Project to any Separately Financed
Facility (or from any Separately Financed Facility to the Project), unless such reallocation would
be permitted if such reallocation were a transaction between the Borrower and an Affiliate of the
Borrower.



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     Section 6.08 Distributions. The Borrower shall not make any Distributions or other payments in respect of any Equity
Interests in the Borrower, except that:



          (a) on the Closing Date, the Borrower may make Distributions to reimburse costs and expenses
incurred prior to the Closing Date provided that such Distributions do not cause the Borrower to
exceed the Maximum Debt to Equity Ratio after giving effect thereto;



          (b) from and after Completion, the Borrower may make Distributions if each of the following
conditions is met: (i) such Distribution is made within 30 days after an Interest Payment Date (ii)
no Default or Event of Default exists or would exist as a result of making the Distribution, (iii)
the Debt Service Coverage Ratio at such time is equal to or greater than 3.0x for the previous 12
months (or, until there have been 12 full months of operations, such shorter period of operation),
(iv) after giving effect to such Distribution, the Maximum Debt to Equity Ratio is satisfied, (v)
PJM is not Insolvent and (vi) PJM has not defaulted with respect to any payment obligation to the
Borrower under the Transmission Owners Agreement (or, if PJM has so defaulted, all amounts received
by PJM and required to be distributed to the Borrower have been so distributed in a timely manner
for a period of four months from the date of such default (or such earlier time as a court of
competent jurisdiction has ordered all such payments to be made to the Borrower on a timely
basis)); and



          (c) if the Sponsor has made, or caused an Affiliate to make, Interim Equity Contributions to
the Borrower pursuant to Section 2.01(d) of the Equity Commitment Agreement in connection with the
expenditure of funds on any Segment for which the Borrower had not obtained Siting Approval, then,
if the Borrower subsequently obtains Siting Approval, the Borrower may make Distributions to the
Sponsor (via the Pledgor) in an amount not to exceed the lesser of (i) 2/3 of the amount of such
Interim Equity Contributions and (ii) the maximum amount that if paid to the Sponsor would not
result in the Borrower exceeding the Maximum Debt to Equity Ratio following the making of any such
Distributions.



     Section 6.09 Contingent Liabilities. The Borrower shall not create, incur, assume or suffer to exist any Guarantee of
obligations of any third party.



     Section 6.10 Investments. The Borrower shall not make or permit to remain outstanding any investments except
Permitted Investments. For the avoidance of doubt, neither the Separately Financed Facilities nor
any Excluded Portion shall be deemed to be “investments” for the purposes of the Financing
Documents.



     Section 6.11 Fiscal Year, Name, Location and EIN. The Borrower shall not permit its fiscal year to end on a day other than December 31, and
shall not, without the Administrative Agent’s consent (such consent not to be unreasonably
withheld, conditioned or delayed), change its name, the location of its principal place of business
or its federal employer identification number.



     Section 6.12 Other Agreements. The Borrower shall not enter into any agreement with any Person (other than (a) the Secured
Parties pursuant to the Financing Documents and (b) providers of Permitted Refinancing Debt) which
agreement prohibits or limits the ability of the



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Borrower to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether owned on the Closing Date or
acquired after the Closing Date.



     Section 6.13 Amendments to Major Project Contracts and Certain Other Agreements.



          (a) Without the consent of the Required Lenders, the Borrower shall not (i) cancel or
terminate any Major Project Contract to which it is a party or consent to or accept any
cancellation or termination thereof (other than upon expiration in accordance with the terms
thereof), (ii) sell, assign or otherwise dispose of any part of its interest in a Major Project
Contract, or (iii) amend, supplement or modify, or waive or fail to enforce any of its rights
under, any Major Project Contract unless, in the case of any of clauses (i) through (iii), such
cancellation, termination, sale, assignment, disposition, amendment, supplement, modification,
waiver or failure, as applicable, could not reasonably be expected to have a Material Adverse
Effect or unless, in the case of any amendment, supplement or modification of the Transmission
Owners Agreement, any of the Borrower’s counterparties under such agreement cause such amendment,
supplement or modification to take effect in accordance with the terms of such agreement.



          (b) Without the consent of the Required Lenders, the Borrower shall not amend, supplement or
otherwise modify any provision of the Tax Allocation Agreement or the Service Agreement (or any
related formula or agreement, including the “applicable approved allocation factor” under the
Service Agreement) in any manner that would result in an increase in the amount owed by the
Borrower to the Sponsor or ServiceCo, as applicable, other than as could not reasonably be expected
to result in a Material Adverse Effect.



     Section 6.14 ERISA. The Borrower shall not (a) terminate, or permit any of its ERISA Affiliates to terminate,
any Plan so as to result in any liability to it or any ERISA Affiliate, which could reasonably be
expected to have a Material Adverse Effect, or (b) permit to exist any Termination Event with
respect to a Plan which could reasonably be expected to have a Material Adverse Effect to the
extent such Termination Event is within the control of the Borrower or the Sponsor.



     Section 6.15 Regulations. The Borrower shall not directly or indirectly apply any part of the proceeds of any Loan or
other extensions of credit hereunder to the buying or carrying of any Margin Stock.



     Section 6.16 Amendments to Project Budget; Project Schedule.



          (a) The Borrower shall not amend the Project Budget such that the Borrower would not have
sufficient funds to achieve Completion of the Project.



          (b) The Borrower shall not amend the Project Schedule such that Completion cannot reasonably
be expected to occur on or before the Maturity Date.



     Section 6.17 Accounts. The Borrower shall not maintain any accounts other than the TrAILCo Accounts. If, at any
time, any Person maintaining any TrAILCo Account ceases to be a Lender, then TrAILCo shall cause
another Lender to maintain such TrAILCo Account.



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     Section 6.18 Hazardous Materials. The Borrower shall not use or Release, or permit the use or Release of, any Hazardous
Materials other than in compliance with all applicable Environmental Laws or Applicable Permits,
except for any use, Release or non-compliance that could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.



     Section 6.19 Other Expenditures; Separately Financed Facilities. The Borrower shall not spend any funds to develop, construct, acquire, maintain, own or
operate any electric transmission project not constituting part of the Project except that:



          (a) the Borrower may expend Permitted Pre-Construction Expenditures on any electric
transmission project that the Borrower reasonably expects may qualify as an “Separately Financed
Facility”; and



          (b) the Borrower may expend funds on Separately Financed Facilities, up to the maximum
aggregate amount of $250,000,000, so long as the aggregate amount of such expenditures with respect
to all Separately Financed Facilities at any time does not exceed the Total Additional Equity
Amount at such time.



     Section 6.20 Organizational Documents. The Borrower shall not amend its organizational documents in any manner that could
reasonably be expected to have a Material Adverse Effect and shall not amend the “separateness”
provisions contained in any of its organizational documents.



ARTICLE VII.

EVENTS OF DEFAULT




     Section 7.01 Events of Default. The occurrence of any of the following events shall constitute an event of default
hereunder (each, an “Event of Default”):



          (a) Principal Payment Default. The Borrower defaults in the payment of any principal
of any Loan or L/C Reimbursement Obligation when and as the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or otherwise.



          (b) Interest Payment Default. The Borrower defaults in the payment of any interest on
any Loan or L/C Reimbursement Obligation or in the payment of any Fee due under any Financing
Document, when and as the same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days.



          (c) Other Financing Document Payment Default. The Borrower defaults in the payment of
any amount (other than an amount referred to in paragraphs (a) or (b) above) due under any
Financing Document for more than 30 days after the same becomes due and payable.



          (d) Immediate Covenant Default. The Borrower defaults in the performance of or
compliance with any covenant, condition or agreement contained in Section 5.01(d),
5.03, 6.01, 6.02, 6.03 (other than non-consensual Liens with
respect to which the cure period set forth in Section 7.01(e) shall apply), 6.04,
6.05, 6.06, 6.07, 6.08, 6.10 or 6.13.



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          (e) Defaults with Cure. The Borrower defaults in the performance of or compliance
with any other covenant, condition or agreement contained in the Financing Documents (other than
those referred to in the foregoing paragraphs (a), (b), (c) or (d)) and such default is not
remedied within 30 days after a Responsible Officer of the Borrower has Knowledge thereof or the
Borrower has received notice thereof from the Administrative Agent; provided that if the
Borrower commences and diligently pursues efforts to cure such default within such 30 day period,
and such default is capable of being cured, the Borrower may continue to effect such cure and such
default will not be deemed to be an Event of Default for an additional 60 days so long as the
Borrower is diligently pursuing such cure.



          (f) Misrepresentations. Any representation or warranty made in writing by or on
behalf of the Borrower or by any officer of the Borrower in the Financing Documents or in any
writing furnished in connection with the transactions contemplated by the Financing Documents
proves to have been false or incorrect in any material respect on the date as of which made (other
than any false or incorrect information contained within a writing delivered prior to the Closing
Date and subsequently corrected in another writing delivered prior to the Closing Date) and such
misrepresentation has not been cured within 30 days after a Responsible Officer of the
Borrower has Knowledge thereof or the Borrower has received notice thereof from the Administrative
Agent; provided that if such misrepresentation is capable of being cured and the Borrower
is diligently pursuing such cure, such cure period shall be extended for an additional 60 days.



          (g) Non-Payment; Cross-Acceleration. The Borrower or, prior to the termination of the
Equity Commitment Agreement in accordance with its terms, the Sponsor (i) is in default whether as
principal or as guarantor or other surety, in the payment of any principal of, or premium or
make-whole amount or interest on, any Indebtedness that is outstanding in an aggregate principal
amount of at least $5,000,000 in the case of the Borrower and $25,000,000 in the case of the
Sponsor (in each case, the “Materiality Threshold”) beyond any grace period provided with
respect thereto or (ii) is in default in the performance of or compliance with any term of any
agreement or other evidence of any Indebtedness in an aggregate outstanding principal amount at
least equal to the applicable Materiality Threshold or any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared, due and payable before its stated maturity or
before its regularly scheduled dates of payment.



          (h) Bankruptcy. The Borrower or the Sponsor is Insolvent; provided that this
paragraph (h) shall not apply to the Sponsor after the termination of the Equity Commitment
Agreement in accordance with its terms.



          (i) Judgments. A final judgment or judgments for the payment of money aggregating in
excess of $5,000,000 is rendered against the Borrower that is not, within 60 days after entry
thereof, bonded, discharged or stayed pending appeal, or is not discharged within 60 days after the
expiration of such stay or is not otherwise covered by insurance.



          (j) ERISA.




               (i) As a result of, or in connection with, any ERISA Event that shall have occurred
with respect to a Plan, the Borrower or any ERISA Affiliate has incurred



85









 







or is reasonably expected to incur liability in an amount exceeding, in the aggregate with any amounts
applicable under clauses (ii) and (iii) of this Section 7.01(j), $25,000,000;




               (ii) The Borrower or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in
an amount that, when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower and any ERISA Affiliates as Withdrawal Liability, exceeds, in the
aggregate with any amounts applicable under clauses (i) and (iii) of this Section
7.01(j), $25,000,000 or requires payments exceeding $25,000,000 per annum; or




               (iii) The Borrower or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated,
and as a result of such reorganization or termination the aggregate annual contributions of
the Borrower and any ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased
over the amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding, in the aggregate with any amounts applicable
under clauses (i) and (ii) of this Section 7.01(j), $25,000,000.



          (k) Major Project Participants. Any Major Project Participant defaults in the
performance of its obligations under the Major Project Contracts to which it is a party and such
default continues for 30 days after the occurrence of such default if such default could reasonably
be expected to result in a Material Adverse Effect; provided that (i) if such Major Project
Participant commences and diligently pursues efforts to cure such default within such 30 day
period, and such default is capable of being cured, such Major Project Participant may continue to
effect such cure and such default will not be deemed to be an Event of Default for an additional 90
days so long as such Major Project Participant is diligently pursuing such cure or (ii) if such
Major Project Participant shall have been replaced (in accordance with the terms hereof) within a
reasonable period of time (not to exceed 90 days) after such default, such default will not be
deemed to be an Event of Default.



          (l) Applicable Permits. The Borrower fails to obtain, renew, maintain or comply with
any Applicable Permit, or any Applicable Permit is impaired or ceases to be in full force and
effect, and such failure, impairment or cessation could reasonably be expected to have a Material
Adverse Effect; provided that no Event of Default shall result from the Borrower’s failure
to obtain Siting Approval (but an Event of Default may result from any failure to renew or maintain
such Siting Approval once obtained).



          (m) Abandonment of Project. Construction of all or any material portion of the
Project (other than an Excluded Portion) or, from and after Completion, operation of the TrAIL
Transmission Line (other than an Excluded Portion) is (a) following commencement of construction on
such portion of the Project, suspended for more than 270 consecutive days, as such period shall be
extended on a day-for-day basis as a result of an event of force majeure, (b) abandoned or (c)
indefinitely deferred (or the Borrower or PJM announces in writing a decision



86









 







to so suspend, abandon or indefinitely defer the construction of the Project (other than an Excluded Portion).



          (n) Affiliates. (i) The Borrower ceases to be (A) a direct, wholly-owned Subsidiary
of the Pledgor and (B) an indirect, wholly owned Subsidiary of the Sponsor or (ii) an Affiliate of
the Sponsor ceases to be the provider of management services to the Borrower, unless replaced
within 90 days by another qualified management services provider reasonably acceptable to the
Required Lenders.



          (o) Equity Commitments. The Sponsor defaults in the payment of any required Equity
Contribution pursuant to the Equity Commitment Agreement when the same becomes due and payable.



          (p) Liens. The failure of the Liens created by, or purported to be created by, the
Pledge Agreement to be valid and perfected liens on the Collateral, free and clear of all other
Liens (other than Permitted Liens).



          (q) Major Project Contracts. (i) Any provision of any Major Project Contract ceases
to be valid and binding or in full force and effect, or the validity or enforceability of any Major
Project Contract is contested by any Major Project Participant, or any Major Project Participant
shall deny that it has further liability or obligation under any Major Project Contract, and in
each such case, such cessation, contest or denial could reasonably be expected to have a Material
Adverse Effect and (ii) the Borrower shall have failed to replace such Major Project Contract
within 90 days with a replacement agreement that (A) provides substantially the same goods or
services as were provided under the relevant Major Project Contract, excluding any goods or
services that are no longer required for the Project, (B) is on terms fair and reasonable to the
Borrower, and (C) is in form and substance reasonably satisfactory to the Administrative Agent and
(x) after giving effect to such replacement agreement, no Material Adverse Effect could reasonably
be expected to occur as a result of the cessation of the relevant Major Project Contract and (y) a
Responsible Officer of the Borrower has certified that the conditions in the preceding clauses (A)
and (B) have been met.



          (r) Financing Documentation. Any material provision of any Financing Document ceases
to be valid and binding and in full force and effect (except in accordance with its terms), or the
validity or enforceability of any Financing Document is contested in writing by any Loan Party
party thereto or any Loan Party party thereto shall deny in writing that it has further liability
or obligation under any Financing Document.



     Section 7.02 Remedies. Upon the occurrence and during the continuation of an Event of Default (other than an Event
of Default with respect to the Borrower described in paragraph (h) of Section 7.01), and at
any time thereafter during the continuation of such Event of Default, the Administrative Agent, at
the request of the Required Lenders, shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate forthwith the Commitments, (ii)
declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon
the principal of the Loans so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Financing Document, shall



87









 







become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Financing Document to the contrary
notwithstanding, (iii) demand cash collateral pursuant to Section 2.04(j), and (iv) direct
the Collateral Agent to exercise the rights and remedies available under the Security Documents,
and in the case of any event with respect to the Borrower described in paragraph (h) of Section
7.01, the Commitments shall automatically terminate, the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Financing Document, shall
automatically become due and payable and the Administrative Agent shall be deemed to have made a
demand for cash collateral to the full extent permitted under Section 2.04(j), without
presentment, demand, protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Financing Document to the
contrary notwithstanding.



ARTICLE VIII.

THE AGENTS




     Section 8.01 Appointment and Authority.



          Each Secured Party hereby irrevocably appoints Citibank, N.A. to act on its behalf as the
Administrative Agent and appoints Union Bank of California, N.A. to act on its behalf as the
Collateral Agent hereunder and under the other Financing Documents and authorizes the
Administrative Agent and Collateral Agent to take such actions on its behalf and to exercise such
powers as are delegated to the such Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this Article are solely
for the benefit of the Administrative Agent (or any successor to the Administrative Agent pursuant
to Section 8.06), the Collateral Agent (or any successor to the Collateral Agent pursuant
to Section 8.07) and the Secured Parties, and neither the Borrower nor any other Person
shall have rights as a third party beneficiary of any of such provisions.



     Section 8.02 Each Agent in its Individual Capacity.



          (a) Each Person serving as the Administrative Agent or the Collateral Agent hereunder shall
have the same rights and powers in its capacity as a Secured Party as any other Secured Party and
may exercise the same as though it were not the Administrative Agent or the Collateral Agent and
the term “Secured Party” or “Secured Parties” shall, unless otherwise expressly indicated or unless
the context otherwise requires, include the Person serving as the Administrative Agent or
Collateral Agent hereunder in its individual capacity. Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other advisory capacity for
and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent or Collateral Agent, as applicable,
hereunder and without any duty to account therefor to the Lenders.



          (b) Each Secured Party understands that the Person serving as Administrative Agent or
Collateral Agent, acting in its individual capacity, and its Affiliates (each, collectively, an
“Agent’s Group”) are engaged in a wide range of Activities and may engage in the Activities



88









 







with or on behalf of the Borrower or its Affiliates. Furthermore, an Agent’s Group may, in
undertaking the Activities, engage in trading in financial products or undertake other investment
businesses for its own account or on behalf of others (including the Borrower and its Affiliates
and including holding, for its own account or on behalf of others, equity, debt and similar
positions in the Borrower or its Affiliates), including trading in or holding long, short or
derivative positions in securities, loans or other financial products of the Borrower or its
Affiliates. Each Secured Party understands and agrees that in engaging in the Activities, an
Agent’s Group may receive or otherwise obtain information concerning the Borrower or its Affiliates
(including information concerning the ability of the Borrower or its Affiliates to perform its or
their Obligations hereunder and under the other Financing Documents) which information may not be
available to any of the Secured Parties that are not members of such Agent’s Group. None of the
Administrative Agent, Collateral Agent nor any member of such
Agent’s Group shall have any duty to disclose to any Secured Party or use on behalf of the
Secured Parties, and shall not be liable for the failure to so disclose or use, any information
whatsoever about or derived from the Activities or otherwise (including any information concerning
the business, prospects, operations, property, financial and other condition or creditworthiness of
the Borrower or any Affiliate of the Borrower) or to account for any revenue or profits obtained in
connection with the Activities, except that the Administrative Agent and Collateral Agent shall
deliver or otherwise make available to each Secured Party such documents as are expressly required
by any Financing Document to be transmitted by the Administrative Agent or Collateral Agent,
respectively, to the Secured Parties.



          (c) Each Secured Party further understands that there may be situations where members of an
Agent’s Group or their respective customers (including the Borrower and its Affiliates) either now
have or may in the future have interests or take actions that may conflict with the interests of
any one or more of the Secured Parties (including the interests of the Secured Parties hereunder
and under the other Financing Documents). Each Secured Party agrees that no member of an Agent’s
Group is or shall be required to restrict its activities as a result of the Person serving as
Administrative Agent or Collateral Agent being a member of the Agent’s Group, and that each member
of the Agent’s Group may undertake any Activities without further consultation with or notification
to any Secured Party. None of (i) this Agreement nor any other Financing Document, (ii) the
receipt by an Agent’s Group of information (including Information) concerning the Borrower or its
Affiliates (including information concerning the ability of the Borrower or its Affiliates to
perform its or their Obligations hereunder and under the other Financing Documents) nor (iii) any
other matter shall give rise to any fiduciary, equitable or contractual duties (including any duty
of trust or confidence) owing by the Administrative Agent, Collateral Agent or any member of an
Agent’s Group to any Secured Party including any such duty that would prevent or restrict such
Agent’s Group from acting on behalf of customers (including the Obligors or their Affiliates) or
for its own account.



     Section 8.03 Duties of Agents; Exculpatory Provisions.



          (a) Duties of the Administrative Agent and Collateral Agent hereunder and under the other
Financing Documents are solely ministerial and administrative in nature and neither the
Administrative Agent nor the Collateral Agent shall have any duties or obligations except those
expressly set forth herein and in the other Financing Documents. Without limiting



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the generality of the foregoing, the Administrative Agent shall not have any duty to take any discretionary action
or exercise any discretionary powers, but shall be required to act or refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the written direction of the
Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Financing Documents), and the Collateral Agent shall be required to act
or refrain from acting (and shall be fully protected in so acting or refraining from acting) upon
the written direction of the Administrative Agent (at the written direction of the Required Lenders
or such other number or percentage of the Lenders as shall be expressly provided for herein or in
the other Financing Documents, if such direction is required hereunder or under the other Financing
Documents) or the Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Financing Documents) and shall have no duty to take
actions or exercise powers hereunder or
under the other Financing Documents other than as set forth in any such written direction;
provided that neither the Administrative Agent nor the Collateral Agent shall be required
to take any action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent, the Collateral Agent or any of their respective Affiliates to liability or
that is contrary to any Financing Document or applicable law or if either such Agent receives
conflicting directions from any Persons that have the authority to direct it hereunder or under the
other Financing Documents. The Collateral Agent shall promptly provide to the Administrative Agent
a copy of any written communication or documentation it receives in its capacity as the Collateral
Agent hereunder or under the other Financing Documents but shall not be required to provide copies
of any such materials to any Lenders.



          (b) Each of the Administrative Agent and Collateral Agent shall not be liable for any action
taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as such Agent shall believe in
good faith shall be necessary, under the circumstances as provided in Sections 7.02 or
9.10) or (ii) in the absence of its own gross negligence or willful misconduct, as
determined by the final non-appealable judgment of a court of competent jurisdiction. Neither the
Administrative Agent nor the Collateral Agent shall be deemed to have knowledge of any Default or
the event or events that give or may give rise to any Default unless and until the Borrower or any
Secured Party shall have given notice to such Agent describing such Default and such event or
events.



          (c) Neither the Administrative Agent, the Collateral Agent nor any member of the Agent’s Group
shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty,
representation or other information made or supplied in or in connection with this Agreement, any
other Financing Document or the Information Memorandum, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection herewith or therewith
or the adequacy, accuracy and/or completeness of the information contained therein, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Financing Document or any other
agreement, instrument or document or the perfection or priority of any Lien or security interest
created or purported to be created by the Security Documents or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein,



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other than (but subject to the foregoing clause (ii)) to confirm receipt of items expressly required to be delivered to the
Administrative Agent and Collateral Agent.



          Nothing in this Agreement or any other Financing Document shall require the Administrative
Agent, the Collateral Agent or any of their Related Parties to carry out any “know your customer”
or other checks in relation to any person on behalf of any Secured Party and each Secured Party
confirms to the Administrative Agent and Collateral Agent that it is solely responsible for any
such checks it is required to carry out and that it may not rely on any statement in relation to
such checks made by the Administrative Agent, the Collateral Agent or any of their Related Parties.



     Section 8.04 Reliance by Agents.



          (a) The Administrative Agent and the Collateral Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. The Administrative Agent and the
Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by
it to have been made by the proper Person, and shall not incur any liability for relying thereon.



          (b) In determining compliance with any condition hereunder to the making of a Loan, or the
issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a
Secured Party, the Administrative Agent may presume that such condition is satisfactory to such
Secured Party unless an officer of the Administrative Agent responsible for the transactions
contemplated hereby shall have received notice to the contrary from such Secured Party prior to the
making of such Loan or the issuance of such Letter of Credit, and in the case of a Borrowing, such
Secured Party shall not have made available to the Administrative Agent such Lender Party’s ratable
portion of such Borrowing.



          (c) The Administrative Agent and the Collateral Agent may consult with legal counsel (who may
be counsel for the Borrower or any other Secured Party), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.



     Section 8.05 Delegation of Duties. Each of the Administrative Agent and the Collateral Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Financing Document by or
through any one or more sub-agents appointed by such Agent. Each of the Administrative Agent and
the Collateral Agent and any such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Related Parties. Each such sub-agent and the
Related Parties of such Agent and each such sub-agent shall be entitled to the benefits of all
provisions of this Section 8.05 and Section 9.06 (as though such sub-agents were
the “Administrative Agent” or the “Collateral Agent,” as applicable, under the Financing Documents)
as if set forth in full herein with respect thereto.



     Section 8.06 Resignation of Administrative Agent. The Administrative Agent or any successor Administrative Agent may at any time give notice
of its resignation to the Secured Parties and the Borrower, such resignation to be effective upon
the appointment of a successor



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Administrative Agent as provided in this Section 8.06. Upon
receipt of any such notice of resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the
City and State of New York, or an Affiliate of any such bank with an office in the City and State
of New York. If no such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the departing Administrative Agent gives notice
of its resignation (such 30-day period, the “Secured Party Appointment Period”), then on
behalf of the Secured Parties, the departing Administrative Agent may appoint a successor
Administrative Agent, meeting the qualifications set forth above. In addition and
without any obligation on the part of the departing Administrative Agent on behalf of the
Lender Parties such departing Administrative Agent may at any time upon or after the end of the
Secured Party Appointment Period notify the Borrower and the Secured Parties that no qualifying
Person has accepted appointment as its successor and the effective date of such departing
Administrative Agent’s resignation which effective date shall be no earlier than three Business
Days after the date of such notice. Upon the resignation effective date established in such notice
and regardless of whether a successor Administrative Agent has been appointed and accepted such
appointment, the departing Administrative Agent’s resignation shall nonetheless become effective
and (i) the departing Administrative Agent shall be discharged from its respective duties and
obligations as Administrative Agent, as applicable, hereunder and under the other Financing
Documents and (ii) all payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Secured Party directly, until
such time as the Required Lenders appoint a successor Administrative Agent as provided for above in
this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the rights, powers,
privileges and duties as Administrative Agent of the departing (or departed) Administrative Agent
and the departing Administrative Agent shall be discharged from all of its respective duties and
obligations as Administrative Agent hereunder or under the other Financing Documents (if not
already discharged therefrom as provided above in this paragraph). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the departing
Administrative Agent’s resignation hereunder and under the other Financing Documents, the
provisions of this Article and Section 9.06 shall continue in effect for the benefit of
such departing Administrative Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while the departing Administrative Agent
was acting as Administrative Agent.



     Section 8.07 Resignation of Collateral Agent. The Collateral Agent or any successor Collateral Agent may at any time give notice of its
resignation to the Secured Parties and the Borrower, such resignation to be effective upon the
appointment of a successor Collateral Agent as provided in this Section 8.07. The Secured
Parties may at any time remove the Collateral Agent for or without cause at any time by giving
written notice to the Collateral Agent. Upon receipt of any such notice of resignation or removal,
or in case the office of the Collateral Agent shall become vacant for any reason, the Secured
Parties shall have the right, in consultation with the Borrower, to appoint a successor, which
shall be a bank with an office in the City and State of New York, or an Affiliate of any such bank
with an office in the City and State of New York. If no such successor shall have been so
appointed by the Secured Parties and shall have accepted



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such appointment within 30 days after the departing Collateral Agent gives notice of its resignation, then on behalf of the Secured Parties,
the departing Collateral Agent may appoint an interim successor Collateral Agent meeting the
qualifications set forth above. Upon the resignation effective date established in such notice, so
long as either (x) a successor Collateral Agent has been appointed and accepted such appointment or
(y) the Collateral Agent has appointed an interim Collateral Agent, then, in either case, (i) the
departing Collateral Agent’s resignation shall become effective, (ii) the departing Collateral
Agent shall be discharged from its respective duties and obligations as Collateral Agent, as
applicable, hereunder and under the other Financing Documents, subject to
the departing Collateral Agent’s compliance and the successor Collateral Agent’s compliance
with the requirements below regarding transfer of the Collateral, and (iii) the successor
Collateral Agent or (until the Secured Parties appoint a successor, the interim Collateral Agent)
shall assume the responsibilities of the Collateral Agent hereunder. Upon the acceptance of a
successor’s appointment as Collateral Agent hereunder, such successor or interim Collateral Agent
shall immediately and without further act succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the departing (or departed) Collateral Agent hereunder and
under the Financing Documents as if originally named herein and therein and the departing
Collateral Agent shall duly assign, transfer and deliver to such successor or interim Collateral
Agent all the rights, property, assets and moneys at the time held by the departing Collateral
Agent hereunder and under the Financing Documents and shall execute and deliver such proper
instruments as may be reasonably necessary or requested to evidence such assignment, transfer and
delivery, and the departing Collateral Agent shall be discharged from all of its respective duties
and obligations as Collateral Agent hereunder or under the other Financing Documents (if not
already discharged therefrom as provided above in this paragraph). The fees payable by the
Borrower to a successor Collateral Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the departing Collateral
Agent’s resignation hereunder and under the other Financing Documents, the provisions of this
Article and Section 9.06 shall continue in effect for the benefit of such departing
Collateral Agent, its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the departing Collateral Agent was acting as
Collateral Agent.



     Section 8.08 Non-Reliance on Administrative Agent, Collateral Agent and Other Lender
Parties. 



          (a) Each Secured Party confirms to the Administrative Agent, the Collateral Agent, each other
Secured Party and each of their respective Related Parties that it (i) possesses (individually or
through its Related Parties) such knowledge and experience in financial and business matters that
it is capable, without reliance on the Administrative Agent, the Collateral Agent, any other Lender
Party or any of their respective Related Parties, of evaluating the merits and risks (including
tax, legal, regulatory, credit, accounting and other financial matters) of (x) entering into this
Agreement, (y) making Loans and other extensions of credit hereunder and under the other Financing
Documents and (z) taking or not taking actions hereunder and thereunder, (ii) is financially able
to bear such risks and (iii) has determined that entering into this Agreement and making Loans and
other extensions of credit hereunder and under the other Financing Documents is suitable and
appropriate for it.



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          (b) Each Secured Party acknowledges that it (i) is solely responsible for making its own
independent appraisal and investigation of all risks arising under or in connection with this
Agreement and the other Financing Documents, (ii) has, independently and without reliance upon the
Administrative Agent, the Collateral Agent, any other Secured Party or any of their respective
Related Parties, made its own appraisal and investigation of all risks associated with, and its own
credit analysis and decision to enter into, this Agreement based on such documents and information,
as it has deemed appropriate and (iii) will, independently and without reliance upon the
Administrative Agent, the Collateral Agent, any other Secured Party or any of their respective
Related Parties, continue to be solely responsible for making its own
appraisal and investigation of all risks arising under or in connection with, and its own
credit analysis and decision to take or not take action under, this Agreement and the other
Financing Documents based on such documents and information as it shall from time to time deem
appropriate, which may include, in each case:




          (i) the financial condition, status and capitalization of the Borrower;




          (ii) the legality, validity, effectiveness, adequacy or enforceability of this
Agreement and each other Financing Document and any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in connection with any Financing
Document;




          (iii) determining compliance or non-compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit and the form and substance of all
evidence delivered in connection with establishing the satisfaction of each such condition;
and




          (iv) the adequacy, accuracy and/or completeness of the Information Memorandum and any
other information delivered by the Administrative Agent, the Collateral Agent any other
Secured Party or by any of their respective Related Parties under or in connection with this
Agreement or any other Financing Document, the transactions contemplated hereby and thereby
or any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Financing Document.



     Section 8.09 No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the Persons acting as book
managers, Arrangers, the Syndication Agent or the Documentation Agent listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or any of the other
Financing Documents, except in its capacity, as applicable, as the Administrative Agent, Collateral
Agent, Issuing Bank or as a Lender Party hereunder.



     Section 8.10 Withholding Tax. To the extent required by any applicable law, the Administrative Agent may withhold from
any interest payment to any Lender an amount equivalent to any withholding Tax. If any
Governmental Authority asserts a claim that the Administrative Agent did not properly withhold Tax
from amounts paid to or for the account of any Lender because the appropriate form was not
delivered or was not properly executed or because such Lender failed to notify the Administrative
Agent of a change in circumstances



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which rendered the exemption from, or reduction of, withholding
Tax ineffective or for any other reason, such Lender shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative Agent as Tax or otherwise,
including any penalties or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expense) incurred.



ARTICLE IX.

MISCELLANEOUS




     Section 9.01 Notices.



          (a) All notices, demands, requests, consents and other communications provided for in this
Agreement shall be given in writing, or by any telecommunication device capable of creating a
written record (including electronic mail), and addressed to the party to be notified at the
applicable address set forth in Schedule 9.01, or at such other address as shall be
notified in writing (i) in the case of the Borrower, the Administrative Agent and the Required
Lenders, to the other parties hereto and (ii) in the case of all other parties, to the Borrower and
the Administrative Agent.



          (b) All notices, demands, requests, consents and other communications described in clause (a)
shall be effective (i) if delivered by hand, including any overnight courier service, upon personal
delivery, (ii) if delivered by mail, when deposited in the mail, (iii) if delivered by posting to
an Approved Electronic Platform, an Internet website or a similar telecommunication device
requiring that a user have prior access to such Approved Electronic Platform, website or other
device (to the extent permitted by Section 9.02 to be delivered thereunder), when such
notice, demand, request, consent or other communication shall have been made generally available on
such Approved Electronic Platform, Internet website or similar device to the class of Person being
notified (regardless of whether any such Person must accomplish, and whether or not any such Person
shall have accomplished, any action prior to obtaining access to such items, including
registration, disclosure of contact information, compliance with a standard user agreement or
undertaking a duty of confidentiality) and such Person has been notified in respect of such posting
that a communication has been posted to the Approved Electronic Platform and (iv) if delivered by
electronic mail or any other telecommunications device, when transmitted to an electronic mail
address (or by another means of electronic delivery) as provided in clause (a); provided,
however, that notices and communications to the Administrative Agent pursuant to
Article II or Article VIII shall not be effective until received by the
Administrative Agent.



          (c) Notwithstanding clauses (a) and (b) (unless the Administrative Agent requests that the
provisions of clause (a) and (b) be followed) and any other provision in this Agreement or any
other Financing Document providing for the delivery of any Approved Electronic Communication by any
other means, the Borrower shall deliver all Approved Electronic Communications to the
Administrative Agent by properly transmitting such Approved Electronic Communications in an
electronic/soft medium in a format acceptable to the Administrative Agent at the email address
referenced on Schedule 9.01 or such other electronic mail address (or similar means of
electronic delivery) as the Administrative Agent may notify to the Borrower. Nothing in this
clause (c) shall prejudice the right of the Administrative Agent or



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any Secured Party to deliver
any Approved Electronic Communication to the Borrower in any manner authorized in this Agreement or
to request that the Borrower effect delivery in such manner.



     Section 9.02 Survival of Agreement. All covenants, agreements, representations and warranties made by the Borrower in this
Agreement and the other Financing Documents and in the certificates or other instruments prepared
or delivered in connection with or pursuant to this Agreement or any other Financing Document shall
be considered to have been relied upon by the Lenders and each Issuing Bank. Such agreements,
representations and warranties shall survive the making by the Lenders of the Loans, the execution
and delivery of the Financing Documents and the issuance of the Letters of Credit, regardless of
any investigation made by such Persons or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or L/C Disbursement or any
Fee or any other amount payable under this Agreement or any other Financing Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not been
terminated. Without prejudice to the survival of any other agreements contained herein, the
indemnification and expense reimbursement obligations contained herein (including pursuant to
Sections 2.18, 2.20 and 9.05) shall survive the payment in full of the
principal and interest hereunder, the expiration of the Letters of Credit and the termination of
the Commitments or this Agreement.



     Section 9.03 Binding Effect. This Agreement shall become effective when it shall have been executed by the parties
hereto and when the Administrative Agent shall have received copies hereof which, when taken
together, bear the signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the Borrower, each Secured Party and their respective successors
and permitted assigns.



     Section 9.04 Successors and Assigns.



          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of any Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder or under any other
Financing Document without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of any Issuing Bank that issues any Letter of Credit), Participants (to
the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Secured Parties) any legal or equitable right, remedy or
claim under or by reason of this Agreement.



          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments, and the Loans and L/C
Disbursements at the time owing to it) with the prior written consent (such consent not to be
unreasonably withheld or delayed) of:



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                    (A) the Borrower; provided that no consent of the Borrower shall be
required:




	 	(1)	 	for any assignment of a Loan or
Commitment to an assignee that is, immediately prior to giving
effect to such assignment, (x) a Lender, (y) an Affiliate of a
Lender, or (z) an Approved Fund with respect to a Lender
(provided that any liability of the Borrower to an
assignee that is an Approved Fund or Affiliate of the assigning
Lender under Section 2.14 or 2.16 shall be
limited to the amount, if any, that would have been payable
hereunder by the Borrower in the absence of such assignment); or
	 
	 	(2)	 	if an Event of Default has
occurred and is continuing, for any assignment; and






                    (B) the Administrative Agent and, in the case of any Revolving Commitment, the
Issuing Bank; provided that no consent of the Administrative Agent or the
Issuing Bank, as applicable, shall be required:




	 	(1)	 	for any assignment of a
Construction Loan, New Construction Loan, Construction
Commitment or New Construction Commitment to an assignee that
is, immediately prior to giving effect to such assignment, (x) a
Lender, (y) an Affiliate of a Lender, or (z) an Approved Fund
with respect to a Lender; or
	 
	 	(2)	 	for any assignment of a Revolving
Loan or Revolving Commitment to an assignee that is, immediately
prior to giving effect to such assignment, (x) a Revolving
Lender, (y) an Affiliate of a Revolving Lender, or (z) an
Approved Fund with respect to a Revolving Lender; and






               (ii) Assignments shall be subject to the following additional conditions:




                    (A) except in the case of an assignment to a Lender or an Affiliate of a
Lender, an assignment of the entire remaining amount of the assigning Lender’s
Commitment or contemporaneous assignments to related Approved Funds that equal at
least $5,000,000 in the aggregate, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $5,000,000, unless the Borrower and the Administrative Agent
otherwise consent; provided that no such consent of the Borrower shall be
required if an Event of
Default has occurred and is continuing and related Approved Funds shall be



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aggregated for purposes of determining compliance with such minimum assignment
amounts;




                    (B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement with
respect to the relevant Credit Facility or Credit Facilities;




                    (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance; and




                    (D) the assignee, if it shall not already be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.




               (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender hereunder shall, to the extent of the interest assigned
by such Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.14, 2.16 and
9.05). Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.




               (iv) Upon its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder) and any written consent to such
assignment required by paragraph (b)(i) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.




          (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent
or any Issuing Bank, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Commitments, and the Loans and L/C
Disbursements at the time owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations and (C) the Borrower and
the Secured Parties shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any agreement or
instrument (oral or written) pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce
this



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Agreement and the other Financing Documents and to approve any amendment, modification
or waiver of any provision of this Agreement and the other Financing Documents;
provided that (x) such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment, modification or waiver
described in Section 9.04(a)(i) or clause (i), (ii), (iii), (iv), (v), (vi) or (vii)
of the first proviso to Section 9.08(b) that affects such Participant and (y) no
other agreement (oral or written) with respect to such Participant may exist between such
Lender and such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.14,
2.15 and 2.16 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.




               (ii) A Participant shall not be entitled to receive any greater payment under
Section 2.14, 2.15 or 2.16 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such Participant. A
Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the
benefits of Section 2.16 unless the Borrower is notified of the participation sold
to such Participant and such Participant complies with Section 2.16(e) as though it
were a Lender.




          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.



     Section 9.05 Expenses; Indemnity.




               (a) The Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred
by the Agents in connection with the preparation of this Agreement and the other Financing
Documents, or by the Agents in connection with the syndication of the Commitments or the
administration of this Agreement and the other Financing Documents (including reasonable and
documented out-of-pocket expenses incurred in connection with any action taken by any Agent to
render fully valid and enforceable under any applicable laws, rights, liens and priorities of the
Secured Parties with respect to Collateral), or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the Transactions hereby contemplated
shall be consummated) or incurred by the any Secured Party in connection with the enforcement or
protection of their rights in connection with this Agreement and the other Financing Documents, in
connection with the Loans made or the Letters of Credit issued hereunder, including the reasonable
and documented fees, charges and disbursements of Latham & Watkins LLP, counsel for the
Administrative Agent and the Arrangers, New York counsel for the Collateral Agent, and any local
counsel for the Arrangers that have been approved by the Borrower, if applicable, and, in
connection with any such enforcement or protection, the reasonable and documented fees, charges and
disbursements of any other counsel for the Arrangers or any Secured Party (but no more than one such counsel
for all Secured Parties).




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          (b) The Borrower agrees to indemnify the Arrangers, each Secured Party and each of their
respective directors, trustees, officers, employees, investment advisors and agents (each such
Person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including reasonable and
documented outside counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or
delivery of this Agreement or any other Financing Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto and thereto of their
respective obligations hereunder or thereunder or the consummation of the Transactions and the
other transactions contemplated hereby, (ii) the use of the proceeds of the Loans or the use of any
Letter of Credit, (iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto, (iv) any Environmental Claim to the
extent related in any way to the Borrower, or (v) any actual or alleged presence, Release or
threatened Release of Hazardous Materials at, under, on or from any Real Property, any property
owned, leased or operated by any predecessor of the Borrower, or, to the extent related in any way
to the Borrower, any property at which the Borrower has sent Hazardous Materials for treatment,
storage or disposal; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related expenses result
primarily from the gross negligence or willful misconduct of such Indemnitee, as determined by the
final non-appealable judgment of a court of competent jurisdiction. The provisions of this Section
shall remain operative and in full force and effect regardless of the expiration of the term of
this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or
any other Financing Document, or any investigation made by or on behalf of any Secured Party. All
amounts due under this Section shall be payable within 30 days following written demand therefor
accompanied by reasonable documentation with respect to any reimbursement, indemnification or other
amount requested.




          (c) Without limiting or reducing the Borrower’s Obligations, each Lender agrees (i) to
reimburse the Agents, on demand, in the amount of its pro rata share (based on its
Commitments hereunder, or if its Commitments shall have expired or been terminated, based on the
respective principal amounts of its applicable outstanding Loans or participations in L/C
Disbursements, as applicable) of any reasonable expenses incurred for the benefit of the Lenders by
the Agents, including reasonable counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, which shall not have been reimbursed by the Borrower,
and (ii) to indemnify and hold harmless each Agent and any of its Related Parties, on demand, in
the amount of such pro rata share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted
against it in its capacity as Agent or any of them in any way relating to or arising out of this
Agreement or any other Financing Document or any action taken or omitted by it or any of them under
this Agreement or any other Financing Document, to the extent the same shall not have been
reimbursed by the Borrower; provided that no Lender shall be liable to an Agent for any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from the gross negligence or willful misconduct of such
Agent or any of its Related Parties.




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          (d) No Indemnitee shall be liable for, and the Borrower hereby agrees not to assert any claim
against any Indemnitee, on any theory of liability, for consequential, incidental, indirect,
punitive or special damages arising out of or otherwise relating to the Financing Documents, the
Transactions, any of the transactions contemplated in the Financing Documents or the actual or
proposed use of the proceeds of the Loans and the L/C Disbursements.




     Section 9.06 Right of Set-off. If an Event of Default shall have occurred and be
continuing, each Lender and each Issuing Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Lender or such Issuing Bank to or for the credit or the account of the
Borrower, against any and all obligations of the Borrower, now or hereafter existing under this
Agreement or any other Financing Document held by such Lender or such Issuing Bank, irrespective of
whether or not such Lender or such Issuing Bank shall have made any demand under this Agreement or
such other Financing Document and although the obligations may be unmatured. The rights of each
Lender and each Issuing Bank under this Section are in addition to other rights and remedies
(including other rights of set-off) that such Lender or such Issuing Bank may have under applicable
law and, in the case of rights and remedies relating to the Letters of Credit, applicable rules
pertaining to such Letters of Credit.



     Section 9.07 APPLICABLE LAW. THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS (OTHER
THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER FINANCING DOCUMENTS) SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.



     Section 9.08 Waivers; Amendment.



          (a) No failure or delay of any Secured Party in exercising any right or power hereunder or
under any other Financing Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce any such right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Secured Parties hereunder and under the
other Financing Documents are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or any other Financing Document
or consent to any departure by the Borrower, the Pledgor or the Sponsor therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose for which given.
No notice or demand on the Borrower, the Pledgor or the Sponsor in any case shall entitle such
Person to any other or further notice or demand in similar or other circumstances.




          (b) Neither this Agreement nor any other Financing Document nor any provision hereof or
thereof may be waived, amended or modified except (x) in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required Lenders and (y) in
the case of any other Financing Document, pursuant to an




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agreement or agreements in writing entered into by each party thereto and consented to by the
Required Lenders; provided, however, that no such agreement shall:





          (i) decrease or forgive the principal amount of, or extend the final maturity of, or
decrease the rate of interest on, any Loan or L/C Disbursement without the prior written
consent of each Lender directly affected thereby;




          (ii) increase or extend any Commitment of any Lender or decrease the Fees of any Lender
without the prior written consent of such Lender (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default or of a
mandatory reduction in the aggregate Commitments shall not constitute an increase of the
Commitments of any Lender);




          (iii) extend or waive any date for payment of principal of any Loan or reduce the
amount due on any such date or extend any date on which payment of interest on any Loan, L/C
Disbursement, or any Fee is due, without the prior written consent of each Lender adversely
affected thereby;




          (iv) amend or modify the provisions of Sections 2.17(b) or 2.17(c) in a
manner that would by its terms alter the pro rata sharing of payments
required thereby, without the prior written consent of each Lender adversely affected
thereby;




          (v) amend or modify the provisions of this Section or the definitions of the terms
“Required Lenders”, “Required Class Lenders” or “Required Construction Class Lenders” or any
other provision hereof specifying the number or percentage of Lenders required to waive,
amend or modify any rights hereunder or make any determination or grant any consent
hereunder, without the prior written consent of each Lender adversely affected thereby;




          (vi) extend the stated expiration date of any Letter of Credit beyond the Maturity Date
without the prior written consent of each Lender directly affected thereby;




          (vii) release all or substantially all the Collateral without the consent of each
Lender;




          (viii) amend, modify or waive any provision hereof if such amendment, modification or
waiver would by its terms affect the rights or obligations of any Construction Loan Class in
a manner different than the other Construction Loan Classes without the prior written
consent of the Required Construction Class Lenders of each affected Construction Loan Class;
or




          (ix) amend, modify or waive any provision hereof if such amendment, modification or
waiver would by its terms affect the rights of any Class of Lenders to receive payments
hereunder in a manner different than any other Class of Lenders without the prior written
consent of the Required Class Lenders of each such affected Class of Lenders;



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provided, further, that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Collateral Agent, or an Issuing Bank
hereunder without the prior written consent of the Administrative Agent, the Collateral Agent, or
such Issuing Bank acting as such at the effective date of such agreement, as applicable. Each
Lender shall be bound by any waiver, amendment or modification authorized by this Section and any
consent by any Lender pursuant to this Section shall bind any assignee of such Lender.




          (c) Without the consent of any Lender, each of the Borrower, the Pledgor, the Sponsor and the
Administrative Agent and/or the Collateral Agent may (in their respective sole discretion) enter
into any amendment, modification or waiver of any Financing Document, or enter into any new
agreement or instrument, in each case to effect the granting, perfection, protection, expansion or
enhancement of any security interest in any Collateral or additional property to become Collateral
for the benefit of the Secured Parties, or as required by local law to give effect to or protect
any security interest for the benefit of the Secured Parties in any property or so that the
security interests therein comply with applicable law.




          (d) If, in connection with any proposed amendment or waiver pursuant to Section 9.08
requiring the consent of “the Required Lenders,” “each Lender,” “such Lender,” “each Lender
directly affected thereby” or “each Lender adversely affected thereby,” a Lender does not approve
such amendment or waiver pursuant to Section 9.08 and such amendment or waiver would
otherwise have been approved but for such Lender’s non-approval (such Lender, a
“Non-Consenting Lender”), together with the failure of any other Lender to approve such
proposed amendment or waiver under Section 9.08, then the Borrower may elect to replace
such Non-Consenting Lender(s) as a Lender party to this Agreement; provided that,
concurrently with such replacement, (i) an Eligible Assignee shall agree, as of such date, to
purchase for cash, at 100% of the principal amount thereof, the Loans and other Obligations due to
the Non-Consenting Lender pursuant to an Assignment and Acceptance and to become a Lender for all
purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date, (ii) the replacement Lender shall grant its consent with respect to the
applicable proposed amendment or waiver and (iii) the Borrower shall pay to such Non-Consenting
Lender in same day funds on the day of such replacement all interest, fees and other amounts then
accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the
date of termination, including payments due to such Non-Consenting Lender under Sections
2.14, 2.15 and 2.16.




     Section 9.09 Dominion Joint Venture. For purposes of determining whether the Borrower
is in compliance with representations and warranties, covenants and other provisions hereunder, any
properties constituting the Jointly Owned Segment (including properties in which each of the
Borrower and Dominion has a joint and undivided interest) will be regarded as if such properties
are wholly-owned by the Borrower.



     Section 9.10 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the applicable interest rate, together with all fees and charges that are
treated as interest under applicable law (collectively, the “Charges”), as provided for
herein or in any other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender or any Issuing Bank, shall exceed the maximum
lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or
reserved by such



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Lender or Issuing Bank in accordance with applicable law, the rate of interest payable
hereunder, together with all Charges payable to such Lender or such Issuing Bank, shall be limited
to the Maximum Rate, provided that such excess amount shall be paid to such Lender or such
Issuing Bank on subsequent payment dates to the extent not exceeding the legal limitation.



     Section 9.11 Entire Agreement. This Agreement, the other Financing Documents and the
agreements regarding certain Fees referred to herein constitute the entire contract between the
parties relative to the subject matter hereof. Any previous agreement among or representations
from the parties or their Affiliates with respect to the subject matter hereof is superseded by
this Agreement and the other Financing Documents. Notwithstanding the foregoing, any fee letter
between the Borrower and any Agent or Arranger shall survive the execution and delivery of this
Agreement and remain in full force and effect. Nothing in this Agreement or in the other Financing
Documents, expressed or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason of this Agreement
or the other Financing Documents.



     Section 9.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER FINANCING DOCUMENTS. EACH PARTY HERETO ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
9.12.



     Section 9.13 Severability. In the event any one or more of the provisions contained
in this Agreement or in any other Financing Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.



     Section 9.14 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which, when taken together,
shall constitute but one contract, and shall become effective as provided in Section 9.03.
Delivery of an executed counterpart to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed original.



     Section 9.15 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this Agreement.



     Section 9.16 Jurisdiction; Consent to Service of Process.



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          (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York County, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or the other Financing
Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding
may be heard and determined in such New York State Court or, to the extent permitted by law, in
such federal court. Each of the parties hereto further irrevocably consents to the service of
process in any action or proceeding in such courts by the mailing thereof by any parties thereto by
registered or certified mail, postage prepaid, to any other party at the address specified for such
party on Schedule 9.01. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party hereto may otherwise have to bring any action or proceeding relating to this
Agreement or the other Financing Documents in the courts of any jurisdiction.




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




     Section 9.17 Confidentiality; Treatment of Information.



          (a) Each of the Secured Parties agrees to maintain the confidentiality of the Information
except that Information may be disclosed (i) to its Related Parties (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the extent requested by,
as part of normal reporting or review procedures to, any Governmental Authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (iv) to its parent companies, Affiliates or auditors and to any
other party hereto (so long as each such Person shall have been instructed to keep the same
confidential in accordance with this Section), (v) in connection with the exercise of any remedies
hereunder or under any other Financing Document, any action or proceeding relating to this
Agreement or any other Financing Document, the enforcement of rights hereunder or thereunder or any
litigation or proceeding to which such Secured Party or any of its respective Affiliates may be a
party, (vi) subject to an agreement containing provisions substantially the same as those of this
Section, to (1) any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (2) any actual or prospective party (or
its managers, administrators, trustees, partners, directors, officers, employees, agents, advisors
and other representatives) surety, reinsurer, guarantor or credit liquidity enhancer (or their
advisors) to or in connection with any swap, derivative or other similar transaction under which
payments are to be made by reference to the Obligations or to the Borrower and its obligations or
to this




105









 







Agreement or payments hereunder, (3) to any rating agency, or (4) the CUSIP Service Bureau or
any similar organization, (vii) with the consent of the Borrower or (viii) to the extent such
Information becomes publicly available other than as a result of a breach of this Section.




          (b) Certain of the Secured Parties may enter into this Agreement and take or not take action
hereunder or under the other Financing Documents on the basis of information that does not contain
material non-public information with respect to any of the Borrower, the Pledgor, the Sponsor or
their Subsidiaries (“Restricting Information”). Other Lenders may enter into this
Agreement and take or not take action hereunder or under the Financing Documents on the basis of
information that may contain Restricting Information. Each Secured Party acknowledges that United
States federal and state securities laws prohibit any person from purchasing or selling securities
on the basis of material, non-public information concerning the such issuer of such securities or,
subject to certain limited exceptions, from communicating such information to any other Person.
Neither the Administrative Agent nor any of its Related Parties shall, by making any Communications
(including Restricting Information) available to a Secured Party, by participating in any
conversations or other interactions with a Secured Party or otherwise, make or be deemed to make
any statement with regard to or otherwise warrant that any such information or Communication does
or does not contain Restricting Information nor shall the Administrative Agent or any of its
Related Parties be responsible or liable in any way for any decision a Secured Party may make to
limit or to not limit its access to Restricting Information. In particular, none of the
Administrative Agent nor any of its Related Parties (i) shall have, and the Administrative Agent,
on behalf of itself and each of its Related Parties, hereby disclaims, any duty to ascertain or
inquire as to whether or not a Secured Party has or has not limited its access to Restricting
Information, such Secured Party’s policies or procedures regarding the safeguarding of material,
nonpublic information or such Secured Party’s compliance with applicable laws related thereto or
(ii) shall have, or incur, any liability to the Borrower, the Pledgor, the Sponsor or a Secured
Party or any of their respective Related Parties arising out of or relating to the Administrative
Agent or any of its Related Parties providing or not providing Restricting Information to any
Secured Party.




          (c) The Borrower agrees that (i) all Communications it provides to the Administrative Agent
intended for delivery to the Secured Parties whether by posting to the Approved Electronic Platform
or otherwise shall be clearly and conspicuously marked “PUBLIC” if such Communications do not
contain Restricting Information which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof, (ii) by marking Communications “PUBLIC,” the Borrower shall
be deemed to have authorized the Administrative Agent and the Secured Parties to treat such
Communications as either publicly available information or not material information (although, in
this latter case, such Communications may contain sensitive business information and, therefore,
remain subject to the confidentiality undertakings of Section 9.17) with respect to the
Borrower and its affiliates or their securities for purposes of United States Federal and state
securities laws, (iii) all Communications marked “PUBLIC” may be delivered to all Secured Parties
and may be made available through a portion of the Approved Electronic Platform designated “Public
Side Information,” and (iv) the Administrative Agent shall be entitled to treat any Communications
that are not marked “PUBLIC” as Restricting Information and may post such Communications to a
portion of the Approved Electronic Platform not designated “Public Side Information.” Neither the
Administrative Agent nor any of its Affiliates shall be responsible for any statement




106









 







or other designation by the Borrower or any Affiliate regarding whether a Communication
contains or does not contain material non-public information with respect to any of the Borrower,
the Pledgor, or the Sponsor or their securities nor shall the Administrative Agent or any of its
Affiliates incur any liability to the Borrower, the Pledgor, the Sponsor, any Secured Party or any
other Person for any action taken by the Administrative Agent or any of its Affiliates based upon
such statement or designation, including any action as a result of which Restricting Information is
provided to a Secured Party that may decide not to access Restricting Information. Nothing in this
Section 9.17 shall modify or limit a Secured Party’s obligations under Section 9.18
with regard to Communications and the maintenance of the confidentiality of or other treatment of
Information.




          (d) Each Secured Party acknowledges that circumstances may arise that require it to refer to
Communications that might contain Restricting Information. Accordingly, each Secured Party agrees
that it will nominate at least one designee to receive Communications (including Restricting
Information) on its behalf and identify such designee (including such designee’s contact
information) on such Secured Party’s Administrative Questionnaire. Each Secured Party agrees to
notify the Administrative Agent from time to time of such Secured Party’s designee’s e-mail address
to which notice of the availability of Restricting Information may be sent by electronic
transmission.




          (e) Each Secured Party acknowledges that Communications delivered hereunder and under the
other Financing Documents may contain Restricting Information and that such Communications are
available to all Secured Parties generally. Each Secured Party that elects not to take access to
Restricting Information does so voluntarily and, by such election, acknowledges and agrees that the
Administrative Agent and other Secured Parties may have access to Restricting Information that is
not available to such electing Secured Party. None of the Administrative Agent nor any Secured
Party with access to Restricting Information shall have any duty to disclose such Restricting
Information to such electing Secured Party or to use such Restricting Information on behalf of such
electing Secured Party, and shall not be liable for the failure to so disclose or use, such
Restricting Information.




          (f) The provisions of the foregoing clauses of this Section 9.17 are designed to
assist the Administrative Agent, the Secured Parties and the Borrower in complying with their
respective contractual obligations and applicable law in circumstances where certain Secured
Parties express a desire not to receive Restricting Information notwithstanding that certain
Communications hereunder or under the other Financing Documents or other information provided to
the Secured Parties hereunder or thereunder may contain Restricting Information. Neither the
Administrative Agent nor any of its Related Parties warrants or makes any other statement with
respect to the adequacy of such provisions to achieve such purpose nor does the Administrative
Agent or any of its Related Parties warrant or make any other statement to the effect that the
Borrower’s and its Affiliates’ or Secured Party’s adherence to such provisions will be sufficient
to ensure compliance by the Borrower or Secured Party with its contractual obligations or its
duties under applicable law in respect of Restricting Information and each of the Secured Parties
and the Borrower assumes the risks associated therewith.




     Section 9.18 Communications.



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          (a) Delivery.





          (i) The Borrower hereby agrees that it will use all reasonable efforts to provide to
the Administrative Agent all information, documents and other materials that it is obligated
to furnish to the Administrative Agent pursuant to this Agreement and any other Financing
Document, including all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such communication
that (A) relates to a request for a new, or a conversion of an existing, borrowing or other
extension of credit (including any election of an interest rate or interest period relating
thereto), (B) relates to the payment of any principal or other amount due under this
Agreement prior to the scheduled date therefor, (C) provides notice of any Default or Event
of Default under this Agreement or (D) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any borrowing or other extension of
credit hereunder (all such non-excluded communications collectively, the
“Communications”), by transmitting the Communications in an electronic/soft medium
in a format reasonably acceptable to the Administrative Agent at the address referenced on
Schedule 9.01. Nothing in this Section shall prejudice the right of the Arrangers,
any Secured Party or the Borrower to give any notice or other communication pursuant to this
Agreement or any other Financing Document in any other manner specified in this Agreement or
any other Financing Document.




          (ii) The Administrative Agent agrees that receipt of the Communications by the
Administrative Agent at the email address referenced in Schedule 9.01 shall
constitute effective delivery of the Communications to the Administrative Agent for purposes
of the Financing Documents. Each Lender agrees that notice to it (as provided in the next
sentence) specifying that the Communications have been posted to the Approved Electronic
Platform shall constitute effective delivery of the Communications to such Lender for
purposes of the Financing Documents. Each Lender agrees (A) to notify the Administrative
Agent in writing (including by electronic communication) from time to time of such Lender’s
email address to which the foregoing notice may be sent by electronic transmission and (B)
that the foregoing notice may be sent to such email address.



          (b) The Approved Electronic Platform is provided “as is” and “as available.” The Agent
Parties (as defined below) do not warrant the accuracy or completeness of the Communications, or
the adequacy of the Approved Electronic Platform and expressly disclaim liability for errors or
omissions in the communications. No warranty of any kind, express, implied or statutory, including
any warranty of merchantability, fitness for a particular purpose, non-infringement of third party
rights or freedom from viruses or other code defects, is made by any Agent Party in connection with
the Communications or the Approved Electronic Platform. In no event shall the Administrative Agent
or any of its Affiliates or any of their respective officers, directors, employees, agents advisors
or representatives (collectively, “Agent Parties”) have any liability to the Borrower, any
Lender or any other Person or entity for damages of any kind, including direct or indirect,
special, incidental or consequential damages, losses or expenses (whether in tort, contract or
otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of
communications through the internet, except to the




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extent the liability of any Agent Party is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted primarily from such Agent Party’s gross negligence or
willful misconduct.




     Section 9.19 Posting of Communication.



          (a) Each of the Secured Parties and the Borrower agree that the Administrative Agent may, but
shall not be obligated to, make the Communications available to the Secured Parties by posting such
Communications on IntraLinksTM or a substantially similar electronic platform chosen by the
Administrative Agent to be its electronic transmission system (the “Approved Electronic
Platform”).




          (b) Although the Approved Electronic Platform and its primary web portal are secured with
generally-applicable security procedures and policies implemented or modified by the Administrative
Agent from time to time (including, as of the Closing Date, a dual firewall and a User ID/Password
Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the Approved Electronic
Platform only on a deal-by-deal basis, each of the Secured Parties and the Borrower and agrees that
the distribution of material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution. In consideration for the
convenience and other benefits afforded by such distribution and for the other consideration
provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each of the
Secured Parties and the Borrower hereby approves distribution of the Communications through the
Approved Electronic Platform and understands and assumes the risks of such distribution.




          (c) THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS
AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT NOR ANY OTHER MEMBER OF THE AGENT’S GROUP WARRANT THE
ACCURACY, ADEQUACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND
EACH EXPRESSLY DISCLAIMS ANY LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS OR THE
APPROVED ELECTRONIC PLATFORM. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY
RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION
WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.




          (d) Each of the Secured Parties and the Borrower agree that the Administrative Agent may, but
(except as may be required by applicable law) shall not be obligated to, store the Communications
on the Approved Electronic Platform in accordance with the Administrative Agent’s
generally-applicable document retention procedures and policies.




     Section 9.20 Release of Liens. The Administrative Agent agrees to take such actions
as are reasonably requested by the Borrower and at the Borrower’s expense to terminate the Liens
and security interests created by the Financing Documents when all the Obligations (excluding



109









 







any contingent obligations) are paid in full and all Letters of Credit and Commitments are
terminated.



     Section 9.21 U.S.A. Patriot Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the U.S.A. Patriot 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 the Lenders to identify the Borrower in accordance
with the U.S.A. Patriot Act.



     Section 9.22 Limitation of Recourse. There shall be full recourse to the Borrower and
to all of its assets for the liabilities of the Borrower under this Agreement and the other
Financing Documents, but in no event shall the Sponsor or the Pledgor, or any officer, director or
holder of any equity interest in a Loan Party be personally liable or obligated for such
liabilities and Obligations of the Borrower, except as may be expressly provided in any Financing
Document to which the Sponsor or the Pledgor is a party.



     Section 9.23 Separateness of the Borrower from Sponsor and its Subsidiaries. Each
Lender Party acknowledges and affirms that (i) it has advanced funds to or extended credit on
behalf of the Borrower in reliance upon the separateness of the Borrower from the Sponsor and its
Subsidiaries (other than the Borrower) and any other Persons and (ii) the Borrower has assets and
liabilities that are separate from those of the Sponsor and its Subsidiaries (other than the
Borrower) and any other Persons.



[Signature pages follow.]





110









 





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





	 	 	 	 	 
	TRANS-ALLEGHENY INTERSTATE
LINE COMPANY 
	 	 
	as the Borrower
 
	 	 
	By:  	/s/  Barry E. Pakenham 	 	 
	 	Name:  	Barry E. Pakenham 	 	 
	 	Title:  	Treasurer 	 	 
	 
	 
	UNION BANK OF CALIFORNIA, N.A.,
as Collateral Agent
 
	 	 
	By:  	/s/  Luis Perez 	 	 
	 	Name:  	Luis Perez 	 	 
	 	Title:  	Vice President 	 	 
	 
	 
	 
	 
	 
	 
	 
	BNP PARIBAS SECURITIES CORP.,
as Joint Lead Arranger
 
	 	 
	By:  	/s/  Aashish Mohan 	 	 
	 	Name:  	Aashish Mohan 	 	 
	 	Title:  	Director 	 	 
	 
	BANK OF AMERICA, N.A.,
as Documentation Agent and as a
Lender
 
	 	 
	By:  	/s/  Jacob Dowden 	 	 
	 	Name:  	Jacob Dowden 	 	 
	 	Title:  	Vice President 	 	 
	 
	 
	BARCLAYS BANK PLC,
as a Lender
 
	 	 
	By:  	/s/  Nicholas Bell 	 	 
	 	Name:  	Nicholas Bell 	 	 
	 	Title:  	Director 	 	 
	 







	 	 	 	 	 
	CITIBANK, N.A.
as Administrative Agent and a Lender
 
	 	 
	By:  	/s/  A. Licata 	 	 
	 	Name:  	A. Licata 	 	 
	 	Title:  	Director 	 	 
	 
	 
	 
	BNP PARIBAS,
as Issuing Bank
 
	 	 
	By:  	/s/  Andrew Platt 	 	 
	 	Name:  	Andrew Platt 	 	 
	 	Title:  	Managing Director 	 	 
	 
	 	 	 
	By:  	/s/  Timothy Chin 	 	 
	 	Name:  	Timothy Chin 	 	 
	 	Title:  	Director 	 	 
	 
	 
	CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arranger
 
	 	 
	By:  	/s/  A. Licata 	 	 
	 	Name:  	A. Licata 	 	 
	 	Title:  	Director 	 	 
	 
	THE BANK OF NOVA SCOTIA,
as Syndication Agent and as a
Lender
 
	 	 
	By:  	/s/  Thane Rattew 	 	 
	 	Name:  	Thane Rattew 	 	 
	 	Title:  	Managing Director 	 	 
	 
	 
	BNP PARIBAS
as Lender
 
	 	 
	By:  	/s/  Timothy Chin 	 	 
	 	Name:  	Timothy Chin 	 	 
	 	Title:  	Director 	 	 
	 
	 	 	 
	By:  	/s/  Andrew Platt 	 	 
	 	Name:  	Andrew Platt 	 	 
	 	Title:  	Managing Director 	 	 
	 










 











 






	 	 	 	 	 
	Credit Suisse, Cayman Islands Branch,
as a Lender
 
	 	 
	By:  	/s/  Rianka Mohan 	 	 
	 	Name:  	Rianka Mohan 	 	 
	 	Title:  	Vice President 	 	 
	 
	 	 	 
	By:  	/s/  Christopher Reo Day 	 	 
	 	Name:  	Christopher Reo Day 	 	 
	 	Title:  	Associate 	 	 
	 
	 
	 
	THE HUNTINGTON NATIONAL BANK,
as a Lender
 
	 	 
	By:  	/s/  W. Christopher Kohler 	 	 
	 	Name:  	W. Christopher Kohler 	 	 
	 	Title:  	Vice President 	 	 
	 
	 
	 
	 
	MORGAN STANLEY BANK,
as a Lender
 
	 	 
	By:  	/s/  Elizabeth Hendricks 	 	 
	 	Name:  	Elizabeth Hendricks 	 	 
	 	Title:  	Authorized Signatory 	 	 
	 
	 
	 
	NATIXIS, NEW YORK BRANCH,
as a Lender
 
	 	 
	By:  	/s/  Richard Garcia 	 	 
	 	Name:  	Richard Garcia 	 	 
	 	Title:  	Senior Managing Director 	 	 



	 	 	 	 	 
	 	/s/  Anthony Perna 	 
	 	Anthony Perna 	 
	 	Director 	 
	 
	 



	 	 	 	 	 
	UNION BANK OF CALIFORNIA, N.A.,
as a Lender
 
	 	 
	By:  	/s/  John Guilds 	 	 
	 	Name:  	John Guilds 	 	 
	 	Title:  	Vice President 	 	 
	 







	 	 	 	 	 
	COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES, 	 	 
	as a Lender
 
	 	 
	By:  	/s/  Hans J. Scholz 	 	 
	 	Name:  	Hans J. Scholz 	 	 
	 	Title:  	Vice President 	 	 
	 
	 	 	 
	By:  	/s/  Eli Davis 	 	 
	 	Name:  	Eli Davis 	 	 
	 	Title:  	Assistant Treasurer 	 	 
	 
	 
	DZ BANK AG DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK,
FRANKFURT AM
MAIN, NEW YORK BRANCH, 	 	 
	as a Lender
 
	 	 
	By:  	/s/  Steven L. Bissonnette 	 	 
	 	Name:  	Steven L. Bissonnette 	 	 
	 	Title:  	First Vice President 	 	 
	 
	 	 	 
	By:  	/s/  Judson M. Horn 	 	 
	 	Name:  	Judson M. Horn 	 	 
	 	Title:  	Assistant Treasurer 	 	 
	 
	 
	 
	 
	 
	JPMORGAN CHASE BANK, N.A.,
as a Lender
 
	 	 
	By:  	/s/  Juan Javellana 	 	 
	 	Name:  	Juan Javellana 	 	 
	 	Title:  	Vice President 	 	 
	 
	 
	 
	 
	 
	 
	 
	NATIONAL CITY BANK,
as a Lender
 
	 	 
	By:  	/s/  Susan J. Dimmick 	 	 
	 	Name:  	Susan J. Dimmick 	 	 
	 	Title:  	Senior Vice President 	 	 
	 









 








 







	 	 	 	 	 
	US BANK, N.A.,
as a Lender
 
	 	 
	By:  	/s/  Felicia La Forgia 	 	 
	 	Name:  	Felicia La Forgia 	 	 
	 	Title:  	Senior Vice President 	 	 
	 
	COBANK, ACB,
as a Lender
 
	 	 
	By:  	/s/  Brett A. Challenge 	 	 
	 	Name:  	Brett A. Challenge 	 	 
	 	Title:  	VP 	 	 
	 







	 	 	 	 	 
	PNC BANK, N.A.,
as a Lender
 
	 	 
	By:  	/s/  Tracy J. DeCoch 	 	 
	 	Name:  	Tracy J. DeCoch 	 	 
	 	Title:  	Vice President