PPL 8k 12-21 Exhibit 10(c)




Exhibit
10(c)

 

 




 




 

$300,000,000

 

 

FIVE-YEAR
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

 

 

December
15, 2005

 

among

 

 

PPL
ENERGY SUPPLY, LLC,

 

THE
LENDERS FROM TIME TO TIME PARTY HERETO,

 

and

 

WACHOVIA
FIXED INCOME STRUCTURED TRADING SOLUTIONS, LLC

as
Administrative Agent and Issuing Lender,

 





















TABLE
OF CONTENTS

Page







	
      ARTICLE
      I

       
	
      DEFINITIONS

       
	
      1

       

	
      Section
      1.01
	
      Definitions
	
      1

	 	 	 
	
      ARTICLE
      II

       
	
      THE
      CREDITS

       
	
      17

       

	
      Section
      2.01
	
      Commitments
      to Lend
	
      17

	
      Section
      2.02
	
      Notice
      of Borrowings
	
      17

	
      Section
      2.03
	
      Notice
      to Lenders; Funding of Loans
	
      18

	
      Section
      2.04
	
      Noteless
      Agreement; Evidence of Indebtedness
	
      19

	
      Section
      2.05
	
      Interest
      Rates
	
      19

	
      Section
      2.06
	
      Fees
	
      21

	
      Section
      2.07
	
      Adjustments
      of Commitments
	
      22

	
      Section
      2.08
	
      Maturity
      of Loans; Mandatory Prepayments
	
      25

	
      Section
      2.09
	
      Optional
      Prepayments and Repayments
	
      26

	
      Section
      2.10
	
      General
      Provisions as to Payments
	
      26

	
      Section
      2.11
	
      Funding
      Losses
	
      27

	
      Section
      2.12
	
      Computation
      of Interest and Fees
	
      27

	
      Section
      2.13
	
      Basis
      for Determining Interest Rate Inadequate, Unfair or
      Unavailable
	
      27

	
      Section
      2.14
	
      Illegality
	
      27

	
      Section
      2.15
	
      Increased
      Cost and Reduced Return
	
      28

	
      Section
      2.16
	
      Taxes
	
      29

	
      Section
      2.17
	
      Base
      Rate Loans Substituted for Affected Euro-Dollar Loans
	
      31

	 	 	 
	
      ARTICLE
      III

       
	
      LETTERS
      OF CREDIT

       
	
      32

       

	
      Section
      3.01
	
      Reserved
	
      32

	
      Section
      3.02
	
      Reserved
	
      32

	
      Section
      3.03
	
      Reserved
	
      32

	
      Section
      3.04
	
      Reserved
	
      33

	
      Section
      3.05
	
      Purchase
      and Sale of Letter of Credit Participations
	
      33

	
      Section
      3.06
	
      Drawings
      under Letter of Credit
	
      33

	
      Section
      3.07
	
      Reimbursement
      Obligations
	
      34

	
      Section
      3.08
	
      Duties
      of Issuing Lender to Lenders; Reliance
	
      34

	
      Section
      3.09
	
      Obligations
      of Lenders to Reimburse Issuing Lender for Unpaid Drawings
	
      35

	
      Section
      3.10
	
      Funds
      Received from the Borrower in Respect of Drawn Letter of
      Credit
	
      36

	
      Section
      3.11
	
      Obligations
      in Respect of Letter of Credit Unconditional
	
      37

	
      Section
      3.13
	
      ISP98
	
      37

	 	 	 
	
      ARTICLE
      IV

       
	
      CONDITIONS

       
	
      38

       

	
      Section
      4.01
	
      Conditions
      to Closing
	
      38

	 	 	 
	
      ARTICLE
      V

       
	
      REPRESENTATIONS
      AND WARRANTIES

       
	
      40

       

	
      Section
      5.01
	
      Status
	
      40

	
      Section
      5.02
	
      Authority;
      No Conflict
	
      40

	
      Section
      5.03
	
      Legality;
      Etc
	
      40

	
      Section
      5.04
	
      Financial
      Condition
	
      41

	
      Section
      5.05
	
      Rights
      to Properties
	
      41

	
      Section
      5.06
	
      Litigation
	
      41

	
      Section
      5.07
	
      No
      Violation
	
      42

	
      Section
      5.08
	
      ERISA
	
      42

	
      Section
      5.09
	
      Governmental
      Approvals
	
      42

	
      Section
      5.10
	
      Investment
      Company Act
	
      42

	
      Section
      5.11
	
      Public
      Utility Holding Company Act
	
      42

	
      Section
      5.12
	
      Restricted
      Subsidiaries, Etc
	
      42

	
      Section
      5.13
	
      Tax
      Returns and Payments
	
      42

	
      Section
      5.14
	
      Compliance
      with Laws
	
      43

	
      Section
      5.15
	
      No
      Default
	
      43

	
      Section
      5.16
	
      Environmental
      Matters
	
      43

	
      Section
      5.17
	
      Reportable
      Transactions
	
      44

	
      Section
      5.18
	
      Guarantees
	
      44

	 	 	 
	
      ARTICLE
      VI

       
	
      COVENANTS

       
	
      44

       

	
      Section
      6.01
	
      Information
	
      44

	
      Section
      6.02
	
      Maintenance
      of Property; Insurance
	
      46

	
      Section
      6.03
	
      Conduct
      of Business and Maintenance of Existence
	
      46

	
      Section
      6.04
	
      Compliance
      with Laws, Etc
	
      46

	
      Section
      6.05
	
      Books
      and Records
	
      47

	
      Section
      6.06
	
      Use
      of Proceeds
	
      47

	
      Section
      6.07
	
      Restriction
      on Liens
	
      47

	
      Section
      6.08
	
      Merger
      or Consolidation
	
      50

	
      Section
      6.09
	
      Asset
      Sales
	
      50

	
      Section
      6.10
	
      Restrictive
      Agreements
	
      51

	
      Section
      6.11
	
      Consolidated
      Debt to Consolidated Capitalization Ratio
	
      51

	
      Section
      6.12
	
      Indebtedness
	
      51

	 	 	 
	
      ARTICLE
      VII

       
	
      DEFAULTS

       
	
      51

       

	
      Section
      7.01
	
      Events
      of Default
	
      51

	 	 	 
	
      ARTICLE
      VIII

       
	
      THE
      AGENTS

       
	
      53

       

	
      Section
      8.01
	
      Appointment
      and Authorization
	
      53

	
      Section
      8.02
	
      Individual
      Capacity
	
      54

	
      Section
      8.03
	
      Delegation
      of Duties
	
      54

	
      Section
      8.04
	
      Reliance
      by the Administrative Agent
	
      54

	
      Section
      8.05
	
      Notice
      of Default
	
      54

	
      Section
      8.06
	
      Non-Reliance
      on the Agents and Other Lenders
	
      55

	
      Section
      8.07
	
      Exculpatory
      Provisions
	
      55

	
      Section
      8.08
	
      Indemnification
	
      56

	
      Section
      8.09
	
      Resignation;
      Successors
	
      56

	
      Section
      8.10
	
      Reserved
	
      56

	 	 	 
	
      ARTICLE
      IX

       
	
      MISCELLANEOUS

       
	
      57

       

	
      Section
      9.01
	
      Notices
	
      57

	
      Section
      9.02
	
      No
      Waivers; Non-Exclusive Remedies
	
      58

	
      Section
      9.03
	
      Expenses;
      Indemnification
	
      58

	
      Section
      9.04
	
      Sharing
      of Set-Offs
	
      59

	
      Section
      9.05
	
      Amendments
      and Waivers
	
      59

	
      Section
      9.06
	
      Successors
      and Assigns
	
      60

	
      Section
      9.07
	
      Governing
      Law; Submission to Jurisdiction
	
      62

	
      Section
      9.08
	
      Counterparts;
      Integration; Effectiveness
	
      62

	
      Section
      9.09
	
      Generally
      Accepted Accounting Principles
	
      63

	
      Section
      9.10
	
      Usage
	
      63

	
      Section
      9.11
	
      WAIVER
      OF JURY TRIAL
	
      64

	
      Section
      9.12
	
      Confidentiality
	
      64

	
      Section
      9.13
	
      USA
      PATRIOT Act Notice
	
      65

	
      Section
      9.14
	
      Effect
      of Agreement
	
      65








































Appendices
and Schedules:




Commitment
Appendix




Schedules:

 

Schedule
5.12 - Restricted
Subsidiaries, Etc.

Schedule
5.18 - Guarantees
of Foreign Subsidiary Debt

Schedule
6.07 - Existing
Liens

Schedule
6.10 - Restrictive
Agreements

Schedule
6.12 - Existing
Debt




Exhibits:

 

Exhibit
A - Form of
Notice of Conversion/Continuation

Exhibit B
 - Form of
Note

Exhibit C
 - Form of
Assignment and Assumption Agreement

Exhibit D
 - Forms of
Opinion of Counsel for the Borrower


























FIVE-YEAR
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this
“Agreement”)
dated as
of December 15, 2005 among PPL ENERGY SUPPLY, LLC, a Delaware limited liability
company (the “Borrower”), the
LENDERS party hereto from time to time, and WACHOVIA FIXED INCOME STRUCTURED
TRADING SOLUTIONS, LLC, a Delaware limited liability company, as Administrative
Agent and Issuing Lender.

 

The
Borrower has requested and the Lenders (as hereinafter defined) have agreed to
enter into this Agreement on the terms and conditions set forth as
follows:

 

ARTICLE
I

 

DEFINITIONS

 

Section
1.01  Definitions. All
capitalized terms used in this Agreement or in any Appendix, Schedule or Exhibit
hereto which are not otherwise defined herein or therein shall have the
respective meanings set forth below.

 

“Adjusted
London Interbank Offered Rate” means,
for any Interest Period, a rate per annum equal to the quotient obtained
(rounded upward, if necessary, to the nearest 1/100th of 1%) by dividing (i) the
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.

 

“Administrative
Agent” means
Wachovia Fixed Income Structured Trading Solutions, LLC, in its capacity as
administrative agent for the Lenders hereunder and under the other Loan
Documents, and its successor or successors in such capacity.

 

“Administrative
Questionnaire” means,
with respect to each Lender, an administrative questionnaire in the form
provided by the Administrative Agent and submitted to the Administrative Agent
(with a copy to the Borrower) duly completed by such Lender.

 

“Affiliates” means,
with respect to any Person, any other Person who is directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through the ownership of stock or its
equivalent, by contract or otherwise.

 

“Agent” means
the Administrative Agent.

 

“Agreement” means
this Five-Year Letter of Credit and Reimbursement Agreement, as amended,
restated, supplemented or modified from time to time.

 

“Applicable
Lending Office” means,
with respect to any Lender, (i) in the case of its Base Rate Loans, its Base
Rate Lending Office and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.

 

“Asset
Sale” shall
mean any sale of any assets, including by way of the sale by the Borrower or any
of its Subsidiaries of equity interests in such Subsidiaries.

 

“Assignee” has the
meaning set forth in Section 9.06(c).

 

“Assignment
and Assumption Agreement” means
an Assignment and Assumption Agreement, substantially in the form of attached
Exhibit C, under which an interest of a Lender hereunder is transferred to an
Eligible Assignee pursuant to Section 9.06(c).

 

“Bankruptcy
Code” means
the Bankruptcy Reform Act of 1978, as amended, or any successor
statute.

 

“Base
Rate” means
for any day a rate per annum equal to the higher of (i) the Prime Rate for such
day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such
day.

 

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

 

“Base
Rate Lending Office” means,
as to each Lender, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Base Rate Lending Office) or such other office as such Lender may
hereafter designate as its Base Rate Lending Office by notice to the Borrower
and the Administrative Agent.

 

“Base
Rate Loan” means a
Loan in respect of which interest is computed on the basis of the Base
Rate.

 

“Borrower” has the
meaning set forth in the Recitals.

 

“Borrower’s
Rating” means
the senior unsecured long-term debt rating of the Borrower from Moody’s or
S&P.

 

“Borrowing” means a
group of Loans of a single Type made by the Lenders on a single date and, in the
case of a Euro-Dollar Borrowing, having a single Interest Period.

 

“Business
Day” means
any day except a Saturday, Sunday or other day on which commercial banks in
Charlotte, North Carolina or New York, New York are authorized by law to close;
provided, that,
when used in Article III with respect to any action taken by or with respect to
any Issuing Lender, the term “Business Day” shall not include any day on which
commercial banks are authorized by law to close in the jurisdiction where the
office at which such Issuing Lender books the Letter of Credit is located; and
provided,
further, that
when used with respect to any borrowing of, payment or prepayment of principal
of or interest on, or the Interest Period for, a Euro-Dollar Loan, or a notice
by the Borrower with respect to any such borrowing payment, prepayment or
Interest Period, the term “Business Day” shall also mean that such day is a day
on which commercial banks are open for international business (including
dealings in Dollar deposits) in London.

 

“Capital
Lease” means
any lease of property which, in accordance with GAAP, should be capitalized on
the lessee’s balance sheet.

 

“Capital
Lease Obligations” means,
with respect to any Person, all obligations of such Person as lessee under
Capital Leases, in each case taken at the amount thereof accounted for as
liabilities in accordance with GAAP.

 

“Change
of Control” means
(i) the acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended) of
25% or more of the outstanding shares of voting stock of PPL Corporation or its
successors or (ii) the failure at any time of PPL Corporation or its successors
to own 80% or more of the outstanding shares of the Voting Stock in the
Borrower.

 

“Closing
Date” means
the date, not later than December 15, 2005, on which the Administrative Agent
determines that the conditions specified in or pursuant to Section 4.01 have
been satisfied.

 

“Commitment” means,
with respect to any Lender, the commitment of such Lender to make Loans under
this Agreement as set forth in the Commitment Appendix and to purchase
participations in the Letter of Credit pursuant to Article III hereof, as such
Commitment may be reduced from time to time pursuant to Sections 2.07, 2.08 or
9.06(c) or increased from time to time pursuant to Section 9.06(c).

 

“Commitment
Appendix” means
the Appendix attached under this Agreement identified as such.

 

“Commitment
Letter” means
that certain commitment letter, dated November 29, 2005, as amended and restated
on December 14, 2005, regarding, among other things, the agreement as to certain
fees payable by the Borrower to Wachovia Bank, National Association and Wachovia
Fixed Income Structured Trading Solutions, LLC, as further amended, supplemented
or otherwise modified from time to time in accordance with its
terms.

 

“Consolidated
Capitalization” shall
mean the sum of, without duplication, (A) the Consolidated Debt of the Borrower,
(B) the consolidated members’ equity (determined in accordance with GAAP) of the
common, preference and preferred equityholders of the Borrower and minority
interests recorded on the Borrower’s consolidated financial statements
(excluding therefrom the effect of all unrealized gains and losses reported
under Financial Accounting Standards Board Statement No. 133 in connection with
forward contracts, futures contracts or other derivatives or commodity hedging
agreements for the future delivery of electricity or capacity), (C) up to an
aggregate amount of $200,000,000 of Hybrid Preferred Securities and (D) up to an
aggregate amount of $200,000,000 of Equity-Linked Securities, except that for
purposes of calculating Consolidated Capitalization of the Borrower,
Consolidated Debt of the Borrower shall exclude Non-Recourse Debt and
Consolidated Capitalization of the Borrower shall exclude that portion of member
equity attributable to assets securing Non-Recourse Debt.

 

“Consolidated
Debt” means
the consolidated Debt of the Borrower and its Consolidated Subsidiaries
(determined in accordance with GAAP), except that for purposes of this
definition (a) Consolidated Debt of the Borrower shall exclude Non-Recourse
Debt and (b) Consolidated Debt of the Borrower shall exclude (i) up to an
aggregate amount of $200,000,000 of Hybrid Preferred Securities and (ii) up to
an aggregate amount of $200,000,000 of Equity-Linked Securities.

 

“Consolidated
Subsidiary” means
with respect to any Person at any date any Subsidiary of such Person or other
entity the accounts of which would be consolidated with those of such Person in
its consolidated financial statements if such statements were prepared as of
such date in accordance with GAAP.

 

“Continuing
Lender” means
with respect to any event described in Section 2.07(b), a Lender which is not a
Retiring Lender, and “Continuing Lenders” means any two or more of such
Continuing Lenders.

 

“Corporation” means a
corporation, association, company, joint stock company, limited liability
company, partnership or business trust.

 

“Debt” of any
Person means, without duplication, (i) all obligations of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all Guarantees by such Person of
Debt of others, (iv) all Capital Lease Obligations and Synthetic Leases of such
Person, (v) all obligations of such Person in respect of Interest Rate
Protection Agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements (the amount of any such obligation to be the
net amount that would be payable upon the acceleration, termination or
liquidation thereof), but only to the extent that such net obligations exceed
$75,000,000 in the aggregate and (vi) all obligations of such Person as an
account party in respect of letters of credit and bankers’ acceptances;
provided,
however, that
“Debt” of such Person does not include (a) obligations of such Person under any
installment sale, conditional sale or title retention agreement or any other
agreement relating to obligations for the deferred purchase price of property or
services (b) obligations under agreements relating to the purchase and sale of
any commodity, including any power sale or purchase agreements, any commodity
hedge or derivative (regardless of whether any such transaction is a “financial”
or physical transaction), (c) any trade obligations or other obligations of such
Person incurred in the ordinary course of business or (d) obligations of such
Person under any lease agreement (including any lease intended as security) that
is not a Capital Lease or a Synthetic Lease.

 

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

 

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

 

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

 

“Effective
Date” means
the date this Agreement becomes effective in accordance with Section
9.08.

 

“Eligible
Assignee” means
(i) a Lender; (ii) a commercial bank organized under the laws of the United
States and having a combined capital and surplus of at least $100,000,000; (iii)
a commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development, or a
political subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000; provided, that
such bank is acting through a branch or agency located and licensed in the
United States; (iv) an Affiliate of a Lender that is an “accredited investor”
(as defined in Regulation D under the Securities Act of 1933, as amended); or
(v) any contractual counterparty, which is an “accredited investor” (as defined
in Regulation D under the Securities Act of 1933, as amended), under any credit
derivative transaction entered into with a Lender in which the Borrower is the
“referenced entity”; provided, that
upon and following the occurrence of an Event of Default, an Eligible Assignee
shall mean any Person.

 

“Environmental
Laws” means
any and all federal, state and local statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses or other written governmental restrictions relating to the environment
or to emissions, discharges or releases of pollutants, contaminants, petroleum
or petroleum products, chemicals or industrial, toxic or Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, petroleum or petroleum products, chemicals
or industrial, toxic or Hazardous Substances or wastes.

 

“Environmental
Liabilities” means
all liabilities (including anticipated compliance costs) in connection with or
relating to the business, assets, presently or previously owned, leased or
operated property, activities (including, without limitation, off-site disposal)
or operations of the Borrower or any of its Subsidiaries, whether vested or
unvested, contingent or fixed, actual or potential, which arise under or relate
to matters covered by Environmental Laws.

 

“Equity-Linked
Securities” means
any securities of the Borrower or any of its Subsidiaries which are convertible
into, or exchangeable for, equity securities of the Borrower, such Subsidiary or
PPL Corporation, including any securities issued by any of such Persons which
are pledged to secure any obligation of any holder to purchase equity securities
of the Borrower, any of its Subsidiaries or PPL Corporation.

 

“ERISA” means
the Employee Retirement Income Security Act of 1974, as amended, or any
successor statute.

 

“ERISA
Group” means
the Borrower and all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section
414(b) or (c) of the Internal Revenue Code.

 

“Euro-Dollar
Lending Office” means,
as to each Lender, its office, branch or Affiliate located at its address set
forth in its Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or
Affiliate of such Lender as it may hereafter designate as its Euro-Dollar
Lending Office by notice to the Borrower and the Administrative
Agent.

 

“Euro-Dollar
Borrowing” means a
Borrowing comprised of Euro-Dollar Loans.

 

“Euro-Dollar
Loan” means a
Loan in respect of which interest is computed on the basis of the Adjusted
London Interbank Offered Rate pursuant to the applicable Notice of
Conversion/Continuation.

 

“Euro-Dollar
Reserve Percentage” of any
Lender for the Interest Period of any LIBOR Rate Loan means the reserve
percentage applicable to such Lender during such Interest Period (or if more
than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) then applicable
to such Lender with respect to liabilities or assets consisting of or including
“Eurocurrency Liabilities” (as defined in Regulation D). The Adjusted London
Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.

 

“Event
of Default” has the
meaning set forth in Section 7.01.

 

“Existing
Debt” means
the Debt outstanding on the Closing Date and listed on Schedule 6.12
hereto.

 

“Existing
Synthetic Lease Financing” means
each of the following lease financings existing as of the date hereof,
regardless of whether such financing constitutes a “Synthetic Lease” within the
meaning of this Agreement: (i) the Lower Mount Bethel project and (ii) the lease
financing involving PPL Large Scale Distributed Generation II, LLC.

 

“Federal
Funds Rate” means
for any day the rate per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average 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 by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, that
(i) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average of quotations for such day on such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by the Administrative Agent.

 

“Foreign
Subsidiary” means a
Subsidiary which is not formed under the laws of the United States or any
territory thereof.

 

“GAAP” means
United States generally accepted accounting principles applied on a consistent
basis.

 

“Governmental
Authority” means
any federal, state or local government, authority, agency, central bank,
quasi-governmental authority, court or other body or entity, and any arbitrator
with authority to bind a party at law.

 

“Group
of Loans” means
at any time a group of Loans consisting of (i) all Loans which are Base Rate
Loans at such time or (ii) all Loans which are Euro-Dollar Loans of the same
Type having the same Interest Period at such time; provided, that,
if a Loan of any particular Lender is converted to or made as a Base Rate Loan
pursuant to Sections 2.14 or 2.17, such Loan shall be included in the same Group
or Groups of Loans from time to time as it would have been in if it had not been
so converted or made.

 

“Guarantee” of or
by any person means any obligation, contingent or otherwise, of such person
guaranteeing or having the economic effect of guaranteeing any Debt of any other
person (the “primary obligor”) in any manner, whether directly or indirectly,
and including any obligation of such person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Debt or
to purchase (or to advance or supply funds for the purchase of) any security for
payment of such Debt, (ii) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Debt of the payment of such Debt
or (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 Debt; provided,
however, that
the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business.

 

“Hazardous
Substances” means
any toxic, caustic or otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing
characteristics.

 

“Hybrid
Preferred Securities” means
any trust preferred securities, or deferrable interest subordinated debt with a
maturity of at least 20 years issued by the Borrower, or any business trusts,
limited liability companies, limited partnerships (or similar entities)
(i) all of the common equity, general partner or similar interests of which
are owned (either directly or indirectly through one or more wholly owned
Subsidiaries) at all times by the Borrower or any of its Subsidiaries, (ii) that
have been formed for the purpose of issuing hybrid preferred securities and
(iii) substantially all the assets of which consist of (A) subordinated
debt of the Borrower or a Subsidiary of the Borrower, as the case may be, and
(B) payments made from time to time on the subordinated debt.

 

“Indemnitee” has the
meaning set forth in Section 9.03(b).

 

“Interest
Period” means
with respect to each Euro-Dollar Loan, a period commencing on the date specified
in the applicable Notice of Conversion/Continuation and ending one, two, three
or six months thereafter, as the Borrower may elect in the applicable notice;
provided,
that:

 

(i)  any
Interest Period which would otherwise end on a day which is not a Business Day
shall, subject to clauses (iii) and (iv) below, be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day;

 

(ii)  any
Interest Period which begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (iii) below, end on
the last Business Day of a calendar month;

 

(iii)  if any
Interest Period includes a date on which a payment of principal of the Loans is
required (based on circumstances existing at the first day of such Interest
Period) to be made under Section 2.08 but does not end on such date, then (x)
the principal amount (if any) of each Euro-Dollar Loan required to be repaid on
such date shall have an Interest Period ending on such date and (y) the
remainder (if any) of each such Euro-Dollar Loan shall have an Interest Period
determined as set forth above; and

 

(iv)  no
Interest Period in respect of a Loan shall end after the Termination
Date.

 

“Interest
Rate Protection Agreements” means
any agreement providing for an interest rate swap, cap or collar, or any other
financial agreement designed to protect against fluctuations in interest
rates.

 

“Internal
Revenue Code” means
the Internal Revenue Code of 1986, as amended, or any successor
statute.

 

“Issuing
Lender” means
Wachovia Fixed Income Structured Trading Solutions, LLC, in its capacity as the
issuer of the Letter of Credit under Section 2.01, and its successor or
successors in such capacity.

 

“Lender” means
each bank or other lending institution listed in the Commitment Appendix as
having a Commitment, each Eligible Assignee that becomes a Lender pursuant to
Section 9.06(c) and their respective successors and shall include, as the
context may require and each Issuing Lender in such capacity.

 

“Lender
Default” means
(i) the failure (which has not been cured) of any Lender to make available any
Loan or any reimbursement for a drawing under the Letter of Credit which in
either case it is obligated to make available under the terms and conditions of
this Agreement or (ii) a Lender having notified the Administrative Agent and the
Borrower that such Lender does not intend to comply with its obligations under
Article II following the appointment of a receiver or conservator with respect
to such Lender at the direction or request of any regulatory agency or
authority.

 

“Letter
of Credit” means
the letter of credit issued under this Agreement by Wachovia Fixed Income
Structured Trading Solutions, LLC, as Issuing Lender, on the Closing Date, as
amended, restated, supplemented or modified from time to time.

 

“Letter
of Credit Commitment” means
the aggregate Commitment.

 

“Letter
of Credit Liabilities” means,
for any Lender at any time, the product derived by multiplying (i) the sum,
without duplication, of (A) the aggregate amount that is (or may thereafter
become) available for drawing under the Letter of Credit plus (B) the aggregate
unpaid amount of all Reimbursement Obligations outstanding at such time by (ii)
the quotient derived by dividing such Lender’s Commitment by the aggregate of
the Commitments of all Lenders.

 

“Lien” means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance intended to confer or having the effect of conferring upon a
creditor a preferential interest.

 

“Loan” means a
Base Rate Loan or a Euro-Dollar Loan, and “Loans” means any combination of the
foregoing; provided, that,
if any such loan or loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Conversion/Continuation, the term “Loan” shall refer to
the combined principal amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision, as the case may
be.

 

“Loan
Availability Period” means
the period from and including the Closing Date to and including the Business Day
immediately preceding the Termination Date.

 

“Loan
Documents” means
this Agreement and the Notes.

 

“London
Interbank Offered Rate” means,
for any Euro-Dollar Loan for any Interest Period, the interest rate for deposits
in Dollars for a period of time comparable to such Interest Period which appears
on Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period; provided,
however, if more
than one rate is specified on Telerate page 3750, the applicable rate shall be
the arithmetic means of all such rates. If for any reason such rate is not
available, the term “London Interbank Offered Rate” means for any Interest
Period, the rate per annum appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period for
a period of time comparable to such Interest Period; provided,
however, that if
more than one such rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%). If for any reason the London interbank
offered rate is not available on either Telerate page 3750 or Reuters Screen
LIBO Page, the term “London Interbank Offered Rate” means for any Interest
Period, the rate per annum at which deposits in Dollars are offered to Wachovia
Bank, National Association in the London interbank market at approximately 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of Wachovia Bank, National Association to which such Interest
Period is to apply and for a period of time comparable to such Interest
Period.

 

“Master
Letter of Credit Fee Rate” shall
have the meaning set forth in the Commitment Letter.

 

“Material
Adverse Effect” means
(i) any material adverse effect upon the business, assets, financial condition
or operations of the Borrower or the Borrower and its Subsidiaries, taken as a
whole; (ii) a material adverse effect on the ability of the Borrower to perform
its obligations under this Agreement, the Notes or the other Loan Documents or
(iii) a material adverse effect on the validity or enforceability of this
Agreement, the Notes or any of the other Loan Documents.

 

“Material
Debt” means
Debt (other than the Notes) of the Borrower and/or one or more of its Restricted
Subsidiaries in a principal or face amount exceeding $40,000,000.

 

“Material
Plan” means
at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of
$25,000,000.

 

“Moody’s” means
Moody’s Investors Service, Inc., a Delaware corporation, and its successors or,
absent any such successor, such nationally recognized statistical rating
organization as the Borrower and the Administrative Agent may
select.

 

“Multiemployer
Plan” means
at any time an employee pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.

 

“New
Lender” means
with respect to any event described in Section 2.07(b), an Eligible Assignee
which becomes a Lender hereunder as a result of such event, and “New Lenders”
means any two or more of such New Lenders.

 

“Non-Defaulting
Lender” means
each Lender other than a Defaulting Lender, and “Non-Defaulting Lenders” means
any two or more of such Lenders.

 

“Non-Recourse
Debt” shall
mean Debt that is nonrecourse to the Borrower or any Restricted
Subsidiary.

 

“Non-U.S.
Lender” has the
meaning set forth in Section 2.16(e).

 

“Note” means a
promissory note, substantially in the form of Exhibit B hereto, issued at the
request of a Lender evidencing the obligation of the Borrower to repay
outstanding Loans.

 

“Notice
of Conversion/Continuation” has the
meaning set forth in Section 2.05(d)(ii).

 

“Obligations”
means:

 

(i)  all
principal of and interest (including, without limitation, any interest which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any Loan, fees
payable or Reimbursement Obligation under, or any Note issued pursuant to, this
Agreement or any other Loan Document;

 

(ii)  all other
amounts now or hereafter payable by the Borrower and all other obligations or
liabilities now existing or hereafter arising or incurred (including, without
limitation, any amounts which accrue after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Borrower, whether or not allowed or allowable as a claim
in any such proceeding) on the part of the Borrower pursuant this Agreement or
any other Loan Document;

 

(iii)  all
expenses of the Administrative Agent as to which the Administrative Agent has a
right to reimbursement under Section 9.03(a) hereof or under any other similar
provision of any other Loan Document; and

 

(iv)  all
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 9.03 hereof or under any other similar provision of
any other Loan Document;

 

together
in each case with all renewals, modifications, consolidations or extensions
thereof.

 

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

 

“Outstandings” means
at any time, with respect to any Lender, the sum of (i) the aggregate principal
amount of such Lender’s outstanding Loans plus (ii) the aggregate amount of such
Lender’s outstanding Letter of Credit Liabilities.

 

“Parent” means
PPL Corporation, a Pennsylvania corporation, and its successors.

 

“Participant” has the
meaning set forth in Section 9.06(b).

 

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

 

“Permitted
Business” with
respect to any Person means a business that is the same or similar to the
business of the Borrower or any Subsidiary as of the date hereof, or any
business reasonably related thereto.

 

“Person” means
an individual, a corporation, a partnership, an association, a limited liability
company, a trust or an unincorporated association or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.

 

“Plan” means
at any time an employee pension benefit plan (including a Multiemployer Plan)
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.

 

“Primary
Facility” shall
mean the letter of credit and loan facility governed by the Five-Year Letter of
Credit and Revolving Credit Agreement, dated the date hereof, among the
Borrower, Wachovia Bank, National Association, as issuing lender, lender and
administrative agent, and the lenders from time to time party thereto, as
amended, restated supplemented or modified from time to time.

 

“Primary
Letter of Credit” shall
mean any letters of credit issued pursuant to the Primary Facility, as amended,
restated supplemented or modified from time to time.

 

“Prime
Rate” means
the rate of interest publicly announced by Wachovia Bank, National Association
in Charlotte, North Carolina from time to time as its Prime Rate.

 

“Quarterly
Date” means
the fifteenth (15th) day of
each March, June, September and December, or, if such day is not a Business Day,
the immediately succeeding Business Day.

 

“Register” has the
meaning set forth in Section 9.06(e).

 

“Regulation
D” means
Regulation D of the Board of Governors of the Federal Reserve System, as
amended, or any successor regulation.

 

“Reimbursement
Obligations” means
at any time all obligations of the Borrower to reimburse the Issuing Lender
pursuant to Section 2.02(a) for amounts paid by the Issuing Lender in respect of
drawings under the Letter of Credit, including any portion of any such
obligation to which a Lender has become subrogated pursuant to Section 2.02(c)
(it being understood that Unpaid Reimbursement Obligations that are converted to
Loans shall no longer be considered Reimbursement Obligations).

 

“Replacement
Date” has the
meaning set forth in Section 2.07(b).

 

“Replacement
Lender” has the
meaning set forth in Section 2.07(b).

 

“Required
Lenders” means
at any time the Administrative Agent and the Non-Defaulting Lenders having at
least 51% of the aggregate amount of the Commitments of all Non-Defaulting
Lenders or, if the Commitments shall have been terminated, the Administrative
Agent and Non-Defaulting Lenders having at least 51% of the aggregate amount of
the Outstandings of the Non-Defaulting Lenders at such time.

 

“Restricted
Subsidiary” means
each Subsidiary listed on Schedule 5.12 and each other Subsidiary designated by
the Borrower as a “Restricted Subsidiary” in writing to the Administrative
Agent; provided, that,
each Restricted Subsidiary shall be a direct Wholly-Owned Subsidiary of the
Borrower or a direct Wholly-Owned Subsidiary of a Restricted
Subsidiary.

 

“Retiring
Lender” means a
Lender that ceases to be a Lender hereunder pursuant to the operation of Section
2.07(b).

 

“SEC” means
the Securities and Exchange Commission.

 

“S&P” means
Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., a New York
corporation, and its successors or, absent any such successor, such nationally
recognized statistical rating organization as the Borrower and the
Administrative Agent may select.

 

“Special
Purpose Subsidiary” means
any Wholly-Owned Subsidiary (regardless of the form of organization) of the
Borrower formed solely for the purpose of, and which engages in no other
activities except those necessary for, effecting financings related to Synthetic
Leases.

 

“Subsidiary” means,
any Corporation a majority of the outstanding Voting Stock of which is owned,
directly or indirectly, by the Borrower or one or more other Subsidiaries of the
Borrower.

 

“Synthetic
Lease” means
any synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.

 

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

 

“Termination
Date” means
March 10, 2011 (or, if such day is not a Business Day, the next preceding
Business Day), or such earlier date upon which the Commitments shall have been
terminated in their entirety in accordance with this Agreement.

 

“Type” when
used in respect of any Loan or Borrowing, shall refer to the rate by reference
to which interest on such Loan or on the Loans comprising such Borrowing is
determined.

 

“Unfunded
Liabilities” means,
with respect to any Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a plan termination
basis using the assumptions prescribed by the PBGC for purposes of Section 4044
of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to
such liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.

 

“United
States” means
the United States of America, including the States and the District of Columbia,
but excluding its territories and possessions.

 

“Unpaid
Reimbursement Obligation” shall
have the meaning set forth in Section 2.02(b).

 

“Voting
Stock” means
stock (or other interests) of a Corporation having ordinary voting power for the
election of directors, managers or trustees thereof, whether at all times or
only so long as no senior class of stock has such voting power by reason of any
contingency.

 

“Wholly-Owned
Subsidiary” means,
with respect to any Person at any date, any Subsidiary of such Person all of the
Voting Stock of which (except directors’ qualifying shares) are at the time
directly or indirectly owned by such Person.

 

ARTICLE
II

 

THE
CREDITS

 

Section
2.01  Commitments.


 

(a)  Letter
of Credit. The
Issuing Lender agrees, on the terms and conditions set forth in this Agreement,
to issue the Letter of Credit on the Closing Date for the account of the
Borrower and in support of such obligations of the Borrower that are acceptable
to the Issuing Lender; provided, that,
immediately after the Letter of Credit is issued, (A) the aggregate amount of
the Letter of Credit Liabilities shall not exceed the Letter of Credit
Commitment and (B) the Outstandings shall not exceed the aggregate amount of the
Commitments. The Letter of Credit shall have a term that extends no more than
one Business Day beyond the Termination Date.

 

(b)  Loans. Each
Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make Loans as required by Section 2.02(b) during the Loan
Availability Period in amounts such that its Outstandings shall not exceed its
Commitment; provided, that,
immediately after giving effect to each such Loan, the aggregate Outstandings of
all Lenders shall not exceed the aggregate amount of the Commitments of all
Lenders. No Loans made hereunder shall be made directly to the Borrower, and
instead, the proceeds of all such Loans shall be paid to the Administrative
Agent to reimburse unpaid Reimbursement Obligations of the Issuing Lender in
accordance with Section 2.02(b). 

 

Section
2.02  Reimbursement
Obligations.


 

(a)  Letter
of Credit Drawings. The
Borrower shall be irrevocably and unconditionally obligated forthwith to
reimburse the Issuing Lender for any amounts paid by such Issuing Lender upon
any drawing under the Letter of Credit, together with any and all reasonable
charges and expenses which the Issuing Lender may pay or incur relative to such
drawing and interest on the amount drawn at the rate applicable to Base Rate
Loans for each day from and including the date such amount is drawn to but
excluding the date such reimbursement payment is due and payable. Such
reimbursement payment shall be due and payable (i) at or before 1:00 P.M.
(Charlotte, North Carolina time) on the date the Issuing Lender notifies the
Borrower of such drawing, if such notice is given at or before 10:00 A.M.
(Charlotte, North Carolina time) on such date or (ii) at or before 10:00 A.M.
(Charlotte, North Carolina time) on the next succeeding Business Day;
provided, that no
payment otherwise required by this sentence to be made by the Borrower at or
before 1:00 P.M. (Charlotte, North Carolina time) on any day shall be overdue
hereunder if arrangements for such payment satisfactory to the Issuing Lender,
in its reasonable discretion, shall have been made by the Borrower at or before
1:00 P.M. (Charlotte, North Carolina time) on such day and such payment is
actually made at or before 3:00 P.M. (Charlotte, North Carolina time) on such
day. In addition, the Borrower agrees to pay to the Issuing Lender interest,
payable on demand, on any and all amounts not paid by the Borrower to the
Issuing Lender when due under this Section 2.02(a), for each day from and
including the date when such amount becomes due to but excluding the date such
amount is paid in full, whether before or after judgment, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day.
Each payment to be made by the Borrower pursuant to this Section 2.02(a) shall
be made to the Issuing Lender in Federal or other funds immediately available to
it at its address referred to Section 9.01. 

 

(b)  Obligations
of Lenders to Reimburse Issuing Lender for Unpaid Drawings. If the
Issuing Lender makes any payment under the Letter of Credit and the Borrower
shall not have reimbursed such amount in full to such Issuing Lender pursuant to
Section 2.02(a), all such amounts remaining unpaid by the Borrower after the
date and time required by Section 2.02(a) (an “Unpaid
Reimbursement Obligation”) shall
convert automatically to a Base Rate Loan on such date. The Administrative Agent
shall, on behalf of the Borrower (which hereby irrevocably directs the
Administrative Agent so to act on its behalf), give notice no later than 1:00
P.M. (Charlotte, North Carolina time) on such date requesting each Lender to
make, and each Lender hereby agrees to make, a Base Rate Loan, in an amount
equal to such Lender’s share (determined by the proportions each Lender’s
Commitment bears to the aggregate Commitments) of the Unpaid Reimbursement
Obligation to which such notice relates. Each Lender shall make such Loan
available to the Administrative Agent at its address referred to in Section 9.01
in immediately available funds, not later than 3:00 P.M. (Charlotte, North
Carolina time), on the date specified in such notice. The Administrative Agent
shall pay the proceeds of such Loans to the Issuing Lender, which shall
immediately apply such proceeds to repay the applicable Unpaid Reimbursement
Obligation. 

 

(c)  Lender
Obligations. To the
extent any Loan is not made by a Lender as required by Section 2.02(b) above,
such Lender will pay to the Administrative Agent, for the account of the Issuing
Lender, immediately upon the Issuing Lender’s demand at any time during the
period commencing after such Unpaid Reimbursement Obligation arises until
reimbursement therefor in full by the Borrower, an amount equal to such Lender’s
share (determined by the proportions each Lender’s Commitment bears to the
aggregate Commitments) of such Unpaid Reimbursement Obligation, together with
interest on such amount for each day from the date of the Issuing Lender’s
demand for such payment (or, if such demand is made after 1:00 P.M. (Charlotte,
North Carolina time) on such date, from the next succeeding Business Day) to the
date of payment by such Lender of such amount at a rate per annum equal to the
sum of 2% plus the rate applicable to Base Rate Loans for such day.


 

Section
2.03  Funding
of Loans.

 

(a)  Funding
By the Administrative Agent in Anticipation of Amounts Due from the
Lenders. Unless
the Administrative Agent shall have received notice from a Lender prior to the
time of any Borrowing (except in the case of a Base Rate Borrowing, in which
case prior to the time of such 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
to the Administrative Agent on the date of such Borrowing in accordance with
Section 2.02(b), and the Administrative Agent may, in reliance upon such
assumption, make available for the purposes of Section 2.02(b) on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such share available to the Administrative Agent, such Lender and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent at (i) a rate per annum equal to
the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.05, in the case of the Borrower, and (ii) the Federal
Funds Rate, in the case of such Lender. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender’s Loan included in such Borrowing for purposes of this
Agreement.

 

(b)  Obligations
of Lenders Several. The
failure of any Lender to make a Loan required to be made by it as part of any
Borrowing hereunder shall not relieve any other Lender of its obligation, if
any, hereunder to make any Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on such date of Borrowing.

 

Section
2.04  Noteless
Agreement; Evidence of Indebtedness.

 

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

 

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

 

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

 

(d)  Any
Lender may request that its Loans be evidenced by a Note. In such event, the
Borrower shall prepare, execute and deliver to such Lender a Note payable to the
order of such Lender. Thereafter, the Loans evidenced by such Note and interest
thereon shall at all times (including after any assignment pursuant to Section
9.06(c)) be represented by one or more Notes payable to the order of the payee
named therein or any assignee pursuant to Section 9.06(c), except to the extent
that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described
in paragraphs (a) and (b) above.

 

Section
2.05  Interest
Rates.

 

(a)  Interest
Rate Options. Each
Loan shall initially be incurred as a Base Rate Loan and, at the option of the
Borrower and except as otherwise provided herein, be maintained as, or converted
into, one or more Base Rate Loans or Euro-Dollar Loans.

 

(b)  Base
Rate Loans. Each
Loan which is made as, or converted into, a Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made as, or converted into, a Base Rate Loan until it becomes due or is
converted into a Loan of any other Type, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable quarterly in arrears on each
Quarterly Date and, with respect to the principal amount of any Base Rate Loan
converted to a Euro-Dollar Loan, on the date such Base Rate Loan is so
converted. Any overdue principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such
day.

 

(c)  Euro-Dollar
Loans. Each
Euro-Dollar Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Adjusted London Interbank Offered Rate for
such Interest Period plus 25 basis points plus the Master Letter of Credit Fee
Rate; provided, that if
any Euro-Dollar Loan or any portion thereof shall, as a result of clause (iii)
of the definition of Interest Period, have an Interest Period of less than one
month, such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof. Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the sum of (A) the Adjusted London Interbank Offered Rate
applicable to such Loan at the date such payment was due plus (B) 25 basis
points plus (C) the Master Letter of Credit Fee Rate (or, if the circumstance
described in Section 2.13 shall exist, at a rate per annum equal to the sum of
2% plus the rate applicable to Base Rate Loans for such day).

 

(d)  Method
of Electing Interest Rates.

 

(i)  Each Loan
shall bear interest initially at the Base Rate. Thereafter, with respect to each
Group of Loans, the Borrower shall have the option (A) to convert all or any
part of (y) so long as no Default or Event of Default is in existence on the
date of conversion, outstanding Base Rate Loans to Euro-Dollar Loans and (z)
outstanding Euro-Dollar Loans to Base Rate Loans; provided, that in
each case that the amount so converted shall be equal to $10,000,000 or any
larger multiple of $1,000,000, or (B) upon the expiration of any Interest Period
applicable to outstanding Euro-Dollar Loans, so long as no Default or Event of
Default is in existence on the date of continuation, to continue all or any
portion of such Loans equal to $10,000,000 and any larger multiple of $1,000,000
in excess of that amount as Euro-Dollar Loans. The Interest Period of any Base
Rate Loan converted to a Euro-Dollar Loan pursuant to clause (A) above shall
commence on the date of such conversion. The succeeding Interest Period of any
Euro-Dollar Loan continued pursuant to clause (B) above shall commence on the
last day of the Interest Period of the Loan so continued. Euro-Dollar Loans may
only be converted on the last day of the then current Interest Period applicable
thereto or on the date required pursuant to Section 2.17.

 

(ii)  The
Borrower shall deliver a written notice of each such conversion or continuation
(a “Notice
of Conversion/Continuation”) to the
Administrative Agent no later than (A) 12:00 Noon (Charlotte, North Carolina
time) at least three Business Days before the date of the proposed conversion
to, or continuation of, a Euro-Dollar Loan and (B) 11:30 A.M. (Charlotte, North
Carolina time) on the day of a conversion to a Base Rate Loan. A written Notice
of Conversion/Continuation shall be substantially in the form of Exhibit A
attached hereto and shall specify: (A) the Group of Loans (or portion thereof)
to which such notice applies, (B) the proposed conversion/continuation date
(which shall be a Business Day), (C) the aggregate amount of the Loans being
converted/continued, (D) an election between the Base Rate and the Adjusted
London Interbank Offered Rate and (E) in the case of a conversion to, or a
continuation of, Euro-Dollar Loans, the requested Interest Period. Upon receipt
of a Notice of Conversion/Continuation, the Administrative Agent shall give each
Lender prompt notice of the contents thereof and such Lender’s pro rata share of
all conversions and continuations requested therein. If no timely Notice of
Conversion/Continuation is delivered by the Borrower as to any Euro-Dollar Loan,
and such Loan is not repaid by the Borrower at the end of the applicable
Interest Period, such Loan shall be converted automatically to a Base Rate Loan
on the last day of the then applicable Interest Period.

 

(e)  Determination
and Notice of Interest Rates. The
Administrative Agent shall determine each interest rate applicable to the Loans
hereunder. The Administrative Agent shall give prompt notice to the Borrower and
the participating Lenders of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.


 

Section
2.06  Fees.

 

(a)  Fees. The
Borrower shall pay to the Administrative Agent the fees set forth in the
Commitment Letter. 

 

(b)  Payments. The
fees referenced in this Section 2.06 shall be payable quarterly in arrears on
each Quarterly Date and on the last day of the Termination Date. Fees paid
hereunder shall not be refundable under any circumstances.

 

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

 

Section
2.07  Adjustments
of Commitments.

 

(a)  Optional
Termination or Reductions of Commitments (Pro-Rata). The
Borrower may, upon at least three Business Days’ prior written notice to the
Administrative Agent, (i) terminate the Commitments, if there are no
Outstandings at such time or (ii) ratably reduce from time to time by a minimum
amount of $10,000,000 or any integral multiple of $5,000,000, the aggregate
amount of the Commitments in excess of the aggregate Outstandings. Any reduction
of the commitments under the Primary Facility shall automatically result in an
irrevocable reduction of the Commitments hereunder in the same ratable amount.
If, under any provision of this Agreement, the Commitments are reduced or
terminated (in whole or in part), all accrued fees and, to the extent required
by the Commitment Letter, the “Master Termination Fee” (as set forth in the
Commitment Letter) shall be payable on the effective date of such termination or
of each such reduction or at the time otherwise required by the Commitment
Letter.

 

(b)  Optional
Termination of Commitments (Non-Pro-Rata). If (i)
any Lender has demanded compensation or indemnification pursuant to Sections
2.13, 2.14, 2.15 or 2.16, (ii) the obligation of any Lender to make Euro-Dollar
Loans has been suspended pursuant to Section 2.14 or (iii) any Lender is a
Defaulting Lender (each such Lender described in clauses (i), (ii) or (iii)
being a “Retiring
Lender”), the
Borrower shall have the right, if no Default or Event of Default then exists, to
replace such Lender with one or more Eligible Assignees (which may be one or
more of the Continuing Lenders) (each a “Replacement
Lender” and,
collectively, the “Replacement Lenders”) reasonably acceptable to the
Administrative Agent. The replacement of a Retiring Lender pursuant to this
Section 2.07(b) shall be effective on the tenth Business Day (the “Replacement
Date”)
following the date of notice of such replacement to the Retiring Lender and each
Continuing Lender through the Administrative Agent, subject to the satisfaction
of the following conditions:

 

(i)  the
Replacement Lender shall have satisfied the conditions to assignment and
assumption set forth in Section 9.06(c) (with all fees payable pursuant to
Section 9.06(c) to be paid by the Borrower) and, in connection therewith, the
Replacement Lender(s) shall pay:

 

(A)  to the
Retiring Lender an amount equal in the aggregate to the sum of (x) the principal
of, and all accrued but unpaid interest on, all outstanding Loans of the
Retiring Lender, (y) all unpaid drawings that have been funded by (and not
reimbursed to) the Retiring Lender under Section 3.10, together with all accrued
but unpaid interest with respect thereto and (z) all accrued but unpaid fees
owing to the Retiring Lender pursuant to Section 2.07; and

 

(B)  to the
Issuing Lender an amount equal to the aggregate amount owing by the Retiring
Lender to the Issuing Lender as reimbursement pursuant to Section 2.02(b), to
the extent such amount was not theretofore funded by such Retiring Lender;
and

 

(ii)  the
Borrower shall have paid to the Administrative Agent for the account of the
Retiring Lender an amount equal to all obligations owing to the Retiring Lender
by the Borrower pursuant to this Agreement and the other Loan Documents (other
than those obligations of the Borrower referred to in clause (i)(A)
above).

 

On the
Replacement Date, each Replacement Lender that is a New Lender shall become a
Lender hereunder, and the Retiring Lender shall cease to constitute a Lender
hereunder; provided, that
the provisions of this Agreement (including, without limitation, the provisions
of Sections 2.11, 2.15, 2.16 and 9.03) shall continue to govern the rights and
obligations of a Retiring Lender with respect to any Loans made, the Letter of
Credit, or any other actions taken by such Retiring Lender while it was a
Lender.

 

Section
2.08  Maturity
of Loans; Mandatory Prepayments.

 

(a)  Scheduled
Repayments and Prepayments of Loans; Overline Repayments.

 

(i)  All Loans
shall mature on the Termination Date, and such Loans or any Letter of Credit
Liabilities then outstanding (together with accrued interest thereon and fees in
respect thereof) shall be due and payable or, in the case of the Letter of
Credit, cash collateralized pursuant to Section 2.08(a)(ii), on such
date.

 

(ii)  If on any
date the aggregate Outstandings exceed the aggregate amount of the Commitments,
the Borrower shall prepay, and there shall become due and payable (together with
accrued interest thereon), on such date an aggregate principal amount of Loans
equal to such excess. If (x) no Loans are outstanding or (y) the Termination
Date shall have occurred and, in either case, any Letter of Credit Liabilities
remain outstanding, the Borrower shall cash collateralize any Letter of Credit
Liabilities by depositing in a cash collateral account established and
maintained (including the investments made pursuant thereto) by the
Administrative Agent pursuant to a cash collateral agreement in form and
substance satisfactory to the Administrative Agent such amounts as are necessary
so that, after giving effect to any repayment of Loans and the cash
collateralization of Letter of Credit Liabilities pursuant to this subsection,
the aggregate Outstandings do not exceed the aggregate amount of the
Commitments. In determining Outstandings for purposes of this clause (ii),
Letter of Credit Liabilities shall be reduced to the extent that they are cash
collateralized as contemplated by this Section 2.08(a)(ii).

 

(b)  Applications
of Prepayments and Reductions.

 

(i)  Each
prepayment of Loans pursuant to this Section 2.08 shall be ratably to the
respective Loans of all of the Lenders.

 

(ii)  Each
payment of principal of the Loans shall be made together with interest accrued
on the amount repaid to the date of payment.

 

(iii)  Each
payment of the Loans shall be applied to such Group or Groups of Loans as the
Borrower may designate (or, failing such designation, as determined by the
Administrative Agent).

 

Section
2.09  Optional
Prepayments and Repayments.

 

(a)  Prepayments
of Loans. Subject
to Section 2.11, the Borrower may (i) upon at least one Business Day’s
notice to the Administrative Agent, prepay any Base Rate Borrowing or (ii) upon
at least three Business Days’ notice to the Administrative Agent, prepay any
Euro-Dollar Borrowing, in each case in whole at any time, or from time to time
in part in amounts aggregating $10,000,000 or any larger multiple of $1,000,000,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Lenders included in such
Borrowing.

 

(b)  Notice
to Lenders. Upon
receipt of a notice of prepayment pursuant to Section 2.09(a), the
Administrative Agent shall promptly notify each Lender of the contents thereof
and of such Lender’s ratable share (if any) of such prepayment, and such notice
shall not thereafter be revocable by the Borrower.

 

Section
2.10  General
Provisions as to Payments.

 

(a)  Payments
by the Borrower. The
Borrower shall make each payment of principal of and interest on the Loans and
Letter of Credit Liabilities and fees hereunder (other than fees payable
directly to the Issuing Lender) not later than 12:00 Noon (Charlotte, North
Carolina time) on the date when due, without set-off, counterclaim or other
deduction, in Federal or other funds immediately available in Charlotte, North
Carolina, to the Administrative Agent at its address referred to in Section
9.01. The Administrative Agent will promptly distribute to each Lender its
ratable share of each such payment received by the Administrative Agent for the
account of the Lenders. Whenever any payment of principal of or interest on the
Base Rate Loans or Letter of Credit Liabilities or of fees shall be due on a day
which is not a Business Day, the date for payment thereof shall be extended to
the next succeeding Business Day. Whenever any payment of principal of or
interest on the Euro-Dollar Loans shall be due on a day which is not a Business
Day, the date for payment thereof shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case the date for payment thereof shall be the next preceding Business Day. If
the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended
time.

 

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

 

Section
2.11  Funding
Losses. If the
Borrower makes any payment of principal with respect to any Euro-Dollar Loan
pursuant to the terms and provisions of this Agreement (any conversion of a
Euro-Dollar Loan to a Base Rate Loan pursuant to Section 2.17 being treated as a
payment of such Euro-Dollar Loan on the date of conversion for purposes of this
Section 2.11) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.05(c), or if the Borrower fails to borrow, convert or prepay any
Euro-Dollar Loan after notice has been given in accordance with the provisions
of this Agreement, the Borrower shall reimburse each Lender within 15 days after
demand for any resulting loss or expense incurred by it (and by an existing
Participant in the related Loan), including, without limitation, any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow or prepay; provided, that
such Lender shall have delivered to the Borrower a certificate as to the amount
of such loss or expense, which certificate shall be conclusive in the absence of
manifest error.

 

Section
2.12  Computation
of Interest and Fees.
Interest on Loans based on the Prime Rate hereunder shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and paid for the actual
number of days elapsed. All other interest and fees shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).

 

Section
2.13  Basis
for Determining Interest Rate Inadequate, Unfair or
Unavailable. If on
or prior to the first day of any Interest Period for any Euro-Dollar Loan: (a)
Lenders having 50% or more of the aggregate amount of the Commitments advise the
Administrative Agent that the Adjusted London Interbank Offered Rate as
determined by the Administrative Agent, will not adequately and fairly reflect
the cost to such Lenders of funding their Euro-Dollar Loans for such Interest
Period; or (b) the Administrative Agent shall determine that no reasonable means
exists for determining the Adjusted London Interbank Offered Rate, the
Administrative Agent shall forthwith give notice thereof to the Borrower and the
Lenders, whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Lenders to make Euro-Dollar Loans or to convert outstanding
Loans into Euro-Dollar Loans shall be suspended; and (ii) each outstanding
Euro-Dollar Loan shall be converted into a Base Rate Loan on the last day of the
current Interest Period applicable thereto. Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the date of (or,
if at the time the Borrower receives such notice the day is the date of, or the
date immediately preceding, the date of such Euro-Dollar Borrowing, by 10:00
A.M. on the date of) any Euro-Dollar Borrowing for which a Notice of
Conversion/Continuation has previously been given that it elects not to borrow
on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.

 

Section
2.14  Illegality. If, on
or after the date of this Agreement, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Lender (or its Euro-Dollar Lending Office) to make,
maintain or fund its Euro-Dollar Loans and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Borrower, whereupon until such Lender
notifies the Borrower and the Administrative Agent that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to make
Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans, shall
be suspended. Before giving any notice to the Administrative Agent pursuant to
this Section, such Lender shall designate a different Euro-Dollar Lending Office
if such designation will avoid the need for giving such notice and will not, in
the judgment of such Lender, be otherwise disadvantageous to such Lender. If
such notice is given, each Euro-Dollar Loan of such Lender then outstanding
shall be converted to a Base Rate Loan either (i) on the last day of the then
current Interest Period applicable to such Euro-Dollar Loan if such Lender may
lawfully continue to maintain and fund such Loan to such day or (ii) immediately
if such Lender shall determine that it may not lawfully continue to maintain and
fund such Loan to such day.

 

Section
2.15  Increased
Cost and Reduced Return.

 

(a)  Increased
Costs. If
after the date hereof, the adoption of any applicable law, rule or regulation,
or any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System), special
deposit, insurance assessment or similar requirement against the Letter of
Credit issued or participated in by, assets of, deposits with or for the account
of or credit extended by, any Lender (or its Applicable Lending Office) or shall
impose on any Lender (or its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank market any other
condition affecting its Euro-Dollar Loans, its Notes, its obligation to make
Euro-Dollar Loans or its obligations hereunder in respect of the Letter of
Credit, and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making or maintaining any
Euro-Dollar Loan, or of issuing or participating in the Letter of Credit, or to
reduce the amount of any sum received or receivable by such Lender (or its
Applicable Lending Office) under this Agreement or under its Notes with respect
thereto, then, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts, as determined by such Lender in good faith, as will
compensate such Lender for such increased cost or reduction, solely to the
extent that any such additional amounts were incurred by the Lender within 90
days of such demand.

 

(b)  Capital
Adequacy. If any
Lender shall have determined that, after the date hereof, the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change in
any such law, rule or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of such Lender (or any Person
controlling such Lender) as a consequence of such Lender’s obligations hereunder
to a level below that which such Lender (or any Person controlling such Lender)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or any Person controlling such
Lender) for such reduction, solely to the extent that any such additional
amounts were incurred by the Lender within 90 days of such demand.

 

(c)  Notices. Each
Lender will promptly notify the Borrower and the Administrative Agent of any
event of which it has knowledge, occurring after the date hereof, that will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender. A certificate of any
Lender claiming compensation under this Section and setting forth in reasonable
detail the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.

 

Section
2.16  Taxes.

 

(a)  Payments
Net of Certain Taxes. Any and
all payments by the Borrower to or for the account of any Lender or any Agent
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges and withholdings and all liabilities with respect
thereto, excluding: (i) taxes imposed on or measured by the net income
(including branch profits or similar taxes) of, and gross receipts, franchise or
similar taxes imposed on, any Agent or any Lender by the jurisdiction (or
subdivision thereof) under the laws of which such Lender or Agent is organized
or in which its principal executive office is located or, in the case of each
Lender, in which its Applicable Lending Office is located, and (ii) in the case
of each Lender, any United States withholding tax imposed on such payments, but
only to the extent that such Lender is subject to United States withholding tax
at the time such Lender first becomes a party to this Agreement or changes its
Applicable Lending Office (all such nonexcluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as “Taxes”). If
the Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any other Loan Document to any Lender or any
Agent, (i) the sum payable shall be increased as necessary so that after making
all such required deductions (including deductions applicable to additional sums
payable under this Section 2.16(a)) such Lender or Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Administrative Agent, for delivery to such Lender, the original
or a certified copy of a receipt evidencing payment thereof.

 

(b)  Other
Taxes. In
addition, the Borrower agrees to pay any and all present or future stamp or
documentary taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement, any Note
or any other Loan Document or from the execution, delivery, registration or
enforcement of, or otherwise with respect to, this Agreement, any Note or any
other Loan Document (collectively, “Other
Taxes”).

 

(c)  Indemnification. The
Borrower agrees to indemnify each Lender and each Agent for the full amount of
Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
2.16(c)), whether or not correctly or legally asserted, paid by such Lender or
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto as certified in good faith
to the Borrower by each Lender or Agent seeking indemnification pursuant to this
Section 2.16(c). This indemnification shall be paid within 15 days after such
Lender or Agent (as the case may be) makes demand therefor.

 

(d)  Refunds
or Credits. If a
Lender or Agent receives a refund, credit or other reduction from a taxation
authority for any Taxes or Other Taxes for which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.16, it shall within 15 days from the date of such
receipt pay over the amount of such refund, credit or other reduction to the
Borrower (but only to the extent of indemnity payments made or additional
amounts paid by the Borrower under this Section 2.16 with respect to the Taxes
or Other Taxes giving rise to such refund, credit or other reduction), net of
all reasonable out-of-pocket expenses of such Lender or Agent (as the case may
be) and without interest (other than interest paid by the relevant taxation
authority with respect to such refund, credit or other reduction); provided,
however, that
the Borrower agrees to repay, upon the request of such Lender or Agent (as the
case may be), the amount paid over to the Borrower (plus penalties, interest or
other charges) to such Lender or Agent in the event such Lender or Agent is
required to repay such refund or credit to such taxation authority.

 

(e)  Tax
Forms and Certificates. On or
before the date it becomes a party to this Agreement, from time to time
thereafter if reasonably requested by the Borrower, and at any time it changes
its Applicable Lending Office, each Lender organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a “Non-U.S.
Lender”) shall
deliver to the Borrower and the Administrative Agent: (i) two properly completed
and duly executed copies of Internal Revenue Service Form W-8 BEN, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to the benefits under an income tax treaty to which the
United States is a party which exempts the Lender from United States withholding
tax or reduces the rate of withholding tax on payments of interest for the
account of such Lender or (ii) two properly completed and duly executed copies
of Internal Revenue Service Form W-8 ECI, or any successor form prescribed by
the Internal Revenue Service, certifying that the income receivable pursuant to
this Agreement and the other Loan Documents is effectively connected with the
conduct of a trade or business in the United States. In addition, each Non-U.S.
Lender agrees that from time to time after the Closing Date, when a lapse in
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete signed originals of Internal
Revenue Service Form W-8 BEN or W-8 ECI, or successor forms, as the case may be,
and such other forms as may be required in order to confirm or establish the
entitlement of such Non-U.S. Lender to a continued exemption from or reduction
in United States withholding tax with respect to payments under this Agreement
and any other Loan Document, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or
certificate.

 

(f)  Exclusions. The
Borrower shall not be required to indemnify any Non-U.S. Lender or Agent, or to
pay any additional amount to any Non-U.S. Lender or Agent, pursuant to Section
2.16(a), (b) or (c) in respect of Taxes or Other Taxes to the extent that the
obligation to indemnify or pay such additional amounts would not have arisen but
for the failure of such Non-U.S. Lender to comply with the provisions of
subsection (e) above.

 

(g)  Mitigation. If the
Borrower is required to pay additional amounts to or for the account of any
Lender pursuant to this Section 2.16, then such Lender will use reasonable
efforts (which shall include efforts to rebook the Loans held by such Lender to
a new Applicable Lending Office, or through another branch or affiliate of such
Lender) to change the jurisdiction of its Applicable Lending Office if, in the
good faith judgment of such Lender, such efforts (i) will eliminate or, if it is
not possible to eliminate, reduce to the greatest extent possible any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous, in the sole determination of such Lender, to such Lender. Any
Lender claiming any indemnity payment or additional amounts payable pursuant to
this Section shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document reasonably requested in
writing by the Borrower or to change the jurisdiction of its Applicable Lending
Office if the making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional amounts that may
thereafter accrue and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.

 

(h)  Confidentiality. Nothing
contained in this Section shall require any Lender or any Agent to make
available any of its tax returns (or any other information that it deems to be
confidential or proprietary).

 

Section
2.17  Base
Rate Loans Substituted for Affected Euro-Dollar Loans. If (a)
the obligation of any Lender to make or maintain, or to convert outstanding
Loans to, Euro-Dollar Loans has been suspended pursuant to Section 2.14 or (b)
any Lender has demanded compensation under Section 2.15(a) with respect to its
Euro-Dollar Loans and, in any such case, the Borrower shall, by at least four
Business Days’ prior notice to such Lender through the Administrative Agent,
have elected that the provisions of this Section shall apply to such Lender,
then, unless and until such Lender notifies the Borrower that the circumstances
giving rise to such suspension or demand for compensation no longer
apply:

 

(i)  all Loans
which would otherwise be made by such Lender as (or continued as or converted
into) Euro-Dollar Loans shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Lenders); and

 

(ii)  after
each of its Euro-Dollar Loans has been repaid (or converted to a Base Rate
Loan), all payments of principal that would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Base Rate Loans
instead.

 

If such
Lender notifies the Borrower that the circumstances giving rise to such notice
no longer apply, the principal amount of each such Base Rate Loan shall be
converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other
Lenders.

 

ARTICLE
III

 

LETTER
OF CREDIT

 

Section
3.01  Reserved.
 

 

Section
3.02  Reserved.


 

Section
3.03  Reserved.


 

Section
3.04  Conditions
to Issuance of Letter of Credit. The
issuance by the Issuing Lender of the Letter of Credit shall, in addition to the
conditions precedent set forth elsewhere in this Agreement, be subject to the
conditions precedent that (i) the Borrower shall have executed and delivered
such other instruments and agreements relating to the Letter of Credit as the
Issuing Lender shall have reasonably requested and (ii) the Issuing Lender shall
have confirmed on the date of (and after giving effect to) such issuance that
(A) the aggregate amount of all Letter of Credit Liabilities will not exceed the
Letter of Credit Commitment and (B) the aggregate Outstandings will not exceed
the aggregate amount of the Commitments. Notwithstanding any other provision of
this Section 3.04, the Issuing Lender shall not be under any obligation to issue
the Letter of Credit if: any order, judgment or decree of any governmental
authority shall by its terms purport to enjoin or restrain the Issuing Lender
from issuing the Letter of Credit, or any requirement of law applicable to the
Issuing Lender or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the issuance of
letters of credit generally or the Letter of Credit in particular.

 

Section
3.05  Purchase
and Sale of Letter of Credit Participations. Upon
the issuance by the Issuing Lender of the Letter of Credit, such Issuing Lender
shall be deemed, without further action by any party hereto, to have sold to
each Lender, and each Lender shall be deemed, without further action by any
party hereto, to have purchased from such Issuing Lender, without recourse or
warranty, an undivided participation interest in the Letter of Credit and the
related Letter of Credit Liabilities in the proportion its Commitment bears to
the aggregate Commitments and any security therefor or guaranty pertaining
thereto. Upon any change in the Commitments pursuant to Section 9.06(c), there
shall be an automatic adjustment to the participations in the Letter of Credit,
to the extent it is still outstanding, and Letter of Credit Liabilities to
reflect the adjusted Commitments of the assigning and assignee Lenders or of all
Lenders having Commitments, as the case may be.

 

Section
3.06  Drawings
under the Letter of Credit. Upon
receipt from the beneficiary of the Letter of Credit of any notice of a drawing
under the Letter of Credit, the Issuing Lender shall determine in accordance
with the terms of the Letter of Credit whether such drawing should be honored.
If the Issuing Lender determines that any such drawing shall be honored, such
Issuing Lender shall make available to such beneficiary in accordance with the
terms of the Letter of Credit the amount of the drawing and shall notify the
Borrower as to the amount to be paid as a result of such drawing and the payment
date.

 

Section
3.07  Reserved.
 

 

Section
3.08  Duties
of Issuing Lender to Lenders; Reliance. In
determining whether to pay under the Letter of Credit, the Issuing Lender shall
not have any obligation relative to the Lenders participating in the Letter of
Credit or the related Letter of Credit Liabilities other than to determine that
any document or documents required to be delivered under the Letter of Credit
have been delivered and that they substantially comply on their face with the
requirements of the Letter of Credit. Any action taken or omitted to be taken by
the Issuing Lender under or in connection with the Letter of Credit shall not
create for the Issuing Lender any resulting liability if taken or omitted in the
absence of gross negligence or willful misconduct. The Issuing Lender shall be
entitled to rely, and shall be fully protected in relying, upon advice and
statements of legal counsel, independent accountants and other experts selected
by such Issuing Lender and upon the Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopier, telex or teletype message, statement, order or other
document believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary unless
the beneficiary and the Borrower shall have notified such Issuing Lender that
such documents do not comply with the terms and conditions of the Letter of
Credit. The Issuing Lender shall be fully justified in refusing to take any
action requested of it under this Section in respect of the Letter of Credit
unless it shall first have received such advice or concurrence of the Required
Lenders as it reasonably deems appropriate or it shall first be indemnified to
its reasonable satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take,
or omitting or continuing to omit, any such action. Notwithstanding any other
provision of this Section, the Issuing Lender shall in all cases be fully
protected in acting, or in refraining from acting, under this Section in respect
of the Letter of Credit in accordance with a request of the Required Lenders,
and such request and any action taken or failure to act pursuant hereto shall be
binding upon all Lenders and all future holders of participations in the Letter
of Credit; provided, that
this sentence shall not affect any rights the Borrower may have against the
Issuing Lender or the Lenders that make such request.

 

Section
3.09  Reserved.


 

Section
3.10  Funds
Received from the Borrower in Respect of Drawn Letter of
Credit.
Whenever the Issuing Lender receives a payment of a Reimbursement Obligation as
to which the Administrative Agent has received for the account of such Issuing
Lender any payments from the Lenders pursuant to Section 2.02(c) above, such
Issuing Lender shall pay the amount of such payment to the Administrative Agent,
and the Administrative Agent shall promptly pay to each Lender which has paid
its pro rata share thereof, in Dollars in Federal or other immediately available
funds, an amount equal to such Lender’s pro rata share of the principal amount
thereof and interest thereon for each day after relevant date of payment at the
Federal Funds Rate.

 

Section
3.11  Obligations
in Respect of Letter of Credit Unconditional. The
obligations of the Borrower under Section 2.02(a) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under all circumstances whatsoever, including,
without limitation, the following circumstances:

 

(a)  any lack
of validity or enforceability of this Agreement or the Letter of Credit or any
document related hereto or thereto;

 

(b)  any
amendment or waiver of or any consent to departure from all or any of the
provisions of this Agreement or the Letter of Credit or any document related
hereto or thereto;

 

(c)  the use
which may be made of the Letter of Credit by, or any acts or omission of, a
beneficiary of the Letter of Credit (or any Person for whom the beneficiary may
be acting);

 

(d)  the
existence of any claim, set-off, defense or other rights that the Borrower may
have at any time against a beneficiary of the Letter of Credit (or any Person
for whom the beneficiary may be acting), the Issuing Lender or any other Person,
whether in connection with this Agreement or the Letter of Credit or any
document related hereto or thereto or any unrelated transaction;

 

(e)  any
statement or any other document presented under the Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever;

 

(f)  payment
under the Letter of Credit against presentation to the Issuing Lender of a draft
or certificate that does not comply with the terms of the Letter of Credit;
provided, that
the relevant Issuing Lender’s determination that documents presented under the
Letter of Credit comply with the terms thereof shall not have constituted gross
negligence or willful misconduct of such Issuing Lender; or

 

(g)  any other
act or omission to act or delay of any kind by any Issuing Lender or any other
Person or any other event or circumstance whatsoever that might, but for the
provisions of this subsection (g), constitute a legal or equitable discharge of
the Borrower’s obligations hereunder.

 

Nothing
in this Section 3.11 is intended to limit the right of the Borrower to make a
claim against any Issuing Lender for damages as contemplated by the proviso to the
first sentence of Section 3.12.

 

Section
3.12  Indemnification
in Respect of Letter of Credit. The
Borrower hereby indemnifies and holds harmless each Lender (including each
Issuing Lender) and the Administrative Agent from and against any and all
claims, damages, losses, liabilities, costs or expenses which such Lender or the
Administrative Agent may incur by reason of or in connection with the failure of
any other Lender to fulfill or comply with its obligations to such Issuing
Lender hereunder (but nothing herein contained shall affect any rights which the
Borrower may have against such defaulting Lender), and none of the Lenders
(including any Issuing Lender) nor the Administrative Agent, their respective
affiliates nor any of their respective officers, directors, employees or agents
shall be liable or responsible, by reason of or in connection with the execution
and delivery or transfer of or payment or failure to pay under the Letter of
Credit, including, without limitation, any of the circumstances enumerated in
Section 3.11, as well as (i) any error, omission, interruption or delay in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, (ii) any error in interpretation of technical terms, (iii) any loss
or delay in the transmission of any document required in order to make a drawing
under the Letter of Credit, (iv) any consequences arising from causes beyond the
control of such indemnitee, including without limitation, any government acts,
or (v) any other circumstances whatsoever in making or failing to make payment
under the Letter of Credit; provided, that
the Borrower shall not be required to indemnify any Issuing Lender for any
claims, damages, losses, liabilities, costs or expenses, and the Borrower shall
have a claim against such Issuing Lender for direct (but not consequential)
damages suffered by it, to the extent found by a court of competent jurisdiction
in a final, non-appealable judgment or order to have been caused by (i) the
willful misconduct or gross negligence of the Issuing Lender in determining
whether a request presented under the Letter of Credit issued by it complied
with the terms of the Letter of Credit or (ii) the Issuing Lender’s failure to
pay under the Letter of Credit issued by it after the presentation to it of a
request strictly complying with the terms and conditions of the Letter of
Credit. Nothing in this Section 3.12 is intended to limit the obligations of the
Borrower under any other provision of this Agreement.

 

Section
3.13  ISP98. The
rules of the “International Standby Practices 1998” (the “ISP98”) as
published by the ICC most recently at the time of issuance of any Standby Letter
of Credit shall apply to the Letter of Credit unless otherwise expressly
provided in the Letter of Credit.

 

ARTICLE
IV

 

CONDITIONS

 

Section
4.01  Conditions
to Closing. The
obligation of the Issuing Lender to issue the Letter of Credit on the Closing
Date is subject to the satisfaction of the following conditions:

 

(a)  Effectiveness. This
Agreement shall have become effective in accordance with Section
9.08.

 

(b)  Notes. On or
prior to the Closing Date, the Administrative Agent shall have received a duly
executed Note for the account of each Lender requesting delivery of a Note
pursuant to Section 2.04.

 

(c)  Officers’
Certificates. The
Administrative Agent shall have received a certificate dated the Closing Date
signed on behalf of the Borrower by the Chairman of the Board, the President,
any Vice President or the Treasurer of the Borrower stating that (A) on the
Closing Date and after giving effect to the Letter of Credit being issued on the
Closing Date, no Default or Event of Default shall have occurred and be
continuing and (B) the representations and warranties of the Borrower contained
in the Loan Documents are true and correct on and as of the Closing
Date.

 

(d)  Proceedings. On the
Closing Date, the Administrative Agent shall have received (i) a copy of the
Borrower’s certificate of formation certified by the Secretary of State of the
State of Delaware; (ii) a certificate of the Secretary of State of the State of
Delaware, dated as of a recent date, as to the good standing of the Borrower;
and (iii) a certificate of the Secretary or an Assistant Secretary of the
Borrower dated the Closing Date and certifying (A) that attached thereto is a
true, correct and complete copy of the limited liability company agreement of
the Borrower, (B) as to the absence of dissolution or liquidation proceedings by
or against the Borrower, (C) that attached thereto is a true, correct and
complete copy of resolutions adopted by the managers of the Borrower authorizing
the execution, delivery and performance of the Loan Documents to which the
Borrower is a party and each other document delivered in connection herewith or
therewith and that such resolutions have not been amended and are in full force
and effect on the date of such certificate and (D) as to the incumbency and
specimen signatures of each officer of the Borrower executing the Loan Documents
to which the Borrower is a party or any other document delivered in connection
herewith or therewith.

 

(e)  Opinions
of Counsel. On the
Closing Date, the Administrative Agent shall have received from counsel to the
Borrower, opinions addressed to the Administrative Agent and each Lender, dated
the Closing Date, substantially in the form of Exhibit D-1 hereto and covering
such additional matters incident to the transactions contemplated hereby as the
Administrative Agent or the Required Lenders may reasonably
request.

 

(f)  Financial
Statements. The
Administrative Agent and each Lender shall have received and be satisfied with
the (i) the audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries for the fiscal year ending December 31, 2004, audited
by PricewaterhouseCoopers LLP, or other nationally recognized independent public
accountants, and containing an opinion of such firm that such financial
statements present fairly, in all material respects and in conformity with GAAP,
the financial position and results of operations of the Borrower and its
Consolidated Subsidiaries, and (ii) unaudited, consolidated, interim financial
statements of the Borrower and its Consolidated Subsidiaries for the fiscal
quarter ending September 30, 2005.

 

(g)  Consents. All
necessary governmental (domestic or foreign), regulatory and third party
approvals, if any, in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall have been obtained and remain in
full force and effect, in each case without any action being taken by any
competent authority which could restrain or prevent such transaction or impose,
in the reasonable judgment of the Administrative Agent, materially adverse
conditions upon the consummation of such transactions.

 

(h)  Borrower’s
Structure. The
corporate and capital structure of the Borrower and its Subsidiaries, including,
without limitation, the Borrower’s direct or indirect ownership of the
Restricted Subsidiaries, shall be satisfactory to the Administrative Agent in
its reasonable discretion.

 

(i)  Primary
Facility.
The
Administrative Agent shall have received evidence satisfactory to it that all
terms and conditions to the effectiveness of the Primary Facility have been
satisfied.

 

(j)  Payment
of Fees. All
costs, fees and expenses due to the Administrative Agent and the Lenders on or
before the Closing Date shall have been paid.

 

(k)  Counsel
Fees. The
Administrative Agent shall have received full payment from the Borrower of the
fees and expenses of Alston & Bird L.L.P. described in Section 9.03 which
are billed through the Closing Date.

 

(l)  Other
Materials. The
Administrative Agent shall have received such other assurances, certificates,
documents, consents or opinions as the Administrative Agent, any Issuing Lender
or the Required Lenders may reasonably request, in each case in form and
substance satisfactory to the Administrative Agent.

 

Section
4.02  Conditions
to Issuance of the Letter of Credit. The
obligation of the Issuing Lender to issue the Letter of Credit is subject to the
satisfaction of the following conditions:

 

(a)  the fact
that the Closing Date shall have occurred; and

 

(b)  the fact
that, immediately before and after giving effect to such issuance, no Default or
Event of Default shall have occurred and be continuing.

 

ARTICLE
V  

 

REPRESENTATIONS
AND WARRANTIES

 

The
Borrower represents and warrants that:

 

Section
5.01  Status. The
Borrower is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the limited
liability company authority to make and perform this Agreement and each other
Loan Document to which it is a party.

 

Section
5.02  Authority;
No Conflict. The
execution, delivery and performance by the Borrower of this Agreement and each
other Loan Document to which it is a party have been duly authorized by all
necessary limited liability company action and do not violate (i) any provision
of law or regulation, or any decree, order, writ or judgment, (ii) any provision
of its limited liability company agreement, or (iii) result in the breach of or
constitute a default under any indenture or other agreement or instrument to
which the Borrower is a party.

 

Section
5.03  Legality;
Etc. This
Agreement and each other Loan Document (other than the Notes) to which the
Borrower is a party constitute the legal, valid and binding obligations of the
Borrower, and the Notes, when executed and delivered in accordance with this
Agreement, will constitute legal, valid and binding obligations of the Borrower,
in each case enforceable against the Borrower in accordance with their terms
except to the extent limited by (a) bankruptcy, insolvency, fraudulent
conveyance or reorganization laws or by other laws relating to or affecting the
enforceability of creditors’ rights generally and by general equitable
principles which may limit the right to obtain equitable remedies regardless of
whether enforcement is considered in a proceeding of law or equity or (b) any
applicable public policy on enforceability of provisions relating to
contribution and indemnification.

 

Section
5.04  Financial
Condition.

 

(a)  Audited
Financial Statements. The
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of December 31, 2004 and the related consolidated statements of income and cash
flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP,
copies of which have been delivered to each of the Administrative Agent and the
Lenders, fairly present, in conformity with GAAP, the consolidated financial
position of the Borrower as of such date and its consolidated results of
operations and cash flows for such fiscal year.

 

(b)  Interim
Financial Statements. The
unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of September 30, 2005 and the related unaudited consolidated
statements of income and cash flows for the three months then ended fairly
present, in conformity with GAAP applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section, the
consolidated financial position of the Borrower as of such date and its
consolidated results of operations and cash flows for such three-month period
(subject to normal year-end audit adjustments).

 

(c)  Material
Adverse Change. Since
December 31, 2004 there has been no change in the business, assets, financial
condition or operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, that would materially and adversely affect the Borrower’s
ability to perform any of its obligations under this Agreement, the Notes or the
other Loan Documents.

 

Section
5.05  Rights
to Properties. The
Borrower and its Restricted Subsidiaries have good and valid fee, leasehold,
easement or other right, title or interest in or to all the properties necessary
to the conduct of their business as conducted on the date hereof and as
presently proposed to be conducted, except to the extent the failure to have
such rights or interests would not have a Material Adverse Effect.

 

Section
5.06  Litigation. Except
as disclosed in or contemplated by the Borrower’s Form 10-K Report to the SEC
for the year ended December 31, 2004 or in any subsequent Form 10-Q or 8-K
Report or otherwise furnished in writing to the Administrative Agent, no
litigation, arbitration or administrative proceeding against the Borrower is
pending or, to the Borrower’s knowledge, threatened, which, if adversely
determined, would materially and adversely affect the ability of the Borrower to
perform any of its obligations under this Agreement, the Notes or the other Loan
Documents. There is no litigation, arbitration or administrative proceeding
pending or, to the knowledge of the Borrower, threatened which questions the
validity of this Agreement or the other Loan Documents to which it is a
party.

 

Section
5.07  No
Violation. No part
of the proceeds of the borrowings by hereunder will be used, directly or
indirectly by the Borrower for the purpose of purchasing or carrying any “margin
stock” within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, or for any other purpose which violates, or which
conflicts with, the provisions of Regulation U or X of said Board of Governors.
The Borrower is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any such “margin stock”.

 

Section
5.08  ERISA. Each
member of the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code with respect to each
Material Plan and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Internal Revenue Code with respect to
each Material Plan. No member of the ERISA Group has (i) sought a waiver of the
minimum funding standard under Section 412 of the Internal Revenue Code in
respect of any Material Plan, (ii) failed to make any contribution or payment to
any Material Plan, or made any amendment to any Material Plan, which has
resulted or could result in the imposition of a lien or the posting of a bond or
other security under ERISA or the Internal Revenue Code or (iii) incurred any
material liability under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA.

 

Section
5.09  Governmental
Approvals. No
authorization, consent or approval from any Governmental Authority is required
for the execution, delivery and performance by the Borrower of this Agreement,
the Notes and the other Loan Documents to which it is a party, except such
authorizations, consents and approvals as have been obtained prior to the
Closing Date and are in full force and effect.

 

Section
5.10  Investment
Company Act.
The
Borrower is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

Section
5.11  Public
Utility Holding Company Act.
The
Borrower is not a “holding company” within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

 

Section
5.12  Restricted
Subsidiaries, Etc. Set
forth in Schedule 5.12 hereto is a complete and correct list as of the Closing
Date of the Restricted Subsidiaries of the Borrower, together with, for each
such Subsidiary, the jurisdiction of organization of such Subsidiary. Except as
disclosed in Schedule 5.12 hereto, as of the Closing Date, (i) each such
Subsidiary is a Wholly-Owned Subsidiary of the Borrower and (ii) each such
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all corporate or other
organizational powers to carry on its businesses as now conducted.

 

Section
5.13  Tax
Returns and Payments. The
Borrower and each of its Restricted Subsidiaries has filed or caused to be filed
all Federal, state, local and foreign income tax returns required to have been
filed by it and has paid or caused to be paid all income taxes shown to be due
on such returns except income taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or its Restricted
Subsidiaries, as the case may be, shall have set aside on its books appropriate
reserves with respect thereto in accordance with GAAP or that would not
reasonably be expected to have a Material Adverse Effect.

 

Section
5.14  Compliance
with Laws. To the
knowledge of the Borrower or any of its Restricted Subsidiaries, the Borrower
and each of its Restricted Subsidiaries is in compliance with all applicable
laws, regulations and orders of any Governmental Authority, domestic or foreign,
in respect of the conduct of its business and the ownership of its property
(including, without limitation, compliance with all applicable ERISA and
Environmental Laws and the requirements of any permits issued under such
Environmental Laws), except to the extent (a) such compliance is being contested
in good faith by appropriate proceedings or (b) non-compliance would not
reasonably be expected to materially and adversely affect its ability to perform
any of its obligations under this Agreement, the Notes or any other Loan
Document to which it is a party.

 

Section
5.15  No
Default. No
Default or Event of Default has occurred and is continuing.

 

Section
5.16  Environmental
Matters.

 

(a)  Except
(i) as disclosed in or contemplated by the Borrower’s Form 10-K Report to the
SEC for the year ended December 31, 2004 or in any subsequent Form 10-Q or 8-K
Report or otherwise furnished to the Administrative Agent in writing, or (ii) to
the extent that the liabilities of the Borrower and its Subsidiaries, taken as a
whole, that relate to or could result from the matters referred to in clauses
(i) through (iii) of this Section 5.16(a), inclusive, would not reasonably be
expected to result in a Material Adverse Effect, to the Borrower’s or any of its
Subsidiaries’ knowledge:

 

(i)  no
notice, notification, citation, summons, complaint or order has been issued, no
complaint has been filed, no penalty has been assessed nor is any investigation
or review pending or threatened by any governmental or other entity with respect
to any (A) alleged violation by the Borrower or any of its Subsidiaries of any
Environmental Law, (B) alleged failure by the Borrower or any of its
Subsidiaries to have any environmental permit, certificate, license, approval,
registration or authorization required in connection with the conduct of its
business or (C) generation, storage, treatment, disposal, transportation or
release of Hazardous Substances;

 

(ii)  no
Hazardous Substance has been released (and no written notification of such
release has been filed) (whether or not in a reportable or threshold planning
quantity) at, on or under any property now or previously owned, leased or
operated by the Borrower or any of its Subsidiaries; and

 

(iii)  no
property now or previously owned, leased or operated by the Borrower or any of
its Subsidiaries or any property to which the Borrower or any of its
Subsidiaries has, directly or indirectly, transported or arranged for the
transportation of any Hazardous Substances, is listed or, to the Borrower’s or
any of its Subsidiaries’ knowledge, proposed for listing, on the National
Priorities List promulgated pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), on
CERCLIS (as defined in CERCLA) or on any similar federal, state or foreign list
of sites requiring investigation or clean-up.

 

(b)  Except as
disclosed in or contemplated by the Borrower’s Form 10-K Report to the SEC for
the year ended December 31, 2004 or in any subsequent Form 10-Q or 8-K Report or
otherwise furnished to the Administrative Agent in writing, to the Borrower’s or
any of its Subsidiaries’ knowledge, there are no Environmental Liabilities that
have resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(c)  For
purposes of this Section 5.16, the terms “the Borrower” and “Subsidiary” shall
include any business or business entity (including a corporation) which is a
predecessor, in whole or in part, of the Borrower or any of its Subsidiaries
from the time such business or business entity became a Subsidiary of the
Parent.

 

Section
5.17  Reportable
Transactions.
The
Borrower does not intend to treat any of the transactions contemplated by this
Agreement as a “reportable transaction” (within the meaning of Treasury
Regulation Section 1.6011-4). In the event the Borrower takes or determines to
take any action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. If the Borrower so notifies the Administrative
Agent, or if the Administrative Agent or any Lender determines that the any of
the transactions contemplated by this Agreement constitutes a “reportable
transaction,” the Borrower acknowledges that each such Person may treat its
extensions of credit as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Persons may maintain the lists and other
records required by such Treasury Regulation.

 

Section
5.18  Guarantees. As of
the Closing Date, except as set forth in
Schedule 5.18 hereto, the
Borrower has no Guarantees of any Debt of any Foreign Subsidiary of the Borrower
other than such Debt not in excess of $25,000,000 in the aggregate.

 

ARTICLE
VI

 

COVENANTS

 

The
Borrower agrees that so long as any Lender has any Commitment hereunder or any
amount payable hereunder or under any Note or other Loan Document remains unpaid
or any Letter of Credit Liability remains outstanding:

 

Section
6.01  Information. The
Borrower will deliver or cause to be delivered to each of the Lenders (it being
understood that posting of the information required in clauses (a), (b) and (f)
of this Section 6.01 on the Borrower’s website () shall
be deemed effective delivery to the Lenders):

 

(a)  Annual
Financial Statements.
Promptly when available and in any event within 10 days after the date such
information is required to be delivered to the SEC, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flows for such
fiscal year and accompanied by an opinion thereon by independent public
accountants of recognized national standing, which opinion shall state that such
consolidated financial statements present fairly the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of the date of
such financial statements and the results of their operations for the period
covered by such financial statements in conformity with GAAP applied on a
consistent basis.

 

(b)  Quarterly
Financial Statements.
Promptly when available and in any event within 10 days after the date such
information is required to be delivered to the SEC, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such quarter
and the related consolidated statements of income and cash flows for such fiscal
quarter, all certified (subject to normal year-end audit adjustments) as to
fairness of presentation, GAAP and consistency by any vice president, the
treasurer or the controller of the Borrower.

 

(c)  Officer’s
Certificate.
Simultaneously with the delivery of each set of financial statements referred to
in subsections (a) and (b) above, a certificate of the chief accounting officer
of the Borrower, (i) setting forth in reasonable detail the calculations
required to establish compliance with the requirements of Sections 6.11 and 6.12
on the date of such financial statements and (ii) stating whether there exists
on the date of such certificate any Default or Event of Default and, if any
Default or Event of Default then exists, setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto.

 

(d)  Default.
Forthwith upon acquiring knowledge of the occurrence of any (i) Default or (ii)
Event of Default, in either case a certificate of a vice president or the
treasurer of the Borrower setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto.

 

(e)  Change
in Borrower’s Ratings. Upon
the chief executive officer, the president, any vice president or any senior
financial officer of the Borrower obtaining knowledge of any change in either
Borrower’s Rating, a notice of such Borrower’s Rating in effect after giving
effect to such change.

 

(f)  Securities
Laws Filing.
Promptly when available and in any event within 10 days after the date such
information is required to be delivered to the SEC, a copy of any Form 10-K
Report to the SEC and a copy of any Form 10-Q Report to the SEC, and promptly
upon the filing thereof, any other filings with the SEC.

 

(g)  ERISA
Matters. If and
when any member of the ERISA Group: (i) gives or is required to give notice to
the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with
respect to any Material Plan which might constitute grounds for a termination of
such Plan under Title IV of ERISA, or knows that the plan administrator of any
Material Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required to be
given to the PBGC; (ii) receives, with respect to any Material Plan that is a
Multiemployer Plan, notice of any complete or partial withdrawal liability under
Title IV of ERISA, or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate, impose
material liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Material Plan, a copy of such
notice; (iv) applies for a waiver of the minimum funding standard under Section
412 of the Internal Revenue Code with respect to a Material Plan, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA; or (vii) fails to make any payment or contribution to any Plan or makes
any amendment to any Plan which has resulted or could result in the imposition
of a lien or the posting of a bond or other security, a copy of such notice, a
certificate of the chief accounting officer of the Borrower setting forth
details as to such occurrence and action, if any, which the Borrower or
applicable member of the ERISA Group is required or proposes to
take.

 

(h)  Reportable
Transactions.
Promptly after the Borrower has provided the Administrative Agent with notice of
the Borrower’s intention to treat the Loans and/or the Letter of Credit as being
a “reportable transaction” (within the meaning of Treasury Regulation Section
1.6011-4), a duly completed copy of IRS Form 8886 or any successor
form.

 

(i)  Other
Information. From
time to time such additional financial or other information regarding the
financial condition, results of operations, properties, assets or business of
the Borrower or any of its Subsidiaries as any Lender may reasonably
request.

 

Section
6.02  Maintenance
of Property; Insurance.

 

(a)  Maintenance
of Properties. The
Borrower will keep, and will cause each of its Restricted Subsidiaries to keep,
all property useful and necessary in their respective businesses in good working
order and condition, subject to ordinary wear and tear, unless the Borrower
determines in good faith that the continued maintenance of any of such
properties is no longer economically desirable and so long as the failure to so
maintain such properties would not reasonably be expected to have a Material
Adverse Effect.

 

(b)  Insurance. The
Borrower will maintain, or cause to be maintained, insurance with financially
sound (determined in the reasonable judgment of the Borrower) and responsible
companies in such amounts (and with such risk retentions) and against such risks
as is usually carried by owners of similar businesses and properties in the same
general areas in which the Borrower and its Restricted Subsidiaries
operate.

 

Section
6.03  Conduct
of Business and Maintenance of Existence. The
Borrower will (i) continue, and will cause each of its Restricted Subsidiaries
to continue, to engage in businesses of the same general type as now conducted
by the Borrower and its Subsidiaries and businesses related thereto or arising
out of such businesses, except to the extent that the failure to maintain any
existing business would not have a Material Adverse Effect and (ii) except as
otherwise permitted in Section 6.08, preserve, renew and keep in full force and
effect, and will cause each of its Subsidiaries to preserve, renew and keep in
full force and effect, their respective limited liability company (or other
entity) existence and their respective rights, privileges and franchises
necessary or material to the normal conduct of business, except, in each case,
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

Section
6.04  Compliance
with Laws, Etc. The
Borrower will comply, and will cause each of its Restricted Subsidiaries to
comply, with all applicable laws, regulations and orders of any Governmental
Authority, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including, without limitation, compliance with
all applicable ERISA and Environmental Laws and the requirements of any permits
issued under such Environmental Laws), except to the extent (a) such compliance
is being contested in good faith by appropriate proceedings or (b)
non-compliance could not reasonably be expected to have a Material Adverse
Effect.

 

Section
6.05  Books
and Records. The
Borrower (i) will keep, and will cause each of its Restricted Subsidiaries to
keep, proper books of record and account in conformity with GAAP and (ii) will
permit representatives of the Administrative Agent and each of the Lenders to
visit and inspect any of their respective properties, to examine and make copies
from any of their respective books and records and to discuss their respective
affairs, finances and accounts with their officers, any employees and
independent public accountants, all at such reasonable times and as often as may
reasonably be desired; provided, that,
the rights created in this Section 6.05 to “visit”, “inspect”, “discuss” and
copy shall not extend to any matters which the Borrower deems, in good faith, to
be confidential, unless the Administrative Agent and any such Lender agree in
writing to keep such matters confidential.

 

Section
6.06  Use
of Proceeds. The
proceeds of the Loans made under this Agreement will be used solely to reimburse
Reimbursement Obligations. The Letter of Credit is issued hereunder solely for
the benefit of the administrative agent under the Primary Facility.


 

Section
6.07  Restriction
on Liens. The
Borrower will not, nor will it permit any of its Restricted Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon or with respect to any
property or assets of any kind (real or personal, tangible or intangible) of the
Borrower or any such Restricted Subsidiary (including, without limitation, their
Voting Stock), except:

 

(a)  Liens for
taxes, assessments or governmental charges or levies not yet due or which are
being contested in good faith and by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books;

 

(b)  Liens
imposed by law, such as carriers’, landlords’, warehousemen’s and mechanics’
liens and other similar liens arising in the ordinary course of business which
secure payment of obligations not more than 45 days past due or which are being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books;

 

(c)  Liens
arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation;

 

(d)  easements
(including, without limitation, reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations, encroachments,
variances and other restrictions, charges or encumbrances (whether or not
recorded) affecting the use of real property;

 

(e)  Liens
existing on the Closing Date and described in Schedule 6.07 hereto;

 

(f)  judgment
Liens arising from judgments which secure payment of legal obligations that
would not constitute a Default under Section 7.01;

 

(g)  any
vendor’s Liens, purchase money Liens or any other Lien on any property or asset
acquired by the Borrower or any of its Restricted Subsidiaries after the date
hereof existing on any such property or asset at the time of acquisition thereof
(and not created in anticipation thereof); provided, that, in any such case no
such Lien shall extend to or cover any other asset of the Borrower or such
Restricted Subsidiaries, as the case may be;

 

(h)  Liens,
deposits and/or similar arrangements to secure the performance of bids, tenders
or contracts (other than contracts for borrowed money), public or statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business by the Borrower or any
of its Restricted Subsidiaries, including Liens to secure obligations under
agreements relating to the purchase and sale of any commodity (including power
purchase and sale agreements, any commodity hedge or derivative regardless of
whether any such transaction is a “financial” or “physical
transaction”);

 

(i)  Liens on
assets of the Borrower and its Restricted Subsidiaries arising out of
obligations or duties to any municipality or public authority with respect to
any franchise, grant, license, permit or certificate.

 

(j)  rights
reserved to or vested in any municipality or public authority to control or
regulate any asset of the Borrower or any of its Restricted Subsidiaries or to
use such asset in a manner which does not materially impair the use of such
asset for the purposes for which it is held by the Borrower or any of its
Restricted Subsidiaries;

 

(k)  irregularities
in or deficiencies of title to any asset which do not materially adversely
affect the use of such property by the Borrower or any of its Restricted
Subsidiaries in the normal course of its business;

 

(l)  any Lien
on any property or asset of any corporation or other entity existing at the time
such corporation or entity is acquired, merged or consolidated or amalgamated
with or into the Borrower or any of its Restricted Subsidiaries and not created
in contemplation of such event;

 

(m)  any Lien
on any asset securing Debt incurred or assumed for the purpose of financing all
or any part of the cost of acquiring, constructing or improving such asset;
provided, that any such Lien attaches to such asset, solely to extent of the
value of the obligation secured by such Lien, concurrently with or within 180
days after the acquisition, construction or improvement thereof:

 

(n)  any Liens
in connection with the issuance of tax-exempt industrial development or
pollution control bonds or other similar bonds issued pursuant to Section 103(b)
of the Internal Revenue Code of 1986, as amended, to finance all or any part of
the purchase price of or the cost of constructing, equipping or improving
property;

 

(o)  rights of
lessees arising under leases entered into by the Borrower or any of its
Restricted Subsidiaries as lessor, in the ordinary course of
business;

 

(p)  any Liens
on or reservations with respect to governmental and other licenses, permits,
franchises, consents and allowances; any Liens on patents, patent licenses and
other patent rights, patent applications, trade names, trademarks, copyrights,
claims, credits, choses in action and other intangible property and general
intangibles including, but not limited to, computer software;

 

(q)  any Liens
on automobiles, buses, trucks and other similar vehicles and movable equipment;
marine equipment; airplanes, helicopters and other flight equipment; and parts,
accessories and supplies used in connection with any of the
foregoing;

 

(r)  any Liens
on furniture and furnishings; and computers and data processing, data storage,
data transmission, telecommunications and other facilities, equipment and
apparatus, which, in any case, are used primarily for administrative or clerical
purposes;

 

(s)  Liens
securing letters of credit entered into in the ordinary course of
business;

 

(t)  Liens
granted on the capital stock of Subsidiaries that are not Restricted
Subsidiaries for the purpose of securing the obligations of such
Subsidiaries;

 

(u)  Liens in
addition to those permitted by clauses (a) through (t) on the property or assets
of a Special Purpose Subsidiary arising in connection with any Existing
Synthetic Lease Financing or the lease of such property or assets through one or
more other Synthetic Lease financings;

 

(v)  Liens by
any Wholly-Owned Subsidiary of the Borrower or any Restricted Subsidiary for the
benefit of the Borrower or any such Restricted Subsidiary;

 

(w)  Liens on
property which is the subject of a Capital Lease Obligation designating the
Borrower or any of its Restricted Subsidiaries as lessee and all right, title
and interest of the Borrower or any of its Restricted Subsidiaries in and to
such property and in, to and under such lease agreement, whether or not such
lease agreement is intended as a security; provided, that the aggregate fair
market value of the obligations subject to such Liens shall not at any time
exceed $500,000,000;

 

(x)  Liens on
property which is the subject of one or more leases designating the Borrower or
any of its Restricted Subsidiaries as lessee and all right, title and interest
of the Borrower or any of its Restricted Subsidiaries in and to such property
and in, to and under any such lease agreement, whether or not any such lease
agreement is intended as a security;

 

(y)  Liens
arising out of the refinancing, extension, renewal or refunding of any Debt or
other obligation secured by any Lien permitted by clauses (a) through (x) of
this Section; provided, that such Debt or other obligation is not increased and
is not secured by any additional assets;

 

(z)  other
Liens on assets or property of the Borrower or any of its Restricted
Subsidiaries, other than Liens on the Voting Stock of the Borrower in its
Restricted Subsidiaries, so long as the aggregate value of the obligations
secured by such Liens does not exceed the greater of $250,000,000 or 15% of the
total consolidated assets of the Borrower and its Consolidated Subsidiaries as
of the most recent fiscal quarter of the Borrower for which financial statements
are available.

 

Section
6.08  Merger
or Consolidation. The
Borrower will not merge with or into or consolidate with or into any other
corporation or entity, unless (i) immediately after giving effect thereto, no
event shall occur and be continuing which constitutes a Default or Event
Default, (ii) the surviving or resulting Person, as the case may be, assumes and
agrees in writing to pay and perform all of the obligations of the Borrower
under this Agreement, (iii) substantially all of the consolidated assets and
consolidated revenues of the surviving or resulting person, as the case may be,
are anticipated to come from the utility or energy businesses and (iv) the
surviving or resulting person, as the case may be, has senior long-term debt
ratings from Moody’s and S&P as available (or if the ratings of Moody’s and
S&P are not available, of such other rating agency as shall be acceptable to
the Administrative Agent) at least equal to each Borrower’s Rating at the end of
the fiscal quarter immediately preceding the effective date of such
consolidation or merger. No Restricted Subsidiary will merge or consolidate with
any other Person if such Restricted Subsidiary is not the surviving or resulting
Person, unless such other Person is (a) the Borrower or a successor of the
Borrower permitted hereunder or (b) any other Person which is a Wholly-Owned
Restricted Subsidiary of the Borrower or a successor of the Borrower permitted
hereunder.

 

Section
6.09  Asset
Sales. Except
for the sale of assets required to be sold to conform with governmental
requirements, the Borrower shall not, and shall not permit any of its
Subsidiaries to, consummate any Asset Sale, if the aggregate net book value of
all such Asset Sales consummated during the four calendar quarters immediately
preceding any date of determination would exceed 25% of the total assets of the
Borrower and its Consolidated Subsidiaries as of the beginning of the Borrower’s
most recently ended full fiscal quarter; provided,
however, that
any such Asset Sale will be disregarded for purposes of the 25% limitation
specified above: (a) if any such Asset Sale is in the ordinary course of
business of the Borrower and its Subsidiaries; (b) if the assets subject to any
such Asset Sale are worn out or are no longer useful or necessary in connection
with the operation of the businesses of the Borrower or its Subsidiaries;
(c) if the assets subject to any such Asset Sale are being transferred to a
Wholly-Owned Subsidiary of the Borrower; (d) if the proceeds from any such Asset
Sale (i) are, within 12 months of such Asset Sale, invested or reinvested by the
Borrower or any Subsidiary in a Permitted Business, (ii) are used by the
Borrower or a Subsidiary to repay Debt of the Borrower or such Subsidiary, or
(iii) are retained by the Borrower or its Subsidiaries; or (e) if, prior to any
such Asset Sale, Moody’s and S&P confirm the then current Borrower Ratings
after giving effect to any such Asset Sale.

 

Section
6.10  Restrictive
Agreements.
Except as
set forth in Schedule 6.10, the Borrower will not permit any of its Restricted
Subsidiaries to enter into or assume any agreement prohibiting or otherwise
restricting the ability of any Restricted Subsidiary to pay dividends or other
distributions on its respective equity and equity equivalents to the Borrower or
any of its Restricted Subsidiaries.

 

Section
6.11  Consolidated
Debt to Consolidated Capitalization Ratio. The
ratio of Consolidated Debt of the Borrower to Consolidated Capitalization of the
Borrower shall not exceed 65% at any time.

 

Section
6.12  Indebtedness. The
Borrower will not permit any of its Restricted Subsidiaries to incur, create,
assume or permit to exist any Debt of such Restricted Subsidiaries
except:

 

(a)  Existing
Debt and any extensions, renewals or refinancings thereof;

 

(b)  Debt
owing to the Borrower or a Wholly-Owned Restricted Subsidiary;

 

(c)  any Debt
incurred in respect of Existing Synthetic Lease Financings;

 

(d)  Non-Recourse
Debt; and

 

(e)  other
Debt, the aggregate principal amount of which does not exceed $500,000,000 at
any time.

 

ARTICLE
VII

 

DEFAULTS

 

Section
7.01  Events
of Default. If one
or more of the following events (each an “Event
of Default”) shall
have occurred and be continuing:

 

(a)  the
Borrower shall fail to pay when due any principal of the Loans or shall fail to
reimburse when due any drawing under the Letter of Credit; or

 

(b)  the
Borrower shall fail to pay when due any interest on the Loans and Reimbursement
Obligations, any fee or any other amount payable hereunder or under any other
Loan Document for 5 days following the date such payment becomes due hereunder;
or

 

(c)  the
Borrower shall fail to observe or perform any covenant or agreement contained in
clause (ii) of Section 6.05, or Sections 6.06, 6.08, 6.09, 6.11 or 6.12;
or

 

(d)  the
Borrower shall fail to observe or perform any covenant or agreement contained in
Section 6.01(d)(i) for 30 days after any such failure or in Section 6.01(d)(ii)
for 10 days after any such failure; or

 

(e)  the
Borrower shall fail to observe or perform any covenant or agreement contained in
this Agreement or any other Loan Document (other than those covered by clauses
(a), (b), (c) or (d) above) for 30 days after written notice thereof has been
given to the defaulting party by the Administrative Agent, or at the request of
the Required Lenders; or

 

(f)  any
representation, warranty or certification made by the Borrower in this Agreement
or any other Loan Document or in any certificate, financial statement or other
document delivered pursuant hereto or thereto shall prove to have been incorrect
in any material respect when made or deemed made; or

 

(g)  the
Borrower or any Restricted Subsidiary shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Material Debt beyond any
period of grace provided with respect thereto, or (ii) fail to observe or
perform any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Material Debt beyond
any period of grace provided with respect thereto if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders
of such Debt or a trustee on its or their behalf to cause, such Debt to become
due prior to its stated maturity; or

 

(h)  the
Borrower or any Restricted Subsidiary of the Borrower shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay, or shall admit in
writing its inability to pay, its debts as they become due, or shall take any
corporate action to authorize any of the foregoing; or

 

(i)  an
involuntary case or other proceeding shall be commenced against the Borrower or
any Restricted Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Restricted Subsidiary under
the Bankruptcy Code; or

 

(j)  any
member of the ERISA Group shall fail to pay when due an amount or amounts
aggregating in excess of $25,000,000 which it shall have become liable to pay
under Title IV of ERISA; or notice of intent to terminate a Material Plan shall
be filed under Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or to cause a
trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could reasonably be expected to cause one or more members of the ERISA Group to
incur a current payment obligation in excess of $25,000,000; or

 

(k)  the
Borrower or any of its Restricted Subsidiaries shall fail within 60 days to pay,
bond or otherwise discharge any judgment or order for the payment of money in
excess of $20,000,000, entered against the Borrower or any such Restricted
Subsidiary that is not stayed on appeal or otherwise being appropriately
contested in good faith; or

 

(l)  a Change
of Control shall have occurred;

 

then, and
in every such event, while such event is continuing, the Administrative Agent
may (A) if requested by the Required Lenders, by notice to the Borrower
terminate the Commitments, and the Commitments shall thereupon terminate, and
(B) if requested by the Lenders holding more than 50% of the sum of the
aggregate outstanding principal amount of the Loans and Letter of Credit
Liabilities at such time, by notice to the Borrower declare the Loans (together
with accrued interest and accrued and unpaid fees thereon) to be, and the Loans
shall thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind (except as set forth in clause (A) above),
all of which are hereby waived by the Borrower; provided, that,
in the case of any Default or any Event of Default specified in clause 7.01(h)
or 7.01(i) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Administrative Agent or any Lender, the
Commitments shall thereupon terminate and the Loans (together with accrued
interest and accrued and unpaid fees thereon) shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.

 

ARTICLE
VIII

 

THE
AGENTS

 

Section
8.01  Appointment
and Authorization. Each
Lender hereby irrevocably designates and appoints the Administrative Agent of to
act as specified herein and in the other Loan Documents and to take such actions
on its behalf under the provisions of this Agreement and the other Loan
Documents and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent agrees to act as such upon the express conditions
contained in this Article VIII. Notwithstanding any provision to the contrary
elsewhere in this Agreement or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein or in the other Loan Documents, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent. The provisions of this Article VIII are solely
for the benefit of the Administrative Agent and Lenders, and no other Person
shall have any rights as a third party beneficiary of any of the provisions
hereof. 

 

Section
8.02  Individual
Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower and its
Affiliates as though the Administrative Agent were not an Agent. With respect to
the Loans made by it and all obligations owing to it, the Administrative Agent
shall have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not an Agent, and the terms “Required
Lenders”, “Lender” and “Lenders” shall include the Administrative Agent in its
individual capacity.

 

Section
8.03  Delegation
of Duties. The
Administrative Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents or attorneys-in-fact. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care except to
the extent otherwise required by Section 8.07.

 

Section
8.04  Reliance
by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy or other electronic facsimile transmission, telex,
telegram, cable, teletype, electronic transmission by modem, computer disk or
any other message, statement, order or other writing or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders, or all of the Lenders, if applicable, as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders or all of the Lenders, if applicable, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.

 

Section
8.05  Notice
of Default. The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”. If the Administrative Agent receives such
a notice, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided, that,
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the
Lenders.

 

Section
8.06  Non-Reliance
on the Agents and Other Lenders. Each
Lender expressly acknowledges that no Agent or officer, director, employee,
agent, attorney-in-fact or affiliate of any Agent has made any representations
or warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by such Agent to any Lender. Each Lender represents
to the Agents that it has, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other condition, prospects and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and to enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Borrower. No Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
assets, property, financial and other condition, prospects or creditworthiness
of the Borrower which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or
affiliates.

 

Section
8.07  Exculpatory
Provisions. The
Administrative Agent shall not, and no officers, directors, employees, agents,
attorneys-in-fact or affiliates of the Administrative Agent, shall (i) be liable
for any action lawfully taken or omitted to be taken by it under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence, willful misconduct or bad faith) or (ii) be responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any of its officers contained in this
Agreement, in any other Loan Document or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document or for any failure of the Borrower or any of its officers to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made by any other Person herein or therein or made by any other Person in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Borrower to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.

 

Section
8.08  Indemnification. The
Lenders agree to indemnify the Administrative Agent, in its capacity as such,
and hold the Administrative Agent, in its capacity as such, harmless ratably
according to their respective Commitments from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs and reasonable expenses or disbursements of any kind whatsoever which may
at any time (including, without limitation, at any time following the full
payment of the obligations of the Borrower hereunder) be imposed on, incurred by
or asserted against the Administrative Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Document, or
any documents contemplated hereby or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by the
Administrative Agent under or in connection with any of the foregoing, but only
to the extent that any of the foregoing is not paid by the Borrower;
provided, that no
Lender shall be liable to the Administrative Agent for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs or expenses or disbursements resulting from the gross
negligence, willful misconduct or bad faith of the Administrative Agent. If any
indemnity furnished to the Administrative Agent for any purpose shall, in the
reasonable opinion of the Administrative Agent, be insufficient or become
impaired, the Administrative Agent may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreement in this Section 8.08 shall survive the
payment of all Loans, Letter of Credit Liabilities, fees and other obligations
of the Borrower arising hereunder.

 

Section
8.09  Resignation;
Successors. The
Administrative Agent may resign as Administrative Agent upon 20 days’ notice to
the Lenders. Upon the resignation of the Administrative Agent, the Required
Lenders shall appoint from among the Lenders a successor to the Administrative
Agent, subject to prior approval by the Borrower (so long as no Event of Default
exists) and the consent of the Required Lenders (such approval or consent, as
the case may be, not to be unreasonably withheld), whereupon such successor
Administrative Agent shall succeed to the rights, powers and duties of the
retiring Administrative Agent, and the term “Administrative Agent” shall include
such successor Administrative Agent effective upon its appointment, and the
retiring Administrative Agent’s rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any other Loan Document. After the retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement or any other Loan
Document.

 

Section
8.10  Reserved.

 

ARTICLE
IX

 

MISCELLANEOUS

 

Section
9.01  Notices. Except
as otherwise expressly provided herein, all notices and other communications
shall have been duly given and shall be effective (i) when delivered, (ii) when
transmitted via telecopy (or other facsimile device) to the number set out
below, (iii) the Business Day following the day on which the same has been
delivered prepaid (or on an invoice basis) to a reputable national overnight air
courier service or (iv) the third Business Day following the day on which the
same is sent by certified or registered mail, postage prepaid, in each case to
the respective parties at the address or telecopy numbers, in the case of the
Borrower and the Administrative Agent, set forth below, and, in the case of the
Lenders, set forth on signature pages hereto, or at such other address as such
party may specify by written notice to the other parties hereto:

 

if to the
Borrower:




PPL
Energy Supply, LLC

Two North
Ninth Street

Allentown,
PA 18101-1179

Attention:
Timothy D. Stephens

Telephone:
610-774-4203

Facsimile:
610-774-5235




with a
copy to:




PPL
Energy Supply, LLC

Two North
Ninth Street

Allentown,
PA 18101-1179

Attention:
Thomas D. Salus, Esq.

Telephone:
610-774-7445

Facsimile:
610-774-5235




if to the
Administrative Agent:




Wachovia
Fixed Income Structured Trading Solutions, LLC

One
Wachovia Center

301 South
College Street - NC0760

Charlotte,
North Carolina 28288

Attention:
Rick Price

Telephone:
704-374-4062

Facsimile:
704-383-6647




with a
copy to:




Wachovia
Fixed Income Structured Trading Solutions, LLC

One
Wachovia Center

301 South
College Street, 7th
Floor

Charlotte,
North Carolina 28288

Attention:
Michael J. Kolosowsky

Telephone:
704-383-8225

Facsimile:
704-383-0661




with a
copy to:




Alston
& Bird L.L.P.

101 South
Tryon Street, Suite 4000

Charlotte,
North Carolina 28280

Attention:
Paul S. Donohue, Esq.

Telephone
: 704-444-1039

Facsimile:
704-444-1739




Section
9.02  No
Waivers; Non-Exclusive Remedies. No
failure by any Agent or any Lender to exercise, no course of dealing with
respect to, and no delay in exercising any right, power or privilege hereunder
or under any Note or other Loan Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided herein and in the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies provided by
law.

 

Section
9.03  Expenses;
Indemnification.

 

(a)  Expenses. The
Borrower shall pay (i) all out-of-pocket expenses of the Agents, including legal
fees and disbursements of Alston & Bird L.L.P. and any other local counsel
retained by the Administrative Agent, in its reasonable discretion, in
connection with the preparation, execution, delivery and administration of the
Loan Documents, the syndication efforts of the Agents with respect thereto, any
waiver or consent thereunder or any amendment thereof or any Default or alleged
Default thereunder and (ii) if an Event of Default occurs, all reasonable
out-of-pocket expenses incurred by the Agents and each Lender, including
(without duplication) the fees and disbursements of outside counsel, in
connection with such Event of Default and restructuring, workout, collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom;
provided, that
the Borrower shall not be liable for any legal fees or disbursements of any
counsel for the Agents and the Lenders other than Alston & Bird L.L.P.
associated with the preparation, execution and delivery of this Agreement and
the closing documents contemplated hereby.

 

(b)  Indemnity
in Respect of Loan Documents. The
Borrower agrees to indemnify the Agents and each Lender, their respective
Affiliates and the respective directors, officers, trustees, agents and
employees of the foregoing (each an “Indemnitee”) and
hold each Indemnitee harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs and
expenses or disbursements of any kind whatsoever, including, without limitation,
the reasonable fees and disbursements of counsel, which may at any time
(including, without limitation, at any time following the payment of the
obligations of the Borrower hereunder) be imposed on, incurred by or asserted
against such Indemnitee in connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of the Loan Documents
or any actual or proposed use of proceeds of Loans hereunder; provided, that no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee’s own gross negligence or willful misconduct as determined by a court
of competent jurisdiction in a final, non-appealable judgment or
order.

 

(c)  Indemnity
in Respect of Environmental Liabilities. The
Borrower agrees to indemnify each Lender and hold each Lender harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs and expenses or disbursements of any kind
whatsoever (including, without limitation, reasonable expenses of investigation
by engineers, environmental consultants and similar technical personnel and
reasonable fees and disbursements of counsel) which may at any time (including,
without limitation, at any time following the payment of the obligations of the
Borrower hereunder) be imposed on, incurred by or asserted against such Lender
in respect of or in connection with any and all Environmental Liabilities.
Without limiting the generality of the foregoing, the Borrower hereby waives all
rights of contribution or any other rights of recovery with respect to
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs and expenses and disbursements in respect of or in connection with
Environmental Liabilities that it might have by statute or otherwise against any
Lender.

 

Section
9.04  Sharing
of Set-Offs. Each
Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Loan made or Note held
by it and any Letter of Credit Liabilities which is greater than the proportion
received by any other Lender in respect of the aggregate amount of principal and
interest due with respect to any Loan, Note and Letter of Credit Liabilities
made or held by such other Lender, the Lender receiving such proportionately
greater payment shall purchase such participations in the Loan made or Notes and
Letter of Credit Liabilities held by the other Lenders, and such other
adjustments shall be made, in each case as may be required so that all such
payments of principal and interest with respect to the Loan made or Notes and
Letter of Credit Liabilities made or held by the Lenders shall be shared by the
Lenders pro rata; provided, that
nothing in this Section shall impair the right of any Lender to exercise any
right of set-off or counterclaim it may have for payment of indebtedness of the
Borrower other than its indebtedness hereunder.

 

Section
9.05  Amendments
and Waivers. Any
provision of this Agreement or the Notes may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the Borrower and the
Required Lenders (and, if the rights or duties of the Administrative Agent or
the Issuing Lender are affected thereby, by the Administrative Agent or the
Issuing Lender, as relevant); provided, that no
such amendment or waiver shall, unless signed by all of the Lenders, (i)
increase or decrease the Commitment of any Lender (except for a ratable decrease
in the Commitments of all of the Lenders) or subject any Lender to any
additional obligation (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or of mandatory reductions in the
Commitments shall not constitute an increase of the Commitment of any Lender,
and that an increase in the available portion of any Commitment of any Lender as
in effect at any time shall not constitute an increase in such Commitment), (ii)
reduce the principal of or rate of interest on any Loan (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or the amount to be reimbursed in respect of the Letter of Credit or any
interest thereon or any fees hereunder, (iii) postpone the date fixed for any
payment of interest on any Loan or the amount to be reimbursed in respect of the
Letter of Credit or any interest thereon or any fees hereunder or for any
scheduled reduction or termination of any Commitment or (except as expressly
provided in Article III) expiration date of the Letter of Credit, (iv) postpone
or change the date fixed for any scheduled payment of principal of any Loan or
(v) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes and Letter of Credit Liabilities, or the number of
Lenders, which shall be required for the Lenders or any of them to take any
action under this Section or any other provision of this Agreement.

 

Section
9.06  Successors
and Assigns.

 

(a)  Successors
and Assigns. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all of the Lenders, except to the
extent any such assignment results from the consummation of a merger or
consolidation permitted pursuant to Section 6.08 of this Agreement.

 

(b)  Participations. Any
Lender may at any time grant to one or more banks or other financial
institutions or special purpose funding vehicle (each a “Participant”)
participating interests in its Commitments and/or any or all of its Loans and
Letter of Credit Liabilities. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Lender shall remain responsible for
the performance of its obligations hereunder, and the Borrower, the Issuing
Lender and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided, that
such participation agreement may provide that such Lender will not agree to any
modification, amendment or waiver of this Agreement which would (i) extend the
Maturity Date or the Termination Date, reduce the rate or extend the time of
payment of principal, interest or fees on any Loan or Letter of Credit Liability
in which such Participant is participating (except in connection with a waiver
of applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the Participant’s
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Commitments shall not constitute a change in the terms of such participation,
and that an increase in any Commitment or Loan or Letter of Credit Liability
shall be permitted without the consent of any Participant if the Participant’s
participation is not increased as a result thereof) or (ii) allow the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement, without the consent of the Participant, except to the extent any such
assignment results from the consummation of a merger or consolidation permitted
pursuant to Section 6.08 of this Agreement. The Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Article II with respect to its participating
interest to the same extent as if it were a Lender, subject to the same
limitations, and in no case shall any Participant be entitled to receive any
amount payable pursuant to Article II that is greater that the amount the Lender
granting such Participant’s participating interest would have been entitled to
receive had such Lender not sold such participating interest. An assignment or
other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection
(b).

 

(c)  Assignments
Generally. Any
Lender may at any time assign to one or more Eligible Assignees (each, an
“Assignee”) all,
or a portiont (equivalent to an initial Commitment of not less than $1,000,000
or any larger multiple of $1,000,000), of any of its rights and obligations
under this Agreement, the Loans, the Letter of Credit Liabilities and the Notes
with respect to its Loans and, if still in existence, its Commitment. Such
assignments may be made on a non-pro rata basis. Any such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit C attached hereto executed by such Assignee
and such transferor, with (and subject to) the consent of the Borrower, which
shall not be unreasonably withheld, the Administrative Agent and the Issuing
Lender, which consent shall not be unreasonably withheld; provided, that if
an Assignee (i) is an Affiliate of such transferor Lender, (ii) was a Lender
immediately prior to such assignment, or (iii) is a contractual counterparty,
which is an “accredited investor” (as defined in Regulation D under the
Securities Act of 1933, as amended), under any credit derivative transaction
entered into with a Lender in which the Borrower is the “referenced entity”,
then no such consent of the Borrower shall be required; provided,
further, that if
at the time of such assignment a Default or an Event of Default has occurred and
is continuing, no such consent of the Borrower shall be required. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
of an amount equal to the purchase price agreed between such transferor and such
Assignee, such Assignee shall be a Lender party to this Agreement and shall have
all the rights and obligations of a Lender with a Commitment as set forth in
such instrument of assumption, and the transferor shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor, the Administrative Agent and
the Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to the Assignee. In connection with any such assignment, the
transferor shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $3,500. If the Assignee is not
incorporated under the laws of the United States or any state thereof, it shall
deliver to the Borrower and the Administrative Agent certification as to
exemption from deduction or withholding of any United States Taxes in accordance
with Section 2.16.

 

(d)  Assignments
to Federal Reserve Banks. Any
Lender may at any time assign all or any portion of its rights under this
Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Lender from its obligations hereunder.

 

(e)  Register. The
Borrower hereby designates the Administrative Agent to serve as the Borrower’s
agent, solely for purposes of this subsection 9.06(e), to (i) maintain a
register (the “Register”) on
which the Administrative Agent will record the Commitments from time to time of
each Lender, the Loans made by each Lender and each repayment in respect of the
principal amount of the Loans of each Lender and to (ii) retain a copy of each
Assignment and Assumption Agreement delivered to the Administrative Agent
pursuant to this Section. Failure to make any such recordation, or any error in
such recordation, shall not affect the Borrower’s obligation in respect of such
Loans. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent, the Issuing Lender
and the Lenders shall treat each Person in whose name a Loan and the Note
evidencing the same is registered as the owner thereof for all purposes of this
Agreement, notwithstanding notice or any provision herein to the contrary. With
respect to any Lender, the assignment or other transfer of the Commitments of
such Lender and the rights to the principal of, and interest on, any Loan made
and any Note issued pursuant to this Agreement shall not be effective until such
assignment or other transfer is recorded on the Register and, except to the
extent provided in this subsection 9.06(e), otherwise complies with Section
9.06, and prior to such recordation all amounts owing to the transferring Lender
with respect to such Commitments, Loans and Notes shall remain owing to the
transferring Lender. The registration of assignment or other transfer of all or
part of any Commitments, Loans and Notes for a Lender shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement and payment of the administrative fee referred to in
Section 9.06(c). The Register shall be available for inspection by each of the
Borrower and each Issuing Lender at any reasonable time and from time to time
upon reasonable prior notice. In addition, at any time that a request for a
consent for a material or substantive change to the Loan Documents is pending,
any Lender wishing to consult with other Lenders in connection therewith may
request and receive from the Administrative Agent a copy of the Register. The
Borrower may not replace any Lender pursuant to Section 2.07(b), unless, with
respect to any Notes held by such Lender, the requirements of subsection 9.06(c)
and this subsection 9.06(e) have been satisfied.

 

Section
9.07  Governing
Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the internal laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such court and any claim that any such proceeding brought in any such court has
been brought in an inconvenient forum.

 

Section
9.08  Counterparts;
Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement and the other Loan Documents constitute the
entire agreement and understanding among the parties hereto and supersede any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof and thereof. This Agreement shall become effective upon
receipt by the Administrative Agent of counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed counterpart
shall not have been received, receipt by the Administrative Agent in form
satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by such
party).

 

Section
9.09  Generally
Accepted Accounting Principles. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Borrower’s independent public
accountants) with the audited consolidated financial statements of the Borrower
and its Consolidated Subsidiaries most recently delivered to the Lenders;
provided, that,
if the Borrower notifies the Administrative Agent that the Borrower wishes to
amend any covenant in Article VI to eliminate the effect of any change in GAAP
on the operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Article VI for such purpose),
then the Borrower’s compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrower and the Required Lenders.

 

Section
9.10  Usage. The
following rules of construction and usage shall be applicable to this Agreement
and to any instrument or agreement that is governed by or referred to in this
Agreement.

 

(a)  All terms
defined in this Agreement shall have the defined meanings when used in any
instrument governed hereby or referred to herein and in any certificate or other
document made or delivered pursuant hereto or thereto unless otherwise defined
therein.

 

(b)  The words
“hereof”, “herein”, “hereunder” and words of similar import when used in this
Agreement or in any instrument or agreement governed here shall be construed to
refer to this Agreement or such instrument or agreement, as applicable, in its
entirety and not to any particular provision or subdivision hereof or
thereof.

 

(c)  References
in this Agreement to “Article”, “Section”, “Exhibit”, “Schedule” or another
subdivision or attachment shall be construed to refer to an article, section or
other subdivision of, or an exhibit, schedule or other attachment to, this
Agreement unless the context otherwise requires; references in any instrument or
agreement governed by or referred to in this Agreement to “Article”, “Section”,
“Exhibit”, “Schedule” or another subdivision or attachment shall be construed to
refer to an article, section or other subdivision of, or an exhibit, schedule or
other attachment to, such instrument or agreement unless the context otherwise
requires.

 

(d)  The
definitions contained in this Agreement shall apply equally to the singular and
plural forms of such terms. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The word “will”
shall be construed to have the same meaning as the word “shall”. The term
“including” shall be construed to have the same meaning as the phrase “including
without limitation”.

 

(e)  Unless
the context otherwise requires, any definition of or reference to any agreement,
instrument, statute or document contained in this Agreement or in any agreement
or instrument that is governed by or referred to in this Agreement shall be
construed (i) as referring to such agreement, instrument, statute or document as
the same may be amended, supplemented or otherwise modified from time to time
(subject to any restrictions on such amendments, supplements or modifications
set forth in this Agreement or in any agreement or instrument governed by or
referred to in this Agreement), including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and (ii) to include (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein. Any reference to any Person shall be construed to include such Person’s
successors and permitted assigns.

 

(f)  Unless
the context otherwise requires, whenever any statement is qualified by “to the
best knowledge of” or “known to” (or a similar phrase) any Person that is not a
natural person, it is intended to indicate that the senior management of such
Person has conducted a commercially reasonable inquiry and investigation prior
to making such statement and no member of the senior management of such Person
(including managers, in the case of limited liability companies, and general
partners, in the case of partnerships) has current actual knowledge of the
inaccuracy of such statement.

 

Section
9.11  WAIVER
OF JURY TRIAL. THE
BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

Section
9.12  Confidentiality. Each
Lender agrees to hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking practices; provided, that
nothing herein shall prevent any Lender from disclosing such information (i) to
any other Lender or to any Agent, (ii) to any other Person if reasonably
incidental to the administration of the Loans and Letter of Credit Liabilities,
(iii) upon the order of any court or administrative agency, (iv) upon the
request or demand of any regulatory agency or authority, (v) which had been
publicly disclosed other than as a result of a disclosure by any Agent or any
Lender prohibited by this Agreement, (vi) in connection with any litigation to
which any Agent, any Lender or any of their respective Subsidiaries or
Affiliates may be party, (vii) to the extent necessary in connection with the
exercise of any remedy hereunder, (viii) to such Lender’s or Agent’s Affiliates
and their respective directors, officers, employees and agents including legal
counsel and independent auditors (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) and (ix)
subject to provisions substantially similar to those contained in this Section,
to any actual or proposed Participant or Assignee or to any actual or
prospective counterparty (or its advisors) to any securitization, swap or
derivative transaction relating to the Borrower's Obligations hereunder.
Notwithstanding the foregoing, any Agent, any Lender or Alston & Bird L.L.P.
may circulate promotional materials and place advertisements in financial and
other newspapers and periodicals or on a home page or similar place for
dissemination of information on the Internet or worldwide web, in each case,
after the closing of the transactions contemplated by this Agreement in the form
of a “tombstone” or other release limited to describing the names of the
Borrower or its Affiliates, or any of them, and the amount, type and closing
date of such transactions, all at their sole expense.

 

Section
9.13  USA
PATRIOT Act Notice. Each
Lender that is subject to the Patriot Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the
“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 such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Patriot
Act.

 




 

[Signature
Pages to Follow]

 



































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
above written.

 




 





	 	
      PPL
      ENERGY SUPPLY, LLC

	 	 
	 	
      By:
	 
	 	
      Name:

      Title:

	 	 
	 	
      WACHOVIA
      FIXED INCOME STRUCTURED TRADING SOLUTIONS, LLC,

      as
      Administrative Agent

	 	 
	 	
      By:
	 
	 	
      Name:

      Title:

	 	 
	 	
      WACHOVIA
      FIXED INCOME STRUCTURED TRADING SOLUTIONS, LLC,

      as
      Issuing Lender

	 	 
	 	
      By:
	 
	 	
      Name:

      Title:

	 	 
	 	
      WACHOVIA
      FIXED INCOME STRUCTURED TRADING SOLUTIONS, LLC, 

      as
      a Lender

	 	 
	 	
      By:
	 
	 	
      Name:

      Title: