________________________________________________

 

CREDIT AGREEMENT


dated as of April 14, 2000

among

SUNBURY GENERATION, LLC,

as Borrower

BAYERISCHE LANDESBANK GIROZENTRALE,

CAYMAN ISLANDS BRANCH,

as WC Lender

The Term Lenders Party Hereto From Time to Time

and

BAYERISCHE LANDESBANK GIROZENTRALE,

NEW YORK BRANCH,

as Administrative Agent

___________________________

BAYERISCHE LANDESBANK GIROZENTRALE,

NEW YORK BRANCH

Arranger and Syndication Agent

 

________________________________________________

 

 
	

TABLE OF CONTENTS 

    	
		
	

SECTION 1. DEFINITIONS  
	1
	
  1.01 Defined Terms 

    	1
	
  1.02 Terms Generally 

    	18
	
  1.03 Accounting Terms 

    	19
		
	


SECTION 2. THE CREDITS  

    	19
	
  2.01 Commitments 

    	19
	
  2.02 WC Borrowings and Term Loans 

    	19
	
  2.03 Requests for WC Borrowings 

    	20
	
  2.04 Funding of Loans 

    	21
	
  2.05 Termination and Reduction of WC Commitment 

    	21
	
  2.06 Repayment of Loans; Evidence of Debt 

    	22
	
  2.07 Voluntary Prepayment of Loans 

    	22
	
  2.08 Mandatory Prepayment of Loans 

    	23
	
  2.09 Payments Generally; Pro Rata Treatment; Sharing of Setoffs 

    	24
	
  2.10 Extension of WC Commitment 

    	25
		
	


SECTION 3. INTEREST, FEES, YIELD PROTECTION, ETC.  

    	26
	
  3.01 Interest 

    	26
	
  3.02 Interest Elections 

    	26
	
  3.03 Fees 

    	28
	
  3.04 Alternate Rate of Interest 

    	28
	
  3.05 Increased Costs; Illegality 

    	28
	
  3.06 Break Funding Payments 

    	30
	
  3.07 Taxes 

    	30
	
  3.08 Mitigation Obligations 

    	32
		
	


SECTION 4. REPRESENTATIONS AND WARRANTIES  

    	32
	
  4.01 Status and Ownership 

    	32
	
  4.02 Power and Authority 

    	33
	
  4.03 Execution and Binding Effect 

    	33
	
  4.04 Governmental Approvals; No Conflicts 

    	33
	
  4.05 Licenses and Permits 

    	33
	
  4.06 Financial Condition; No Material Adverse Change 

    	34
	
  4.07 Title to and Condition of Properties 

    	34
	
  4.08 Leases 

    	35
	
  4.09 Litigation and Environmental Matters 

    	36
	
  4.10 Compliance with Laws and Agreements 

    	36
	
  4.11 Regulatory Status 

    	36
	
  4.12 Taxes 

    	36
	4.13 ERISA

    	37
	
  4.14 Disclosure 

    	37
	
  4.15 Subsidiaries 

    	37
	
  4.16 Insurance 

    	37
	
  4.17 Labor Matters 

    	37
	
  4.18 Solvency 

    	38
	
  4.19 Security Documents 

    	38
	
  4.20 Federal Reserve Regulations 

    	39
		
	


SECTION 5. CONDITIONS  

    	39
	
  5.01 Effective Date 

    	39
	
  5.02 Each Borrowing 

    	43
		
	


SECTION 6. AFFIRMATIVE COVENANTS  

    	43
	
  6.01 Financial Statements and Other Information 

    	44
	
  6.02 Notices of Material Events 

    	45
	
  6.03 Existence; Conduct of Business 

    	46
	
  6.04 Payment of Obligations 

    	46
	
  6.05 Performance of Material Project Contracts 

    	46
	
  6.06 Maintenance of Properties 

    	46
	
  6.07 Books and Records; Inspection Rights 

    	47
	
  6.08 Compliance with Laws 

    	47
	
  6.09 Use of Proceeds 

    	47
	
  6.10 Information Regarding Collateral 

    	47
	
  6.11 Insurance 

    	48
	
  6.12 Casualty and Condemnation 

    	48
	
  6.13 Debt Service Reserve Account 

    	49
	
  6.14 Application of Operating Cash Flow 

    	50
	
  6.15 Environmental Compliance 

    	52
	
  6.16 Hedging Agreements 

    	52
	
  6.17 Further Assurances 

    	52
		
	


SECTION 7. NEGATIVE COVENANTS  

    	53
	
  7.01 Debt; Preferred Equity Interests 

    	53
	
  7.02 Liens 

    	53
	
  7.03 Fundamental Changes 

    	55
	
  7.04 Investments, Loans, Advances, Guarantees and Acquisitions 

    	55
	
  7.05 Capital Expenditures 

    	55
	
  7.06 Asset Sales 

    	55
	
  7.07 Sale and Lease-Back Transactions 

    	56
	
  7.08 Hedging Agreements 

    	56
	7.09 Restricted Payments

    	56
	
  7.10 Transactions with Affiliates 

    	56
	
  7.11 Modification of Material Contracts and Other Documents 

    	57
		
	


SECTION 8. EVENTS OF DEFAULT  

    	57
		
	


SECTION 9. THE ADMINISTRATIVE AGENT  

    	60
	
  9.01 Appointment 

    	60
	
  9.02 General Nature of Administrative Agent's Duties 

    	60
	
  9.03 Exercise of Powers 

    	61
	
  9.04 General Exculpatory Provisions 

    	61
	
  9.05 Administration by the Administrative Agent 

    	62
	
  9.06 Lenders Not Relying on Administrative Agent or Other Lenders 

    	63
	
  9.07 Indemnification 

    	63
	
  9.08 Administrative Agent in its Individual Capacity 

    	64
	
  9.09 Holders of Notes 

    	64
	
  9.10 Successor Administrative Agent 

    	64
	
  9.11 Additional Administrative Agents 

    	65
	
  9.12 Calculations 

    	65
	
  9.13 Other Agents 

    	65
		
	


SECTION 10. MISCELLANEOUS  

    	66
	
  10.01 Notices 

    	66
	
  10.02 Waivers; Amendments 

    	67
	
  10.03 Expenses; Indemnity; Damage Waiver 

    	69
	
  10.04 Successors and Assigns 

    	70
	
  10.05 Survival 

    	72
	
  10.06 Counterparts; Integration; Effectiveness 

    	72
	
  10.07 Severability 

    	73
	
  10.08 Right of Setoff 

    	73
	
  10.09 Governing Law; Jurisdiction; Consent to Service of Process 

    	74
	
  10.10 WAIVER OF JURY TRIAL 

    	74
	
  10.11 Headings 

    	75
	
  10.12 Interest Rate Limitation 

    	75
	
  ANNEX I             
  Principal Payment Schedule

    	



   




SCHEDULES:

	
      Schedule 1.01A
	
      Material Project Contracts

	
      Schedule 1.01B
	
      Mortgaged Properties

	
      Schedule 4.05(a)
	
      Required Permits

	
      Schedule 4.05(b)
	
      Environmental Permits

	
      Schedule 4.07(a)
	
      Title Exceptions

	
      Schedule 4.07(b)
	
      Condition of Assets

	
      Schedule 4.07(c)
	
      Real Estate

	
      Schedule 4.07(d)
	
      Condemnation; First Refusal Rights

	
      Schedule 4.08
	
      Leases

	
      Schedule 4.09
	
      Litigation and Environmental Matters

	
      Schedule 4.16
	
      Insurance

	
      Schedule 7.02
	
      Existing Liens

	
      Schedule 7.04
	
      Existing Investments




EXHIBITS:

	
      Exhibit A-1
	
      Form of WC Note

	
      Exhibit A-2
	
      Form of Term Note

	
      Exhibit B
	
      Form of Assignment Agreement

	
      Exhibit C
	
      Form of Borrowing/Continuation Request

	
      Exhibit D
	
      Form of Contract Assignment

	
      Exhibit E
	
      Form of Subordination Agreement

	
      Exhibit F
	
      Form of PPL Letter of Credit

	
      Exhibit G
	
      Form of Debt Service Reserve Letter of Credit

	
      Exhibit H
	
      Form of Security Agreement

	
      Exhibit I
	
      Form of Opinion of Counsel

	 	 




    CREDIT AGREEMENT, dated as of April 14, 2000, among SUNBURY
GENERATION, LLC, BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH, as
WC Lender, the Term Lenders party hereto from time to time and BAYERISCHE
LANDESBANK GIROZENTRALE, NEW YORK BRANCH, as Administrative Agent.

    The parties hereto agree as follows:


  
    
      
        
          
          SECTION 1.    DEFINITIONS

          

        

      

    

  

      1.01    Defined
  Terms


           
As used in this Agreement, the following terms have the
meanings specified in this Section.

           
"Adjusted LIBO Rate" means, with respect to
any Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

           
"Administrative Agent" means Bayerische
Landesbank Girozentrale, New York Branch, in its capacity as administrative
agent for the Lenders hereunder.

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

           
"Affiliate Agreements" means, collectively,
the Anthracite Silt Supply Agreement dated as of November 1, 1999 between
the Borrower and Penfield, the Services Agreement dated as of November 1,
1999 between the Borrower and Penfield, the Power Purchase Agreement dated as of
January 15, 2000 between the Borrower and ESI, the Brokering and Dispatch
Agreement dated as of January 15, 2000 between the Borrower and ESI, the
Master Affiliated Interest Agreement dated as of May 21, 1997 among the
Borrower, WPSR and other Affiliates of WPSR, and the Tax Allocation Agreement
dated as of September 1, 1994 among the Borrower, WPSR and other affiliates
of WPSR, and any future agreements approved by the Administrative Agent to which
the Borrower and any Affiliate or Affiliates are parties.

           
"Applicable Term Margin" means, at all times
during the applicable period set forth below: (a) with respect to Term
Eurodollar Borrowings the percentage per annum set forth below adjacent to the
applicable period under the heading "Eurodollar Margin"; and (b) with
respect to Term Federal Funds Borrowings, the percentage per annum set forth
below adjacent to the applicable period under the heading "Federal Funds
Margin."



	
      Period
	
      Eurodollar Margin
	
      Federal Funds Margin

	
      Initial Funding Date through March 31, 2004
	
      1.25%
	
      1.75%

	
      April 1, 2004 through March 31, 2008
	
      1.50%
	
      2.00%

	
      April 1, 2008 through March 31, 2012
	
      1.75%
	
      2.25%

	
      April 1, 2012 through March 31, 2016
	
      2.00%
	
      2.50%

	
      April 1, 2016 through March 31, 2018
	
      2.25%
	
      2.75%




           
"Applicable WC Margin" means (i) in the case
of Eurodollar Loans, 1.25% per annum, and (ii) in the case of Federal Funds
Loans, 2.00% per annum.

           
"Assignment Agreement" means an assignment
and acceptance agreement, substantially in the form of Exhibit B or in any other
form approved by the Administrative Agent and the Borrower, entered into by a
Lender and an assignee (with the consent of the Borrower, if required by Section
10.04) and accepted by the Administrative Agent.

           
"Available Debt Service Reserve Account Balance"
means, as of any date of determination, the amount equal to the lesser of (i)
the amount of cash held in the Debt Service Reserve Account on such date plus
the liquidation value (either giving effect to or assuming sale on such date) of
Eligible Investments held in the Debt Service Reserve Account on such date, net
of selling expenses (collectively, "available cash"), and (ii) the
difference, if positive, between (A) the available cash in the Debt Service
Reserve Account on such date, and (B) the Debt Service Reserve Requirement on
such date.

           
"Available WC Commitment" means (i) at any
time when the Debt Service Coverage Ratio, as shown in the most recent Quarterly
Certificate delivered by the Borrower, is equal to or greater than 1.00, the
excess, if any, of the WC Commitment Amount over the total WC Loans outstanding
to the Borrower, and (ii) at any time when the Debt Service Coverage Ratio as
shown in the most recent such Quarterly Certificate is less than 1.00, zero.

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

           
"Borrower" means Sunbury Generation, LLC, a
Delaware limited liability company.

           
"Borrowing" means a borrowing consisting of
one or more Loans of the same Type and Interest Period, if applicable, made,
continued or converted on the same Business Day.

           
"Borrowing Request" means a request by the
Borrower for a Borrowing pursuant to Section 2.03, substantially in the form of
Exhibit C with appropriate modifications and insertions.

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

           
"Capital Expenditures" of any Person means
expenditures (whether paid in cash or other consideration or accrued as a
liability) for fixed or capital assets (excluding (i) any capitalized interest
and any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations, (ii) any
replacement assets acquired with the proceeds of insurance, (iii) purchases of
emissions allowances and (iv) purchases of fuel inventory) made by such Person.

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

           
"Change in Control" means (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof), other than WPSR or any Affiliate thereof, of shares
representing more than 50% of the aggregate ordinary voting power or
economic interests represented by the issued and outstanding equity securities
of PDI on a fully diluted basis without the prior written consent of the
Required Lenders (such consent not to be unreasonably withheld or delayed), (b)
the failure of PDI or any Affiliate thereof to own directly, beneficially and of
record, more than 50% of the aggregate ordinary voting power represented by the
outstanding membership interests of the Borrower on a fully diluted basis, in
each case, without the prior written consent of the Required Lenders (such
consent not to be unreasonably withheld or delayed), or (c) the acquisition by
any Person or group, other than PDI, WPSR and any Affiliates thereof, of Control
over the Borrower (other than through the ownership of membership interests in
the Borrower), or operating control over the Project, by contract or otherwise,
without the prior written consent of the Required Lenders (such consent not to
be unreasonably withheld or delayed). To avoid uncertainty in the interpretation
of this definition, in the event of any dispute as to whether any required
consent has been unreasonably withheld or delayed by any party hereto, the
consent at issue shall be conclusively presumed not to have been given by such
party until either (x) such party shall have given its express written consent
to the matter at issue or (y) a final, nonappealable judgment shall have been
issued by a court of competent jurisdiction determining that such party acted
unreasonably in withholding or delaying its consent and directing such party to
give its consent.

           
"Change in Law" means (a) the adoption of
any law, rule or regulation after the date of this Agreement, (b) any change in
any law, rule or regulation or in the interpretation or application thereof by
any Governmental Authority after the date of this Agreement or (c) compliance by
any Lender (or, for purposes of Section 3.07(b), by any lending office of such
Lender or by such Lender's holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

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

           
"Collateral" means any and all
"Collateral" or "Mortgaged Property," as defined in any
applicable Security Document.

           
"Continuation Request" means a request by
the Borrower to continue Eurodollar Loans pursuant to Section 3.02,
substantially in the form of Exhibit C with appropriate modifications and
insertions.

           
"Contract Assignment" means an Assignment of
Contracts and Licenses, substantially in the form of Exhibit D, from the
Borrower to the Administrative Agent for the benefit of the Lenders.

           
"Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise. The terms "Controlling" and
"Controlled" have meanings correlative thereto.

           
"Debt" of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services,
(f) all Debt of others secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Debt secured thereby has
been assumed, (g) all Guarantees by such Person of Debt of others, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Debt of any Person shall
include the Debt of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Debt provide that such Person is
not liable therefor, but shall not include current accounts payable incurred in
the ordinary course of business.

           
"Debt Service" for any specified fiscal
period, means the sum of (a) all interest expense (including the interest
component of Capital Lease Obligations and allowance for borrowed funds used
during construction), commitment and other fees, and hedging costs paid or
payable by the Borrower in respect of all Debt of the Borrower (other than WC
Loans and Subordinated Debt) during such period, and (b) the aggregate amount of
all payments of principal of Debt of the Borrower (other than WC Loans and
Subordinated Debt) made or scheduled to be made by the Borrower during such
period.

           
"Debt Service Coverage Ratio" means, for any
specified fiscal quarter of the Borrower, the quotient of (a) the aggregate Net
Operating Cash Flow of the Borrower for the four consecutive fiscal quarters
ended on the last day of such quarter, divided by (b) the aggregate Debt Service
of the Borrower for the four consecutive fiscal quarters ended on the last day
of such quarter.

           
"Debt Service Reserve Account" has the
meaning assigned to such term in Section 6.13(a).

           
"Debt Service Reserve Letter of Credit"
means an irrevocable standby letter of credit substantially in the form of
Exhibit G, issued by an Eligible Bank in favor of the Administrative Agent, as
agent for the Lenders, with an expiration date no earlier than one year from the
date of issuance.

           
"Debt Service Reserve Requirement" means, as
of the date of any determination, the excess, if any, of (i) the sum of (a)
interest in respect of the Term Loans payable during the period of six months
commencing on the day next following the end of the most recent fiscal quarter
ended on or before the date of determination, calculated for such period by
giving effect to the weighted average interest rate in effect with respect to
such Loans at the end of such quarter and the payments described in the
following clause, and (b) scheduled payments of principal of the Term Loans
during such six-month period, over (ii) the amount available to be drawn under
any unexpired Debt Service Reserve Letter of Credit then held by the
Administrative Agent.

           
"Default" means any event or condition which
constitutes an Event of Default or that upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default.

           
"Determination Date" means, consecutively,
each of December 31, 2005 and December 31, 2011.

           
"dollars" or "$" refers to
lawful money of the United States of America.

           
"Effective Date" means the date on which the
conditions specified in Section 5.01 are satisfied (or waived in accordance with
Section 10.02).

           
"Eligible Bank" means a commercial bank
having combined capital and surplus of at least $100,000,000 and a short-term
credit rating of "P-1" from Moody's and "A-1" from Standard
& Poor's, and otherwise reasonably satisfactory to the Administrative Agent.

           
"Eligible Investments" means any of the
following: (i) demand deposits, time deposits or certificates of deposit
maturing in 30 days or less from the date of issuance of any commercial bank
having a combined capital and surplus of at least $100,000,000 and a short-term
credit rating of P-1 from Moody's and A-1 from Standard & Poor's on the date
of deposit or purchase; (ii) direct obligations of the United States of America
or any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in 30 days or less from the
date of investment; (iii) commercial paper maturing in 30 days or less from the
date of investment having a rating of P-1 from Moody's or A-1 from Standard
& Poor's on the date of investment; and (iv) money market funds having, at
the time of the investment, ratings of at least P-1 by Moody's and A-1 from
Standard & Poor's.

           
"Environmental Laws" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices
or binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.

           
"Environmental Liability" means any
liability, contingent or otherwise (including any liability for damages, costs
of environmental remediation, fines, penalties or indemnities), of the Borrower
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

           
"Environmental Permit" has the meaning
assigned to such term in Section 4.05(b).

           
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.

           
"ERISA Affiliate" means any trade or
business (whether or not incorporated) that, together with the Borrower, is
treated as a single employer under Section 414(b) or (c) of the Code or, solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.

           
"ERISA Event" means (a) any "reportable
event," as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the
Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Plan; (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any ERISA
Affiliate of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

           
"ESI" means WPS Energy Services, Inc., a
wholly-owned indirect Subsidiary of WPSR.

           
"Eurodollar" when used in conjunction with
the term "Loan" or "Borrowing," means a Loan or Borrowing
which bears interest at a rate determined by reference to the Adjusted LIBO
Rate.

           
"Event of Default" has the meaning assigned
to such term in Article 8.

           
"Excluded Taxes" means, with respect to any
Lender, any other recipient of any payment to be made by or on account of any
obligation of the Borrower under any Loan Document or the Administrative Agent,
(a) income or franchise taxes imposed on (or measured by) its income or capital
by the United States of America or the Federal Republic of Germany, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction to which any such Lender, other recipient or the Administrative
Agent is subject, and (c) in the case of a Foreign Lender, any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Lender's failure to comply with
Section 3.07(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or at
the time of assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 3.07(a).

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

           
"Federal Funds" when used in conjunction
with the term "Loan" or "Borrowing," means a Loan or
Borrowing which bears interest at a rate determined by reference to the Federal
Funds Effective Rate.

           
"FERC" means the United States Federal
Energy Regulatory Commission.

           
"Financial Officer" means the chief
financial officer, principal accounting officer, vice president in charge of
finance or accounting, treasurer, or controller, any assistant treasurer or
assistant controller, or any manager performing analogous limited liability
company functions, of the Borrower.

           
"Foreign Lender" means any Lender that is
organized under the laws of any jurisdiction other than the United States of
America or any state thereof or the District of Columbia.

           
"Fuel Subordination Agreement" means the
Fuel Subordination Agreement of even date herewith among the Administrative
Agent, Penfield and the Borrower.

           
"GAAP" means generally accepted accounting
principles in the United States of America, consistently applied.

           
"Governmental Authority" means the
government of the United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

           
"Guarantee" of or by any Person (the "guarantor")
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Debt or other obligation of any
other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Debt or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor as to enable the primary obligor
to pay such Debt or other obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Debt or
obligation, provided that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business.

           
"Hazardous Materials" means all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes
or other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

           
"Hedging Agreement" means any interest rate
protection agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or commodity
price hedging arrangement.

           
"Historical Average DSCR" means the average
of the Debt Service Coverage Ratios shown on all of the Quarterly Certificates
delivered by the Borrower during (i) the period from the date of this Agreement
to the first Determination Date, in the case of the first Renewal Date, or (ii)
the period from the first Determination Date to the second Determination Date,
in the case of the second Renewal Date.

           
"Historical Minimum DSCR" means the lowest
Debt Service Coverage Ratio shown on any Quarterly Certificate delivered by the
Borrower during (i) the period from the date of this Agreement to the first
Determination Date, in the case of the first Renewal Date, or (ii) the period
from the first Determination Date to the second Determination Date, in the case
of the second Renewal Date.

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

           
"Indemnified Taxes" means Taxes other than
Excluded Taxes.

           
"Indemnitee" has the meaning assigned to
such term in Section 10.03(b).

           
"Independent Engineer" means Parsons Energy
& Chemicals Group Inc.

           
"Initial Funding Date" means the date, on or
after the Effective Date, on which the Borrower proposes to borrow the Term
Loans pursuant to a Borrowing Request delivered in accordance with this
Agreement.

           
"Interest Payment Date" means (a) with
respect to any Eurodollar Borrowing, the last day of the Interest Period
applicable to such Eurodollar Borrowing and, in the case of a Eurodollar
Borrowing with an Interest Period of more than six months' duration, the day
prior to the last day of such Interest Period that occurs at an interval of six
months' duration after the first day of such Interest Period, and (b) with
respect to any Federal Funds Borrowing, the last day of each March, June,
September and December.

           
"Interest Period" means, with respect to any
Eurodollar Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in the calendar month that is one,
two, three, six, nine or twelve months (or any other number of months less than
twelve, if made available by the Administrative Agent) thereafter, as the
Borrower may elect, provided that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Eurodollar Borrowing initially shall be the date
on which such Borrowing is made and thereafter shall be the effective date of
the most recent continuation of such Eurodollar Borrowing.

           
"Knowledge" means the actual knowledge,
after due inquiry, of the officers or managers of the Borrower charged with
responsibility for the relevant function or matter.

           
"Lender" means, depending on the context,
the WC Lender or any Term Lender.

           
"LIBO Rate" means, with respect to any
Eurodollar Borrowing for any Interest Period, a rate of interest per annum equal
to the rate appearing on Page 3750 of the Telerate Service (or on any successor
or substitute page of such Service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period.

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

           
"Loan" means any WC Loan or any Term Loan,
as applicable; "Loans" means any or all of the WC Loans and the
Term Loans.

           
"Loan Documents" means this Agreement, the
WC Note, the Term Notes, each Subordination Agreement, the Fuel Subordination
Agreement and the Security Documents.

           
"LOC Bank" means Bayerische Landesbank
Girozentrale, New York Branch.

           
"Letter of Credit" means the PPL Letter of
Credit or the Debt Service Reserve Letter of Credit, as applicable; "Letters
of Credit" means the PPL Letter of Credit and the Debt Service Reserve
Letter of Credit.

           
"Letter of Credit Exposure" means, at the
time of any determination, the sum of (i) the amount then available to be drawn
against the LOC Bank under the Letters of Credit, and (ii) any unpaid
reimbursement obligations of WPSR to the LOC Bank with respect to the Letters of
Credit.

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

           
"Material Adverse Effect" means a material
adverse effect on (a) the business, assets, operations, or condition, financial
or otherwise, of the Borrower, (b) the ability of the Borrower to perform any of
its material obligations under any Loan Document or (c) the legality, validity
or enforceability of any Loan Document.

           
"Material Debt" means Debt (other than Debt
under the Loan Documents and Subordinated Debt) or obligations in respect of one
or more Hedging Agreements, of the Borrower in an aggregate principal amount
exceeding $1,000,000. For purposes of this definition, the "principal
amount" of the obligations of the Borrower in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower would be required to pay if such
Hedging Agreement were terminated at such time.

           
"Material Project Contract" means any of the
contracts listed on Schedule 1.01A (excluding the Transition Services
Contracts), as such schedule may be updated from time to time pursuant to
Section 6.01(a)(iii).

           
"Moody's" means Moody's Investors Service,
Inc.; provided, that if such corporation (or its successors or assigns)
shall for any reason no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency selected by the Administrative Agent.

           
"Mortgage" means a mortgage, deed of trust,
assignment of leases and rents, leasehold mortgage or other security document
granting a Lien on any Mortgaged Property to secure the Obligations. Each
Mortgage shall be satisfactory in form and substance to the Administrative
Agent.

           
"Mortgaged Property" means, initially, each
parcel of real property and the improvements thereto owned by the Borrower and
identified on Schedule 1.01B.

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

           
"Net Operating Cash Flow" for any specified
period, means Operating Cash Flow for such period, less the sum of
(i) operation expense, (ii) maintenance expense, (iii) expense related to
non-operating income, and (iv) taxes other than income taxes on income of the
Borrower for such period.

           
"Net Proceeds" means, with respect to any
event, (a) the cash proceeds received in respect of such event, including (i)
any cash received in respect of any non-cash proceeds, but only as and when
received, (ii) in the case of a casualty, insurance proceeds and (iii) in the
case of a condemnation or similar event, condemnation awards and similar
payments, (b) net of the sum of (i) all reasonable fees and out-of-pocket
expenses paid by the Borrower to third parties in connection with such event,
(ii) in the case of a sale, transfer, lease or other disposition of an asset
(including pursuant to a sale and leaseback transaction), the amount of all
payments required to be made by the Borrower as a result of such event to repay
Debt (other than the Loans) secured by such asset or otherwise subject to
mandatory payment as a result of such event and (iii) the amount of all taxes
paid (or reasonably estimated to be payable) by the Borrower, and the amount of
any reserves established by the Borrower to fund contingent liabilities
reasonably estimated to be payable, in each case during the year that such event
occurred or the next succeeding year and that are directly attributable to such
event (as determined reasonably and in good faith by a Financial Officer of the
Borrower).

           
"Obligations" means (a) the due and punctual
payment of (i) principal of and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, commissions,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Borrower
to the Lenders, or that are otherwise payable to the Lenders, under this
Agreement and the other Loan Documents, (b) the due and punctual performance of
all covenants, agreements, obligations and liabilities of the Borrower under or
pursuant to this Agreement and the other Loan Documents and (c) all obligations
of the Borrower, monetary or otherwise, under each interest rate protection
agreement entered into with any Lender (including any branch thereof) as
counterparty in respect of any of the Loans.

           
"Officer" means the president, any vice
president, the secretary, any assistant vice president, any assistant secretary,
any Financial Officer, or any manager performing analogous limited liability
company functions, of the Borrower.

           
"Operating Cash Flow" for any specified
period, means the sum of (i) operating revenues and other operating income
relating to the sale of electrical energy by the Borrower for such period, (ii)
interest income and other non-operating income for such period and (iii) any
amounts drawn during such period from the Borrower's reserves for operating
expenses, reserves for capital expenditures and other reserves.

           
"Other Taxes" means any and all current or
future stamp or documentary taxes or any other excise or property taxes,
charges, recording fees or similar levies arising from any payment made to any
Lender or the Administrative Agent hereunder or from the execution, delivery or
enforcement of the Loan Documents.

           
"Parent" means Sunbury Holdings, LLC, a
wholly-owned Subsidiary of PDI, and the sole member of the Borrower.

           
"Payment Date" has the meaning assigned to
such term in Section 2.06(b).

           
"Participant" has the meaning assigned to
such term in Section 10.04(e).

           
"PBGC" means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any successor entity performing
similar functions.

           
"PDI" means WPS Power Development, Inc., a
wholly-owned indirect Subsidiary of WPSR.

           
"Penfield" means Penfield Collieries, LLC, a
wholly-owned indirect Subsidiary of WPSR.

           
"Percentage" of any Lender means, at any
time: (i) with respect to the Term Loans to be made by the Lenders on the
Initial Funding Date the Percentage set forth opposite such Lender's name on the
signature page hereto, and (ii) with respect to the aggregate amount of Term
Loans which are outstanding at such time, the percentage which the aggregate
principal amount of such Lender's Term Loans is of the total principal amount of
the Term Loans outstanding at such time, in all cases as changed from time to
time as a consequence of Assignment Agreements pursuant to Section 10.04 and as
reflected in the Register at such time.

           
"Perfection Certificate" means a certificate
in the form of Annex 2 to the Security Agreement or any other form approved by
the Administrative Agent.

           
"Permitted Encumbrances" means:


  
    (a) Liens imposed by law for taxes or other governmental
    charges or assessments that are not yet due or are being contested in
    compliance with Section 6.04;

    (b) carriers', warehousemen's, mechanics', materialmen's,
    repairmen's and other like Liens imposed by law, arising in the ordinary
    course of business and securing obligations that are not overdue by more
    than 60 days or are being contested in compliance with Section 6.04;

    (c) pledges and deposits made in the ordinary course of
    business in compliance with workers' compensation, unemployment insurance
    and other social security laws or regulations;

    (d) deposits to secure the performance of bids, trade
    contracts, leases, statutory obligations, surety and appeal bonds,
    performance bonds and other obligations of a like nature, in each case in
    the ordinary course of business;

    (e) judgment liens in respect of judgments that do not
    constitute an Event of Default under clause (j) of Article 8;

    (f) easements, zoning restrictions, rights-of-way,
    encroachments and similar encumbrances on real property that do not secure
    any monetary obligations and do not materially detract from the value of the
    affected property or materially interfere with the ordinary conduct of
    business of the Borrower; and

    (g) Liens, easements, rights-of-way, encroachments and
    other encumbrances set forth on Schedule 4.07(c).

  



           
"Permitted Investments" means:


  
    (a) direct obligations of, or obligations the principal
    of and interest on which are unconditionally guaranteed by, the United
    States of America (or by any agency thereof to the extent that such
    obligations are backed by the full faith and credit of the United States of
    America), in each case maturing within one year from the date of acquisition
    thereof;

    (b) investments in commercial paper maturing within 270
    days from the date of acquisition thereof and having, at such date of
    acquisition, the highest credit rating obtainable from Standard & Poor's
    or from Moody's;

    (c) investments in certificates of deposit, banker's
    acceptances and time deposits maturing within 180 days from the date of
    acquisition thereof issued or guaranteed by or placed with, and money market
    deposit accounts issued or offered by, any domestic office of any commercial
    bank organized under the laws of the United States of America or any State
    thereof that has a combined capital and surplus and undivided profits of not
    less than $500,000,000; and

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

  



           
"Person" means any natural person,
corporation, limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other entity.

           
"Plan" means any employee pension benefit
plan (other than a Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of
which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.

           
"PPL" means PPL Electric Utilities
Corporation, a Pennsylvania corporation formerly known as PP&L, Inc.

           
"PPL Letter of Credit" means an irrevocable
standby letter of credit substantially in the form of Exhibit F, (or any
substitution therefor) issued by an Eligible Bank in favor of PPL.

           
"Pro Forma Debt Service" for any specified
fiscal period means the sum of (a) all interest expense (including the interest
component of Capital Lease Obligations and allowance for borrowed funds used
during construction), commitment and other fees, and hedging costs, payable in
respect of all Debt of the Borrower (other than WC Loans and Subordinated Debt)
outstanding at the end of the fiscal quarter immediately preceding the
commencement of such fiscal period (the "reference date"), calculated
for such period by giving effect to the weighted average interest rate in effect
with respect to such Debt as of the reference date and the payment when due of
the amounts referred to in the following clause, and (b) the aggregate amount of
all payments of principal of Debt of the Borrower (other than WC Loans and
Subordinated Debt) that, as of the reference date, were scheduled to be made
during the specified period; provided, however, that Pro Forma Debt
Service as of the reference date immediately prior to the Effective Date shall
be calculated by giving effect to the borrowing of the Term Loans under this
Agreement.

           
"Pro Forma Debt Service Coverage Ratio"
means, as of the date of any determination, the quotient of (a) the Net
Operating Cash Flow of the Borrower as shown on the most recent Quarterly
Certificate, divided by (b) Pro Forma Debt Service for the fiscal quarter of the
Borrower commencing on the day next following the end of the fiscal quarter
covered by such Quarterly Certificate.

           
"Project" means the Sunbury Steam Electric
Station, a four-unit coal-fired generating station, including two black start
diesel generating sets and two oil-fired combustion turbine generators, with a
nominal capacity of 436.7 MW, located on the Susquehanna River in Monroe
township and the borough of Shamokin Dam, Snyder County, Pennsylvania, and
certain facilities and other assets associated therewith and ancillary thereto.

           
"Project Cost" means the cost to the
Borrower of acquiring the Project, including asset purchase costs, financing and
legal fees, fuel inventory, materials and tools inventory, purchase of emissions
allowances, a reserve for Capital Expenditures and purchases of emissions
allowances, the initial funding of the Debt Service Reserve Account, fees
incurred in connection with the Letters of Credit, and other transaction costs.

           
"Projected Average DSCR" means the average
of the Debt Service Coverage Ratios projected at the end of each of the fiscal
quarters of the Borrower occurring during the period of six years commencing on
the relevant Determination Date, as determined by the Borrower and approved by
the Renewal Independent Engineer.

           
"Quarterly Certificate" means a certificate
of the Borrower delivered to the Administrative Agent pursuant to Section
6.01(a)(iii).

           
"Real Estate" has the meaning assigned to
such term in Section 4.07(c).

           
"Register" has the meaning assigned to such
term in Section 10.04(c).

           
"Regulation D," "Regulation T,"
"Regulation U" or "Regulation X" means,
respectively, Regulation D, Regulation T, Regulation U or Regulation X,
respectively, of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.

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

           
"Renewal Date" means, consecutively, each of
March 31, 2006 and March 31, 2012.

           
"Renewal Independent Engineer" means an
independent engineering firm to be selected by the Borrower with the approval of
the Administrative Agent.

           
"Renewal Requirements" means that as of the
applicable Determination Date:


  
    (i) The Historical Minimum DSCR, the Historical Average
    DSCR and the Projected Average DSCR each shall have been equal to or greater
    than the amounts set forth opposite the applicable Determination Date in the
    following table:

  



 
	
      Determination Date
	
      Historical Minimum DSCR
	
      Historical Average DSCR
	
      Projected Average DSCR

	
      December 31, 2005
	
      1.00
	
      1.55
	
      1.90

	
      December 31, 2011
	
      1.00
	
      1.85
	
      2.80





  
    (ii) The assets constituting the Project are capable of
    generating electricity for a period of at least two years after the Term
    Maturity Date in amounts and with efficiencies as contemplated in the Base
    Case of the Borrower's Confidential Information Memorandum dated November
    1999;

    (iii) No Event of Default shall have occurred and be
    continuing; and

    (iv) The amount of cash and the fair market value of
    Eligible Investments on deposit in the Debt Service Reserve Account shall
    have been at least equal to the Debt Service Reserve Requirement.

  



           
"Required Lenders" means, at any time, the
Lenders and the LOC Bank, or any combination of them, having, in the aggregate,
Letter of Credit Exposure, outstanding WC Loans, outstanding Term Loans and
unused WC Commitment representing more than 50% of the sum of the outstanding
Letter of Credit Exposure, WC Loans and Term Loans, and unused WC Commitment at
such time; or in the case of matters described in the definition of "Change
of Control" in this Section and in Sections 7.11, 8, 9.10 and 10.02(d),
66-2/3% or more of such sum.

           
"Required Permit" has the meaning assigned
to such term in Section 4.07(a).

           
"Restricted Cash Flow" has the meaning
assigned thereto in Section 6.14(c).

           
"Restricted Payment" means (i) any dividend
or other distribution by the Borrower (whether in cash, securities or other
property) with respect to any shares of any class of equity securities of the
Borrower or any other equity interest in the Borrower, (ii) any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares or equity interest or any option,
warrant or other right to acquire any such shares or equity interest, and (iii)
any payment of principal, premium or interest with respect to Debt of the
Borrower to any Affiliate, whether at maturity, upon acceleration or otherwise.

           
"Security Agreement" means the Security
Agreement, substantially in the form of Exhibit H, between the Borrower and the
Administrative Agent, for the benefit of the Lenders.

           
"Security Documents" means the Security
Agreement, the Mortgage, the Contract Assignments, and each other security
agreement, instrument or other document executed or delivered pursuant to
Section 6.17 to secure any of the Obligations.

           
"Senior Company Guarantee" means an
unconditional Guarantee, in form and substance reasonably satisfactory to the
Administrative Agent, in favor of the Borrower and the Administrative Agent for
the benefit of the Lenders, by any of WPSR, PDI, ESI, WPS Resources Capital
Corporation, the Parent or Penfield, provided, that at the date of
execution thereof such guarantor has an issuer rating of at least A3 from
Moody's or at least A- from Standard & Poor's.

           
"Standard & Poor's" means Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.; provided,
that if such corporation (or its successors or assigns) shall for any reason no
longer perform the functions of a securities rating agency, "Standard &
Poor's" shall be deemed to refer to any other nationally recognized
securities rating agency selected by the Administrative Agent.

           
"Statutory Reserve Rate" means a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D). Such reserve
percentages shall include those imposed pursuant to Regulation D. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

           
"Subordinated Debt" means Debt of the
Borrower to the Parent or any other Person that, in each instance, is fully and
unconditionally subordinated to the Obligations as to payment of principal and
interest pursuant to a Subordination Agreement or another agreement or
instrument satisfactory to the Administrative Agent.

           
"Subsidiary" means, with respect to any
Person (the "parent") at any date, any corporation, limited
liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity of which securities
or other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held by the parent or one or more subsidiaries of the parent.

           
"Subordination Agreement" means a
Subordination Agreement, substantially in the form of Exhibit E.

           
"Taxes" means any and all current or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.

           
"Term Commitment Amount" means the lesser of
(i) $86,600,000 and (ii) an amount equal to 70 percent of the Project Cost, as
certified by the Borrower to the Administrative Agent on or before the Effective
Date.

           
"Term Lender" means each Person that has
executed this Agreement as a Term Lender, and any other Person that shall have
become a party hereto pursuant to an Assignment Agreement, excluding any Person
that has ceased to be a party hereto pursuant to an Assignment Agreement.

           
"Term Loan" means a loan made by a Term
Lender pursuant to Section 2.01(b) as to which a single Interest Period is in
effect.

           
"Term Maturity Date" means March 31, 2018.

           
"Term Note" means a promissory note
evidencing Term Loans substantially in the form of Exhibit A-2.

           
"Transition Services Contracts" means the
contracts identified on Schedule 1.01A as "Transition Services
Agreements."

           
"Type", when used in reference to any Loan
refers to whether the rate of interest on such Loan is determined by reference
to the Adjusted LIBO Rate or the Federal Funds Effective Rate.

           
"Uniform Commercial Code" when used in
relation to any Collateral, means the Uniform Commercial Code as enacted and in
effect in the jurisdiction in which such Collateral is located at the time of
the attachment of a security interest thereto or, if different, the jurisdiction
in which a Uniform Commercial Code financing statement is required to be filed
in order to perfect a security interest in such Collateral.

           
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title
IV of ERISA.

           
"WC Borrowing" means a Borrowing consisting
of one or more WC Loans.

           
"WC Commitment" means the commitment of the
WC Lender to make WC Loans to the Borrower in an aggregate amount not in excess
of the WC Commitment Amount, subject to the terms and conditions of this
Agreement.

           
"WC Commitment Amount" means $2,700,000, or
such lesser amount to which the WC Commitment may be reduced from time to time
pursuant to Section 2.05(b).

           
"WC Loan" means a loan made by the WC Lender
pursuant to Section 2.01(a) as to which a single Interest Period is in effect.

           
"WC Lender" means Bayerische Landesbank
Girozentrale, Cayman Islands Branch.

           
"WC Maturity Date" means March 31, 2006, or
such later date to which the Maturity Date may be extended in accordance with
Section 2.10.

           
"WC Note" means a promissory note evidencing
WC Loans substantially in the form of Exhibit A-1.

           
"WC
Termination Date" means the earliest to occur of (i) February 28, 2006,
or such later date to which the WC Termination Date shall be extended in
accordance with Section 2.10, (ii) the date of termination or reduction in whole
of the WC Commitment pursuant to Section 2.05 or Article 8 or (iii) the date of
acceleration of all amounts payable under this Agreement and under the Notes
pursuant to Article 8.

           
"WPSR" means WPS Resources Corporation, a
Wisconsin corporation.


    1.02    
Terms
Generally


           
The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and
"including" are not words of limitation, and the words
"will" and "shall" both imply a promise and not mere
intention. Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein,"
"hereof" and "hereunder," and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Sections, Annexes,
Exhibits and Schedules shall be construed to refer to Sections of, and Annexes,
Exhibits and Schedules to, this Agreement, (e) all references to time of day
shall mean New York City time, and (f) the words "asset" and
"property" shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights. Any reference to an
applicable Lender shall mean (i) in the case of WC Loans, the WC Lender and (ii)
in the case of Term Loans, the Term Lenders.


    1.03     Accounting
Terms


           
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP applied on a basis consistent with the
principles employed in the preparation of the financial statements of the
Borrower referred to in Section 6.01. Unless the context otherwise requires, any
reference to a fiscal period refers to the relevant fiscal period of the
Borrower.

          
          SECTION 2.     THE
          CREDITS

              2.01    Commitments


           
(a) Subject to the terms and
conditions set forth herein, the WC Lender agrees to make WC Loans to the
Borrower from time to time at the Borrower's request on any Business Day during
the period from the Initial Funding Date until the WC Termination Date in an
aggregate principal amount not to exceed the Available WC Commitment. Within the
foregoing limit and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow WC Loans.

           
(b) Subject to the terms and
conditions hereof, each Term Lender severally agrees to make Term Loans to the
Borrower on the Initial Funding Date in a principal amount equal to such Term
Lender's Percentage of the Term Commitment Amount.


    2.02     WC
Borrowings and Term Loans


           
(a) Each WC Borrowing shall consist of WC Loans from the WC
Lender. The Term Lenders shall not have any right or obligation to make WC Loans
to the Borrower or to participate therein. Each WC Borrowing shall be in an
aggregate principal amount that is an integral multiple of $100,000; provided,
that one WC Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the Available WC Commitment.

           
(b) The Term Loans shall be made by the Term Lenders on the
Initial Funding Date, in proportion to their respective Percentages, in an
aggregate principal amount equal to the Term Commitment Amount. The failure of
any Term Lender to make the Term Loans required to be made by it shall not
relieve any other Term Lender of its obligations hereunder. The commitments of
the Term Lenders are several, and no Lender shall be responsible for any other
Lender's failure to make a Term Loan as required.

           
(c) Unless Section 3.04 is applicable, the Term Loans and
each WC Borrowing shall be comprised entirely of Eurodollar Loans, in each case
as the Borrower may request in accordance herewith. There shall not at any time
be more than eight Interest Periods in effect with respect to WC Loans or more
than four Interest Periods in effect with respect to Term Loans. Each Lender at
its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan, provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement or any other obligation of
the Borrower or the Lenders under this Agreement.

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


    2.03     Requests
for WC Borrowings


           
To request a WC Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case of a
Federal Funds Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by
delivery or telecopy to the Administrative Agent of a written Borrowing Request
signed by the Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:


    (i) the aggregate amount of the requested WC Borrowing;

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

    (iii) the Type of the Borrowing, which shall be a
    Eurodollar Borrowing unless Section 3.04 is applicable;

    (iv) in the case of a Eurodollar Borrowing, the initial
    Interest Period to be applicable thereto, which shall be a period
    contemplated by the definition of the term "Interest Period"; and

    (v) the location and number of the Borrower's account to
    which funds are to be disbursed, which shall comply with the requirements of
    Section 2.04.



If no Interest Period is specified with respect to any
requested Eurodollar Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.


    2.04    
Funding
of Loans


           
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
Subject to Section 5.02, the Administrative Agent will make such Loans available
to the Borrower by promptly crediting or otherwise transferring the amounts so
received, in like funds, to an account of the Borrower maintained with the
Administrative Agent and designated by the Borrower in the applicable Borrowing
Request.

           
(b) Unless the Administrative Agent
shall have received notice from a Term Lender prior to the Initial Funding Date
that such Lender will not make available to the Administrative Agent such
Lender's share of the Term Loans, the Administrative Agent may assume that such
Lender has made such share available on the Initial Funding Date in accordance
with paragraph (a) of this Section and may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. In such event, if a Term
Lender has not in fact made its share of the Term Loans available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Term Lender, the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the Borrower, the interest rate that would be otherwise
applicable to such Borrowing. If a Term Lender pays the required amount to the
Administrative Agent, then such amount shall constitute such Lender's Term Loan.


    2.05     Termination
and Reduction of WC Commitment


           
(a) Unless previously terminated, the WC Commitment shall
terminate on the WC Termination Date.

           
(b) The Borrower may at any time
terminate the WC Commitment, or from time to time reduce the WC Commitment
Amount; provided, that (i) the Borrower shall not terminate the WC
Commitment or reduce the WC Commitment Amount if, after giving effect to any
concurrent prepayment of the WC Loans in accordance with Section 2.08(a), the
sum of the WC Loans outstanding would exceed the WC Commitment Amount, and (ii)
each such reduction shall be in an amount that is an integral multiple of
$100,000.

           
(c) The Borrower shall notify the Administrative Agent of any
election to terminate the WC Commitment or reduce the WC Commitment Amount under
paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the WC Lender of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided,
that a notice of termination of the WC Commitment delivered by the Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination of the WC Commitment or reduction of
the WC Commitment Amount hereunder shall be permanent.


    2.06     Repayment
of Loans; Evidence of Debt


           
(a) The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of each applicable Lender the then
unpaid principal amount of each WC Loan and Term Loan on the WC Maturity Date
and Term Maturity Date, respectively.

           
(b) The principal amount of the Term
Loans shall be payable in consecutive quarterly installments on the last day of
each March, June, September and December, commencing on June 30, 2000, and in a
final installment due on the Term Maturity Date (each, a "Payment Date").
Each such installment of principal shall be the amount set forth opposite the
applicable Payment Date in the Principal Payment Schedule attached hereto as
Annex I (or any lesser amount resulting from the application of mandatory
prepayments pursuant to Section 2.08(b)), except that the final installment
shall be the amount necessary to pay in full the unpaid principal amount of the
Term Loans.

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

           
(d) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.

           
(e) The entries made in the accounts maintained pursuant to
paragraph (c) or (d) of this Section shall, to the extent not inconsistent with
any entries made in any Note, be prima facie evidence of the existence and
amounts of the obligations recorded therein, provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

           
(f) The Loans and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or
more Notes payable to the order of the payee named therein and its registered
assigns.


    2.07     Voluntary
Prepayment of Loans


           
(a) The Borrower shall have the right
at any time and from time to time to prepay any Loans in whole or in part on any
Business Day, without premium or penalty (but subject to Section 3.06); provided,
that: (i) no voluntary prepayment of Eurodollar Loans may be made on a day other
than the last day of the Interest Period applicable thereto; (ii) each voluntary
prepayment of Term Loans shall be in an amount equal to $1,000,000 or an
integral multiple thereof and each voluntary prepayment of WC Loans shall be in
an amount equal to $100,000 or an integral multiple thereof or, in each case,
the outstanding principal balance of the Loans if less; (iii) no voluntary
prepayment of Eurodollar Term Loans may be made that would result in the
aggregate outstanding principal amount of Loans as to which a particular
Interest Period is in effect being less than $1,000,000; and (iv) the Borrower
shall have given the Administrative Agent written notice of such prepayment in
accordance with paragraph (b) of this Section. Voluntary prepayments shall be
accompanied by accrued interest to the extent required by Section 3.01. Each
voluntary prepayment of Term Loans shall be applied to installments of principal
in inverse order of maturity. Term Loans which are prepaid or repaid, in whole
or in part, may not be reborrowed.

           
(b) The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any voluntary
prepayment hereunder (i) in the case of prepayment of Eurodollar Loans, not
later than 11:00 a.m., New York City time, three Business Days before the date
of prepayment or (ii) in the case of prepayment of Federal Funds Loans, not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of Loans to be prepaid; provided,
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the WC Commitment as contemplated by Section 2.05, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.05. Promptly following receipt of any such prepayment
notice, the Administrative Agent shall advise the applicable Lenders of the
contents thereof.


    2.08     Mandatory Prepayment
of Loans


           
(a) The principal amount of the Loans
shall be prepaid under the following circumstances:


  
    (i) The WC Loans and the Term Loans shall be prepaid
    under the circumstances and to the extent of the amounts specified in
    Sections 6.12(c) and 6.14(c), pro rata in proportion to the respective
    principal amounts of the WC Loans and the Term Loans outstanding at the date
    of prepayment. Unless an Event of Default has occurred and is continuing,
    the Administrative Agent will cause prepayments pursuant to this paragraph
    from funds held by the Administrative Agent pursuant to Section 6.12(b) to
    be made, to the extent reasonably practicable, on the last day of the
    Interest Period or Periods then in effect with respect to the respective
    Loans; except that if an Event of Default has occurred and is continuing,
    the Administrative Agent may cause the Loans to be prepaid on any date
    selected by it.

    (ii) In the event that the
    Renewal Requirements shall not have been met on either Renewal Date, as
    demonstrated by the timely delivery to the Administrative Agent and the
    Lenders of the reports and certificates required by Section 6.01(c),
    commencing on such Renewal Date the Borrower shall thereafter, for so long
    as any Term Loans are outstanding, on the 5th Business Day
    following the delivery of each Quarterly Certificate prepay the Term Loans
    in an amount equal to the amount of Restricted Cash Flow shown on such
    Quarterly Certificate, less the amount of any prepayments required by
    Section 6.14(c).

    (iii) In the event of any partial
    reduction of the WC Commitment Amount pursuant to Section 2.05(b), then (i)
    at or prior to the date of such reduction, the Administrative Agent shall
    notify the Borrower and the WC Lender of the sum of the principal amount of
    the WC Loans then outstanding and (ii) if such sum would exceed the WC
    Commitment Amount after giving effect to such reduction, then the Borrower
    shall prepay WC Loans on the date of such reduction in amount sufficient to
    eliminate such excess.

    (iv) In the event of termination of the WC Commitment
    pursuant to Section 2.05(b), the Borrower shall prepay all WC Loans
    outstanding on the date of such termination.

  



           
(b) Each mandatory prepayment of Term
Loans shall be applied ratably to the remaining installments of principal
required under 2.06(b).


    2.09     Payments
Generally; Pro Rata Treatment; Sharing of Setoffs


           
(a) The Borrower shall make each payment required to be made
by it hereunder or under any other Loan Document prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds, without setoff
or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its office at 560
Lexington Avenue, New York, New York, or such other office as to which the
Administrative Agent may notify the other parties hereto, except that payments
pursuant to Sections 3.05, 3.06, 3.07 and 10.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.

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

           
(c) If any Term Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of, or interest on, its Term Loans resulting in such
Term Lender receiving payment of a greater proportion of the aggregate amount of
its Term Loans and accrued interest thereon than the proportion received by any
other Term Lender, then the Term Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Term Loans of
other Term Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Term Lenders ratably in accordance with the
aggregate amount of principal of, and accrued interest on, their respective Term
Loans; provided, that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Term Lender as consideration for the assignment of or sale of a
participation in its Term Loans to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Term Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of setoff and counterclaim with respect to
such participation as fully as if such Term Lender were a direct creditor of the
Borrower in the amount of such participation.

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

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


    2.10     Extension
of WC Commitment


           
Unless the WC Termination Date shall have previously
occurred, at least 90 days but not more than 180 days before the WC Maturity
Date, as then in effect, the Borrower may, by notice to the Administrative
Agent, request the WC Lender to extend the WC Maturity Date and the WC
Termination Date, in each case for a period of six years. The Administrative
Agent shall promptly notify the WC Lender of such request. The Administrative
Agent shall notify the Borrower in writing not later than 45 days prior to the
WC Maturity Date if the WC Lender consents to the request and the conditions of
such consent (including conditions relating to legal documentation and evidence
of the obtaining of all necessary government approvals). If the Administrative
Agent shall notify the Borrower in writing that the WC Lender has consented to
the Borrower's extension request, and subject to the satisfaction of any
conditions set forth in such notice, the WC Maturity Date and the WC Termination
Date shall each be extended to the corresponding day of the month in the sixth
consecutive year thereafter, and the terms "WC Maturity Date" and
"WC Commitment Termination Date" shall thereafter refer to such dates
as so extended. Only two such extension requests may be made pursuant to this
Agreement.

          
          SECTION 3.     INTEREST,
          FEES, YIELD PROTECTION, ETC.

      3.01     Interest


           
(a) Eurodollar WC Loans shall bear interest at the Adjusted
LIBO Rate for the Interest Period in effect for such Loans plus the
Applicable WC Margin; Eurodollar Term Loans shall bear interest at the Adjusted
LIBO Rate for the Interest Period in effect for such Loans plus the
Applicable Term Margin.

           
(b) Federal Funds WC Loans shall bear interest at the Federal
Funds Effective Rate plus the Applicable WC Margin; Federal Funds Term
Loans shall bear interest at the Federal Funds Effective Rate plus the
Applicable Term Margin.

           
(c) Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing, then, so long as such Event of Default is
continuing, all principal of and interest on each Loan and each fee and other
amount payable by the Borrower hereunder shall bear interest, after as well as
before judgment, at a rate per annum equal to (i) in the case of principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided
in paragraphs (a) and (b) of this Section or (ii) in the case of any other
amount, 2% plus the Federal Funds Effective Rate plus the
Applicable WC Margin.

           
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; provided, that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any payment of principal pursuant to Section 2.06(b),
accrued interest on the amount paid shall be payable on the applicable Payment
Date, (iii) in the event of any prepayment of any Loans pursuant to Section 2.07
or Section 2.08, accrued interest on the principal amount prepaid shall be
payable on the date of such prepayment and (iv) in the event of any conversion
of any Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

           
(e) All interest hereunder shall be computed on the basis of
a year of 360 days, and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The
applicable Adjusted LIBO Rate, LIBO Rate and Federal Funds Effective Rate shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent clearly demonstrable error.


    3.02     Interest
Elections


           
(a) The Term Loans and each WC Borrowing initially shall be
of the Type specified in the applicable Borrowing Request (which shall be a
Eurodollar Borrowing unless Section 3.04 is applicable) and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to continue such Loans
and, in the case of a Eurodollar Loans, may elect Interest Periods therefor, all
as provided in this Section. The Borrower may elect different options with
respect to different portions of the affected Loans, in which case each such
portion shall be allocated ratably among the applicable Lenders holding the
affected Loans.

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

           
(c) Each telephonic notice and written Continuation Request
pursuant to this Section shall specify the following information:


  
    (i) the Loans to which such Continuation Request applies
    and, if different options are being elected with respect to different
    portions of the principal amount thereof, the principal amount to be
    allocated to each resulting portion (in which case the information to be
    specified pursuant to clauses (iii) and (iv) of this paragraph shall be
    specified for each resulting portion);

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

    (iii) that the resulting Loans are to be Eurodollar Loans
    (unless Section 3.04 applies); and

    (iv) with respect to Eurodollar Loans, the Interest
    Period to be applicable thereto after giving effect to such election, which
    shall be a period contemplated by the definition of the term "Interest
    Period."

  



           
(d) Promptly following receipt of a Continuation Request, the
Administrative Agent shall advise each applicable Lender of the details thereof
and of such Lender's portion of the resulting Loans.

           
(e) If any Continuation Request requests Eurodollar Loans but
does not specify an Interest Period, then the Borrower shall be deemed to have
selected Eurodollar Loans with an Interest Period of one month's duration. If
the Borrower fails to deliver a timely Continuation Request prior to the end of
the Interest Period applicable to any Loans, then, unless such Loans are repaid
as provided herein at the end of such Interest Period, such Loans shall be
continued as Eurodollar Loans with an Interest Period of one month's duration.

           
(f) Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the Administrative Agent, at
the request of the Required Lenders, so notifies the Borrower, then, so long as
an Event of Default is continuing, (i) no outstanding Loans may be continued as
a Eurodollar Loans and (ii) unless repaid, all Eurodollar Loans shall be
converted to Federal Funds Loans at the ends of the Interest Periods applicable
thereto.


    3.03     Fees


           
(a) The Borrower agrees to pay to the Administrative Agent
and each Lender, for its own account, fees and other amounts payable in the
amounts and at the times separately agreed upon between the Borrower and such
party.

           
(b) All fees and other amounts payable to the Administrative
Agent hereunder shall be paid to the Administrative Agent on the dates due, in
immediately available funds. Fees and other amounts paid shall not be refundable
under any circumstances.


    3.04     Alternate
Rate of Interest


           
If prior to the commencement of any Interest Period for any
Eurodollar Loans:


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

    (ii) the Administrative Agent is advised by any
    applicable Lender that the Adjusted LIBO Rate or the LIBO Rate, as
    applicable, for such Interest Period will not adequately and fairly reflect
    the cost to such Lender of making or maintaining its Loan for such Interest
    Period;

  



then the Administrative Agent shall give notice thereof to
the Borrower and the applicable Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent notifies the Borrower
and the applicable Lenders that the circumstances giving rise to such notice no
longer exist, (i) any Continuation Request that requests the continuation of any
Loans as Eurodollar Loans shall be ineffective, and (ii) if any Borrowing
Request requests Eurodollar Loans, such Loans shall be made as Federal Funds
Loans.


    3.05     Increased
Costs; Illegality


           
(a) If any Change in Law shall:


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

    (ii) impose on any Lender or the London interbank market
    any other condition affecting this Agreement, any Eurodollar Loans made by
    such Lender or any participation therein,

  



and the result of any of the foregoing shall be to increase
the cost to such Lender of making or maintaining any Eurodollar Loan hereunder
or to increase the cost to such Lender or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise), then the Borrower will pay to such Lender such additional amount
or amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.

           
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.

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

           
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided, that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 90 days prior to the date that
such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; and provided further, that if the Change in Law
giving rise to such increased costs or reductions is retroactive, the 90-day
period referred to above shall be extended to include the period of retroactive
effect thereof.

           
(e) Notwithstanding any other provision of this Agreement,
if, after the date of this Agreement, any Change in Law shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:


  
    (i) such Lender may declare that Eurodollar Loans will
    not thereafter (for the duration of such unlawfulness) be made by such
    Lender hereunder (or be continued for additional Interest Periods),
    whereupon any request for a Eurodollar Loan or to continue a Eurodollar
    Loan, as applicable, for an additional Interest Period shall, as to such
    Lender only, be deemed a request for a Federal Funds Loan (or a request to
    convert a Eurodollar Loan into an Federal Funds Loan, as applicable), unless
    such declaration shall be subsequently withdrawn; and

    (ii) such Lender may require that all outstanding
    Eurodollar Loans made by it be converted to Federal Funds Loans, in which
    event all such Eurodollar Loans shall be automatically converted to Federal
    Funds Loans, as of the effective date of such notice as provided in the last
    sentence of this paragraph.

  



For purposes of this paragraph, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.


    3.06     Break
Funding Payments


           
In the event of (a) the payment or prepayment (voluntary or
otherwise) of any principal of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto or (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.07(b) and is revoked in accordance therewith), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest that would accrue on such principal amount for such period at
the interest rate that such Lender would bid were it to bid, at the commencement
of such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.


    3.07     Taxes


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

           
(b) In addition, the Borrower shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

           
(c) The Borrower shall indemnify each Lender, within ten days
after written demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid by such Lender on or with respect to any payment by or on
account of any obligation of the Borrower under the Loan Documents (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

           
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority pursuant to
Section 3.07(a), the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

           
(e) Each Foreign Lender agrees that
it will, not later than the date that it becomes a Lender hereunder, deliver to
each of the Borrower and the Administrative Agent such certificates, documents
or other evidence, as required by the Code or treasury regulations issued
pursuant thereto, including (i) two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI certifying in either case that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United states federal income taxes, and (ii) any
other certificate or statement requested by the Borrower and required by
Treasury Regulation Section  1.1441-4 or Section  1.1441-6, in each case to
establish that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes. Each
Foreign Lender will use good faith efforts to apprise the Borrower and the
Administrative Agent as promptly as practicable of any impending change in its
tax status that would give rise to any obligation by the Borrower to pay any
additional amounts pursuant to this Section 3.07. Unless the Borrower and the
Administrative Agent have received forms or other documents satisfactory to them
indicating that payments under the Loan Documents are not subject to United
States withholding tax, the Borrower or the Administrative Agent shall withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Foreign Lender. Each Foreign Lender represents and
warrants that each form supplied by it to the Borrower and the Administrative
Agent pursuant to this Section 3.07 and not superseded by another form supplied
by it, is or will be, as the case may be, complete and accurate.

           
(f) In the event that any Lender
claims any tax credit or receives any reimbursement relating to any payment
pursuant to this Section, such Lender shall reimburse the Borrower in an amount
equal to the benefit to such Lender of such credit or reimbursement. The benefit
to such Lender of such credit or reimbursement shall be the excess of (i) such
Lender's total income or franchise taxes for the year in which the credit or
reimbursement is taken into account over (ii) what such Lender's total income or
franchise taxes for such year would have been in the absence of such credit or
reimbursement. A certificate of such Lender setting forth in reasonable detail
the calculation of the amount of the benefit shall be conclusive and binding,
absent manifest error.


    3.08     Mitigation
Obligations


           
(a) If any Lender requests compensation under Section 3.05,
or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.07,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans (or any participation therein)
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the good faith judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 3.05 or 3.07, as applicable, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

           
(b) If any Lender requests compensation under Section 3.05,
or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for account of any Lender pursuant to Section 3.07, or if
any Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
and the other Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided,
that (i) the Borrower shall have received the prior consent of the
Administrative Agent, which consent shall not unreasonably be withheld, (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 3.05 or payments required
to be made pursuant to Section 3.07, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

          
          SECTION 4.     REPRESENTATIONS
          AND WARRANTIES


           
The Borrower represents and warrants to the Administrative
Agent and the Lenders that:


    4.01     Status
and Ownership


           
(a) The Borrower is duly organized, validly existing and in
good standing as a limited liability company under the laws of the State of
Delaware, has all requisite limited liability company power and authority to
carry on its business as now conducted, and is qualified or licensed to do
business in, and is in good standing in the Commonwealth of Pennsylvania. There
is no other jurisdiction where the ownership of the Borrower's properties or the
nature of its activities or both makes such qualification or licensing necessary
or advisable.

           
(b) All of the outstanding membership interests in the
Borrower are owned, directly and beneficially, by the Parent.


    4.02     Power and Authority


           
The Borrower has the limited liability company power and
authority to execute, deliver, perform, and take all actions contemplated by,
each of the Loan Documents to which it is a party, and all such action has been
duly and validly authorized by all necessary limited liability company
proceedings on its part and on the part of the Parent. The Borrower has the
limited liability company power and authority to borrow pursuant to the Loan
Documents to the fullest extent permitted hereby and thereby, and all necessary
limited liability company action to authorize such borrowing has been taken.


    4.03     Execution and
Binding Effect


           
This Agreement and each of the other Loan Documents to which
the Borrower is a party and which is required to be delivered on or before the
Effective Date pursuant to Section 5.01 has been duly and validly executed
and delivered by the Borrower. This Agreement and each such other Loan Document
constitute, and the Notes when executed and delivered by the Borrower will
constitute, the legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with their terms, except as the
enforceability hereof or thereof may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement of
creditors' rights or by general principles of equity limiting the availability
of equitable remedies.


    4.04     Governmental
Approvals; No Conflicts


           
The execution and delivery of this Agreement and the other
Loan Documents, the borrowing of the Loans, the use of the proceeds thereof as
permitted by this Agreement, and the consummation of any other transactions
contemplated hereby and thereby (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority
(excluding Uniform Commercial Code financing statements), (b) will not violate
any applicable law or regulation or the organization certificate or limited
liability company agreement of the Borrower or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Borrower or its assets, or give
rise to a right thereunder to require any payment to be made by the Borrower,
and (d) will not result in the creation or imposition of any Lien on any asset
of the Borrower (other than Liens permitted by Section 7.02).


    4.05     Licenses
and Permits


           
(a) Schedule
4.05(a) lists all material permits, licenses, franchises and other governmental
authorizations, consents and approvals, other than Environmental Permits,
necessary to own or otherwise utilize, operate or maintain, or engage in the
business of the Borrower as presently conducted (the "Required Permits").
Except as set forth in Schedule 4.05(a), the Borrower has not received any
written notification that it is, or in the future may be considered to be, in
violation of any of the Required Permits, or any law, statute, order, rule,
regulation, ordinance or judgment of any Governmental Authority applicable to
any Required Permits, except for notifications of violations which would not
individually or in the aggregate, create a Material Adverse Effect.

           
(b) The
Borrower holds all of the permits, licenses and governmental authorizations
listed on Schedule 4.05(b) (the "Environmental Permits"),
which are all of the material permits, licenses and governmental authorizations
required for the Borrower to own, operate, maintain and engage in its business
under applicable Environmental Laws, and is in compliance with all such
Environmental Permits, with respect to its assets, the operation or maintenance
of its assets, and the business of the Borrower in connection with its assets,
except where such failure to hold or comply with required Environmental Permits
individually or in the aggregate, are not reasonably likely to create a Material
Adverse Effect.


    4.06     Financial Condition;
No Material Adverse Change


           
(a) The Borrower has heretofore furnished to the
Administrative Agent an unaudited balance sheet of the Borrower as of March 31,
2000. Such balance sheet presents fairly the financial condition of the Borrower
as of March 31, 2000 in conformity with GAAP, subject to normal and recurring
year-end audit adjustments.

           
(b) Since March 31, 2000 there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower, taken as a whole, and there has been no such
material adverse change in the assets or financial condition of the Borrower
described in the balance sheet referred to in paragraph (a) of this Section.


    4.07     Title to and
Condition of Properties


           
(a) Title. Except as
set forth in Schedule 4.07(a) and except for other Permitted Encumbrances, the
Borrower has good and marketable title to all of the Real Estate and all of the
personal property material to its businesses, free and clear of all Liens,
except for minor defects in title that do not materially interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for the purposes for which they were acquired.

           
(b) Condition. Except
as set forth in Schedule 4.07(b), the tangible assets at the Project, taken as a
whole, (i) are in good operating and usable condition and repair, free from any
defects (except ordinary wear and tear, in light of their respective ages and
historical usage, and except such minor defects as do not interfere with the use
thereof in the conduct of the normal operation and maintenance thereof) and (ii)
have been maintained consistent with the standards generally followed in the
electrical utilities industry.

           
(c) Real
Estate. Schedule 4.07(c) sets forth all real property owned, leased,
used or occupied by the Borrower (the "Real Estate"), including
a description of all land, and all Liens, encumbrances, easements or rights of
way of record (or, if not of record, of which the Borrower has notice or
Knowledge) granted on or appurtenant to or otherwise affecting such Real Estate,
the zoning classification thereof, and all plants, buildings or other structures
located thereon. Except as set forth on Schedule 4.07(c), to the Knowledge of
the Borrower no fact or condition exists which would prohibit or materially
adversely affect the ordinary rights of access to and from the Real Estate from
and to the existing highways and roads, and there is no pending or threatened
restriction or denial, governmental or otherwise, upon such ingress or egress.
Except as set forth on Schedule 4.07(c), to the Knowledge of the Borrower: (i)
the Borrower's occupation and use of the Real Estate is in material compliance
with all applicable laws and regulations; (ii) there is not (A) any claim of
adverse possession or prescriptive rights involving any of the Real Estate, (B)
any structure located on any Real Estate which encroaches on or over the
boundaries of neighboring or adjacent properties or (C) any structure of any
other party which encroaches on or over the boundaries of any such Real Estate;
and (iii) none of the Real Estate is located in a flood plain, flood hazard
area, wetland or lakeshore erosion area within the meaning of any applicable
order decree, statute, rule, or regulation. To the Knowledge of the Borrower, no
public improvements have been commenced and none are planned which in either
case may result in special assessments against any of the Real Estate or
otherwise create a Material Adverse Effect. Except as set forth on Schedule
4.07(c), the Borrower has no Knowledge of any (i) planned or proposed increase
in assessed valuations of any Real Estate, (ii) order, writ, injunction, or
decree requiring repair, alteration or correction of any existing condition
affecting any Real Estate or the systems or improvements thereat, or any
condition or defect which could give rise to such an order, writ, injunction, or
decree, or (iii) underground storage tanks, or any structural mechanical, or
other defects of material significance affecting any Real Estate or the systems
or improvements thereat (including, but not limited to, inadequacy for normal
use of mechanical systems or disposal or water systems at or serving the Real
Estate).

           
(d) Condemnation; First Refusal
Rights. Except as set forth on Schedule 4.07(d), the Borrower has not
received notice of, nor have Knowledge of, any pending or contemplated
condemnation proceeding affecting any Mortgaged Property or any sale or
disposition thereof in lieu of condemnation. Neither any Mortgaged Property nor
any interest therein is subject to any right of first refusal, option or other
contractual right to purchase such Mortgaged Property or interest therein.


    4.08     Leases


           
Schedule 4.08 lists all real property leases under which the
Borrower is a lessee or lessor and which (i) relate to the real or personal
property of the Borrower, the operation or maintenance thereof, or the business
of the Borrower in connection therewith and (ii) (A) provide for annual payments
of more than $250,000 or (B) are material to the operation or condition
(financial or otherwise) of the Borrower's property or the business of the
Borrower in connection therewith. Except as set forth in Schedule 4.08, each
such lease constitutes a valid, binding and enforceable obligation of the
Borrower in accordance with its terms, and is in full force and effect; there
are no existing material defaults by the Borrower or, to the Borrower's
Knowledge, any other party thereunder; and no event has occurred which (whether
with or without notice, lapse of time, or both) would constitute a material
default by the Borrower or, to the Borrower's Knowledge, any other party
thereunder, or would cause the acceleration of any of the Borrower's obligations
thereunder or result in the creation of any Lien on any of the Borrower's
property, or would give rise to an automatic termination, or the right of
discretionary termination thereof, except such defaults and other events which
would not individually or in the aggregate create a Material Adverse Effect.


    4.09     Litigation
and Environmental Matters


           
(a) Except as disclosed in Schedule 4.09, there are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the Knowledge of the Borrower, threatened
against or affecting the Borrower (i) that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) that involve any Loan Document or the
transactions contemplated hereby and thereby.

           
(b) Except as disclosed in Schedule 4.09, and except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, the Borrower (i)
has not failed to comply with any Environmental Law nor to obtain, maintain or
comply with any permit, license or other approval required under any
Environmental Law, (ii) has not become subject to any Environmental Liability,
(iii) has not received notice of any claim with respect to any Environmental
Liability and (iv) has no Knowledge of any basis for any Environmental
Liability.


    4.10     Compliance with Laws
and Agreements


           
(a) The Borrower is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

           
(b) To the Knowledge of the Borrower there is no default or
event which with notice or lapse of time, or both, would become a material
default under any Material Project Contract, or would otherwise permit any party
thereto to terminate or materially modify its obligations thereunder or entitle
such party to damages or equitable relief;


    4.11     Regulatory Status


           
(a) The Borrower is not an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940.

           
(b) The Borrower is not subject to regulation as a public
utility company under the Holding Company Act, other than as an exempt wholesale
generator subject to section 32 of the Holding Company Act.

           
(c) The Borrower is subject to regulation in the United
States as a public utility only by FERC. It is also subject to regulation by the
Department of Energy as to international exports of energy and by the Public
Service Commission of Wisconsin as to its transactions with its public utility
affiliate, Wisconsin Public Service Corporation.


    4.12     Taxes


           
All tax and information returns required to be filed by or on
behalf of the Borrower have been properly prepared, executed and filed. All
Taxes upon the Borrower or upon any of its properties, incomes, sales or
franchises which are due and payable have been paid, other than those not yet
delinquent and payable without premium or penalty, and except for those being
diligently contested in good faith by appropriate proceedings, and in each case
adequate reserves and provisions for Taxes have been made on the books of the
Borrower. The reserves and provisions for Taxes on the books of the Borrower are
adequate for all open years and for its current fiscal period. The Borrower has
no Knowledge of any proposed additional assessment or basis for any material
assessment for additional Taxes (whether or not reserved against).


    4.13     ERISA


           
No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, materially
exceed the fair market value of the assets of such Plan, and the present value
of all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, materially exceed the fair market value of the assets of all such
underfunded Plans.


    4.14     Disclosure


           
The Borrower has disclosed to the Administrative Agent all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the reports, financial statements, certificates or other information
furnished by or on behalf of the Borrower to the Administrative Agent in
connection with the negotiation of the Loan Documents or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, that with respect to projected
financial information, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.


    4.15     Subsidiaries


           
The Borrower has no Subsidiaries.


    4.16     Insurance


           
Schedule 4.16 sets forth a description of all insurance
maintained by or on behalf of the Borrower as of the date of this Agreement. As
of the date of this Agreement, all premiums in respect of such insurance that
are due and payable have been paid.


    4.17     Labor Matters


           
As of the date of this Agreement, there are no strikes,
lockouts or slowdowns against the Borrower pending or, to the Knowledge of the
Borrower, threatened. The hours worked by and payments made to employees of the
Borrower have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state or local law dealing with such matters, except where
any such violations, individually and in the aggregate, would not be reasonably
likely to result in a Material Adverse Effect. All material payments due from
the Borrower, or for which any claim may be made against the Borrower on account
of wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of the Borrower.


    4.18     Solvency


           
Immediately after the execution and delivery of the Loan
Documents and immediately following the making of the Loans and after giving
effect to the application of the proceeds of the Loans, (a) the fair
value of the assets of the Borrower, taken at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (b) the present
fair saleable value of the property of the Borrower will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the Borrower will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the Borrower will not
have unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be conducted
following such date. For purposes of calculations pursuant to this Section 4.18,
all Subordinated Debt shall be treated as equity of the Borrower rather than as
Debt, but only if such Subordinated Debt is not "debt" for purposes of
section 101(32) of the Bankruptcy Code.


    4.19     Security Documents


           
(a) The Security Agreement is effective to create in favor of
the Administrative Agent for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when (i) the financing statements in appropriate form are filed
in the offices specified on Schedule 6 to the Perfection Certificate and (ii)
all other applicable filings under the Uniform Commercial Code or otherwise that
are required under the Loan Documents are made, the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Borrower in such Collateral, in each case prior and superior
in right to any other Person, other than with respect to Liens expressly
permitted by Section 7.02.

           
(b) The Mortgage with respect to the
Mortgaged Property is effective to create, in favor of the Administrative Agent
for the benefit of the Lenders, a legal, valid and enforceable Lien, subject to
the exceptions listed in the title insurance policy covering such Mortgage, on
all of the right, title and interest of the Borrower in and to the Mortgaged
Property and the proceeds thereof, and when such Mortgage is filed in the office
specified on Schedule 4.19(b), such Mortgage will constitute a Lien on, and
security interest in, all right, title and interest of the Borrower in the
Mortgaged Property and the proceeds thereof, in each case prior and superior in
right to any other Person, other than with respect to the rights of persons
pursuant to Liens expressly permitted by Section 7.02.

           
(c) The Contract Assignments are effective to create in favor
of the Lender a legal, valid and enforceable Lien on and collateral assignment
of all of the right, title and interest of the Borrower in and to the contracts,
licenses and permits covered thereby and when all applicable filings under the
Uniform Commercial Code or otherwise that are required under the Loan Documents
are made, the Contract Assignments shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the grantors
thereunder in such Collateral, in each case prior and superior in right to any
other Person, other than with respect to Liens expressly permitted by Section
7.02.


    4.20     Federal Reserve
Regulations


           
(a) The Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.

           
(b) No part of the proceeds of the Loans will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase, acquire or carry any Margin Stock or for any purpose
that entails a violation of, or that is inconsistent with, the provisions of the
regulations of the Board, including Regulations T, U and X.

          
          SECTION 5.     CONDITIONS

      5.01     Effective
  Date


           
The obligations of the Lenders to make Loans hereunder shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.02):

           
(a) Document Deliveries. The Administrative
Agent shall have received the following documents, with sufficient copies for
each Lender:


  
    (i) Either (A) a counterpart of this Agreement signed on
    behalf of each party hereto or (B) written evidence satisfactory to the
    Administrative Agent (which may include telecopy transmission of an executed
    signature page of this Agreement) that each such party has signed a
    counterpart of this Agreement;

    (ii) A WC Note payable to the WC Lender and a Term Note
    payable to each Term Lender, each in the principal amount of such Lender's
    Loans, dated the date of this Agreement, and signed on behalf of the
    Borrower;

    (iii) A Security Agreement, dated the date of this
    Agreement and signed on behalf of the Borrower, together with the following:

    
        (A) all instruments and other documents, including
        Uniform Commercial Code financing statements, required by law or
        reasonably requested by the Administrative Agent (or the Administrative
        Agent's counsel) to be filed, registered or recorded to create or
        perfect the Liens intended to be created under the Security Agreement;
        and

        (B) a completed Perfection Certificate, dated the
        date of this Agreement and signed by an Officer of the Borrower,
        together with all attachments contemplated thereby, including the
        results of a search of the Uniform Commercial Code (or equivalent)
        filings made with respect to the Borrower in the jurisdictions
        contemplated by the Perfection Certificate and copies of the financing
        statements (or similar documents) disclosed by such search and evidence
        reasonably satisfactory to the Administrative Agent (and its counsel)
        that the Liens indicated by such financing statements (or similar
        documents) are permitted by Section 7.02 or have been released;

    

    (iv) Counterparts of a Mortgage with respect to the
    Mortgaged Property signed on behalf of the record owner of such Mortgaged
    Property, together with: (A) a policy or policies of title insurance issued
    by a nationally recognized title insurance company, insuring the Lien of
    such Mortgage as a valid first Lien on the Mortgaged Property described
    therein, free of any other Liens except as permitted by Section 7.02, in
    form and substance reasonably acceptable to the Administrative Agent and the
    Administrative Agent's counsel, together with such endorsements, coinsurance
    and reinsurance as the Administrative Agent may reasonably request, (B) such
    surveys as may be required pursuant to such Mortgage or as the
    Administrative Agent may reasonably request, (C) a copy of the original
    permanent certificate or temporary certificate of occupancy as the same may
    have been amended or issued from time to time, covering each improvement
    located upon the Mortgaged Property subject to such Mortgage that were
    required to have been issued by the appropriate Governmental Authority for
    such improvement, (D) written confirmation from the applicable zoning
    commission or other appropriate Governmental Authority stating that, with
    respect to the Mortgaged Property subject to such Mortgage as built, it
    complies with existing land use and zoning ordinances, regulations and
    restrictions applicable to such Mortgaged Property, (E) a Phase I
    environmental report for the Mortgaged Property subject to such Mortgage by
    Chester Engineering (each such report to be satisfactory to the
    Administrative Agent and the Borrower), (F) such opinions of local counsel
    to the Borrower with respect to such Mortgage as the Administrative Agent
    shall reasonably require, and (G) such other customary documentation with
    respect to the Mortgage and the Mortgaged Property as the Administrative
    Agent may reasonably request;

    (v) One or more Contract Assignments with respect to the
    Material Project Contracts and all other power purchase, fuel supply,
    operation and maintenance contracts to which the Borrower is a party, in
    each case dated the date of this Agreement and signed on behalf of the
    Borrower;

    (vi) A Subordination Agreement with respect to any
    Subordinated Debt to be outstanding on the Initial Funding Date, dated the
    date of this Agreement and signed on behalf of the Borrower and the holder
    of such Subordinated Debt;

    (vii) The Fuel Subordination Agreement, duly executed by
    the parties thereto;

    (viii) A certificate of the secretary or analogous
    limited liability company manager of the Borrower, certifying as of the date
    of this Agreement:

    
        (A) the names and true signatures of the Officers of
        the Borrower authorized to sign the Loan Documents;

        (B) that attached thereto are true, correct and
        complete copies of: (1) the organization certificate and limited
        liability company agreement of the Borrower, together with all
        amendments thereto, as in effect on such date; (2) the resolutions or
        other instrument of the Borrower's managers or the Parent approving the
        execution, delivery and performance by the Borrower of the Loan
        Documents to which it is a party; (3) all documents evidencing other
        necessary limited liability company or other action by the Borrower or
        the Parent, if any, with respect to the execution delivery and
        performance of the Loan Documents by the Borrower and the Parent; and
        (4) true and correct copies of all approvals of Governmental Authorities
        required to be obtained by the Borrower in connection with the execution
        and delivery of the Loan Documents and the performance of the
        transactions contemplated therein (including orders of FERC and the
        Pennsylvania Public Utilities Commission); and

        (C) that the resolutions and approvals referred to in
        the foregoing clause (B) have not been modified, revoked or rescinded
        and are in full force and effect on such date;

    

    (ix) Good standing certificates, dated as of a date not
    more than ten days prior to the date of this Agreement, of the Secretaries
    of State of the State of Delaware and the Commonwealth of Pennsylvania with
    respect to the Borrower;

    (x) A certificate of an Officer of the Borrower
    certifying, as of the date of this Agreement that (i) true, correct and
    complete copies of the Material Project Contracts and the Transition
    Services Contracts, and all amendments and supplements thereto, have been
    theretofore delivered to the Administrative Agent by or on behalf of the
    Borrower, and (ii) such Material Project Contracts and Transition Services
    Contracts have not been modified, revoked or rescinded and are in full force
    and effect on such date;

    (xi) [Reserved];

    (xii) A certificate of an Officer of the Borrower, dated
    the date of this Agreement, to the effect that: (A) no Default or Event of
    Default has occurred or is continuing; (B) no event which could reasonably
    be expected to have a Material Adverse Effect has occurred and is
    continuing; (C) the representations and warranties of the Borrower set forth
    in each Loan Document are true and correct in all material respects on and
    as of the date of such certificate with the same force and effect as if made
    on and as of such date (or, if any such representation or warranty is
    expressly stated to have been made as of a specific date, as of such
    specific date); and (D) to such Officer's knowledge, after due inquiry, all
    Liens in favor of the Administrative Agent for the benefit of the Lenders
    pursuant to the Security Documents are in full force and effect and (subject
    to the filing of Uniform Commercial Code financing statements, and to any
    other necessary filings or recordings with Governmental Authorities having
    been made) with the required first priority, subject to Permitted Liens.

    (xiii) Copies of the following, each in form and
    substance reasonably satisfactory to the Administrative Agent: (A) a
    technical evaluation report with respect to the Project from the Independent
    Engineer; (B) an electric market analysis by ICF Resources Incorporated; and
    (C) a fuel evaluation report by John T. Boyd Company;

    (xiv) A favorable written opinion (addressed to the
    Administrative Agent and each Lender and dated the date of this Agreement)
    from Foley & Lardner on behalf of the Borrower, substantially in the
    form of Exhibit I, and covering such other matters relating to the Borrower,
    the Loan Documents or the transactions contemplated by the Loan Documents as
    the Administrative Agent shall reasonably request. The Borrower hereby
    requests such counsel to deliver such opinion.

    (xv) Certificates of insurance or other evidence
    reasonably satisfactory to the Administrative Agent that the insurance
    policies listed on Schedule 4.16 are in effect.

  



           
(b) Borrowing Requests. The Administrative
Agent shall have received from the Borrower, not later than 11:00 a.m. on the
third Business Day prior to the proposed Initial Funding Date, (i) a written
request setting forth (A) the date on which the Borrower proposes to borrow the
Term Loans, (B) the initial Interest Period or Interest Periods to be applicable
to the Term Loans, (C) if more than one Interest Period is requested, the
amounts of the Term Loans to be allocated to each, and (D) the location and
number of the Borrower's account to which funds are to be disbursed, and, if the
Borrower also proposes to make a WC Borrowing on the Initial Funding Date, a
completed and signed Borrowing Request. Both requests may be combined in a
single document.

           
(c) Debt Service Reserve Account. The Debt
Service Reserve Account shall have been opened with the Administrative Agent and
cash or Eligible Investments in an amount equal to the Debt Service Reserve
Requirement (after giving effect to the delivery of the Debt Service Reserve
Letter of Credit) shall have been deposited therein.

           
(d) Letters of Credit. The LOC Bank shall have
issued and delivered (i) a Debt Service Reserve Letter of Credit in a stated
amount of $6,500,000 to the Administrative Agent, and (ii) the PPL Letter of
Credit to PPL.

           
(e) Governmental Approvals. All material
approvals of Governmental Authorities necessary for the operation of the Project
shall have been duly obtained, shall be in full force and effect, and shall not
contain any conditions that, in the reasonable opinion of the Independent
Engineer, are not capable of being satisfied by the Borrower in a manner
consistent with the availability of funds and without materially adversely
affecting the Project.

           
(f) Adverse Contingencies. There shall be no
litigation or administrative proceeding, or regulatory development, that would
reasonably be expected to have a Material Adverse Effect on (a) the business,
assets, operations, prospects, condition (financial or otherwise) or Material
Project Contracts of the Borrower, (b) the ability of the Borrower to perform
any of its obligations under any Loan Document or (c) the rights of or benefits
available to the Administrative Agent and the Lenders under any Loan Document.

           
(g) Outstanding Debt. After giving effect to
the Loans, the Borrower shall not have outstanding any Debt, other than (i) Debt
incurred under the Loan Documents and (ii) Debt permitted by Section 7.01.

           
(h) Fees and Expenses. The Administrative Agent
shall have received all fees and other amounts due and payable by the Borrower
on or before the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower hereunder on or before the Effective Date.

           
(i) Other. The Administrative Agent shall have
received such other documentation and assurances as shall be reasonably required
by it in connection with the Loan Documents and the transactions contemplated
thereby.

The Administrative Agent shall notify the Borrower and the
Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 10.02) at or prior to 3:00 p.m., New
York City time, on April 30, 2000. In the event such conditions are not so
satisfied or waived, the Lenders' obligations hereunder shall terminate at such
time.


    5.02     Each
Borrowing


           
The obligation of each Lender to make a Loan on the occasion
of any Borrowing (including the making of the Term Loans) is subject to the
further condition precedent that, both immediately prior to the making of such
Loan and also after giving effect thereto and to the intended use thereof: (a)
no Default or Event of Default shall have occurred and be continuing; (b) no
event which could reasonably be expected to have a Material Adverse Effect shall
have occurred and be continuing; (c) the representations and warranties of the
Borrower set forth in each Loan Document shall be true and correct in all
material respects on and as of the date of such Borrowing with the same force
and effect as if made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such
specific date); and (d) to the Knowledge of the Borrower, all Liens in favor of
the Administrative Agent for the benefit of the Lenders pursuant to the Security
Documents shall be in full force and effect with the required first priority,
subject to Permitted Liens. Each Borrowing Request shall constitute a
certification by the Borrower to the effect set forth in the preceding sentence
(both as of the date of such notice and, unless the Borrower otherwise notifies
the Administrative Agent prior to the date of such Borrowing, as of the date of
such Borrowing).

          
          SECTION 6.     AFFIRMATIVE
          COVENANTS


           
Until the WC Commitment has expired or been terminated and
the principal of and interest on each Loan and all fees and other amounts
payable under the Loan Documents shall have been paid in full, the Borrower
covenants and agrees with the Lenders that:


    6.01     Financial
Statements and Other Information


           
(a) The Borrower will furnish to the
Administrative Agent (with a duplicate copy for each Lender):


  
    (i) within 120 days after the end of each fiscal year, an
    audited balance sheet of the Borrower and the related statements of income,
    member's equity and cash flows as of the end of and for such year, setting
    forth in each case in comparative form the comparable figures for the
    previous fiscal year, all reported on by Arthur Andersen LLP or other
    independent public accountants of recognized national standing (without a
    "going concern" or like qualification or exception and without any
    qualification or exception as to the scope of such audit) to the effect that
    such financial statements present fairly in all material respects the
    financial condition and results of operations of the Borrower in accordance
    with GAAP consistently applied;

    (ii) within 90 days after the end of each of the first
    three fiscal quarters of each fiscal year, a balance sheet of the Borrower
    and the related statements of income, member's equity and cash flows as of
    the end of and for such fiscal quarter and the then elapsed portion of the
    fiscal year, setting forth in each case in comparative form the figures for
    the corresponding period or periods of (or, in the case of the balance
    sheet, as of the end of) the previous fiscal year, all certified by one of
    its Financial Officers as presenting fairly in all material respects the
    financial condition and results of operations of the Borrower in accordance
    with GAAP consistently applied, subject to normal year-end audit adjustments
    and the absence of footnotes;

    (iii) not
    later than 45 days after the end of each fiscal quarter of the Borrower,
    commencing with the quarter ending June 30, 2000, a certificate of a
    Financial Officer of the Borrower setting forth in reasonable detail
    calculations of Net Operating Cash Flow and Debt Service of the Borrower
    for, and the Debt Service Coverage Ratio of the Borrower as of, the end of
    such fiscal quarter and, if during such quarter
    the Borrower has entered into any material power purchase, fuel supply,
    operation or maintenance agreement, or any other agreement the breach of
    which by any party thereto could reasonably be expected to have a Material
    Adverse Effect, such certificate shall be accompanied by (A) a true, correct
    and complete copy of each such agreement and (B) an updated Schedule 1.01A,
    identifying each such agreement as a Material Project Contract. Each such
    updated schedule, upon delivery, shall be deemed to be a part of this
    Agreement and shall supercede any earlier dated Schedule 1.01A.

    (iv) not later than November 1 in
    each year, projections prepared by a Financial Officer of the Borrower
    showing in reasonable detail the Borrower's projected operating revenues and
    operating expenses, and the Borrower's projected Capital Expenditures, for
    the following fiscal year;

    (v) promptly following any request therefor, such other
    information regarding the operations, business affairs and financial
    condition of the Borrower, or compliance with the terms of the Loan
    Documents, as the Administrative Agent may reasonably request.

  



           
(b) Each
year, at the time of delivery of the annual financial statements of the Borrower
pursuant to clause (i) of Section 6.01(a), the Borrower will furnish to the
Administrative Agent a certificate of a Financial Officer of the Borrower, (i)
setting forth the information required pursuant to Sections 1 and 2 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate or the date of the most
recent certificate delivered pursuant to this paragraph and (ii) certifying that
all Uniform Commercial Code financing statements or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above, and all other actions have
been taken, to the extent necessary to protect and perfect the security
interests under the Security Agreement for a period of not less than 18 months
after the date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period).

           
(c) Not earlier than 90 days and
not later than five Business Days prior to each Renewal Date, the Borrower will
furnish to the Administrative Agent (with a duplicate copy for each Lender):


  
    (i) a report of a Renewal Independent Engineer, dated not
    earlier than 90 days prior to the Renewal Date, stating whether or not the
    conditions specified in clauses (i) and (ii) of the definition of Renewal
    Requirements have been met as of the preceding Determination Date and
    including calculations, schedules and other information supporting in
    reasonable detail the conclusions contained therein; and

    (ii) a certificate, dated not more than five days prior
    to the delivery thereof and signed by a Financial Officer of the Borrower,
    to the effect that as of the preceding Determination Date and as of the date
    of such certificate (A) no Default or Event of Default had occurred or was
    continuing, and (B) the amount of cash and the fair market value of Eligible
    Investments on deposit in the Debt Service Reserve Account was at least
    equal to the Debt Service Reserve Requirement.

  




    6.02     Notices of
Material Events


           
(a) The Borrower will furnish to the Administrative Agent and
each Lender written notice of the following, promptly after acquiring Knowledge
thereof:


  
    (i) the occurrence of any Default;

    (ii) the filing or commencement of any action, suit or
    proceeding by or before any arbitrator or Governmental Authority against or
    affecting the Borrower that, if adversely determined, could reasonably be
    expected, in the good faith opinion of the Borrower, to result in a Material
    Adverse Effect;

    (iii) the occurrence of any ERISA Event that, alone or
    together with any other ERISA Events that have occurred, could reasonably be
    expected to result in liability of the Borrower in an aggregate amount
    exceeding $250,000; provided, that liability attributable to an ERISA
    Event that occurs with respect to the Plan of an ERISA Affiliate (other than
    the Borrower) shall be considered only if the ERISA Affiliates, in the
    aggregate but excluding the Borrower, do not, as of the date of such ERISA
    Event, have sufficient net worth to satisfy the liability attributable to
    the ERISA Event; and

    (iv) any other development that could reasonably be
    expected, in the good faith opinion of the Borrower, to result in a Material
    Adverse Effect.

  



Each notice delivered under this paragraph shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.

           
(b) The Borrower will give written notice to the
Administrative Agent not later than 30 days prior to the expiration date of the
Debt Service Reserve Letter of Credit, stating whether the Borrower will, not
later than the expiration date of such Debt Service Reserve Letter of Credit,
(i) furnish the Administrative Agent with an extension of such Debt Service
Reserve Letter of Credit or a new Debt Service Reserve Letter of Credit in a
stated amount specified in such notice in place of the expiring Debt Service
Reserve Letter of Credit, (ii) deposit cash and/or Eligible Investments in the
Debt Service Reserve Account in an amount specified in such notice, or (iii)
both.


    6.03     Existence;
Conduct of Business


           
The Borrower will do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business, including, without limitation, the Required Permits and the
Environmental Permits, except to the extent that any such failure could not
reasonably be expected to have a Material Adverse Effect.


    6.04     Payment of
Obligations


           
The Borrower will pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect,
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.


    6.05     Performance of Material Project Contracts


           
The Borrower will perform and observe all of the covenants
and agreements on its part to be performed under the Material Project Contracts,
except to the extent that such noncompliance could not reasonably be expected to
have a Material Adverse Effect.


    6.06     Maintenance of
Properties


           
The Borrower will keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted.


    6.07     Books and Records;
Inspection Rights


           
(a) The Borrower will keep proper books of record and account
in which full, true and correct entries are made of all transactions in relation
to its business and activities.

           
(b) The Borrower will permit any representatives designated
by the Administrative Agent or any Lender, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested.


    6.08     Compliance with Laws


           
The Borrower will comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
including without limitation the Required Permits and the Environmental Permits,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.


    6.09     Use
of Proceeds


           
The proceeds of the Term Loans will be used only to pay or
reimburse Project Costs, including professional fees and other closing costs,
and (b) to refinance certain existing Debt incurred in connection with the
foregoing acquisition. The proceeds of the WC Loans will be used only for
working capital and other general company purposes. No part of the proceeds of
the Loans will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase, acquire or carry any Margin Stock or
for any purpose that entails a violation of any of the regulations of the Board,
including Regulations T, U and X.


    6.10     Information
Regarding Collateral


           
The Borrower will furnish to the Administrative Agent prompt
written notice of any change in (i) its legal name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) the location of its chief executive office, its principal place
of business, any office in which it maintains books or records relating to
Collateral owned or held by it or on its behalf or any office or facility at
which Collateral owned or held by it or on its behalf with an aggregate book
value in excess of $250,000 is located (including the establishment of any such
new office or facility), (iii) the identity or organizational structure of the
Borrower such that a filed financing statement becomes misleading or (iv) the
Federal Taxpayer Identification Number of the Borrower. The Borrower agrees not
to effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower also agrees promptly to notify the Lender if
any material portion of the Collateral is damaged or destroyed.


    6.11     Insurance


           
(a) The Borrower will maintain, with financially sound and
reputable insurance companies, (i) adequate insurance for its insurable
properties, all to such extent and against such risks, including fire, casualty
and other risks insured against by extended coverage, as is customary with
corporations engaged in the same or similar businesses or having similar
properties similarly situated, and (ii) such other insurance as is required
pursuant to the terms of any Security Document.

           
(b) The Borrower will promptly upon request therefor, deliver
or cause to be delivered to the Administrative Agent originals or duplicate
originals of all such policies of insurance. All such insurance policies in
respect of property insurance shall contain a standard loss payable clause and
shall be endorsed to provide that, in respect of the interests of the
Administrative Agent: (i) the Administrative Agent shall be an additional
insured, as its interest may appear, with respect to all coverages, (ii) 30
days' prior written notice of any cancellation, reduction of amounts payable, or
any changes and amendments shall be given to the Administrative Agent, and (iii)
the Administrative Agent shall have the right, but not the obligation, to pay
any premiums due or to acquire other such insurance upon the failure of the
Borrower to pay the same or to so insure.


    6.12     Casualty
and Condemnation


           
(a) The Borrower will give the
Administrative Agent prompt written notice of any material casualty or other
material damage to the Project or any material part thereof or the commencement
of any action or proceeding for the taking of the Project or any material part
thereof or interest therein under power of eminent domain or by condemnation or
similar proceeding.

           
(b) If
any casualty or damage to the Project or any taking of the Project or any part
thereof under power of eminent domain or by condemnation or similar proceeding
results in Net Proceeds (whether in the form of insurance proceeds, condemnation
award or otherwise) in an amount in excess of 7.5% of the book value of the
Project at the time of such event, determined in accordance with GAAP, the
Administrative Agent, on behalf of the Lenders, is authorized to collect such
Net Proceeds and, if received by the Borrower, such Net Proceeds shall be paid
over promptly to the Administrative Agent. Within 30 days after the date of
receipt by the Borrower of such Net Proceeds or the date of receipt by the
Borrower of written notice from the Administrative Agent that it has received
such Net Proceeds from a Person other than the Borrower, (i) the Borrower will
give notice to the Administrative Agent, whether or not the Project (A) has been
repaired, restored or replaced or (B) is capable of being repaired, restored or
replaced within 180 days from the date of receipt of such Net Proceeds and, if
the latter, whether or not the Borrower intends to repair, restore or replace
the Project within such 180-day period, and (ii) will furnish the Administrative
Agent with a report from an engineer or architect satisfactory to the
Administrative Agent to the effect that the Project has been repaired, restored
or replaced or can be repaired, restored or replaced within 180 days from the
date of receipt of such Net Proceeds, and that the completed or contemplated
restoration, repair or replacement of the Project has rendered, or when
completed will render, the Project a complete, economically viable facility of
substantially the same usefulness, design and construction and fully functional
for the same purposes and uses as existed prior to the event described in
paragraph (a) of this Section. The Administrative Agent will hold any Net
Proceeds received by it in an interest bearing account in the name of the
Borrower and, subject to receipt of the notice and report required by the
preceding sentence, will pay over to the Borrower from time to time upon its
written request, to the extent of such Net Proceeds and any accrued interest
thereon, the amounts theretofore expended by the Borrower or required by the
Borrower to pay liabilities incurred to repair, restore or replace the Project
within such 180-day period, except that if a Default described in Section 8(e)
shall have occurred and be continuing the Administrative Agent will hold any
undisbursed Net Proceeds as Collateral until such Default shall be cured. If at
the end of such 180-day period any Net Proceeds and accrued interest remain
undisbursed, after completion of the restoration, repair or replacement of the
Project, the Administrative Agent will pay over the remaining amount to the
Borrower upon receipt of a certificate of a Financial Officer that the repair,
restoration or replacement of Project has been completed.

           
(c) In
the event that the Administrative Agent receives any Net Proceeds pursuant to
paragraph (b) of this Section and (i) within 30 days thereafter the
Administrative Agent has not received the notice and report required by
paragraph (b) of this Section, or (ii) the Project has not been repaired,
restored or replaced by the Borrower within 180 days from the date of receipt of
such Net Proceeds, or (iii) an Event of Default shall have occurred and be
continuing, the Administrative Agent will apply all Net Proceeds and any
accrued interest thereon held by it to prepay the Loans in accordance with
Section 2.08. Any amount remaining after such application will be paid over to
the Borrower.


    6.13     Debt
Service Reserve Account


           
(a) The Borrower will open and
maintain with the Administrative Agent an account in the name of the Borrower
(the "Debt Service Reserve Account") and will deposit and
maintain in such account cash or Eligible Investments, or both, in an amount the
fair market value of which is equal at all times to not less than the Debt
Service Reserve Requirement. The Administrative Agent will invest and reinvest
any cash balances in the Debt Service Reserve Account in Eligible Investments as
directed by the Borrower in writing from time to time; provided, that the
Administrative Agent shall have no obligation to invest or reinvest any cash
balances in the Debt Service Reserve Account in the absence of such written
instructions. The Borrower hereby grants the Administrative Agent, for the
benefit of the Lenders, a first priority security interest in the Debt Service
Reserve Account, the Eligible Investments therein and the proceeds thereof.
Proceeds of Eligible Investments held in the Debt Service Reserve Account shall
be applied by the Borrower as provided in Section 6.14.

           
(b) Subject to Section 6.14(d), the Borrower shall be
entitled to withdraw cash and/or Eligible Investments from the Debt Service
Reserve Account, during the period of 10 Business Days following the date of
delivery of each Quarterly Certificate, in an amount not in excess of the
Available Debt Service Reserve Account Balance as of the end of the fiscal
quarter covered by such Quarterly Certificate.


    6.14     Application
of Operating Cash Flow


           
(a) So long as no Event of Default
has occurred and is continuing, the Borrower will make payments for the
following items during each fiscal quarter, in the order of priority set forth
below, only to the extent of the Operating Cash Flow for such fiscal quarter:


  
    (i) First: Amounts payable during such fiscal
    quarter with respect to the following items (whether or not accrued during
    such quarter): (A) all proper operation and maintenance expenses of the
    Project incurred by the Borrower, including (1) power production expenses
    (including fuel and emission allowance expenses), transmission expenses,
    distribution expenses and administrative and general expenses, net of
    amounts expensed during such quarter for fuel, emissions allowances,
    materials, supplies and other prepaid expenses recorded as assets by the
    Borrower during any preceding fiscal quarter; (2) reimbursement to the
    Parent or other Affiliates of the Borrower's reasonably allocable share of
    operation and maintenance expenses incurred by the Parent or such Affiliates
    for the benefit of the Borrower, to the extent such expenses would be proper
    operation and maintenance expenses if incurred directly by the Borrower; and
    (3) reasonable administrative fees to the Parent or other Affiliates of the
    Borrower; (B) Taxes, other than income taxes and (C) without duplication of
    any amounts included in clause (A) above, purchases of fuel inventories (to
    the extent that such payments are not then prohibited under the Fuel
    Subordination Agreement), emission allowance inventories, materials,
    supplies and other prepaid expenses;

    (ii) Next: Capital Expenditures necessary to
    complete, maintain, repair or replace the Project or any part thereof, to
    the extent permitted by Section 7.05;

    (iii) Next: Interest, fees and other amounts,
    other than principal, due under this Agreement and the Notes, and payments
    due under Hedging Agreements;

    (iv) Next: Principal due under this Agreement and
    the Notes, including voluntary and mandatory prepayments;

    (v) Next: Funding of any current deficiency in the
    Debt Service Reserve Account; and

    (vi) Finally: As provided in Section 6.14(c)
    below.

  



           
(b) If an Event of Default has occurred and is continuing,
the Borrower shall apply all Operating Cash Flow in such order of priority as
the Administrative Agent or the Required Lenders shall approve.

           
(c) Subject to Section 2.08(a)(ii)
and paragraph (b) of this Section, the amount of Operating Cash Flow remaining
after giving effect to the payments specified in clauses (i), (ii), (iii), (iv)
and (v) of Section 6.14(a) ("Restricted Cash Flow"), shall be
applied, commencing with the quarter beginning July 1, 2000, as follows:


  
    (i) If the Debt Service Coverage Ratio as shown in the
    most recent Quarterly Certificate is less than or equal to 1.00, the
    Borrower will, within 10 Business Days after delivery of such Quarterly
    Certificate, transfer to the Administrative Agent an amount equal to
    Restricted Cash Flow for the immediately preceding quarter, if any, plus all
    Restricted Cash Flow from previous fiscal quarters retained by the Borrower,
    and will direct the Administrative Agent to apply such amount, and if such
    amount is not sufficient, first to withdraw cash and the proceeds of
    Eligible Investments from the Debt Service Reserve Account, to the extent
    required, and then, if such additional amount is not sufficient, to draw on
    the Debt Service Reserve Letter of Credit to the extent of the amount
    available thereunder, or to the extent required, if less, and apply such
    amounts to prepay the Loans in accordance with Section 2.08, until, after
    giving effect to such prepayment, the Pro Forma Debt Service Coverage Ratio
    shall be equal to 1.50.

    (ii) If the Debt Service Coverage Ratio as shown in the
    most recent Quarterly Certificate is greater than 1.00 but less than or
    equal to 1.25, the Borrower will, within 10 Business Days after delivery of
    such Quarterly Certificate, transfer an amount equal to 50% of the
    Restricted Cash Flow for the immediately preceding quarter plus 50% of all
    Restricted Cash Flow from previous fiscal quarters retained by the Borrower
    (less any amounts previously transferred pursuant to this clause or clause
    (iii) below) to the Administrative Agent and will direct the Administrative
    Agent to deposit such amount in the Debt Service Reserve Account; and

    (iii) If the Debt Service Coverage Ratio as shown in the
    most recent Quarterly Certificate is greater than 1.25 but less than or
    equal to 1.50, the Borrower will deposit an amount equal to 25% of the
    Restricted Cash Flow for the immediately preceding quarter plus 25% of all
    Restricted Cash Flow from previous fiscal quarters retained by the Borrower
    (less any amounts previously transferred pursuant to this clause) to the
    Administrative Agent and will direct the Administrative Agent to deposit
    such amount in the Debt Service Reserve Account;.

  



All accumulated Restricted Cash Flow remaining after making
the transfers required in clauses (i), (ii) and (iii) above shall be retained by
the Borrower and shall not be available for Restricted Payments until the
Borrower is entitled to withdraw funds from the Debt Service Reserve Account
pursuant to Section 6.14(d) below.

           
(d) If (i) the Debt Service Coverage
Ratio as shown in the Borrower's Quarterly Certificates for four consecutive
fiscal quarters shall have been equal to or greater than 1.5 but less than 1.75,
or (ii) the Debt Service Coverage Ratio as shown in the Borrower's Quarterly
Certificate for the immediately preceding fiscal quarter is equal to or greater
than 1.75, the Borrower may withdraw cash and/or Eligible Investments from the
Debt Service Reserve Account in an amount not in excess of the Available Debt
Service Reserve Account Balance.

           
(e) Notwithstanding anything to the contrary in this Section
6.14:


  
    (i) The Borrower may make payments from Operating Cash
    Flow during any fiscal quarter without regard to the order of priority set
    forth in Section 6.14(a), or in excess of Operating Cash Flow for such
    quarter if, prior to any such non-conforming payment, the Borrower shall
    have caused to be delivered to the Administrative Agent a Senior Company
    Guarantee of the payment in full when due of all payments of principal and
    interest with respect to the Loans due or to become due (whether at stated
    maturity, by acceleration or otherwise) during the period from the date of
    such Senior Company Guarantee through the fourth consecutive Payment Date
    following such date;

    (ii) The
    Borrower may (A) withdraw cash and/or Eligible Investments from the Debt
    Service Reserve Account in an amount not in excess of the Available Debt
    Service Reserve Account Balance at the date of withdrawal and (B) make
    Restricted Payments from Restricted Cash Flow (including amounts deposited
    in, and subsequently withdrawn from the Debt Service Reserve Account) if,
    prior to any such withdrawal or Restricted Payment, the Borrower shall have
    caused to be delivered to the Administrative Agent a Senior Company Guaranty
    of payment to the Borrower upon demand by the Borrower of all amounts
    required by the Borrower for payment of the items enumerated in clauses (i)
    through (v), inclusive, of Section 6.14(a), subject to the limit that the
    aggregate amount so guaranteed shall not exceed the aggregate amount of
    Restricted Payments made pursuant to this Section 6.14(e)(ii); and

    (iii) The Borrower may from time to time withdraw cash
    and/or Eligible Investments from the Debt Service Reserve Account in an
    aggregate amount not in excess of the Available Debt Service Reserve Account
    Balance at the date of withdrawal, provided, that the entire amount
    so withdrawn is applied on such date to prepay the Loans pursuant to Section
    2.07(a).

  




    6.15     Environmental
Compliance


           
The Borrower shall use and operate the Project in compliance
with all Environmental Laws, keep all necessary permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters in effect and remain in compliance therewith, and handle all Hazardous
Materials in compliance with all applicable Environmental Laws, except where
noncompliance with any of the foregoing could not reasonably be expected to have
a Material Adverse Effect.


    6.16     Hedging Agreements


           
Not later than six months after the Initial Funding Date, the
Borrower will enter into Hedging Agreements, in form and substance and with
counterparties reasonably satisfactory to the Administrative Agent, to fix the
interest rate on 50% or more of the outstanding principal amount of the Term
Loans until the Term Maturity Date.


    6.17    
Further
Assurances


           
The Borrower will execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, Mortgages and other documents), that may be required under any
applicable law, or which the Administrative Agent may reasonably request, to
effectuate the transactions contemplated by the Loan Documents or to grant,
preserve, protect or perfect the Liens created or intended to be created by the
Security Documents or the validity or priority of any such Lien, all at the
expense of the Borrower. The Borrower also agrees to provide to the
Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.

          
          SECTION 7.     NEGATIVE
          COVENANTS


           
Until the WC Commitment has expired or been terminated and
the principal of and interest on each Loan and all fees and other amounts
payable under the Loan Documents shall have been paid in full, the Borrower
covenants and agrees with the Lenders that:


    7.01     Debt;
Preferred Equity Interests


           
(a) The Borrower will not create,
incur, assume or permit to exist any Debt, except:


  
    (i) Debt under the Loan Documents;

    (ii) Subordinated Debt;

    (iii) Debt of the Borrower secured by Liens permitted by
    Sections 7.02(a)(iii) and 7.02(a)(iv).

    (iv) Debt of the Borrower
    incurred in the ordinary course of business or for the maintenance,
    replacement or improvement of any fixed or capital assets constituting the
    Project, provided that the aggregate principal amount of Debt
    permitted by this clause (iv), plus the aggregate amount of the Borrower's
    accounts payable to trade creditors for goods or services, shall not exceed
    $10,000,000 at any time outstanding; and

    (v) Debt to counterparties in respect of Hedging
    Agreements.

  



           
(b) The Borrower will not (i) issue any preferred membership
or other equity interest or (ii) be or become liable in respect of any
obligation (contingent or otherwise) to purchase, redeem, retire, acquire or
make any other payment in respect of any membership or other equity interest in
the Borrower or any option, warrant or other right to acquire any such
membership or other equity interest.


    7.02     Liens


           
(a) The Borrower will not create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:


  
    (i) Liens created under the Loan Documents;

    (ii) Permitted Encumbrances;

    (iii) any Lien on any property or
    asset of the Borrower existing on the date hereof and set forth in Schedule
    7.02, provided that (i) such Lien shall not apply to any other
    property or asset of the Borrower and (ii) such Lien shall secure only those
    obligations which it secures on the date hereof and any extensions, renewals
    and replacements thereof that do not increase the outstanding principal
    amount thereof;

    (iv) Purchase-money Liens on any
    property hereafter acquired or the assumption of any Lien on property
    existing at the time of such acquisition (and not created in contemplation
    of such acquisition) or a Lien incurred in connection with any conditional
    sale or other title retention agreement or a capital lease; provided,
    that:

    
        (A) Any property subject to any of the foregoing is
        acquired by the Borrower in the ordinary course of its business and the
        Lien on any such property attaches to such asset concurrently or within
        ninety (90) days after the acquisition thereof;

        (B) The obligation secured by any Lien so created,
        assumed, or existing shall not exceed one hundred percent (100%) of the
        lesser of the cost or the fair market value as of the time of
        acquisition of the property covered thereby to the Borrower;

        (C) Each such Lien shall attach only to the property
        so acquired and fixed improvements thereon; and

        (D) The Debt secured by all
        such Liens shall not exceed $5,000,000 (adjusted as provided in
        paragraph (b) of this Section) at any time outstanding in the aggregate;

    

    (v) Liens securing Debt permitted
    by Section 7.01, other than Subordinated Debt; provided, that such
    Liens are subordinate in priority to the Liens of the Security Documents;

    (vi) Liens to secure Capital Expenditures contemplated by
    or arising under Material Project Contracts; provided, that such
    Liens: (i) are approved by the Administrative Agent in writing prior to the
    attachment thereof; (ii) are limited to the property to be acquired or
    constructed; (iii) do not secure indebtedness for borrowed money; and (iv)
    are subordinate in priority to the Liens of the Security Documents;

    (vii) Liens created pursuant to Material Project
    Contracts or in the ordinary course of business of the Borrower; provided,
    that such Liens: (i) are approved by the Administrative Agent in writing
    prior to the attachment thereof; (ii) do not secure indebtedness for
    borrowed money; and (iii) are subordinate in priority to the Liens of the
    Security Documents; and

    (viii) Minor encumbrances, capital leases and judgment
    liens (other than judgment liens which have been bonded paid or stayed
    within 90 days after attachment) not exceeding $5,000,000 in the aggregate.

  



           
(b) The total amount of Debt permitted by Section
7.02(a)(iv)(D) shall be increased on each anniversary of the date of this
Agreement in proportion to the GDP Price Deflator for the immediately preceding
calendar year. For purposes of this paragraph, "GDP Price Deflator"
means the average of the four implicit price deflators for the gross domestic
product reported by the United States Department of Commerce for the four
quarters of the relevant calendar year.


    7.03     Fundamental Changes


           
(a) The Borrower will not merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets, whether now
owned or hereafter acquired, or liquidate or dissolve.

           
(b) The Borrower will not engage to any material extent in
any business other than business of the type conducted by the Borrower on the
date of execution of this Agreement and business directly related thereto.


    7.04     Investments,
Loans, Advances, Guarantees and Acquisitions


           
The Borrower will not purchase, hold or acquire (including
pursuant to any merger) any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions (including pursuant to any merger)) any assets of any
other Person constituting a business unit, except:


  
    (i) Permitted Investments; and

    (ii) investments existing on the date hereof and set
    forth in Schedule 7.04;

  




    7.05     Capital Expenditures


           
The Borrower will not permit Capital Expenditures made by the
Borrower in any fiscal year to exceed (i) $7,000,000 or (ii) 150% of the amount
of Capital Expenditures projected in the most recent projections delivered by
the Borrower to the Administrative Agent pursuant to Section 6.01(a)(iv),
whichever amount is greater.


    7.06     Asset
Sales


           
The Borrower will not sell, transfer, lease or otherwise
dispose (including pursuant to a merger) of any asset except, to the extent that
any such transaction will not have a Material Adverse Effect, (i) sales,
transfers, leases and other dispositions in the ordinary course of business in
connection with the repair or replacement of any equipment or parts, (ii) sales,
transfers, leases and other dispositions of obsolete equipment or parts which
are no longer used or useful in the operation or maintenance of the Project, and
(iii) sales or other dispositions of other property in an amount up to $500,000
with respect to any single transaction and up to $1,000,000 in the aggregate
during any fiscal year.


    7.07     Sale and Lease-Back
Transactions


           
The Borrower will not enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred.


    7.08     Hedging Agreements


           
The Borrower will not enter into any Hedging Agreement, other
than Hedging Agreements required or permitted by Section 6.16 and Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower is exposed in the conduct of its business or the
management of its liabilities.


    7.09     Restricted
Payments


           
The Borrower will not declare or make, or agree to pay for or
make, directly or indirectly, any Restricted Payment, except that so long as the
conditions specified in Section 6.14(d) or Section 6.14(e)(ii) are applicable,
the Borrower may make distributions with respect to the equity interest of the
Parent in the Borrower and pay Subordinated Debt to the extent of its
accumulated Restricted Cash Flow; provided, however, that the Borrower
shall not make any Restricted Payments to any Person at any time when total cash
and Eligible Investments on deposit in the Debt Service Reserve Account are less
than the Debt Service Reserve Requirement.


    7.10     Transactions with
Affiliates


           
Except as otherwise required or permitted by the Affiliate
Agreements, the Borrower will not sell, transfer, lease or otherwise dispose
(including pursuant to a merger) any property or assets to, or purchase, lease
or otherwise acquire (including pursuant to a merger) any property or assets
from, or otherwise engage in any other transactions with, any Affiliates, except
in the ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower than could be obtained on an arms-length basis
from unrelated third parties, provided that notwithstanding anything in
Section 7.01, 7.04, 7.06 and 7.09 to the contrary, the Borrower may participate
in, and make payments under, any Affiliate cost-sharing or cost- or
benefit-allocation program or agreement, including without limitation, overhead
allocation payments, tax credit allocation, income tax allocation, service cost
payments or Plan premium allocation payments, whether or not such payments or
allocations are pursuant to a written agreement, provided that (i) in the case
of any payment, cost sharing or overhead or cost allocation, such payment,
sharing or allocation is in ordinary course of business of the Borrower and
pursuant to the reasonable requirements of the Borrower's business, is in
consideration of services or other benefits rendered or provided to the
Borrower, and is upon fair and reasonable terms comparable to terms the Borrower
would obtain in a comparable arms-length transaction, and (ii) in the case of
any tax credit allocation or income tax allocation or other similar allocation,
such allocation is applied consistently and in a fair and reasonable manner to
all Affiliates included in the relevant consolidated tax return (after giving
due effect to the intent of the Sections enumerated above).


    7.11     Modification
of Material Contracts and Other Documents


           
The Borrower will not (i) amend, modify or waive any of its
rights under any Material Project Contract or terminate, cancel or permit the
termination or cancellation of any Material Project Contract, (ii) amend, modify
or waive any of its rights under any Required Permit or Environmental Permit,
(iii) amend or modify its certificate of formation, limited liability company
agreement or other organizational documents, or (iv) amend, modify or waive any
of its rights under any Transition Service Contract or terminate, cancel or
permit the termination or cancellation of any Transition Service Contract, in
each case other than amendments, modifications or waivers that would not
reasonably be expected to cause a Material Adverse Effect, without the prior
written consent of the Required Lenders, in the case of matters described in
clauses (i), (ii) and (iii) of this Section, or the Administrative Agent, in the
case of matters described in clause (iv) of this Section.

          
          SECTION 8.     EVENTS
          OF DEFAULT


           
If any of the following events ("Events of Default")
shall occur:

           
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, or the Borrower shall fail to
pay any interest on any Loan or any fee, commission or any other amount payable
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of more than five Business
Days;

           
(b) WPSR shall fail to pay any reimbursement obligation, fee
or other amount with respect to either Letter of Credit when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of more than five Business Days;

           
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower in or in connection with any Loan Document or any
amendment or modification hereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification hereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;

           
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 6.02, 6.03, or 6.09 or in
Article 7;

           
(e) the Borrower shall fail to
observe or perform any covenant, condition or agreement contained in any Loan
Document to which it is a party (other than those specified in clause (a) or (c)
of this Article), and such failure shall continue unremedied for a period of 30
days after the Borrower shall have received written notice thereof from the
Administrative Agent; provided, however, that if such Default cannot be
cured by the Borrower within such 30-day period, it shall not constitute an
Event of Default if curative action is instituted by the Borrower within such
period and thereafter is diligently pursued until such Default is cured, so long
as such Default is cured in any event within 30 days after the expiration of the
initial 30-day period;

           
(f) the Borrower shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material Debt,
when and as the same shall become due and payable (after giving effect to any
applicable grace period);

           
(g) any event or condition occurs that results in any
Material Debt becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Debt or any trustee or agent on its or their
behalf to cause any Material Debt to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity
(in each case after giving effect to any applicable grace period), provided,
that this clause shall not apply to secured Debt that becomes due solely as a
result of the voluntary sale or transfer, or casualty loss, of the property or
assets securing such Debt;

           
(h) an involuntary proceeding shall
be commenced or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;

           
(i) the Borrower shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (g) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

           
(j) the Borrower shall become
insolvent; shall fail to pay, become unable to pay, or admit in writing that it
is or will be unable to pay, its debts as they become due; or shall voluntarily
suspend transaction of its business;

           
(k) one or more judgments for the payment of money in an
aggregate amount not covered by insurance in excess of $5,000,000 shall be
rendered against the Borrower and the same shall remain undischarged or unbonded
for a period of 90 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Borrower to enforce any such judgment;

           
(l) an ERISA Event shall have occurred that, in the opinion
of the Administrative Agent or the Required Lenders, when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower in an aggregate amount exceeding (i)
$1,000,000 in any year or (ii) $2,000,000 for all periods; provided, that
liability attributable to an ERISA Event that occurs with respect to any Plan of
an ERISA Affiliate (other than the Borrower) shall be considered only if the
ERISA Affiliates, in the aggregate but excluding the Borrower do not, as of the
date of such ERISA Event, have sufficient net worth to satisfy the liability
attributable to the ERISA Event;

           
(m) any Loan Document shall cease, for any reason, to be in
full force and effect, or the Borrower shall so assert in writing or shall
disavow any of its obligations thereunder;

           
(n) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by the Borrower not to be, a
valid and perfected Lien on any Collateral, with the priority required by the
applicable Security Document, except (i) as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under the
Loan Documents or (ii) as a result of the Administrative Agent's failure to
maintain possession of any instrument, certificated security or negotiable
document delivered to it under the Security Agreement;

           
(o) a Change in Control shall occur; or

           
(p) the amount on deposit in the Debt Service Reserve Account
shall at any time be less than the Debt Service Reserve Requirement and the
Borrower shall not within 30 days after it shall receive written notice from the
Administrative Agent of such deficiency, either deposit cash in the Debt Service
Reserve Account in the amount, or deliver to the Administrative Agent a Debt
Service Reserve Letter of Credit in a stated amount, equal to the amount of such
deficiency;

then, and in every such event (other than an event described
in clause(h) or (i) of this Section), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate the WC
Commitment, and thereupon the WC Commitment shall terminate immediately and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued under the Loan Documents,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event described in clause (h) or (i) of this Section, the WC
Commitment shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued under the Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.

          
          SECTION 9.     THE
          ADMINISTRATIVE AGENT

      9.01     Appointment


           
Each Lender hereby irrevocably appoints Bayerische Landesbank
Girozentrale, acting through its New York Branch, to act as Administrative Agent
for such Lender under this Agreement and the other Loan Documents. Each Lender
hereby irrevocably authorizes the Administrative Agent to take such action on
behalf of such Lender under the provisions of this Agreement and the other Loan
Documents, and to exercise such powers and to perform such duties, as are
expressly delegated to or required of the Administrative Agent by the terms
hereof or thereof, together with such powers as are reasonably incidental
thereto. Bayerische Landesbank Girozentrale hereby agrees to act as
Administrative Agent on behalf of the Lenders on the terms and conditions set
forth in this Agreement and the other Loan Documents, subject to its right to
resign as provided in Section 9.10. Each Lender hereby irrevocably
authorizes the Administrative Agent to execute and deliver each of the Loan
Documents executed after the date hereof and to accept delivery of such of the
other Loan Documents delivered after the date hereof as may not require
execution by the Administrative Agent (with such consents of the Lenders as
required pursuant to Section 10.02). Each Lender agrees that the rights and
remedies granted to the Administrative Agent under the Loan Documents shall be
exercised exclusively by the Administrative Agent, and that no Lender shall have
any right individually to exercise any such right or remedy, except to the
extent expressly provided herein or therein.


    9.02     General Nature of
Administrative Agent's Duties


           
Notwithstanding anything to the contrary elsewhere in this
Agreement or in any other Loan Document:


  
    (i) The Administrative Agent shall have no duties or
    responsibilities except those expressly set forth in this Agreement and the
    other Loan Documents, and no implied duties or responsibilities on the part
    of the Administrative Agent shall be read into this Agreement or any other
    Loan Document or shall otherwise exist.

    (ii) The duties and responsibilities of the
    Administrative Agent under this Agreement and the other Loan Documents shall
    be mechanical and administrative in nature, and the Administrative Agent
    shall not have a fiduciary relationship in respect of any Lender.

    (iii) The Administrative Agent is and shall be solely the
    agent of the Lenders. The Administrative Agent does not assume, and shall
    not at any time be deemed to have, any relationship of agency or trust with
    or for, or any other duty or responsibility to, the Borrower or any other
    Person (except only for its relationship as agent for, and its express
    duties and responsibilities to, the Lenders as provided in this Agreement
    and the other Loan Documents).

    (iv) The Administrative Agent shall be under no
    obligation to take any action hereunder or under any other Loan Document if
    the Administrative Agent believes in good faith that taking such action may
    conflict with any Law or any provision of this Agreement or any other Loan
    Document, or may require the Administrative Agent to qualify to do business
    in any jurisdiction where it is not then so qualified.

  




    9.03     Exercise of Powers


           
The Administrative Agent shall take any action of the type
specified in this Agreement or any other Loan Document as being within the
Administrative Agent's rights, powers or discretion in accordance with
directions from the Required Lenders (or, to the extent this Agreement or such
Loan Document expressly requires the direction or consent of some other Person
or set of Persons, then instead in accordance with the directions of such other
Person or set of Persons). In the absence of such directions, the Administrative
Agent shall have the authority (but under no circumstances shall be obligated),
in its sole discretion, to take any such action, except to the extent that this
Agreement or such Loan Document expressly requires the direction or consent of
the Required Lenders (or some other Person or set of Persons), in which case the
Administrative Agent shall not take such action absent such direction or
consent. Any action or inaction pursuant to such direction, discretion or
consent shall be binding on all the Lenders. The Administrative Agent shall not
have any liability to any Person as a result of (a) the Administrative Agent
acting or refraining from acting in accordance with the directions of the
Required Lenders (or other applicable Person or set of Persons), (b) the
Administrative Agent refraining from acting in the absence of instructions to
act from the Required Lenders (or other applicable Person or set of Persons),
whether or not the Administrative Agent has discretionary power to take such
action, or (c) the Administrative Agent taking discretionary action it is
authorized to take under this Section (subject, in the case of clauses (b)
and (c), to the provisions of Section 9.04(i)).


    9.04     General Exculpatory
Provisions


           
Notwithstanding anything to the contrary elsewhere in this
Agreement or any other Loan Document:


  
    (i) The Administrative Agent
    shall not be liable for any action taken or omitted to be taken by it under
    or in connection with this Agreement or any other Loan Document, unless
    caused by its own gross negligence or willful misconduct.

    (ii) The Administrative Agent shall not be responsible
    for (i) the execution, delivery, effectiveness, enforceability,
    genuineness, validity or adequacy of this Agreement or any other Loan
    Document, (ii) any recital, representation, warranty, document,
    certificate, report or statement in, provided for in, or received under or
    in connection with, this Agreement or any other Loan Document,
    (iii) any failure of the Borrower or any Lender to perform any of their
    respective obligations under this Agreement or any other Loan Document, or
    (iv) the existence, validity, enforceability, perfection, recordation,
    priority, adequacy or value, now or hereafter, of any Lien or other direct
    or indirect security afforded or purported to be afforded by any of the Loan
    Documents or otherwise from time to time.

    (iii) The Administrative Agent shall not be under any
    obligation to ascertain, inquire or give any notice relating to (i) the
    performance or observance of any of the terms or conditions of this
    Agreement or any other Loan Document on the part of the Borrower,
    (ii) the business, operations, condition (financial or otherwise) or
    prospects of the Borrower or any other Person, or (iii) except to the
    extent set forth in Section 9.05(f), the existence of any Default or
    Event of Default.

    (iv) The Administrative Agent shall not be under any
    obligation, either initially or on a continuing basis, to provide any Lender
    with any notices, reports or information of any nature, whether in its
    possession presently or hereafter, except for such notices, reports and
    other information expressly required by this Agreement or any other Loan
    Document to be furnished by the Administrative Agent to such Lender.

  




    9.05     Administration by
the Administrative Agent


           
(a) The Administrative Agent may rely upon any notice or
other communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any other Loan
Document) purportedly made by or on behalf of the proper party or parties, and
the Administrative Agent shall not have any duty to verify the identity or
authority of any Person giving such notice or other communication.

           
(b) The Administrative Agent may consult with legal counsel
(including, without limitation, in-house counsel for the Administrative Agent or
in-house or other counsel for the Borrower), independent public accountants and
any other experts selected by it from time to time, and the Administrative Agent
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts.

           
(c) The Administrative Agent may conclusively rely upon the
truth of the statements and the correctness of the opinions expressed in any
certificates or opinions furnished to the Administrative Agent in accordance
with the requirements of this Agreement or any other Loan Document. Whenever the
Administrative Agent shall deem it necessary or desirable that a matter be
proved or established with respect to the Borrower or any Lender, such matter
may be established by a certificate of the Borrower or such Lender, as the case
may be, and the Administrative Agent may conclusively rely upon such certificate
(unless other evidence with respect to such matter is specifically prescribed in
this Agreement or another Loan Document).

           
(d) The Administrative Agent may fail or refuse to take any
action unless it shall be indemnified to its satisfaction from time to time
against any and all amounts, liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature which may be imposed on, incurred by or asserted against the
Administrative Agent by reason of taking or continuing to take any such action.

           
(e) The Administrative Agent may perform 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.

           
(f) The Administrative Agent shall
not be deemed to have any knowledge or notice of the occurrence of any Default
or Event of Default 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 each Lender.


    9.06     Lenders Not Relying
on Administrative Agent or Other Lenders


           
Each Lender acknowledges that:


  
    (i) Neither the Administrative Agent nor any other Lender
    has made any representations or warranties to it, and no act taken hereafter
    by the Administrative Agent or any other Lender shall be deemed to
    constitute any representation or warranty by the Administrative Agent or
    such other Lender to it.

    (ii) It has, independently and without reliance upon the
    Administrative Agent or any other Lender, and based upon such documents and
    information as it has deemed appropriate, made its own credit and legal
    analysis and decision to enter into this Agreement and the other Loan
    Documents.

    (iii) It will, independently and without reliance upon
    the Administrative Agent or any other Lender, and based upon such documents
    and information as it shall deem appropriate at the time, make its own
    decisions to take or not take action under or in connection with this
    Agreement and the other Loan Documents.

  




    9.07     Indemnification


           
Each Lender agrees to reimburse and indemnify the
Administrative Agent and its directors, officers, employees and agents (to the
extent not reimbursed by the Borrower and without limitation of the obligations
of the Borrower to do so, in each case pursuant to the terms of this Agreement
and the other Loan Documents), based on its Percentage, from and against any and
all amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or
nature (including, without limitation, the fees and disbursements of counsel for
the Administrative Agent or such other Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Administrative Agent or such other Person shall be designated
a party thereto) that may at any time be imposed on, incurred by or asserted
against the Administrative Agent or such other Person as a result of, or arising
out of, or in any way related to or by reason of, this Agreement, any other Loan
Document, any transaction from time to time contemplated hereby or thereby, or
any transaction financed in whole or in part or directly or indirectly with the
proceeds of any Loan, provided that no Lender shall be liable for any
portion of such amounts, losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements
resulting solely from the gross negligence or willful misconduct of the
Administrative Agent or such other Person, as finally determined by a court of
competent jurisdiction. Payments under this Section shall be due and payable on
demand, and to the extent that any Lender fails to pay any such amount on
demand, such amount shall bear interest for each day from the date of demand
until paid (before and after judgment) at a rate per annum (calculated on the
basis of a year of 360 days and actual days elapsed) which for each day shall be
equal to the Federal Funds Effective Rate for such day.


    9.08     Administrative Agent
in its Individual Capacity


           
With respect to its Commitment and the Obligations owing to
it, the Administrative Agent shall have the same rights and powers under this
Agreement and each other Loan Document as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the terms
"Lenders," "holders of Notes" and like terms shall include
the Administrative Agent in its individual capacity as such. The Administrative
Agent and its affiliates may, without liability to account, make loans to,
accept deposits from, acquire debt or equity interests in, act as trustee under
indentures of, and engage in any other business with, the Borrower and any
stockholder, subsidiary or affiliate of the Borrower, as though the
Administrative Agent were not the Administrative Agent hereunder.


    9.09     Holders of Notes


           
The Administrative Agent may deem and treat the Lender which
is payee of a Note as the owner and holder of such Note for all purposes hereof
unless and until an Assignment Agreement with respect to the assignment or
transfer thereof shall have been filed with the Administrative Agent in
accordance with Section 10.04. Any authority, direction or consent of any
Person who at the time of giving such authority, direction or consent is shown
in the Register as being a Lender shall be conclusive and binding on each
present and subsequent holder, transferee or assignee of any Note or Notes
payable to such Lender or of any Note or Notes issued in exchange therefor.


    9.10     Successor
Administrative Agent


           
The Administrative Agent may resign at any time by giving 10
days' prior written notice thereof to the Lenders and the Borrower. The
Administrative Agent may be removed by the Required Lenders at any time with or
without cause by giving 10 days, prior written notice thereof to the
Administrative Agent, the other Lenders and the Borrower. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed and consented to, and shall have accepted such appointment,
within 30 days after such notice of resignation or removal, then the retiring
Administrative Agent, on behalf of the Lenders, may appoint a successor
Administrative Agent. Each successor Administrative Agent shall be a commercial
bank or trust company organized under the Laws of the United States of America
or any State thereof and having a combined capital and surplus of at least
$1,000,000,000. The appointment of any successor Administrative Agent at any
time pursuant to this Section shall be subject to the approval of the Borrower,
provided that at such time there shall not have occurred and be continuing any
Default or Event of Default, and provided further that the Borrower's consent to
any such appointment shall not be unreasonably withheld. Upon the acceptance by
a successor Administrative Agent of its appointment as Administrative Agent
hereunder, such successor Administrative Agent shall thereupon succeed to and
become vested with all the properties, rights, powers, privileges and duties of
the former Administrative Agent without further act, deed or conveyance. Upon
the effective date of resignation or removal of a retiring Administrative Agent,
the Administrative Agent shall be discharged from its duties under this
Agreement and the other Loan Documents, but the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted by it while it was
Administrative Agent under this Agreement. If and for so long as no successor
Administrative Agent shall have been appointed, then any notice or other
communication required or permitted to be given by the Administrative Agent
shall be sufficiently given if given by the Required Lenders, all notices or
other communications required or permitted to be given to the Administrative
Agent shall be given to each Lender, and all payments to be made to the
Administrative Agent shall be made directly to the Borrower or Lender for whose
account such payment is made.


    9.11     Additional
Administrative Agents


           
If the Administrative Agent shall from time to time deem it
necessary or advisable, for its own protection in the performance of its duties
hereunder or in the interest of the Lenders, the Administrative Agent and the
Borrower shall execute and deliver a supplemental agreement and all other
instruments and agreements necessary or advisable in the opinion of the
Administrative Agent to constitute another commercial bank or trust company, or
one or more other Persons approved by the Administrative Agent, to act as
co-Administrative Agent, with such powers of the Administrative Agent as may be
provided in such supplemental agreement, and to vest in such bank, trust company
or Person, as such co-Administrative Agent, any properties, rights, powers,
privileges and duties of the Administrative Agent under this Agreement or any
other Loan Document. The appointment of any co-Administrative Agent at any time
pursuant to this Section shall be subject to the approval of the Borrower,
provided that at such time there shall not have occurred and be continuing any
Default or Event of Default, and provided further that the Borrower's consent to
any such appointment shall not be unreasonably withheld.


    9.12     Calculations


           
The Administrative Agent shall not be liable for any
calculation, apportionment or distribution of payments made by it in good faith,
in the absence of its own gross negligence or willful misconduct. If such
calculation, apportionment or distribution is subsequently determined to have
been made in error, the sole recourse of any Lender to whom payment was due but
not made (except as provided in the preceding sentence) shall be to recover from
the other Lenders any payment in excess of the amount to which they are
determined to be entitled or, if the amount due was not paid by the Borrower, to
recover such amount from the Borrower.


    9.13     Other Agents


           
Notwithstanding anything in any Loan Document to the
contrary, no Agent other than the Administrative Agent shall have any duty or
obligation under the Loan Documents.

          
          SECTION 10.     MISCELLANEOUS

      10.01     Notices


           
Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:


  
(a) if to the Borrower:

    
            Sunbury Generation, LLC

            c/o WPS Power Development, Inc.

            677 Baeten Road

            Green Bay, WI 54304

            Attention: George R. Wiesner

            Assistant Controller 

            Telephone: (920) 490-6052

            Telecopy: (920) 496-9399 

            with a copy to:

             Foley & Lardner

            Firstar Center

            777 E. Wisconsin Ave.

            Milwaukee, WI 53202-5367

            Attention: Mary Ann C. Halloin, Esq.

             Telephone: (414) 297-5604

            Telecopy: (414) 297-4900

    

(b) if to the Administrative Agent:

    
            Bayerische Landesbank Girozentrale

            560 Lexington Avenue

            New York, NY 10022

            Attention: Export & Project Finance
            Department

            Telephone: (212) 310-9800

            Telecopy: (212) 310-9868

          with a copy to:

          Emmet, Marvin & Martin, LLP

          120 Broadway

          New York, NY 10271

          Attention: Julian A. McQuiston, Esq.

          Telephone: (212) 238-3000

          Telecopy: (212) 238-3100

  

  



           
(c) if to any other Lender, to it at its address (or telecopy
number) set forth on its signature page to this Agreement or in its Assignment
Agreement.

Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.


    10.02     Waivers;
Amendments


           
(a) No failure or delay by the Administrative Agent or any
Lender in exercising any right or power under any Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent and
the Lenders under the Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
any Loan Document or consent to any departure by the Borrower therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the time.

           
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided,
that no such agreement shall (i) increase the WC Commitment of the WC Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan, or reduce the rate of interest thereon, or reduce any fees or
other amounts payable under the Loan Documents, without the written consent of
each Lender affected thereby, (iii) postpone any scheduled date of payment of
the principal amount of any Loan, or any interest thereon, or any fees or other
amounts payable under the Loan Documents, or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date of reduction or
expiration of the WC Commitment, without the written consent of each Lender
affected thereby, (iv) change any provision hereof in a manner that would alter
the pro rata sharing of payments required by any Loan Document, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the definition of "Required Lenders" or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender, or (vi) release any of
the Collateral from the Liens of the Loan Documents (except as expressly
provided in the Mortgage or the Security Agreement), without the consent of each
Lender; and provided, further, that no such agreement shall amend, modify
or otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.

           
(c) If any Lender other than
Bayerische Landesbank Girozentrale fails to consent to any action, waiver, or
amendment requested by Borrower when such Lender's consent is required hereunder
(for purposes hereof, a "Dissenting Lender"), the Borrower may,
at its sole expense and effort, upon notice to the Dissenting Lender and the
Administrative Agent, require the Dissenting Lender to assign and delegate,
without recourse, all its interests, rights and obligations under this Agreement
and the other Loan Documents to an assignee (for purposes hereof, a "Replacement
Lender") that shall assume such obligations in accordance with and
subject to the restrictions contained in Section 10.04; provided, that
(i) the Borrower shall have received the prior consent of the Required Lenders,
and (ii) the Dissenting Lender shall have received payment of an amount equal to
the outstanding principal of its Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the Replacement Lender (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts).

           
(d) If the Borrower is reasonably
unable to obtain a Replacement Lender for any Dissenting Lender, the Borrower,
the Parent, and/or any of their Affiliates may purchase, and the Dissenting
Lender shall sell and assign to the Borrower, the Parent, or such Affiliate, as
the case may be (for purposes hereof, the "Purchaser"), without
recourse, all of the Dissenting Lender's interests, rights and obligations under
this Agreement and the other Loan Documents; provided, that (i) the
Borrower shall have received the prior consent of the Required Lenders, (ii) the
Dissenting Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the Purchaser (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts), and (iii) the Purchaser, the Borrower, and the
Administrative Agent shall have entered into a subordination and waiver
agreement ("Subordination Agreement") on terms and conditions
acceptable to the Required Lenders whereby (A) all payments in respect of the
Purchaser's Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder shall be subordinated on substantially the same terms
and conditions as other Subordinated Debt, (B) the Purchaser shall waive all of
its interests, rights, and remedies in respect of the Liens created under the
Security Documents, and (C) the Purchaser shall waive all of its rights to
exercise any of the voting or consent rights of the Lenders under any of the
Loan Documents, in each case for so long as Purchaser continues to own such
interests, rights, and obligations. All of the terms, conditions, and waivers
set forth in any such Subordination Agreement shall expire and be of no further
force and effect upon the sale and assignment of the Purchaser's interests,
rights and obligations under this Agreement and the other Loan Documents to a
Replacement Lender in accordance with paragraph (c) of this Section.

           
(e) For purposes of this Section 10.02, "Required
Lenders" shall be determined without reference to the sum of the
outstanding Term Loans of the Dissenting Lender.


    10.03     Expenses;
Indemnity; Damage Waiver


           
(a) The Borrower shall pay all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (other than any
Affiliate acting in the capacity of a Lender), including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in connection
with (i) any amendments, modifications or waivers of the provisions of any Loan
Document (whether or not the transactions contemplated thereby shall be
consummated), and (ii) in connection with the enforcement or protection of the
rights of the Administrative Agent and the Lenders in connection with the Loan
Documents, including the Administrative Agent's rights under this Section, or in
connection with the Loans made hereunder, including all such reasonable
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

           
(b) The Borrower shall indemnify the
Administrative Agent, each Lender and each Related Party thereof (each such
Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the transactions contemplated thereby, (ii)
any Loan or the use of the proceeds thereof, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower, or any Environmental Liability related in any way to
the Borrower or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided, that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee (including claims of any Lender resulting from the
gross negligence or willful misconduct of the Administrative Agent).

           
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section, each Lender severally agrees to pay to the Administrative Agent
an amount equal to the product of such unpaid amount multiplied by a fraction,
the numerator of which is the outstanding principal balance of such Lender's
Loans and the denominator of which is the outstanding principal balance of all
Loans (in each case determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought), provided that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as
applicable, was incurred by or asserted against the Administrative Agent in its
capacity as such.

           
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, any Loan Document or any agreement, instrument or other document
contemplated thereby, the Transactions or any Loan or the use of the proceeds
thereof.

           
(e) All amounts due under this Section shall be payable
promptly but in no event later than ten days after written demand therefor.


    10.04     Successors
and Assigns


           
(a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of the Administrative Agent and each
Lender) any legal or equitable right, remedy or claim under or by reason of any
Loan Document.

           
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of the Loans at the time owing to it); provided, that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Borrower and the Administrative Agent must give its prior written consent to
such assignment (which consent shall not be unreasonably withheld), (ii) in the
case of the WC Lender all of its rights and obligations (including all the WC
Loans at the time owing to it and the WC Commitment) shall be assigned, (iii)
except in the case of an assignment to a Lender or an Affiliate of a Lender or
an assignment of the entire remaining amount of the assigning Lender's Term
Loans, the amount of the Term Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment Agreement with respect to
such assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless the Borrower and the Administrative Agent otherwise consent,
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment Agreement together with, unless otherwise
agreed by the Administrative Agent, a processing and recordation fee of $5,000,
and (v) if the assignee is a Foreign Lender, the assignee shall deliver to the
Borrower and the Administrative Agent the documents required by Section 3.07(e);
and provided, further, that any consent of the Borrower otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment Agreement, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment Agreement, have the
rights and obligations of a Term Lender under the Loan Documents, and the
assigning Term Lender thereunder shall, to the extent of the interest assigned
by such Assignment Agreement, be released from its obligations under the Loan
Documents (and, in the case of an Assignment Agreement covering all of the
assigning Term Lender's rights and obligations under the Loan Documents, such
Term Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 3.05, 3.06, 3.07 and 10.03). Any assignment or
transfer by a Term Lender of rights or obligations under the Loan Documents that
does not comply with this paragraph shall be treated for purposes of the Loan
Documents as a sale by such Term Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.

           
(c) The Administrative Agent, acting
for this purpose as an agent of the Borrower, shall maintain at one of its
offices in New York City a copy of each Assignment Agreement delivered to it and
a register for the recordation of the names and addresses of the Lenders, the
amount of the WC Commitment of the WC Lender, and the principal amounts of the
Loans owing to each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive
absent clearly demonstrable error, and the Borrower and each Lender may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

           
(d) Upon its receipt of a duly completed Assignment Agreement
executed by an assigning Lender and an assignee, the processing and recordation
fee referred to in paragraph (b) of this Section, any written consent to such
assignment required by paragraph (b) of this Section, and, if applicable, the
documents required by Section 3.07(e), the Administrative Agent shall accept
such Assignment Agreement and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.

           
(e) Any Lender may, without the
consent of the Borrower, the Administrative Agent or any other Lender,
sell participations to one or more banks or other entities (each such bank or
other entity being called a "Participant") in all or a portion
of such Lender's rights and obligations under this Agreement and the other Loan
Documents (including all or a portion of the Loans owing to it); provided,
that (i) such Lender's obligations under the Loan Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of any Loan Documents; provided,
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.05 and 3.06 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.08 as
though it were a Lender, provided that such Participant agrees to be
subject to Section 2.09(c) as though it were a Lender.

           
(f) A Participant shall not be entitled to receive any
greater payment under Section 3.05 or 3.07 than the Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.07 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Sections
3.07(e), 3.07(f) and 3.08 as though it were a Lender.

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


    10.05     Survival


           
All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of any Loan Document
and the making of any Loans, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under the
Loan Documents is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 3.05, 3.06, 3.07, 9 and 10.03
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans and the
termination of the Commitments or the termination of this Agreement or any
provision hereof.


    10.06     Counterparts;
Integration; Effectiveness


    This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one contract. This Agreement and any separate letter agreements with respect
to fees and expenses payable to the Administrative Agent and any Lender
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
5.01, this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of this Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement.


    10.07     Severability


           
In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.


    10.08     Right
of Setoff


           
If an Event of Default shall have occurred and be continuing,
each of the Lenders and their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to setoff and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by it to or for the credit or the account of the Borrower against any of and all
the obligations of the Borrower now or hereafter existing under this Agreement
held by it, irrespective of whether or not it shall have made any demand under
this Agreement and although such obligations may be unmatured. The rights of
each the Lenders and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that it
may have.



    10.09     Governing Law; Jurisdiction; Consent to Service of Process


           
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

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

           
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any court referred to in paragraph (b) of this Section. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

           
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.


            10.10    
WAIVER
OF JURY TRIAL

           
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

    10.11     Headings


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


    10.12     Interest
Rate Limitation


           
Notwithstanding anything herein to the contrary, if at any
time the interest rate applicable to any Loan, together with all fees, charges
and other amounts that are treated as interest on such Loan under applicable law
(collectively the "charges"), shall exceed the maximum lawful
rate (the "maximum rate") that may be contacted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all of the charges payable in respect thereof, shall be limited to
the maximum rate and, to the extent lawful, the interest and the charges that
would have been payable in respect of such Loan but were not payable as a result
of the operation of this Section shall be cumulated, and the interest and the
charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the maximum rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.


[Continued and executed on the following pages]


 

           
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.


  
    
      
        
                    SUNBURY GENERATION, LLC

By:___________________________

Name: Ralph G. Baeten

Title: Treasurer

        

      

    

  



 

 


  
    
      
        
                      BAYERISCHE LANDESBANK GIROZENTRALE,

                      NEW YORK BRANCH,

                      as Administrative Agent

By:___________________________

Name: Alexander Kohnert

Title: First Vice President





By:___________________________

Name: Christopher A. Stolarski

Title: Vice President

        

      

    

  



 


  
    
      
        
                      BAYERISCHE LANDESBANK GIROZENTRALE,

                      CAYMAN ISLANDS BRANCH,

                      as WC Lender

By:___________________________

Name: Alexander Kohnert

Title: First Vice President





By:___________________________

Name: Christopher A. Stolarski

Title: Vice President




Address for Notices:

Bayerische Landesbank Girozentrale,

Cayman Islands Branch

c/o Bayerische Landesbank Girozentrale

560 Lexington Avenue

New York, NY 10022

Attention: Export & Project Finance
                    Department

          
            
              
                
                  
                     

                  

                

              

            

          

                    Telephone: (212) 310-9800

                    Telecopy: (212) 310-9868

                     

        

      

    

  



                    Percentage: 100% 


  
    
      
        
BAYERISCHE LANDESBANK GIROZENTRALE,

CAYMAN ISLANDS BRANCH,

as Term Lender

By:___________________________

Name: Alexander Kohnert

Title: First Vice President

 

By:___________________________

Name: Christopher A. Stolarski

Title: Vice President


                      Address for Notices:

                    Bayerische Landesbank Girozentrale,

                    Cayman Islands Branch

                    c/o Bayerische Landesbank Girozentrale

                    560 Lexington Avenue

                    New York, NY 10022

                    Attention: Export & Project Finance
                    Department

                    Telephone: (212) 310-9800

                    Telecopy: (212) 310-9868

                     

          

        

      

    



  	
        Credit Agreement

        dated as of April 14, 2000

        among Sunbury Generation, LLC

        Bayerische Landesbank Girozentrale,

        Cayman Islands Branch, et al.

        

        PRINCIPAL PAYMENT SCHEDULE

	 
	
        Payment

        Date
	
        Installment

        Percentage
	
        
          
          Installment Amount
          


          	
        
          
          Principal Balance
          


          
	
        June 30, 2000
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $82,172,475

	
        September 30, 2000
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $80,644,950

	
        December 31, 2000
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $79,117,425

	
        March 31, 2001
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $77,589,900

	
        June 30, 2001
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $76,062,375

	
        September 30, 2001
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $74,534,850

	
        December 31, 2001
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $73,007,325

	
        March 31, 2002
	
        
          
            
            1.825%
            


          

        	
        $1,527,525
	
        $71,479,800

	
        June 30, 2002
	
        
          
            
            0.575%
            


          

        	
        $481,275
	
        $70,998,525

	
        September 30, 2002
	
        
          
            
            0.575%
            


          

        	
        $481,275
	
        $70,517,250

	
        December 31, 2002
	
        
          
            
            0.575%
            


          

        	
        $481,275
	
        $70,035,975

	
        March 31, 2003
	
        
          
            
            0.575%
            


          

        	
        $481,275
	
        $69,554,700

	
        June 30, 2003
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $68,717,700

	
        September 30, 2003
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $67,880,700

	
        December 31, 2003
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $67,043,700

	
        March 31, 2004
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $66,206,700

	
        June 30, 2004
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $65,369,700

	
        September 30, 2004
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $64,532,700

	
        December 31, 2004
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $63,695,700

	
        March 31, 2005
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $62,858,700

	
        June 30, 2005
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $62,021,700

	
        September 30, 2005
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $61,184,700

	
        December 31, 2005
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $60,347,700

	
        March 31, 2006
	
        
          
            
            1.000%
            


          

        	
        $837,000
	
        $59,510,700

	
        June 3O, 2006
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $58,548,150

	
        September 30, 2006
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $57,585,600

	
        December 31, 2006
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $56,623,050

	
        March 31, 2007
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $55,660,500

	
        June 30, 2007
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $54,697,950

	
        September 30, 2007
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $53,735,400

	
        December 31, 2007
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $52,772,850

	
        March 31, 2008
	
        
          
            
            1.150%
            


          

        	
        $962,550
	
        $51,810,300

	
        June 30, 2008
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $50,722,200

	
        September 30, 2008
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $49,634,100

	
        December 31, 2008
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $48,546,000

	
        March 31, 2009
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $47,457,900

	
        June 30, 2009
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $46,369,800

	
        September 30, 2009
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $45,281,700

	
        December 31, 2009
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $44,193,600

	
        March 3l, 2010
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $43,105,500

	
        June 30, 2010
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $42,017,400

	
        September 30, 2010
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $40,929,300

	
        December 31, 2010
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $39,841,200

	
        March 3l, 2011
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $38,753,100

	
        June 30, 2011
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $37,665,000

	
        September 30, 2011
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $36,576,900

	
        December 31, 2011
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $35,488,800

	
        March 31, 2012
	
        
          
            
            1.300%
            


          

        	
        $1,088,100
	
        $34,400,700

	
        June 30, 2012
	
        
          
            
            1.450%
            


          

        	
        $1,213,650
	
        $33,187,050

	
        September 30, 2012
	
        
          
            
            1.450%
            


          

        	
        $1,213,650
	
        $31,973,400

	
        December 31, 2012
	
        
          
            
            1.450%
            


          

        	
        $1,213,650
	
        $30,759,750

	
        March 3l, 2013
	
        
          
            
            1.450%
            


          

        	
        $1,213,650
	
        $29,546,100

	
        June 30, 2013
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $28,206,900

	
        September 30, 2013
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $26,867,700

	
        December 31, 2013
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $25,528,500

	
        March 3l, 2014
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $24,189,300

	
        June 30, 2014
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $22,850,100

	
        September 30, 2014
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $21,510,900

	
        December 31, 2014
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $20,171,700

	
        March 31, 2015
	
        
          
            
            1.600%
            


          

        	
        $1,339,200
	
        $18,832,500

	
        June 30, 2015
	
        
          
            
            1.725%
            


          

        	
        $1,443,825
	
        $17,388,675

	
        September 30, 2015
	
        
          
            
            1.725%
            


          

        	
        $1,443,825
	
        $15,944,850

	
        December 31, 2015
	
        
          
            
            1.725%
            


          

        	
        $1,443,825
	
        $14,501,025

	
        March 31, 2016
	
        
          
            
            1.725%
            


          

        	
        $1,443,825
	
        $13,057,200

	
        June 30, 2016
	
        
          
            
            1.875%
            


          

        	
        $1,569,375
	
        $11,487,825

	
        September 30, 2016
	
        
          
            
            1.875%
            


          

        	
        $1,569,375
	
        $ 9,918,450

	
        December 31, 2016
	
        
          
            
            1.875%
            


          

        	
        $1,569,375
	
        $ 8,349,075

	
        March 31, 2017
	
        
          
            
            1.875%
            


          

        	
        $1,569,375
	
        $ 6,779,700

	
        June 30, 2017
	
        
          
            
            2.025%
            


          

        	
        $1,694,925
	
        $ 5,084,775

	
        September 30, 2017
	
        
          
            
            2.025%
            


          

        	
        $1,694,925
	
        $ 3,389,850

	
        December 31, 2017
	
        
          
            
            2.025%
            


          

        	
        $1,694,925
	
        $ 1,694,925

	
        March 3l, 2018
	
        
          
            
            2.025%
            


          

        	
        $1,694,925
	
        0

	 	 	
        $83,700,000