Document:

Exhibit 10.29

 

EMPLOYMENT AGREEMENT

BETWEEN

TEAMBANK, N.A.

AND

CAROLYN SUE JACOBS

 

This Agreement is made this 1st
day of January, 2004 between TeamBank, N.A., a National Association located in
Paola, Kansas (“Company”)  and Carolyn Sue Jacobs  (“Executive”).

 

A.            Executive is employed as Senior Vice
President and Trust Officer and Administrator for the Team Financial, Inc.
Employee Stock Ownership Plan (ESOP) for whom TeamBank, N.A. is the agent, has
rendered valuable services to Company and has acquired an extensive background
in and knowledge of Company’s business.

 

B.            Company desires to continue the services of
Executive, and Executive desires to continue to serve Company as Senior Vice
President and Trust Officer of TeamBank, N.A. and Administrator for the ESOP.

 

In consideration of the
foregoing recitals and the agreements set forth herein, Company and Executive
agree as follows:

 

1.             Term of Agreement and
Definitions:

 

1.0          Terms of Agreement:  Company shall employ Executive
and Executive accepts such Employment for a term beginning on the date of this
Agreement and ending the 31st day of December, 2006, subject to the
terms and conditions set forth herein, unless earlier termination of the
agreement shall occur in accordance with the subsequent provisions set forth
herein.

 

1.1          Automatic Extension of Agreement Term: 
Notwithstanding the foregoing, if this Agreement shall not have been
terminated in accordance with the provisions herein on or by the 31st
day of December, 2006; the term of this Agreement shall be extended
automatically without further action by either party such that at every moment
of time thereafter, the term shall be one year.

 

Provided, however, during
such period of automatic extension of the term, this Agreement may be
terminated in accordance with the termination provisions of this Agreement as
set forth in Sections 10 and 11.

 

1.2          Definitions:  The following definitions shall be used in
the interpretation of this   Agreement.

 

1.2.1       Employment on an active full
time basis means the Executive’s
professional services shall be substantially devoted to Company.  Although prior approval by the Company of
Executive’s employment by third parties is not required, the Company shall have
the right to review any employment of Executive by any entity and shall have
the right to require Executive to abandon any unsuitable employment as may be
determined

 

 

by Company or any activities
competitive with Company.  The term
“active full time basis” includes the requirement that Executive refrain from
any activities which interfere with Executive’s Company duties.

 

1.2.2       Year, Month, Week and Day, unless otherwise provided in this agreement,
the word “year” shall be construed to mean a calendar year of 365 days, the
word “month” shall be construed to mean a calendar month, the work “week” shall
be construed to mean a calendar week of 7 days, and the word “day” shall be
construed to mean a period of 24 hours running from midnight to midnight.

 

1.2.3       Annual Base Salary is the sum of money regularly paid by Company
to Executive each year of the term of this Agreement pursuant to provisions of
Section 8.0 of this Agreement.

 

1.2.4       Customary payroll practices are those policies and procedures routinely
followed by the Company concerning the time and method of payment of
compensation to its employees as may from time to time be adopted by the
Company during course of this Agreement.

 

1.2.5       Company policies are those written policies adopted by the
Company and/or customary practices routinely followed by the Company which may
from time to time be adopted by the Company during the course of the
Agreement.  The parties acknowledge the
Company may from time to time reasonably enact new policies or alter existing
policies.

 

1.2.6       Organization as used herein shall be broadly defined to
include any business, civic or community group or entity.

 

1.2.7       Willful Misconduct is any act performed with a designed purpose
or intent on the part of a person to do wrong.

 

1.2.8       Gross misappropriation of
funds shall be any
misappropriation of company funds by any means which is intentional and not of
an inconsequential nature or amount.

 

2.             Entire Agreement

 

2.0          With respect to the matters specified herein,
this Agreement contains the entire agreement between the parties and supersedes
all prior oral and written agreements, under standings and commitments between
the parties.  This Agreement shall not
affect the provisions of any other compensation, retirement or other benefit
programs of Company to which Executive is a party or of which Executive is a
beneficiary.

 

3.             Validity

 

3.0          In the event that any provision of this
Agreement is held to be invalid, void or unenforceable, the same shall not
affect, in any respect whatsoever, the validity of any other prevision of the
Agreement.

 

 

4.             Paragraphs and other
headings

 

4.0          Paragraphs and other headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

 

5.             Successors

 

5.0          The rights and duties of a party hereunder
shall not be assignable by that party; provided, however, that this Agreement
shall be binding upon and inure to the benefit of any successor of Company, and
any such successor shall be deemed substituted for Company under the terms of
this Agreement.  The term “successor” as
used herein shall include any person, firm, corporation or other business
entity which at any time, by merger, purchase or otherwise, acquires all or
substantially all of the assets or business of Company.

 

6.             Designation of beneficiaries

 

6.0          If Executive should die during the term of
this Agreement all sums due to Executive hereunder shall be paid as designed by
Executive on the attached Beneficiary Designation Form.

 

6.1          The spouse of the Executive shall join in any
designation of a beneficiary other than the spouse.

 

6.2          If Executive wholly fails to designate a
beneficiary as provided for in this paragraph, or if the Executive’s spouse at
the time of his death shall not have joined in the designation of a
beneficiary, then the sums due Executive shall be paid to his estate.

 

7.             Duties

 

7.0          Company employs Executive upon an active
full-time basis, as Senior Vice President and Trust Officer and Administrator
for the ESOP subject to the order and direction of the President of Company.

 

7.1          During the term of this Agreement Executive
shall devote substantially all of his time, attention, and best efforts to the
business of Company.  Executive shall
perform such duties and shall exercise such power and authority as delegated by
the President from time to time, provided that such duties are commensurate
with the position of Senior Vice President and Trust Officer and Administrator
for the ESOP.  Executive may engage in
other non business activities such as charitable, educational, religious and
similar types of activities so long as such activities do not prevent the
performance of Executive’s duties herein or conflict in any material way with
the business of Company. 
Notwithstanding the above, Executive shall be permitted to serve as a
Director or Trustee of other organizations, in accordance with the policies of
Company.

 

7.2          The duties of Executive shall be defined
using a written job definition developed by the President.  The President shall consult with Executive
in the development of the written job definition.  Executive and said written job definition shall be subject to any
systematic evaluation system(s) that the Company may from time to time employ.

 

7.3          Executive’s duties shall be performed
principally at Company’s headquarters, located in Paola, Kansas.  During the term of the Agreement it is
understood that Company expects to maintain its principal place of business in
Paola, Kansas.

 

 

8.             Salary, Bonus, Benefits,
Additional Compensation

 

8.0          Annual Base Salary.

 

Executive shall receive an
annual base salary of  $94,190.32
payable according to the customary  payroll practices of Company and subject to all required withholding
taxes.  The President, in the
President’s discretion, may increase this annual base salary upon relevant
circumstances.  Executive will be
reviewed at least annually.  Any
increase in annual base salary awarded by the President, will constitute a new
annual base salary for the purpose of the Agreement.

 

8.1          Bonus

 

8.1.1       Standard Company Bonuses.  Executive shall be eligible to receive, in addition to his salary, any
contributions or sums specified as additional compensation through any
established plan or policy of Company which is available to senior executives
as compensation over and above
established salaries.

 

8.1.2       Annual Executive Bonus.  In
addition, Executive shall be entitled to receive a yearly annual bonus.  The amount of such bonus shall be based upon
criteria established by the President and may include either or both stock and
cash.  Provided, however, such bonus
shall not exceed fifty percent (50%) of Executive’s annual base salary in
effect for the period for which the bonus is granted.  During the term of this Agreement, the yearly annual bonus shall
be paid not later than January 31 of the calendar year following annual bonus
year.

 

8.2          Benefits

 

8.2.0       Executive shall be entitled to receive all
benefits generally made available to executives of Company as may from time to
time be in effect.

 

8.2.1       Executive shall be entitled, in addition to life insurance coverage in
effect for all employees, to a life insurance policy in the amount of
$110,000.00 with all premiums paid by Company.

 

8.2.2       Executive shall be entitled to participate,
during the term of the Agreement, under the terms and conditions thereof, in
any group life, medical, dental or other health and welfare plans generally
available to management personnel of Company which may be in effect from time
to time; provided that nothing herein shall require the Company to establish or
maintain such plans.

 

8.2.3       Executive Expenses. 
Executive shall be entitled to reimbursement for business expense.  Executive shall be expected to incur various
business expenses customarily incurred by persons holding like positions,
including but not limited to traveling, entertainment and similar expenses, all
of which are to be incurred by Executive for the benefit of Company.  Executive shall be subject to Company’s
policies regarding the reimbursement and non-reimbursement of said
expense.  Executive acknowledges that
Company policies do not necessarily provide for the reimbursement of all
expenses..

 

 

8.2.4       Accounting. 
Executive shall account to the Company for any reimbursement or payment
of such expenses in such a manner as Company practices may from time to time
require.  Subject to Company’s policy
regarding the payment of reimbursable expenses, Company shall reimburse
Executive for such expenses from time to time, at Executive’s request.

 

8.2.5       Company shall indemnify and hold Executive harmless
for any legal fees and expenses incurred by Executive in the performance of his
duties as a result of civil or criminal actions against him in accordance with
the indemnification provisions of the Articles of Incorporation and bylaws of
Company.

 

8.2.6       During (i) the term of this Agreement, (ii)
the twelve month period following the termination of this Agreement as a result
of death, (iii) the twelve month period following the termination of this
Agreement as a result of disability, (iv) a three year period following
termination of this Agreement by Executive for material breach or good cause,
and (v) a three year period following a termination of this Agreement by
Company without cause, Company shall pay to Executive, or his estate if he be
deceased, a sum as reimbursement for reasonable out-of-pocket expenses incurred
for third-party professional financial and tax advice provided by a licensed
professional of Executive’s choice. 
Provided, however, that in (i) above, the sum shall not exceed fifteen
percent (15%) of Executive’s annual base salary for that year; (ii) above, the
sum shall not exceed twenty five percent (25%) of Executive’s annual base
salary for that year; (iii), (iv), and (v) above, the sum shall not exceed
twenty five percent (25%), each year, of executive’s annual base salary at the
time of his disability or time of termination.

 

8.3          Additional Compensation.

 

Executive shall be eligible
to receive, in addition to his salary, any contributions or sums specified for
additional compensation through any established plan or policy of the Company
which is available to senior executives as compensation over and above
established salaries,
including but not limited to
stock options.

 

8.4          Tax Liability.

 

Any tax liability which
these benefits create for Executive will be the sole responsibility of
Executive.

 

9.             Protection of Company’s
Interests

 

9.0          During the term of this Agreement Executive shall not directly or
indirectly engage in competition with, or not own any interest in any business which
competes with, any business of Company; provided, however, that the provisions
of this Section 9 shall not prohibit Executive’s ownership of not more than
five percent (5%) of voting stock of any publicly held corporation.

 

9.1          Except for actions taken in the course of Executive’s employment
hereunder, at no time shall Executive divulge, furnish or make accessible to
any person any information of a confidential or proprietary nature obtained by
him while in the employ

 

 

of
Company.  Upon termination of
Executive’s employment by Company, Executive shall return to Company all such
information which exists in writing or other physical form and all copies
thereof in Executive’s possession or under Executive’s control.

 

9.2          Company, its successors and assigns, shall,
in addition to Executive’s services, be entitled to receive and own all of the
results and proceeds of said services (including, without limitation, literary
material and other intellectual property) produced or created during the term
of Executive’s employment hereunder. 
Executive will, at the request of Company, execute such assignments,
certificates or other instruments as Company may from time to time deem
necessary or desirable to evidence, establish, maintain, protect, enforce or
defend its right or title to any such material.

 

10.          Termination by Company

 

10.0        Company shall have the right to terminate
this Agreement under the following circumstances:

(i)            Upon the death of Executive;

(ii)           Upon the disability of Executive;

(iii)          Upon material breach or good cause; and

(iv)          Upon written notice by Company without cause.

(v)                                 Upon written notice by Company, during
the period of automatic extension of the term, of Company’s intention to
have this Agreement expire in one year.

 

10.1

If
Executive dies before his employment with Company is otherwise terminated,
Executive’s designated beneficiary, or in the absence of a designated
beneficiary, the estate of the Executive, will receive all sums due under the
Split Dollar Agreement and Deferred Compensation Agreement between Executive
and TeamBank, N. A. then in existence. 
In the event the total amount paid to the beneficiaries or the estate of
Executive is less than $300,000.00, Company shall pay to the designated
beneficiary of Executive, or n the absence of a designated beneficiary, to the
estate of Executive, as soon as reasonably practical, a sum equal to the
difference between the total amount paid under the Split Dollar Agreement and
$300,000.00.  Under this section it is
the intent of the Company and Executive that the Executive’s beneficiary, or in
the absence of a designated beneficiary, to the estate of Executive, receive in
total death benefits shall not be less than $300,000.00. Company may purchase
life insurance to cover all or any part of its obligations contained in this
section. Executive agrees to take a physical examination to facilitate the
Company’s purchase of such insurance. 
In the event that Executive is uninsurable, Company may elect to disperse any funds owed
by Company under this section in equal monthly payments over the remaining
period of the year of Executive’s death, or if less than six (6) months, over a
period of twelve (12) consecutive months. 
Executive’s dependents will also be entitled to:

 

(i)                                     All Company insured and self insured medical
and dental plans in which Executive was participating immediately prior to
termination, provided,

 

 

however, that if Company so
elects, or such continued participation is not possible under the general terms
and conditions of such plans or under such policies, Company shall, in lieu of
the foregoing, arrange to have issued for the benefit of Executive’s dependents
equivalent benefits (on an after-tax basis); provided, further that, in no
event shall Executive’s dependents be required to pay any premiums or other
charges in an amount greater than that which Executive would have paid in order
to participate in Company’s plans and policies.

 

Entitlement (i) above shall
be maintained in effect for the continued benefit of Executive’s dependents for
a period of six (6) months after the date of termination due to death.

 

10.2        For the purposes of this Agreement, Executive
shall be deemed to have become disabled, if, during any year of the term of
this Agreement, because of ill health, physical or mental impairment, or for
other causes beyond Executive’s control, Executive shall have been continuously
unable or unwilling, or shall have failed to perform Executive’s duties under
this Agreement for ninety (90) consecutive days, or if, during any calendar
year of the term of this Agreement, Executive shall have been unable or
unwilling or shall have failed to perform Executive’s duties for a total period
of one hundred eighty (180) days, irrespective of whether or not such days are
consecutive.  With respect to any
termination by Company for disability, the specifics of the basis of
termination shall be communicated to Executive in writing at least thirty (30)
days before the date on which the termination is proposed to take effect.  Executive shall have until the effective
date of the notice to cure or remedy such disability and or correct the
misconception of the disability.  If
this Agreement is terminated for disability, any question as to the existence of
the Total and Permanent disability of Executive as to which Executive and
Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Executive and Company.  If Executive and Company cannot agree as to
a qualified independent physician, each shall appoint such a physician and
those two physicians shall select a third who shall make such determination in
writing.  If there is a disagreement
between Executive and Company as to the disability of Executive, the effective
date of the termination will be extended a reasonable time to allow for a
determination by a physician, as described above.  Any refusal by Executive to submit to a medical examination for
the purpose of certifying disability under this section shall be deemed to
constitute evidence of Executive’s disability. 
If Executive is disabled before Executive’s employment with Company is
otherwise terminated, Company shall continue to pay the current annual base
salary for the remainder of the contract to the Executive, or if the Executive is
totally incapacitated, to Executive’s appointed guardian, at the time she is
determined to be disabled.  Whenever
compensation is payable to Executive hereunder, during a time when Executive is
disabled, pursuant to the terms of any insurance provided by Company, the
compensation payable to Executive hereunder shall be inclusive of any such
disability insurance and shall not be in addition thereto.  If this agreement is terminated for
disability Executive shall also be entitled to:

 

(i)            All Company
insured and self insured medical and dental plans in which Executive was
participating immediately prior to termination paid for by the company for a
period of one year provided, further that, in no event shall

 

 

Executive
be required to pay any premiums or other charges in an amount greater than that
which Executive would have paid in order to participate in Company’s plans and
policies..

 

(ii)           The group
individual life insurance policies of Company then in effect for Executive;
provided, further that, in no event shall Executive be required to pay any
premiums or other charges in an amount greater than that which Executive would
have paid in order to participate in Company’s plans and policies.

 

(iii)          All such
Bonuses and Other Compensation as provided for in Section 8 above, it being
understood, however, that all such payments due, if made pursuant to this
clause shall be paid in cash within thirty (30) days of the date of
termination.  All stock options granted
by Company to Executive under any provision of Section 8 or granted by Company
to Executive prior to the date hereof will accelerate and become immediately
exercisable;

 

10.3        For purposes of this Agreement, material
breach and good cause shall mean willful misconduct in following the legitimate
directions of the President; commission of a significant act of dishonesty,
deceit or breach of fiduciary duty in the performance of Executive’s duties;
gross misappropriation of Company funds or property; habitual drunkenness;
excessive absenteeism not related to illness, sick leave or vacations.  Provided, however, Executive shall be
entitled to notice of any acts which the President considers to be misconduct
or excessive absenteeism as described in this paragraph.  Such notice shall include the specifics of the
basis for possible termination and shall be communicated to Executive in
writing at least thirty (30) days prior to any such intended termination.  Prior to any such termination, if requested
before the effective date of the intended termination, Executive shall be given
a reasonable period of time in which to show that Executive has corrected any
specified deficiencies.  Upon the cure
or remedy of such deficiencies, Company shall rescind its notice of termination.  If there is any question about the effective
correction of the deficiencies, a decision will be sought from a lawyer agreed
to by Company and Executive.  If Company
and Executive can not agree on a lawyer, each will pick a lawyer who will
together pick a lawyer who will render a decision.

 

If this Agreement is
terminated for material breach or good cause, Executive shall be entitled to:

 

(i)            All Company insured and self insured medical
and dental plans in which Executive was participating immediately prior to
termination; and

 

(ii)           The group individual life insurance and disability insurance policies
of Company then in effect for Executive; provided, however, that if Company so
elects, or such continued participation is not possible under the general terms
and conditions of such plans or under such policies, Company shall, in lieu of
the foregoing, arrange to have issued for the benefit of Executive and
Executive’s dependents equivalent benefits (on an after-tax basis); provided,
further that, in no event shall Executive be required to pay any premiums or
other charges in an amount greater than that which Executive would have paid in
order to participate in Company’s plans and policies.

 

Entitlements of (i) and (ii)
of this section shall be maintained in effect for the continued benefit of the
Executive and his dependents for a period of six (6) months after the date of
termination or until the commencement of each equivalent benefit from
Executive’s

 

 

new employer, but not to be
provided longer than six (6) months.

 

10.4         Company shall be entitled to terminate this Agreement without cause
upon ninety (90) days written notice to Executive.  If Company shall so terminate this agreement, Executive shall be
entitled to:

 

(i)            All Company insured and self insured medical
and dental plans in which Executive was participation immediately prior to
termination; and

 

(ii)           The group individual life insurance and disability insurance policies
of Company then in effect for Executive; provided, however, that if Company so
elects, or such continued participation is not possible under the general terms
and conditions of such plans or under such policies, Company shall, in lieu of
the foregoing, arrange to have issued for the benefit of Executive and
Executive’s dependents equivalent benefits (on an after-tax basis); provided,
further that, in no event shall Executive be required to pay any premiums or
other charges in an amount greater than that which Executive would have paid in
order to participate in Company’s plans and policies.

 

Entitlements of (i) and (ii)
of this section shall be maintained in effect for the continued benefit of
Executive and his dependents for a period of two (2) years after the date of
termination or until the commencement of each equivalent benefit from
Executive’s new employer, but not to be provided longer than two (2) years
after the date of termination.

 

(iii)          A cash payment equal to the present value (based on a discount rate
of9%) of Executive’s annual base salary hereunder for the remainder of the term
of the Agreement, or for one (1) year, which ever is longer, payable within
thirty (30) days of the date of such termination;

 

(iv)          All such Bonuses and Other Compensation as provided for in Section 8
above, it being understood, however, that all such payments due, if made
pursuant to this clause shall be paid in cash within thirty (30) days of the
date of termination.  All stock options
granted by Company to Executive under any provision of Section 8 or granted by
Company to Executive prior to the date hereof will accelerate and become immediately
exercisable;

 

(v)           A sum as reimbursement for reasonable out-of-pocket expenses incurred
for third-party professional financial and tax advice provided by a licensed
professional of Executive’s choice for a period of one (1) year after date of
termination, sum not to exceed twenty five percent (25%) of Executive’s annual
base salary, as provided in Section 8:

 

(vi)          A sum as reimbursement for reasonable our-of-pocket expenses incurred
for out-placement advice and counseling provided by a professional placement
agency and/or recruiter of Executive’s choice for a period of twelve (12)
months after date of termination, sum not to exceed fifty percent (50%) of
Executive’s annual base salary, as provided in Section 8;

 

10.5        Company shall be entitled to terminate this
Agreement during the period of automatic extension of the term as set forth in
Section 1.1, by giving written notice to Executive of the Company’s intention
to have the term of this Agreement expire one year from the date of such
notification.  If company shall so
terminate this agreement, Executive shall be entitled only to those benefits
provided under existing law.

 

10.6        Company may purchase life insurance to cover
all or any part of its obligations contained in this paragraph and Executive
agrees to take a physical examination to

 

 

facilitate the placement of
such insurance.  In the event that
Executive is uninsurable, Company may elect to disperse the funds due in equal
monthly payments over the remaining period of the year due, or if less than six
(6) months, over a period of twelve (12) consecutive months.

 

11.                               Termination by Executive

 

11.0                        Executive shall have the right to terminate
this Agreement under the following circumstances:

 

(i)            Upon material breach or good cause;
and

 

(ii)           Upon written notice to the President without cause.

 

11.01      For purposes of this Agreement, a material breach by Company of the
terms of this Agreement shall entitle Executive, upon written notice to
Company, to terminate his services under this Agreement effective thirty (30)
days from and after receipt of such notice by Company.  Such notice shall include a specific
description of such breach and Company shall have until the effective date of
the notice to cure or remedy such breach. Upon the cure or remedy of such
breach, Executive shall rescind Executive’s notice of termination.  For purposes of this Agreement, a
termination for good cause by Executive shall be based upon the following
action by the Company:  a failure,
without good cause to continue Executive as Senior Vice President and Trust
Officer and Administrator of the ESOP; a failure, without good cause to
continue to vest Executive with the power and authority of Senior Vice
President and Trust Officer and Administrator of the ESOP; the loss, without
good cause or Executive’s consent, of any significant duties or
responsibilities attending such offices. 
Provided, however, Executive’s title, duties and responsibilities shall
be deemed to be altered with good cause by the President if Company is (or
substantially all of its assets are) sold to or combined with another entity
and Executive shall thereafter continue to have the same significant duties and
responsibilities with respect to Company’s continuing business and with a like
Agreement, for a term no less than that of this Agreement.  Upon the occurrence of any happening which
would authorize Executive to terminate Executive’s employment for good cause,
Executive shall notify the President in writing within sixty (60) days
following such occurrence or Executive shall be deemed to have waived his right
to terminate this Agreement for such occurrence.  The President shall have until the effective date of the notice
to cure or remedy such good cause occurrence. 
Upon the cure or remedy of such good cause occurrence, the Executive
shall rescind Executive’s notice of termination.  Upon termination of employment by Executive for material breach
or good cause, Executive shall be entitled to:

 

(i)            All
Company insured and self insured medical and dental plans in which Executive was participating immediately prior
to termination; and

 

(ii)           The group individual life insurance and disability insurance policies
of Company than in effect for Executive; provided, however, that if company so
elects, or such continued participation is not possible under the general terms
and conditions of such plans or under such policies, Company shall, in lieu of
the foregoing, arrange to have issued for the benefit of Executive and
Executive’s dependents equivalent benefits (on an after-tax basis); provided,
further that, in no event shall Executive be required to pay any premiums or
other charges in an amount greater than that which Executive would have paid in
order to participate in Company’s plans and policies.

 

 

Entitlements of (i) and (ii)
of this section shall be maintained in effect for the continued benefit of
Executive and Executive’s dependents for a period of one (1) year after the
date of termination or until the commencement of each equivalent benefit from
Executive’s new employer, but not to be provided longer than one (1) year after
the date of termination.

 

(iii)          A cash payment equal to the present value (based on a discount rate of
9%) of Executive’s base salary hereunder for the remainder of the term of the
Agreement, or for one (1) year, which ever is longer, payable within thirty
(30) days of the date of such termination;

 

(iv)          All such Bonuses and Other Compensation as provided for in Section 8
above, it being understood, however, that all such payments due, if made
pursuant to this clause shall be paid in cash within thirty (30) days of the
date of termination.  All stock options
granted by Company to Executive under any provision of Section 8 or granted by
Company to Executive prior to the date hereof will accelerate and become
immediately exercisable;

 

(v)           A sum as reimbursement for reasonable out-of-pocket expenses incurred
for third-party professional financial and tax advice provided by a licensed
professional of Executive’s choice for a period of one (1) year after date of
termination, sum not to exceed twenty five percent (25%) of Executive’s annual
base salary, as provided in Section 8;

 

(vi)          A sum as reimbursement for reasonable out-of-pocket expenses incurred
for out-placement advice and counseling provided by a professional placement
agency and/or recruiter of Executive’s choice for a period of twelve (12)
months after date of termination, sum not to exceed fifty percent (50%) of
Executive’s annual base salary, as provided in Section 8;

 

11.02      Executive shall be entitled to terminate this
Agreement without cause upon ninety (90) days written notice to Company.  If Executive shall so terminate this
agreement, Executive shall be entitled only to those benefits provided under
existing law.

 

11.03                 If Company is
(or substantially all of its assets are) sold to or combined with another
entity, Executive shall have the exclusive right and option to approve any
resulting salary, benefits, title, duties and/or responsibilities of Executive
if the entity offers Executive continuing employment with the entity or in the
alternative Executive shall be entitled to terminate this Agreement for good
cause and shall have all of the entitlements set forth in Section 11.1 (i)
through (ix) except the entitlement provided for in (iv) which shall be void in
these circumstances and the following shall be substituted therefore; “(iv) A
cash payment equal to the present value (based upon a discount rate of 9%) of
Executives base after-tax salary hereunder for the remainder of the term of
this Agreement, or for three (3) years, which ever is longer, payable within
thirty days of the date of such termination.”

 

Executive
shall also be entitled to:

 

(i)            All Company
insured and self insured medical and dental plans in which Executive was
participating immediately prior to termination; and

 

(ii)           The group
individual life insurance and disability insurance policies of Company then in
effect for Executive; provided, however, that if Company so elects, or such
continued participation is not possible under the general terms and conditions
of such plans or under such policies, Company shall, in lieu of

 

 

the
foregoing, arrange to have issued for the benefit of Executive and Executive’s
dependents equivalent benefits (on an after-tax basis); provided, further that,
in no event shall Executive be required to pay any premiums or other charges in
an amount greater than that which Executive would have paid in order to
participate in Company’s plans and policies.

 

Entitlement
of (i) and (ii) of this section shall be maintained in effect for the continued
benefit of Executive and his dependents for a period of three (3) years after
the date of termination or until the commencement of each equivalent benefit
from Executive’s new employer, but not to be provided longer than three (3)
years after the date of termination.

 

ii)             All such
Bonuses and Other Compensation as provided for in Section 8 above, it being
understood, however, that all such payments due, if made pursuant to this
clause shall be paid in cash within thirty (30) days of the date of
termination.  All stock options granted
by Company to Executive under any provision of Section 8 or granted by Company
to Executive prior to the date hereof will accelerate and become immediately
exercisable;

 

(iv)          A sum as
reimbursement for reasonable out-of-pocket expenses incurred for third-party
professional financial and tax advice provided by a licensed professional of
Executive’s choice for a period of three (3) years after the date of
termination, sum not to exceed, in any one year, twenty-five percent (25%) and
in the aggregate, seventy-five percent (75%) of Executive’s base salary, as
provided in Section 8;

 

(v)           A sum as
reimbursement for reasonable out-of-pocket expenses incurred for out-placement
advice and counseling provided by a professional placement agency and/or
recruiter of Executive’s choice for a period of twelve (12) months after date
of termination, sum not to exceed fifty percent (50%) of Executive’s base
salary, as provided in Section 8;

 

12.          Consequences of Breach

 

12.0        If
this Agreement is terminated pursuant to Section 11.01 hereof, or if Company
shall terminate Executive’s employment under this Agreement in any other way
that is a breach of this Agreement by Company, the following shall apply:

 

(i)            The parties believe that because of the
limitations of Section 11 the payments to Executive do not constitute “Excess
Parachute Payments” under Section 280G of the Internal Revenue Code of 1954, as
amended (the “Code”).  Notwithstanding
such belief, if any benefit under the preceding paragraph is determined to be
an “Excess Parachute Payment” Company shall pay Executive an additional amount
(“Tax Payment”) such that (x) the excess of all Excess Parachute Payments
(including payments under this sentence) over the sum of excise tax thereon
under section 4999 of the Code and income tax thereon under Subtitle A of the
Code and under applicable state law is equal to (y) the excess of all Excess
Parachute Payments (excluding payments under this sentence) over income tax
thereon under Subtitle A of the Code and under applicable state law.

 

13.          Mitigation and Offset

 

13.0        Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking employment
or otherwise, nor to offset the amount of

 

 

any payment provided for in
this Agreement by amounts earned as a result of Executive’s employment or
self-employment during the period he is entitled to such payment.

 

14.          Tax “Gross-Up” Provision

 

14.0        If any payment due Executive under this
Agreement results in Executive’s liability for an excise tax (“parachute tax”)
under Section 49 of the Internal Revenue Code of 1986, as amended (the “Code”),
the Company will pay to Executive, after deducting any Federal, state or local
income tax imposed on the payment, an amount sufficient to fully satisfy the
“parachute tax” liability.  Such payment
shall be made to Executive no later than thirty (30) days prior to the due date
of the “parachute tax.”

 

15.          Remedies

 

15.0        Company recognizes that because of
Executive’s special talents, stature and opportunities in the financial
services industry, in the event of termination by Company hereunder (except
under Section 10.0), or in the event of termination by Executive under Section
11, before the end of the agreed term, Company acknowledges and agrees that the
provisions of this Agreement regarding further payments of base salary, bonuses
and the ability to exercise stock options, constitute fair and reasonable
provisions for the consequences of such termination, do not constitute a
penalty, and such payments and benefits shall not be limited or reduced by
amounts Executive might earn or be able to earn from any other employment or
ventures during the remainder of the agreed term of this Agreement.

 

16.          Binding Agreement

 

16.0        This agreement shall be binding upon and
inure to the benefit of Executive, Executive’s heirs, distributes and assigns
and company, its successor and assigns. 
Executive may not, without the express written permission of the Company
assign or pledge any right or obligations hereunder to any person, firm or
corporation.

 

17.          Arbitration

 

17.0        Company and Executive agree that any dispute
or claim concerning this Agreement, or the terms and conditions of employment
under this Agreement, shall be settled by arbitration.  The arbitration proceedings will be
conducted under the Commercial Arbitration Rules of the American Arbitration
Association in effect at the time a demand for arbitration under the Rules is
made.  The decision of the arbitrators,
including determination of the amount of any damages suffered, will be
exclusive, final and binding on Company and Executive, their heirs, executors,
administrators, successors and assigns. 
Each party will bear that party’s own expenses in the arbitration
proceedings for arbitrators’ fees and attorney fees, for that party’s
witnesses, and other expenses of presenting the case.  Other arbitration costs, including administrative fees and fees
for records or transcripts, will be borne equally by Company and Executive.

 

18.          Amendment; Waiver

 

18.0        This instrument contains the entire agreement
of the parties with respect to the employment of Executive by Company and
supersedes any prior Agreement between Company and Executive (it being
understood, however, that this agreement shall not

 

 

affect any stock options
granted to Executive prior to the date hereof).  No amendment or modification of this Agreement shall be valid
unless evidenced by a written instrument executed by the parties hereto.  No waiver by either party of any breach by
the other party of any provision or condition of this Agreement shall be deemed
a waiver of any similar or dissimilar provision or condition at the same or any
prior or subsequent time.

 

19.          Governing Law

 

19.0        This Agreement shall be governed by and
construed in accordance with the laws of thee State of Kansas.

 

20.          Notices

 

20.0        All
notices which a party is required or may desire to give to the other party
under or in connection with this Agreement shall be given in writing by
addressing the same to the other party as follows:

 

If to Executive, to:

Carolyn Sue Jacobs

807 East Osage

Paola, Kansas 66071

 

If to Company, to:

TeamBank, N.A.

President

One South Pearl, P.O. Box
369

Paola, Kansas 66071

 

or at such other place as
may be designated in writing by like notice. 
Any notice shall be deemed to have been given within forty-eight (48)
hours after being addressed as required herein and deposited, first-class postage
prepaid, in the United States mail.

 

IN WITNESS
THEREOF, the parties
have executed this agreement this 10th day of March, 2004, effective as of the
day and year first above written.

 

	
   

  	
  TeamBank, N.A. (Company)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J
  Weatherbie

  	
   

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
  Carolyn Sue Jacobs

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Carolyn Sue Jacobs

  	
   

  
	
   

  	
   

  	
  Executive

  
						

 

 

This Agreement
made this
                     
Day of
                           ,
19     , by and between Team Financial, Inc. (TFI), a
Kansas Corporation, (“Company”) and TeamBank, N.A., a National Association (“Agent”).

 

Company, an ESOP
organization, is engaged in the business of providing financial services and
desires to engage the Agent for the Administration of the Team Financial, Inc.
ESOP Plan (Plan).

 

In consideration of the mutual terms, conditions and covenants
hereinafter set forth, the parties agree as follows:

 

The Company engage the Agent
for the purpose of administration of the Plan.

 

The duties and
responsibilities of the Agent shall be to provide or arrange to be provided all
administrative services associated with the timely administration of the Plan
and the Agent shall devote such time and effort as are required to effectively
satisfy all assigned duties and responsibilities.  The specific duties, responsibilities and reporting obligations
are assigned in the matrix of responsibilities derived by the Advisory Board of
the Trustee which are attached as a separate document.

 

This Agreement shall continue
in full force and effect until terminated, in writing, by either party.  This agreement may be terminated by either
party: (i) Agent may terminate this agreement during the ninety  (90) day period following the annual company
meeting and at no other time, with written notice to Company, certified mail,
return receipt requested; (ii) Company may terminate this agreement at any time
with thirty (30) days’ written notice of the Agent, certified mail, return
receipt requested.

 

For the services performed
hereunder the Agent shall receive a fee as annually negotiated by Company and
Agent.

 

The Agent shall not represent
any company engaged in the same business as the Company during the term of this
agreement not for a period of twelve (12) months thereafter if the Agent
terminates this agreement.

 

Agent shall continue to
employ SVP Trust Officer, Carolyn Jacobs, to accomplish the purposes of this
agreement.  Said employee or any other
Agent employee shall not be deemed to be an employee of Company and Agent shall
be responsible for all aspects of employment and compensation of said
employees.

 

The SVP Trust Officer shall
be authorized to contract all outside services for Company that are needed to
successfully carry out the administration of Plan.  Company shall provide Agent a budget sufficient to accomplish
assigned duties and responsibilities.

 

It is intended that Agent
shall be an independent contractor. 
Nothing contained in this agreement is intended or shall be construed to
constitute the Agent as a partnership, joint venture, or employee relationship
between Company and Agent.

 

Nothing contained in this
agreement shall be construed to relieve Company of its responsibilities of
satisfying the terms and conditions of the Plan.

 

Intending to be legally
bound, the parties have signed this Agreement as of the date first above
written.

 

 

	
   

  	
  Team Financial, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Robert Weatherbie

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TeamBank, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Rick BartleyExhibit 10.25

 

 

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

 

effective as of January 1, 2004

 

between

 

AES EASTERN ENERGY, L.P.

as Borrower

 

and

 

THE AES CORPORATION

as L/C Provider

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  	
  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Defined Terms

  	
   

  
	
  Section 1.02.

  	
  Other Interpretive Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Commitment to Lend

  	
   

  
	
  Section 2.02.

  	
  Evidence of Indebtedness

  	
   

  
	
  Section 2.03.

  	
  Payments by the Borrower

  	
   

  
	
  Section 2.04.

  	
  Permitted Subordinated Indebtedness
  Designation

  	
   

  
	
  Section 2.05.

  	
  Letters of Credit and Cash Collateral
  Agreements

  	
   

  
	
  Section 2.06.

  	
  Reimbursement to L/C Provider

  	
   

  
	
  Section 2.07.

  	
  Obligations Absolute

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  CONDITIONS TO EXTENSIONS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Conditions to the Initial Extension of
  Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  FEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Commitment Fee.

  	
   

  
	
  Section 4.02.

  	
  Computation of Fee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Notices and Deliveries.

  	
   

  
	
  Section 5.02.

  	
  Amendments: Waivers

  	
   

  
	
  Section 5.03.

  	
  No Third Parties Benefited

  	
   

  
	
  Section 5.04.

  	
  Governing Law

  	
   

  
	
  Section 5.05.

  	
  Judicial Proceedings; Waiver of Jury Trial

  	
   

  
	
  Section 5.06.

  	
  Severability of Provisions

  	
   

  
	
  Section 5.07.

  	
  Counterparts

  	
   

  
	
  Section 5.08.

  	
  Successors and Assigns

  	
   

  
				

 

i

 

LETTER
OF CREDIT AND REIMBURSEMENT AGREEMENT

 

This Letter of Credit and Reimbursement Agreement (this “Agreement”),
is made on February 12, 2004 and effective as of January 1, 2004 (the
“Agreement Date”), between AES EASTERN ENERGY, L.P., as Borrower (the “Borrower”),
and THE AES CORPORATION, as L/C Provider (the “L/C Provider”).

 

W  I  T
N  E  S  S  E  T  H :

 

WHEREAS, the Borrower has requested that the L/C Provider cause, from
time to time, the issuance of Letters of Credit (as defined below) or the
posting of Cash Collateral (as defined below) to satisfy certain obligations
arising in connection with the Borrower’s sale of electricity.

 

WHEREAS, the L/C Provider has agreed to and will cause the issuance of
Letters of Credit or the posting of Cash Collateral from time to time, subject
to the execution and delivery of this Agreement and the terms and conditions
hereof.

 

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

 

ARTICLE 1

 

INTERPRETATION

 

Section 1.01.     Defined
Terms.  Each capitalized term used
herein and not otherwise defined herein shall have the meaning assigned to such
term in Appendix A to the Participation Agreement (Kintigh A-1), dated as of
May 1, 1999, as amended on or before the Agreement Date (and as amended,
supplemented or otherwise modified after the Agreement Date) (“Appendix A”),
among the Borrower, as Lessee, Kintigh Facility Trust A-1, as Owner Trust, DCC
Project Finance Fourteen, Inc., as Owner Participant, Bankers Trust Company, as
Indenture Trustee, and Bankers Trust Company, as Pass Through Trustee, and the
principles of interpretation set forth in such Appendix A shall apply to such
definitions.  As used herein, the term
“Operative Documents” shall refer not only to the plural of such term as
defined in such Appendix A but shall also refer to each Other Operative
Document as such term is defined in such Appendix A.  For the purposes of this Agreement:

 

“AES Costs” means all costs incurred by the L/C Provider in
connection with the issuance, modification or amendment of any Letter of
Credit, the execution, delivery, modification or amendment of  any Cash Collateral Agreement, a drawing
under such Letter of Credit, a drawing under such Cash Collateral Agreement,
and all other costs incurred by the L/C Provider in connection with this
Agreement, such Letter of Credit or such Cash Collateral Agreement, including
without limitation any fees, interest costs, reimbursement obligations and
other expenses incurred by the L/C Provider in connection with any Letter of
Credit or Cash Collateral or any drawing thereon or in connection with its
maintenance of commitments from Letter of Credit issuers sufficient to enable
the L/C Provider to satisfy its obligations hereunder, but without duplication
for the fees paid by Borrower to the L/C Provider pursuant to Section 4.01
of this Agreement.

 

 

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

 

“Applicable Law” means (a) all applicable common law and
principles of equity and (b) all applicable provisions of all constitutions,
statutes, rules, regulations and orders of governmental bodies.

 

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

 

“Cash Collateral” means any cash collateral posted (pursuant to
a Cash Collateral Agreement) by the L/C Provider pursuant to Section 2.05
to support certain obligations of the Borrower related to the sale of power
from the Borrower’s power generating facilities.

 

“Cash Collateral Agreement” means any agreement, in form and
substance reasonably satisfactory to the Borrower, the L/C Provider and the
beneficiary of such Cash Collateral Agreement, pursuant to which Cash
Collateral is pledged to such beneficiary or its designee to support certain
obligations of the Borrower related to the sale of power from the Borrower’s
power generating facilities, as such agreement may from time to time be
amended, modified or extended in accordance with the terms of this Agreement.

 

“Commitment” means, (i) from the Agreement Date until
December 31, 2004, the obligation to cause the issuance (or cause the
continuation, extension, modification or amendment) of Letters of Credit or to
execute and deliver (or continue, extend, modify or amend) Cash Collateral
Agreements in an aggregate amount no greater than $35,000,000 and,
(ii) from January 1, 2005 until the Maturity Date, the obligation to
cause the issuance (or cause the continuation, extension, modification or
amendment) of Letters of Credit or to execute and deliver (or continue, extend,
modify or amend) Cash Collateral Agreements in an aggregate amount no greater
than $25,000,000.

 

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

 

“Extension
of Credit” means (i) causing the issuance of any Letter of Credit,
or causing the amendment or modification of any Letter of Credit having the
effect of extending the stated expiration date thereof, increasing the LC
Outstandings thereunder, or otherwise altering any of the material terms or
conditions thereof or (ii) executing and delivering any Cash Collateral
Agreement, or amending or modifying any Cash Collateral Agreement having the
effect of extending the stated expiration date thereof, increasing the LC
Outstandings thereunder, or otherwise altering any of the material terms or
conditions thereof .

 

“LC
Outstandings” means the aggregate of the following (i) for any
Letter of Credit on any date of determination, the maximum amount available to
be drawn under such Letter of Credit at any time on or after such date
(assuming the satisfaction of all conditions for drawing set forth therein)
plus (ii) for any Cash Collateral Agreement on any date of determination, the
maximum amount of Cash Collateral available to be drawn upon at any time on or
after such date (assuming the satisfaction of all conditions for drawing set
forth in such Cash Collateral Agreement).

 

2

 

“Letter
of Credit” means any irrevocable standby letter of credit caused to
be issued by the L/C Provider pursuant to Section 2.05 to support certain
obligations of the Borrower related to the sale of power from the Borrower’s
power generating facilities, as such letter of credit may from time to time be
amended, modified or extended in accordance with the terms of this Agreement.

 

“Maturity Date” means December 30, 2005.

 

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

 

“Request for Issuance” has the meaning assigned to that term in
Section 2.05(a).

 

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

 

“Unreimbursed Drawing” means any drawing under a Letter of
Credit that has not yet been reimbursed by the Borrower to the L/C Provider and
any drawing of Cash Collateral under a Cash Collateral Agreement that has not
yet been reimbursed by the Borrower to the L/C Provider.

 

Section 1.02.     Other
Interpretive Provisions.  (a)  Except as otherwise specified herein, all
references herein (i) to any Person shall be deemed to include such Person’s
successors and assigns, (ii) to any Applicable Law defined or referred to
herein shall be deemed references to such Applicable Law or any successor
Applicable Law as the same may have been or may be amended or supplemented from
time to time; and

 

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

 

ARTICLE 2

 

LETTERS OF CREDIT

 

Section 2.01.     Commitment
to Lend.  The aggregate amount of
the Commitment (i) from the date hereof until December 31, 2004 is
$35,000,000 and, (ii) from January 1, 2005 until the Maturity Date is
$25,000,000.

 

Section 2.02.     Evidence of
Indebtedness.  Each obligation to
pay any amount hereunder shall be evidenced by this Agreement and the records
of the L/C Provider.  The records of the
L/C Provider shall be prima facie
evidence of such indebtedness and of all payments made in respect thereof.

 

3

 

Section 2.03.     Payments by
the Borrower.  (a)  Time, Place and Manner  All payments due to the L/C Provider under
this Agreement shall be made to the L/C
Provider at such address as the L/C Provider may designate by notice to
the Borrower.

 

(b)         No Reductions.  All payments due to the L/C Provider and all
other terms and agreements to be observed and performed by the Borrower
hereunder, shall be made, observed or performed by the Borrower without any
reduction or deduction whatsoever, including any reduction or deduction for any
set-off, recoupment, counterclaim (whether sounding in tort, contract or
otherwise) or Tax.

 

Section 2.04.     Permitted
Subordinated Indebtedness Designation.  The Commitment hereunder to cause the issuance of Letters of
Credit, to execute and deliver Cash Collateral Agreements, all reimbursements
payable pursuant to Sections 2.06, the Commitment Fee payable pursuant to
Section 4.01, and any other amounts payable hereunder, and all agreements
and other obligations of the Borrower relating hereto, are designated as
“Permitted Subordinated Indebtedness” as such term is used in the Operative
Documents.

 

Section 2.05.     Letters of Credit
and Cash Collateral Agreements. 
(a)  Subject to the terms and
provisions of Section 2.05(b) and Section 3.01 hereof, the L/C
Provider shall cause the issuance of each Letter of Credit (or cause the stated
expiration date thereof to be extended or the terms thereof to be modified or
amended), subject to the limitations of the Commitment, pursuant to notice by
the Borrower to the L/C Provider.  Each
such notice (a “Request for Issuance”) shall specify (i) the date
(which shall be a Business Day) of issuance of such Letter of Credit (or the
date of effectiveness of such extension, modification or amendment) and the
stated expiry date thereof (which shall be no later than the last Business Day
occurring on or before the Maturity Date), (ii) the proposed stated amount
of such Letter of Credit, (iii) the name and address of the beneficiary of such
Letter of Credit, (iv) whether such Letter of Credit should be delivered
directly to the beneficiary thereof or to the Borrower and (v) such other
information as shall demonstrate compliance of such Letter of Credit with the
requirements specified therefor in this Agreement; provided  however,
that at the option of the L/C Provider, the L/C Provider may post Cash
Collateral pursuant to a Cash Collateral Agreement, in form and substance
reasonably acceptable to the Borrower, the L/C Provider and the beneficiary of
such Cash Collateral, in lieu of causing the issuance of a Letter of Credit as
requested pursuant to the Request for Issuance.  In the event the L/C Provider elects to so post Cash Collateral
pursuant to a Cash Collateral Agreement, the L/C Provider shall, subject to the
limitations of the Commitment, cause the Cash Collateral Agreement to have the
effective date, stated expiry date and other terms (or cause the stated
expiration date thereof to be extended or the terms thereof to be modified or
amended) that are substantively equivalent to the information and directions
contained in the Request for Issuance delivered by the Borrower to the L/C
Provider.

 

(b)         Notwithstanding anything
herein to the contrary, (i) the sum of (x) the aggregate LC Outstandings of all
Letters of Credit and all Cash Collateral Agreements outstanding at any time
during the term of such Letters of Credit and Cash Collateral Agreements and
(y) the aggregate principal amount of Unreimbursed Drawings outstanding at such
time, shall not exceed the then-current Commitment; (ii) the stated expiration
date of any Letter of Credit or Cash Collateral Agreement shall not extend past
December 31, 2004 if and to the extent that (x) the aggregate LC
Outstandings of all Letters of Credit and all Cash Collateral Agreements

 

4

 

outstanding at any time after December 31, 2004 and (y) the
aggregate principal amount of Unreimbursed Drawings outstanding at such time,
would exceed the then-current Commitment after December 31, 2004; and
(iii) the stated expiration date of any Letter of Credit or Cash Collateral
Agreement shall not extend past the Maturity Date.

 

Section 2.06.     Reimbursement
to L/C Provider.  The Borrower
hereby agrees to pay to the L/C Provider, on demand made by the L/C Provider to
the Borrower, on and after each date on which the L/C Provider shall pay any
amount in respect of the Letter of Credit issued at the request of the Borrower
(or in respect of the Cash Collateral Agreement executed and delivered by the
L/C Provider, at its option, in lieu of the Letter of Credit which was
requested by the Borrower), an amount equal to the aggregate AES Costs incurred
and not theretofore reimbursed by Borrower hereunder through the time of
demand; provided,
however,
that if, pursuant to the Depositary Agreement, the Borrower is not permitted to pay any such amounts to the L/C Provider
on the date of demand therefor, the Borrower shall pay such amounts, and any
additional AES Costs incurred between the date of demand and the date of actual
payment to the L/C Provider, on the first date thereafter that the Borrower is
permitted to pay such amounts pursuant to the Depositary Agreement.

 

Section 2.07.     Obligations
Absolute.  The payment
obligations of the Borrower under this Agreement in respect of any AES Costs
shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following circumstances:

 

(a)          any lack of validity or
enforceability of this Agreement;

 

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

 

(c)          any statement or any
other document presented under any Letter of Credit or Cash Collateral
Agreement proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;

 

(d)         payment in good faith by
the issuer of a Letter of Credit on behalf of the L/C Provider against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit;

 

(e)          payment in good faith by
the L/C Provider, under a Cash Collateral Agreement executed and delivered by
the L/C Provider, against presentation of documentation which does not comply
with the terms of such Cash Collateral Agreement; or

 

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

 

5

 

ARTICLE 3

 

CONDITIONS TO EXTENSIONS OF CREDIT

 

Section 3.01.     Conditions
to the Extension of Credit.  The
obligation of the L/C Provider to cause the issuance of any Letter of Credit
(or to execute and deliver any Cash Collateral Agreement) shall be subject to
(a) the L/C Provider’s receipt of the Borrower’s Request for Issuance (or
similar request given in connection with a previously executed and delivered
Cash Collateral Agreement), (b) no Lease Event of Default or Event of Loss, and
no event that with the passage of time or giving of notice or both would
constitute a Lease Event of Default or Event of Loss, shall have occurred and
be continuing under the Operative Documents, and (c) the Borrower shall not be
in default with respect to its obligations under this Agreement, including
without limitation its payment obligations under Section 2.06 and Section 4.01
hereof; provided
further , however, that if the Borrower shall not have paid in full
on any Rent Payment Date (as defined in the Depositary Agreement) the amounts
that would otherwise have been due and payable under Section 2.06 or
Section 4.01 on or before such date but for the terms of the Depositary
Agreement, then the condition precedent in this clause (c) shall not have been
satisfied.

 

ARTICLE 4

 

FEE

 

Section 4.01.                             Commitment
Fee.

 

(a)                                  Commitment
Fee.  The Borrower shall pay to the
L/C Provider a commitment fee (the “Commitment Fee”) on the average daily
unused amount of the Commitment for each day from the date hereof through (and
including) the Maturity Date at a rate per
annum of one-half of one percent (0.50%), payable quarterly in arrears
on each Rent Payment Date, and on the Maturity Date; provided, however,
that if, pursuant to the Depositary
Agreement, the Borrower is not permitted to pay any
such amounts to the L/C Provider on such Rent Payment Date or the Maturity
Date, as the case may be, the Borrower shall pay such Commitment Fee, together
with any Commitment Fee incurred between such Rent Payment Date or Maturity
Date and the date of actual payment to the L/C Provider, on the first date
thereafter that the Borrower is permitted to pay such amounts pursuant to the
Depositary Agreement.

 

(b)                                 Fee
Non-Refundable.  The Commitment Fee
payable under this Section 4.01 shall not be refundable in whole or in
part.

 

Section 4.02.                             Computation
of Fee.  The Commitment Fee payable
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed.

 

6

 

ARTICLE 5

 

MISCELLANEOUS

 

Section 5.01.     Notices and
Deliveries.

 

(a)                                  Manner
of Delivery.  All notices, communications
and materials to be given or delivered pursuant to this Agreement shall be
given or delivered in writing (which shall include telecopy transmissions).

 

(b)                                 Addresses.  All notices, communications and materials to
be given or delivered hereunder shall be given or delivered at the following
respective addresses and telecopier number and to the attention of the
following individuals or departments:

 

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

7725 Lake Road

Barker, New York 14012

Telecopier No.:               (716) 795-3153

Attention:                                         Amy
Conley

 

(ii)                                  if to the L/C
Provider, to it at:

 

1001 North 19th Street, 20th Floor

Arlington, VA 22209

Telecopier No.:               (703) 528-4510

Attention:                                         Kyle
Hoffman

 

or at such other address or telecopier number or to the attention of
such other individual or department as the party to which such information
pertains may hereafter specify for such purpose in a notice specifically
captioned “Notice of Change of Address”.

 

Section 5.02.     Amendments:
Waivers.  No amendment or waiver of
any provision of this Agreement, and no consent with respect to any departure
by the Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the L/C Provider and the Borrower and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

Section 5.03.     No Third
Parties Benefited.  Except as
expressly provided for herein, this Agreement is made and entered into for the
sole protection and legal benefit of the Borrower and the L/C Provider, and no
other person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with this Agreement.

 

Section 5.04.     Governing
Law.  The rights and duties of the
Borrower and the L/C Provider under this Agreement shall, pursuant to New York
General Obligations Law Section 5-1401, be governed by the law of the
State of New York.

 

7

 

Section 5.05.     Judicial
Proceedings; Waiver of Jury Trial. 
Any judicial proceeding brought against the Borrower with respect to
this Agreement may be brought in any court of competent jurisdiction in the
City of New York, and, by execution and delivery of this Agreement, the
Borrower (a) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any judgment rendered thereby and (b) irrevocably waives
any objection it may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such a court is an inconvenient
forum.  The Borrower hereby waives
personal service of process and consents that service of process upon it may be
made by certified or registered mail, return receipt requested, at its address
specified or determined in accordance with the provisions of
Section 5.01(b), and service so made shall be deemed completed on the
third Business Day after such service is deposited in the mail.  THE BORROWER AND THE L/C PROVIDER HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY CLAIM HEREUNDER.

 

Section 5.06.     Severability
of Provisions.  Any provision of
this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  To the extent permitted
by Applicable Law, the Borrower hereby waives any provision of Applicable Law
that renders any provision of this Agreement prohibited or unenforceable in any
respect.

 

Section 5.07.     Counterparts.  This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.

 

Section 5.08.     Successors
and Assigns.  This Agreement is not
assignable without the consent of the non-assigning party.  This Agreement shall not be binding upon any
successors of the parties hereto.

 

8

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers effective as of January 1,
2004.

 

	
   

  	
  AES EASTERN ENERGY, L.P., as Borrower

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Amy
  Conley

  	
   

  
	
   

  	
   

  	
  Name: Amy
  Conley

  
	
   

  	
   

  	
  Title: Vice
  President and Chief Financial

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE AES CORPORATION, as L/C Provider

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Barry
  Sharp

  	
   

  
	
   

  	
   

  	
  Name: Barry
  Sharp

  
	
   

  	
   

  	
  Title: Vice
  President and Chief Financial

  Officer

  

 

9

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