Document:

Ex-10.1 Fall Credit Agreement

 

Exhibit 10.1

This Credit Agreement has been filed to provide investors with information regarding its terms. It
is not intended to provide any other factual information about the Tennessee Valley Authority. The
representations and warranties of the parties in this Credit Agreement were made to, and solely for
the benefit of, the other parties to this Credit Agreement. The assertions embodied in the
representations and warranties may be qualified by information included in schedules, exhibits or
other materials exchanged by the parties that may modify or create exceptions to the
representations and warranties. Accordingly, investors should not rely on the representations and
warranties as characterizations of the actual state of facts at the time they were made or
otherwise.

 

 

 

 

FALL MATURITY CREDIT AGREEMENT

Dated as
of May 17, 2006

Among

TENNESSEE VALLEY AUTHORITY,

as the Borrower

BANK OF AMERICA, N.A.,

as Administrative Agent

BANK OF AMERICA, N.A.,

as a Lender

and

THE OTHER LENDERS PARTY HERETO

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	13	 
	1.03 Accounting Terms
	 	 	14	 
	1.04 Times of Day
	 	 	14	 
	ARTICLE II THE COMMITMENTS AND LOANS
	 	 	14	 
	2.01 Loans
	 	 	14	 
	2.02 Borrowings, Conversions and Continuations of Loans
	 	 	14	 
	2.03 Prepayments
	 	 	15	 
	2.04 Termination or Reduction of Aggregate Commitments; Availability
	 	 	16	 
	2.05 Repayment of Loans
	 	 	17	 
	2.06 Interest 
	 	 	17	 
	2.07 Commitment Fee
	 	 	17	 
	2.08 Computation of Interest and Fees
	 	 	18	 
	2.09 Evidence of Debt
	 	 	18	 
	2.10 Payments Generally; Administrative Agent’s Clawback
	 	 	18	 
	2.11 Sharing of Payments by Lenders
	 	 	19	 
	ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
	 	 	20	 
	3.01 Taxes
	 	 	20	 
	3.02 Illegality
	 	 	22	 
	3.03 Inability to Determine Rates
	 	 	22	 
	3.04 Increased Costs
	 	 	23	 
	3.05 Compensation for Losses
	 	 	24	 
	3.06 Mitigation Obligations; Replacement of Lenders
	 	 	24	 
	3.07 Survival
	 	 	25	 
	ARTICLE IV CONDITIONS PRECEDENT TO LOANS
	 	 	25	 
	4.01 Conditions to Closing
	 	 	25	 
	4.02 Conditions to all Loans
	 	 	26	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	26	 
	5.01 Existence, Qualification and Power
	 	 	26	 
	5.02 Authorization; No Contravention
	 	 	26	 
	5.03 Governmental Authorization; Other Consents
	 	 	27	 
	5.04 Binding Effect
	 	 	27	 
	5.05 Financial Statements; No Material Adverse Effect
	 	 	27	 
	5.06 Litigation
	 	 	27	 
	5.07 No Default
	 	 	28	 
	5.08
Ownership of Property; Liens
	 	 	28	 
	5.09 Environmental Compliance
	 	 	28	 
	5.10 Payment of Governmental Charges
	 	 	28	 
	5 11 ERISA Compliance
	 	 	28	 
	5.12 Margin Regulations; Investment Company Act; Public Utility Holding Company Act
	 	 	29	 
	5 13 Disclosure
	 	 	29	 
	5 14 Compliance with Laws
	 	 	30	 
	ARTICLE VI AFFIRMATIVE COVENANTS
	 	 	30	 
	6.01 Financial Statements
	 	 	30	 
	6.02 Certificates; Other Information
	 	 	30	 
	6.03 Notices
	 	 	31	 

i

 

	 	 	 	 	 
	6.04 Payment of Obligations
	 	 	32	 
	6.05
Preservation of Existence, Etc.
	 	 	32	 
	6.06 Maintenance of Properties
	 	 	32	 
	6.07 Maintenance of Insurance
	 	 	32	 
	6.08 Compliance with Laws
	 	 	32	 
	6.09 Books and Records
	 	 	33	 
	6.10 Inspection Rights
	 	 	33	 
	6.11 Use of Proceeds 
	 	 	33	 
	ARTICLE VII NEGATIVE COVENANTS
	 	 	33	 
	7.01 Liens
	 	 	33	 
	7.02 Indebtedness
	 	 	33	 
	7.03 Fundamental Changes; Subsidiaries
	 	 	34	 
	7.04 Change in Nature of Business
	 	 	34	 
	7.05 Use of Proceeds
	 	 	34	 
	ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
	 	 	34	 
	8.01 Events of Default
	 	 	34	 
	8.02 Remedies Upon Event of Default
	 	 	36	 
	8.03 Application of Funds
	 	 	37	 
	ARTICLE IX ADMINISTRATIVE AGENT
	 	 	37	 
	9.01 Appointment and Authority
	 	 	37	 
	9.02 Rights and Obligations as a Lender
	 	 	38	 
	9.03 Exculpatory Provisions
	 	 	38	 
	9.04 Reliance by Administrative Agent
	 	 	39	 
	9.05 Delegation of Duties
	 	 	39	 
	9.06 Resignation of Administrative Agent
	 	 	39	 
	9.07 Non-Reliance on Administrative Agent and Other Lenders
	 	 	40	 
	9.08 No Other Duties; Etc
	 	 	40	 
	9.09 Administrative Agent May File Proofs of Claim
	 	 	40	 
	ARTICLE X MISCELLANEOUS
	 	 	41	 
	10.01
Amendments, Etc.
	 	 	41	 
	10.02 Notices and Other Communications; Facsimile Copies
	 	 	42	 
	10.03 No Waiver; Cumulative Remedies
	 	 	43	 
	10.04 Expenses; Indemnity; and Damage Waiver
	 	 	43	 
	10.05 Payments Set Aside
	 	 	45	 
	10.06 Successors and Assigns
	 	 	45	 
	10.07 Treatment of Certain Information; Confidentiality
	 	 	47	 
	10.08 Set-off
	 	 	48	 
	10.09 Interest Rate Limitation
	 	 	48	 
	10.10 Counterparts; Integration; Effectiveness
	 	 	48	 
	10.11 Survival of Representations and Warranties
	 	 	49	 
	10.12 Severability
	 	 	49	 
	10.13 Replacement of Lenders
	 	 	49	 
	10.14 Governing Law; Jurisdiction; Etc
	 	 	50	 
	10.15 Waiver of Right to Trial by Jury
	 	 	50	 
	10.16 USA PATRIOT Act Notice
	 	 	51	 
	10.17 Statement of Borrower regarding the Bankruptcy Code of the United
States
	 	 	51	 
	10.18 TVA Related Provisions
	 	 	51	 

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	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	2.01 Commitments and Applicable Percentages
	 	 	 	 
	7.01 Other Permitted Liens
	 	 	 	 
	10.02 Certain Addresses for Notices
	 	 	 	 
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	2.02 Form of Loan Notice
	 	 	 	 
	2.09 Form of Note
	 	 	 	 
	10.07 Form of Assignment and Assumption
	 	 	 	 
	10.18 Certification for Contracts, Grants, Loans, and Cooperative Agreements
	 	 	 	 

iii

 

FALL MATURITY CREDIT AGREEMENT

     This FALL MATURITY CREDIT AGREEMENT is entered into as of May 17, 2006 among TENNESSEE VALLEY
AUTHORITY, a wholly owned corporate agency and instrumentality of the United States of America
(the “Borrower”), the Lenders (defined herein) and BANK OF AMERICA, N.A., as a Lender and as
Administrative Agent.

     The Borrower has requested that the Lenders provide $1.25 billion in credit facilities for
the purposes set forth herein, and the Lenders are willing to do so on the terms and conditions
set forth herein.

     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms.

     As used in this Agreement, the following terms shall have the meanings set forth below:

     “Administrative Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.

     “Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02 or such other address or account as
the Administrative Agent may from time to time notify to the Borrower and the Lenders.

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

     “Affiliate” means, with respect to any 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.

     “Aggregate Commitments” means the aggregate of the Commitments of all the Lenders.
The initial amount of the Aggregate Commitments in effect on the Closing Date is ONE BILLION TWO
HUNDRED FIFTY MILLION DOLLARS ($1,250,000,000).

     “Agreement” means this Fall Maturity Credit Agreement.

     “Annual Financial Statements” means the balance sheet of the Borrower as of the end
of the fiscal year ended September 30, 2005, and the related statements of income and cash flows
for such fiscal year.

     “Applicable Percentage” means with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s
Commitment at such time; provided that if the commitment of each Lender to make Loans has been
terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is

 

 

set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

     “Applicable Rate” means, for any day, the following percentages per annum based upon the S&P
Debt Rating and the Moody’s Debt Rating then in effect:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pricing	 	 	 	 	 	Moody’s Debt	 	LIBOR Rate	 	 	 	 
	Tier	 	S&P Debt Rating	 	Rating	 	Loans	 	Base Rate Loans	 	Commitment Fee
	1
	 	AAA	 	Aaa	 	 	0.10	%	 	 	0.00	%	 	 	0.06	%
	2
	 	AAA but on CreditWatch	 	  Aaa but on Watchlist	 	 	0.18	%	 	 	0.00	%	 	 	0.08	%
	3
	 	AA+	 	Aa1	 	 	0.33	%	 	 	0.00	%	 	 	0.18	%
	4
	 	AA	 	Aa2	 	 	0.33	%	 	 	0.00	%	 	 	0.18	%
	5
	 	AA-	 	Aa3	 	 	0.43	%	 	 	0.00	%	 	 	0.28	%

The Applicable Rate shall be determined by the Administrative Agent based on the lower of
the S&P Debt Rating and Moody’s Debt Rating then in effect. Each change in the Applicable Rate
shall be effective on and as of the date of such change and shall be applicable to all existing
Loans and to any new Loans made on and after the date thereof.

Notwithstanding
the foregoing, at any time that either the Moody’s Debt Rating
is lower than Aa3 or
the S&P Debt Rating is lower than AA-, the Applicable Rate shall be increased to (a) with respect
to the LIBOR Rate Loans, two and one-half percent (2.50%), (b) with respect to Base Rate Loans,
one-half of one percent (0.50%), and (c) with respect to the Commitment Fee, one-half of one
percent (0.50%).

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b)
an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is required by
Section, 10.06(b)), and accepted by the Administrative Agent, in substantially the form of
Exhibit 10.07 or any other form approved by the Administrative Agent and the Borrower.

     “Availability Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments
pursuant to Section 2.04, and (c) the date of termination of the commitment of each Lender
to make Loans pursuant to Section 8.02.

     “Bank of America” means Bank of America, N.A. and its successors.

     “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus one-half of one percent (0.5%) and (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its “prime rate.” The
“prime rate” is a rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the “prime rate” announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such change.

     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.

2

 

     “Borrower” has the meaning specified in the introductory paragraph hereto.

     “Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and,
in the case of LIBOR Rate Loans, having the same Interest Period, made by each of the Lenders
pursuant to Section 2.01.

     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agent’s Office is located and, if such day relates to any LIBOR Rate
Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks
in the LIBOR market.

     “Businesses” means, at any time, a collective reference to the businesses operated by
the Borrower at such time.

     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any
change in any law, rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or issuance of any guideline
or directive by any Governmental Authority.

     “Closing Date” means the date hereof.

     “Commitment” means, as to each Lender, its obligation to make Loans to the Borrower
pursuant to Section 2.01 in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as
such amount may be adjusted from time to time in accordance with this Agreement.

     “Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to which such Person is
a party or by which it or any of its property is bound.

     “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.
“Controlling” and “Controlled” have meanings
correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to
be Controlled by another Person if such other Person possesses, directly or indirectly, power to
vote five percent (5%) or more of the securities having ordinary voting power for the election of
directors, managing general partners or the equivalent.

     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

     “Default” means any event or condition that constitutes an Event of Default or that,
with the giving of any notice, the passage of time, or both, would be an Event of Default.

     “Default Rate” means (a) with respect to any Loan, the interest rate (including any
Applicable Rate and any applicable Liquidity Premium) otherwise applicable to such Loan plus two
percent (2%) per annum and (b) with respect to any other Obligation, an interest rate equal to the
sum of (i) the Base Rate

3

 

plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) two
percent (2%) per annum, in each case to the fullest extent permitted by applicable Laws.

     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Loans required to be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within one (1) Business Day of
the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.

     “Dollar” and “$” mean lawful money of the United States.

     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative
Agent and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include (i) the Borrower or any of the Borrower’s
Affiliates or (ii) without the consent of the Borrower, any Person that is primarily in the
business of producing or transmitting electricity.

     “Environmental Laws” means to the extent relating to pollution and the protection of
the environment or the release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public sewer systems: any
and all applicable federal, state, local and foreign statutes, laws, regulations, ordinances, rules
or judgments; any and all applicable administrative orders, decrees, permits, concessions, grants,
franchises, licenses or agreements made with or issued by any governmental authority; and any and
all applicable governmental restrictions.

     “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.

     “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
Internal Revenue Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Internal Revenue Code, is treated as a single employer under Section 414 of the Internal Revenue
Code.

     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an

4

 

event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

     “Event of Default” has the meaning specified in Section 8.01.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) 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 or any similar tax imposed by
any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrower under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in Law occurring after
such Foreign Lender becomes a party hereto) to comply with Section 3.01(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 assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 3.01(a).

     “Facilities” means, at any time, a collective reference to the facilities and real
properties owned, leased or operated by the Borrower.

     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of one-hundredth of
one percent (1/100 of 1%)) charged to Bank of America on such day on such transactions as
determined by the Administrative Agent.

     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

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

     “Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.

     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board, including, without limitation, Financial Accounting Standards Board Statement No.
71, Accounting for the Effects of Certain Types of Regulation, consistently applied and as in
effect from time to time.

5

 

     “Governmental Authority” means the government of the United States or any other
nation, or of 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 (including any supranational bodies such as the European Union or the
European Central Bank).

     “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.

     “Indemnified Taxes” means Taxes other than Excluded
Taxes.

     “Indemnitees” has the meaning specified in Section 10.04(b).

     “Interest Payment Date” means (a) as to any LIBOR Rate Loan, the last day of each
Interest Period applicable to such Loan and the Maturity Date;
provided, however, that if
any Interest Period for a LIBOR Rate Loan exceeds one month, the respective dates that fall every
month after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as
to any Base Rate Loan, the last Business Day of each calendar month and the Maturity Date.

     “Interest
Period” means, as to each LIBOR Rate Loan, the period commencing on the date such
LIBOR Rate Loan is disbursed or converted to or continued as a LIBOR Rate Loan and ending on the
date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice;
provided that:

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

     (ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and

     (iii) no Interest Period shall extend beyond the Maturity Date.

     “Interim Financial Statements” means the balance sheet of the Borrower as of the end
of the fiscal quarter ended December 31, 2005, and the related statements of income and cash flows
for such fiscal year.

     “Internal Revenue Code” means the Internal Revenue Code
of 1986.

     “IRS” means the United States Internal Revenue
Service.

     “Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and binding administrative or judicial
precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable binding administrative orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental Authority.

6

 

     “Lender” means each of Bank of America and the other Persons identified as a “Lender”
on the signature pages hereto and its successors and assigns and, as the context requires.

     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices
as a Lender may from time to time notify the Borrower and the Administrative Agent.

     “LIBOR Base Rate” means, for any Interest Period with respect to a LIBOR Rate Loan,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits
(for delivery on the first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the “LIBOR Rate” for such
Interest Period shall be the rate per annum determined by the Administrative Agent (and agreed to
by the Borrower) to be the rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the LIBOR Rate Loan being made,
continued or converted by Bank of America and with a term equivalent to such Interest Period would
be offered by Bank of America’s London Branch to major banks in the LIBOR market at their request
at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period.

     “LIBOR Rate” means, for any Interest Period with respect to any LIBOR Rate Loan, a
rate per annum determined by the Administrative Agent to be equal to the quotient obtained by
dividing (a) the LIBOR Base Rate for such LIBOR Rate Loan for such Interest Period by (b) one (1)
minus the LIBOR Reserve Percentage for such LIBOR Rate Loan for such Interest Period.

     “LIBOR Rate Loan” means a Loan that bears interest at a rate based on the LIBOR
Rate.

     “LIBOR Reserve Percentage” means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, carried out to five (5) decimal places) in effect on such day,
whether or not applicable to any Lender, under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to eurocurrency funding (currently referred to as
“eurocurrency liabilities”). The LIBOR Rate for each outstanding LIBOR Rate Loan shall be adjusted
automatically as of the effective date of any change in the LIBOR Reserve Percentage.

     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

     “Liquidity Premium” means, for any day, the following percentages per annum based
upon the Notice Period and the principal amount of any Borrowing, any conversion of Loans from one
Type to the other and any continuation of LIBOR Rate Loans:

7

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Size of Borrowing, Conversion or Continuation
	 	 	 	 	 	 	3 $500 Million but less	 	3 $1 Billion but less than
	Notice Period	 	< $500 Million	 	than $l Billion	 	$1.25 Billion
	Same Day
	 	 	0.05	%	 	 	0.05	%	 	 	0.10	%
	One Day
	 	 	0.05	%	 	 	0.05	%	 	 	0.05	%
	Two or More Days
	 	 	0.00	%	 	 	0.00	%	 	 	0.00	%

The Liquidity Premium shall apply to each Borrowing, each conversion of Loans from one Type
to the other, and each continuation of LIBOR Rate Loans. As used herein, “Notice Period” means the
period equal to the number of Business Days notice that the Borrower provides to the Administrative
Agent pursuant to Section 2.02 prior to the date of the applicable Borrowing, conversion or
continuation (any such notice provided after 1:00 pm on any Business Day shall for purposes hereof
be deemed to have been provided on the immediately succeeding Business Day). If the Borrower fails
to give a timely notice requesting a conversion or continuation of an outstanding Loan and such
Loan is converted to, or continued as, a LIBOR Rate Loan with an Interest Period of one month
pursuant to Section 2.02, then, for purposes of the Liquidity Premium, the Borrower shall
be deemed to have given same day notice for such conversion or continuation.

     “Loan” has the meaning specified in Section 2.01. 

     “Loan Documents” means this Agreement and each Note.

     “Loan Notice” means a notice of (a) a Borrowing of Loans, (b) a conversion of Loans
from one Type to the other, or (c) a continuation of LIBOR Rate Loans, in each case pursuant to
Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit 2.02.

     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Borrower; (b) a material impairment of the ability of the
Borrower to perform its obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or enforceability against the
Borrower of any Loan Document. The parties agree that a downgrade of the S&P Debt Rating or the
Moody’s Debt Rating shall not itself constitute a Material Adverse Effect.

     “Maturity Date” means November 12, 2006 (being the date 180 days following the
Closing Date).

      “Moody’s” means Moody’s Investors Service, Inc. and any successor
thereto.

     “Moody’s Debt Rating” means, at any time, the rating (if any) assigned to the
Borrower’s senior unsecured long term non-credit enhanced debt by Moody’s.

     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.

     “Note” has the meaning specified in Section 2.09.

8

 

     “Nuclear Decommissioning Trust” means the Nuclear Decommissioning Trust established
by the Borrower to fund the future decommissioning of nuclear power facilities operated by the
Borrower.

     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, the Borrower arising under any Loan Document, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the commencement by or against
the Borrower of any proceeding under any Debtor Relief Laws naming the Borrower as the debtor in
such proceeding, regardless of whether such interest and fees are allowed claims in such
proceeding.

     “Other Taxes” means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

     “Participant” has the meaning specified in Section 10.06(d).

     “PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.

     “Permitted Liens” means any of the following:

     (a) Liens pursuant to any Loan Document;

     (b) the pledge by the Borrower of Net Power Proceeds (as defined under the Power
Resolution) to secure bonds, notes and other evidences of indebtedness issued under the
Power Resolution;

     (c) Liens existing on the date hereof and listed on Schedule 7.01;

     (d) Liens for taxes (other than Liens imposed under ERISA), assessments or
governmental charges or levies not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;

     (e) Liens imposed under Law, including statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers, and Liens imposed pursuant to
customary reservations or retentions of title arising in the ordinary course of business,
provided that such Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the same or are being
contested in good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established;

9

 

     (f) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance, Pension Plan, Nuclear Decommissioning Trust
and other social security legislation, other than any Lien imposed by ERISA;

     (g)
deposits to secure the performance of bids, trade contracts and
leases (other than indebtedness), statutory obligations, surety bonds
(other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business;

     (h) easements, rights-of-way, restrictions, licenses, permits and other similar encumbrances
affecting real property which, in the aggregate, do not materially interfere with the ordinary
conduct of the Borrower’s power program;

     (i) Liens securing judgments for the payment of money (or appeal or other surety bonds
relating to such judgments) not in excess of the Threshold Amount (except to the extent covered by
independent third-party insurance as to which the insurer has acknowledged in writing its
obligation to cover), unless any such judgment remains undischarged for a period of more than
thirty consecutive days during which execution is not effectively stayed;

     (j) Liens securing Indebtedness incurred to provide funds for the construction, acquisition,
enlargement, improvement, replacement, operation and maintenance of the Borrower’s power system;
provided that (i) such Liens do not at any time encumber any Property other than (A) the
Property financed by such indebtedness, (B) supporting and other related facilities, including
without limitation, facilities that are shared or used in common by multiple units or facilities
and that are necessary for or otherwise used in the operation of the Property being financed and
(C) other Property to the extent such Liens would otherwise be Permitted Liens, (ii) the
indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of
the Property being acquired on the date of acquisition and (iii) such Liens attach to such
Property concurrently with or within one year after (A) the later of the completion of such
construction or commencement of full operation of such Property or (B) ninety (90) days from the
acquisition thereof, as applicable;

     (k) leases, subleases, licenses or easements involving real or personal property, whether or
not the economic equivalent of a sale, where the Borrower obtains a sublease, service contract or
other arrangements giving the Borrower a right to the output or use of related Property which is
the subject of such lease, sublease, license or easement (“Lease Transactions”), and Liens
granted in such leaseholds, subleaseholds, licenses or easements in connection with such Lease
Transactions;

     (1) leases or subleases granted to others not interfering in any material respect with the
business of the Borrower;

     (m) any interest of title of a lessor under, and Liens arising from UCC financing statements
(or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases
permitted by this Agreement;

     (n) Liens deemed to exist in connection with investments in repurchase agreements;

     (o) normal and customary rights of setoff upon deposits of cash in favor of banks or other
depository institutions;

10

 

     (p) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial
Code on items in the course of collection;

     (q) Liens of sellers of goods to the Borrower arising under Article 2 of the Uniform
Commercial Code or similar provisions of applicable law in the ordinary course of business,
covering only the goods sold and securing only the unpaid purchase price for such goods and
related expenses;

     (r) Liens existing on Property at the time of the acquisition thereof by the Borrower,
provided that such Liens are not created in contemplation of such acquisition; and

     (s) any renewals or extensions of any Liens permitted under (b), (c), (j), or (1)
above, provided that (i) any renewal or extension is limited to the Property
subject to such Lien, (ii) the amount secured or benefited thereby is not increased, (iii)
the direct or any contingent obligor with respect to the Lien is not changed and (iv) any
renewal or extension of any indebtedness secured or benefited thereby is permitted by
Section 7.02.

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

     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is subject to Section
412 of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate.

     “Power Resolution” means the Basic Tennessee Valley Authority Power Bond Resolution,
as amended from time to time.

     “Property” means any interest of any kind in any property or asset, whether real,
personal or mixed, or tangible or intangible.

     “Register” has the meaning specified in Section 10.06(c).

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

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the thirty-day notice period has been waived.

     “Required Lenders” means, at any time, Lenders holding in the aggregate more than 50%
of (a) the unfunded Commitments and the outstanding Loans and participations therein or (b) if the
Commitments have been terminated, the outstanding Loans and participations therein. The unfunded
Commitments of, and the outstanding Loans held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

     “Responsible Officer” means the Chief Financial Officer, the Treasurer, the Senior
Manager, Finance, or the Senior Manager, Cash Management, of the Borrower. Any document delivered
hereunder that is signed by a Responsible Officer shall be conclusively presumed to have been
authorized by all necessary action on the part of the Borrower and such Responsible Officer shall
be conclusively presumed to have acted on behalf of the Borrower.

11

 

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

     “S&P Debt Rating” means, at any time, the rating (if any) assigned to the Borrower’s
senior unsecured long term non-credit enhanced debt by S&P.

     “SEC” means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.

     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of Voting Stock is at
the time beneficially owned, directly, or indirectly through one or more intermediaries, or both,
by such Person.

     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are subject to the terms
and conditions of, or governed by, any form of master agreement published by the International
Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or
any other master agreement (any such master agreement, together with any related schedules, a
“Master Agreement”), including any such obligations or liabilities under any Master
Agreement.

     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).

     “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority (other than
Other Taxes), including any interest, additions to tax or penalties applicable thereto.

     “Threshold Amount” means $1 billion.

     “Treasury Management Agreement” means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled disbursement,
lockbox, account reconciliation and reporting and trade finance services.

     “TVA Act” means the Tennessee Valley Authority Act of 1933, as amended.

     “Type” means, with respect to any Loan, its character as a Base Rate Loan or a LIBOR
Rate Loan.

12

 

     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding that Pension Plan pursuant to
Section 412 of the Internal Revenue Code for the applicable plan year.

     “United
States” and “U.S.” mean the United States of America.

     “Voting Stock” means, with respect to any Person, capital stock or other ownership
and equity interests issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even though the right so to vote has been suspended by the happening of
such a contingency.

1.02 Other Interpretive Provisions.

     With reference to this Agreement and each other Loan Document, unless otherwise specified
herein or in such other Loan Document:

     (a) 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” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and effect as the
word “shall.” Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document 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 or in any other Loan Document), (ii) any reference herein to
any Person shall be construed to include such Person’s successors and assigns, (iii) the
words “herein,” “hereof and “hereunder,” and words of similar import when used in
any Loan Document, shall be construed to refer to such Loan Document in its entirety and not
to any particular provision thereof, (iv) all references in a Loan Document to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any
reference to any law shall include all statutory and regulatory provisions consolidating,
amending replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) 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.

     (b) In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;”
the words “to” and “until” each
mean “to but excluding;” and the word
“through” means “to and including.”

     (c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this Agreement or
any other Loan Document.

13

 

1.03 Accounting Terms.

     (a) Generally. Except as otherwise specifically provided herein, all accounting
terms not specifically or completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a
consistent basis, as in effect from time to time, applied in a manner consistent with that used in
preparing the Annual Financial Statements.

     (b) Changes in GAAP. If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the
Required Lenders); provided
that, until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations
of such ratio or requirement made before and after giving effect to such change in GAAP.

1.04 Times of Day.

     Unless otherwise specified, all references herein to times of day shall be references to
Eastern time (daylight or standard, as then applicable).

ARTICLE II

THE COMMITMENTS AND LOANS

2.01 Loans.

     Subject to the terms and conditions set forth herein, each Lender severally agrees to make
loans (each such loan, a “Loan”) to the Borrower in Dollars from time to time on any Business Day
during the Availability Period in an aggregate amount not to exceed at any time outstanding the
amount of such Lender’s Commitment; provided, however, that after giving effect
to any Borrowing of Loans, the outstanding principal amount of Loans shall not exceed the
Aggregate Commitments. Within the limits of each Lender’s Commitment, and subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under
Section 2.03. and reborrow under this Section 2.01. Loans may be Base Rate Loans
or LIBOR Rate Loans, as further provided herein.

2.02 Borrowings, Conversions and Continuations of Loans.

     (a) Each Borrowing, each conversion of Loans from one Type to the other, and each
continuation of LIBOR Rate Loans shall be made upon the Borrower’s irrevocable notice to the
Administrative Agent, which may be given by telephone by an individual identifying himself or
herself as a Responsible Officer. Each such notice must be received by the Administrative Agent
not later than 1:00 p.m. on the date of the requested Borrowing, conversion or continuation. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed
and signed by a Responsible Officer. Each Borrowing of, conversion to or continuation of Loans
shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof.
Each Loan Notice (whether telephonic or written) shall

14

 

specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to
the other, or a continuation of LIBOR Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be
borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify a Type of a Loan in a
Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Loan shall be made as, converted to, or continued as, a LIBOR
Rate Loan with an Interest Period of one month. Any such automatic conversion to a LIBOR Rate Loan
with an Interest Period of one month shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable LIBOR Rate Loan. If the Borrower requests a
Borrowing of, conversion to, or continuation of LIBOR Rate Loans in any Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

     (b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each
Lender of the amount of its Applicable Percentage of the applicable Loans, and if no timely notice
of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to a LIBOR Rate Loan with an Interest Period
of one month as described in the preceding subsection. In the case of a Borrowing, each Lender
shall make the amount of its Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 3:00 p.m. on the Business Day specified
in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 4.02, the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent either by (i) crediting the account
of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer
of such funds, in each case in accordance with instructions provided to (and reasonably acceptable
to) the Administrative Agent by the Borrower.

     (c) Except as otherwise provided herein, a LIBOR Rate Loan may be continued or converted only
on the last day of the Interest Period for such LIBOR Rate Loan. During the existence of a Default,
no Loans may be requested as, converted to or continued as LIBOR Rate Loans without the consent of
the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding
LIBOR Rate Loans be converted immediately to Base Rate Loans.

     (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for LIBOR Rate Loans upon determination of such
interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such change.

     (e) After giving effect to all Borrowings, all conversions of Loans from one Type to the
other, and all continuations of Loans as the same Type, there shall not be more than eight (8)
Interest Periods in effect with respect to Loans (for purposes hereof, LIBOR Rate Loans with
separate or different Interest Periods will be considered as separate Loans even if their Interest
Periods expire on the same date).

2.03 Prepayments.

     (a) Voluntary
Prepayments. The Borrower may, upon notice from the Borrower to the
Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 1:00 p.m. (A) one (1) Business Day prior to the date of
prepayment; and (ii) any such prepayment shall be in a principal amount of $1,000,000 or a whole
multiple of $1,000,000 in excess

15

 

thereof (or, if less, the entire principal amount thereof then outstanding). Each such notice
shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of
the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Any prepayment of a LIBOR Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together with any additional
amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the
Loans of the Lenders in accordance with their respective Applicable Percentages.

     (b) Mandatory Prepayments of Loans. If for any reason the outstanding principal
amount of the Loans at any time exceeds the Aggregate Commitments then in effect, the Borrower
shall immediately prepay Loans in an aggregate amount equal to such excess. Prepayments shall be
applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.03(b)
and Section 2.04(a)(ii)
shall be subject to Section 3.05, but otherwise without premium or penalty, and shall be
accompanied by interest on the principal amount prepaid through the date of prepayment.

2.04 Termination or Reduction of Aggregate Commitments; Availability.

     (a) Termination or Reduction of Aggregate Commitments.

     (i) Optional. The Borrower may, upon written notice to the Administrative
Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the
Aggregate Commitments to an amount not less than the aggregate outstanding principal amount
of Loans; provided that (i) any such notice shall be received by the Administrative
Agent not later than 12:00 noon five (5) Business Days prior to the date of termination or
reduction, and (ii) any such partial reduction shall be in an aggregate amount of $5,000,000
or any whole multiple of $1,000,000 in excess thereof. The Administrative Agent will
promptly notify the Lenders of any such notice of termination or reduction of the Aggregate
Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment
of each Lender according to its Applicable Percentage. All fees accrued with respect thereto
until the effective date of any termination or reduction of the Aggregate Commitments shall
be paid on the effective date of such termination or reduction.

     (ii) Mandatory. If at any time the Moody’s Debt Rating is reduced to lower
than Aa3 and the S&P Debt Rating is reduced to lower than AA-, the Required Lenders
may, in their sole discretion, upon written notice to the Borrower (the “Commitment
Termination Notice”), terminate the Aggregate Commitments and require the prepayment of
the Loans and other Obligations in full on the date ninety (90) days after the effective
date of such reduction in the Moody’s Debt Rating and S&P Debt Rating.

     (b) Availability. Notwithstanding any provision in this Agreement or any other Loan
Document to the contrary, if at any time either the Moody’s Debt Rating is reduced to lower than
Aa3 or the S&P Debt Rating is reduced to lower than AA-, then the Borrower shall not be permitted
to request, and the Lenders shall not be obligated to make, any new Loans (although the Borrower
shall be permitted to continue and convert existing Loans); provided that so long as the
Required Lenders have not delivered the Termination Notice to the Borrower, the Borrower shall be
permitted to request, and the Lenders shall be obligated to make, new Loans upon the occurrence of
one of the following: (i) the Moody’s Debt Rating is raised to Aa3 or higher and the S&P
Debt Rating is raised to AA- or higher or (ii) the Required Lenders consent to the Borrower making
new Loan borrowings.

16

 

2.05 Repayment of Loans.

     The Borrower shall repay to the Administrative Agent, for the account of the Lenders, on the
Maturity Date the aggregate principal amount of all Loans outstanding on such date.

2.06 Interest.

     (a) Subject to the provisions of subsection (b) below, (i) each LIBOR Rate Loan shall bear
interest on the outstanding principal amount thereof for each Interest Period at a rate per annum
equal to the sum of (A) the LIBOR Rate for such Interest Period plus (B) the Applicable
Rate plus (C) the applicable Liquidity Premium; and (ii) each Base Rate Loan shall bear
interest on the outstanding principal amount thereof from the applicable borrowing date at a rate
per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate plus
(C) the applicable Liquidity Premium.

(b) (i) If any amount payable by the Borrower under any Loan Document is not paid
when due (without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

     (ii) Upon the request of the Required Lenders, while any Event of Default exists, the
Borrower shall pay interest on the principal amount of all outstanding Obligations
hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable Laws.

     (iii) Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.

2.07 Commitment Fee.

     The Borrower shall pay to the Administrative Agent, for the account of each Lender in
accordance with its Applicable Percentage, a commitment fee (the “Commitment Fee”) equal to the
product of the Applicable Rate times (ii) the actual daily amount by which the Aggregate
Commitments exceed the aggregate outstanding principal amount of the Loans. The Commitment Fee
shall accrue at all times during the Availability Period, including at any time during which one or
more of the conditions in Article IV is not met, and shall be due and payable in arrears on
the first Business Day of each calendar month, commencing with the first such date to occur after
the Closing Date, and on the Maturity Date. The Commitment Fee shall be calculated monthly in
arrears, and if there is any change in the Applicable Rate during any calendar month, the actual
daily amount shall be computed and multiplied by the Applicable Rate separately for each period
during such calendar month that such Applicable Rate was in effect.

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2.08 Computation of Interest and Fees.

     All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of
America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall be made on the
basis of a 360-day year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on
each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that any Loan
that is repaid on the same day on which it is made shall, subject to
Section 2.10(a), bear
interest for one day.

2.09 Evidence of Debt.

     The Loans made by each Lender shall be evidenced by one or more accounts or records maintained
by such Lender and by the Administrative Agent in the ordinary course of business. Any failure to
so record or any error in doing so shall not, however, limit or otherwise affect the obligation of
the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a promissory note, which shall evidence such Lender’s Loans in addition to
such accounts or records. Each such promissory note shall be in the
form of Exhibit 2.09 (a “Note”). Each Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.

2.10 Payments Generally; Administrative Agent’s Clawback.

     (a) General. All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office. All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. Subject to the definition of “Interest
Period”, if any payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent.
Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may
assume that such Lender has made such share available on such date in accordance with
Section 2.02 and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the Borrower

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to but excluding the date of payment to the Administrative Agent, at (A) in the case of a
payment to be made by such Lender, the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of such interest paid
by the Borrower for such period. If such Lender pays its share of the applicable Borrowing
to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan
included in such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such payment to
the Administrative Agent.

     (ii) Payments by Borrower: Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the 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 of the Lenders severally agrees
to repay to the Administrative Agent forthwith on demand the amount so distributed to such
Lender in immediately available funds 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 Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation.

     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to the Borrower by
the Administrative Agent because the conditions to the applicable Loan set forth in Article
IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent
shall return such funds (in like funds as received from such Lender) to such Lender, without
interest.

     (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Loan, to fund any such participation or to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be responsible for the failure
of any other Lender to so make its Loan, to purchase its participation or to make its payment under
Section 10.04(c).

     (e) Funding
Source. Subject to Section 3.06(a), nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or
to constitute a representation by any Lender that it has obtained or will obtain the funds for any
Loan in any particular place or manner.

2.11 Sharing of Payments by Lenders.

     If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Loans made by it resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such Loans or participations
and accrued interest thereon greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such
fact, and (b) purchase

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(for cash at face value) participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

     (i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and

     (ii) the provisions of this Section shall not be construed to apply to (x) any payment
made by the Borrower pursuant to and in accordance with the express terms of this Agreement
or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other than to the
Borrower (as to which the provisions of this Section shall apply).

     The Borrower consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any 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 Lender were a direct creditor of the Borrower in the amount
of such participation.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

     (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of
the Borrower hereunder or under any other Loan Document shall be made free and clear of and without
reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the
Borrower shall be required by applicable law to deduct any Indemnified Taxes or any 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 Administrative Agent or any Lender, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

     (c) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent and each Lender for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) paid by the Administrative Agent or such Lender, as the case may be, 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. If the Administrative Agent or any Lender desires indemnification
under this Section 3.01 (c), the Administrative Agent or such Lender, as the case may be,
shall notify the Borrower of the payment of the

20

 

applicable Indemnified Taxes or Other Taxes as promptly as is practicable, and in no event later
than one hundred twenty (120) days after the later of the date of such payment (or, if later, the
date the Administrative Agent or such Lender, as the case may be, is notified of its obligation to
make such payment by the applicable Governmental Authority). If the Administrative Agent or such
Lender, as the case may be, fails to prove such notice to the Borrower within one hundred twenty
(120) days after the date of such payment (or, if later, the date the Administrative Agent or such
Lender, as the case may be, is notified of its obligation to make such payment by the applicable
Governmental Authority), the Administrative Agent or such Lender, as the case may be, shall not be
entitled to indemnification under this Section 3.01(c) for such payment. Payment by the
Borrower pursuant to this Section 3.01 (c) shall be made within thirty (30) days after the
date the Administrative Agent or such Lender, as the case may be, makes written demand therefore
(submitted through the Administrative Agent in the case of a demand by a Lender) which demand
shall be accompanied by a certificate describing in reasonable detail the amount of the payment
and the basis thereof.

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

     (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

     Without limiting the generality of the foregoing, in the event that the Borrower is resident
for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the request of the Borrower or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is applicable:

     (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a party,

     (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881 (c) of the Code, (x) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN, or

21

 

     (iv) any other form prescribed by applicable law as a basis for claiming exemption
from or a reduction in United States Federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by applicable law to permit the
Borrower to determine the withholding or deduction required to be made.

     (f) Treatment of Certain Refunds. If the Administrative Agent or any Lender has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to this Section, it
shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund),
provided that the Borrower, upon the request of the Administrative Agent or such Lender,
agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender
in the event the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This subsection shall not be construed to require the Administrative Agent
or any Lender to make available its tax returns (or any other information relating to its taxes
that it deems confidential) to the Borrower or any other Person.

3.02 Illegality.

     If any Lender determines that any Law has made it unlawful, or that any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to
make, maintain or fund LIBOR Rate Loans, or to determine or charge interest rates based upon the
LIBOR Rate, or any Governmental Authority has imposed material restrictions after the Closing Date
on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, any obligation of such Lender to make or continue LIBOR Rate Loans or to
convert Base Rate Loans to LIBOR Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), have the option to either prepay or, if applicable, convert
all LIBOR Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such LIBOR Rate Loans to such
day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount
so prepaid or converted.

3.03 Inability to Determine Rates.

     If the Required Lenders determine that for any reason in connection with any request for a
LIBOR Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the LIBOR market for the applicable amount and Interest Period of such LIBOR
Rate Loan, (b) adequate and reasonable means do not exist for determining the LIBOR Base Rate for
any requested Interest Period with respect to a proposed LIBOR Rate
Loan, or (c) the LIBOR Base
Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the Administrative
Agent will promptly notify the Borrower and all Lenders. Thereafter, the obligation of the Lenders
to make or maintain LIBOR Rate Loans shall be suspended until the Administrative Agent revokes such
notice. Upon receipt of such notice, the Borrower may (a) revoke any pending request for a
Borrowing, conversion or continuation of LIBOR Rate Loans or (b) prepay any affected Loans,
including accrued interest. If the Borrower fails to

22

 

do (a) or (b) above, the Borrower’s request will be deemed to have converted into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

3.04 Increased Costs.

     (a) Increased Costs Generally. If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
reflected in the LIBOR Rate);

     (ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any LIBOR Rate Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender); or

     (iii) impose on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or LIBOR Rate Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any LIBOR Rate Loan (or of maintaining its obligation to make any such
Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or any other amount) then, upon request of such Lender, 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) Capital Requirements. If any Lender determines that any Change in Law affecting
such Lender or any Lending Office of such Lender or such Lender’s holding company, if any,
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, the Commitments of such Lender 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) Certificates for Reimbursement. Each Lender that desires compensation under this
Section 3.04 shall notify the Borrower of the occurrence of the event entitling such
Lender to compensation pursuant to this Section 3.04 as promptly as is practicable, and in
no event later than one hundred twenty (120) days after the date of the occurrence of such event.
Each Lender shall be entitled to compensation with respect to such event under this Section
3.04 only for compensation accruing as a result of such event during the period one hundred
twenty (120) days prior to the date such Lender provides notice to the Borrower pursuant to the
foregoing sentence. Payment by the Borrower pursuant to this Section 3.04 shall be made
within thirty (30) days from the date such Lender makes written demand therefore (submitted
through the Administrative Agent) which demand shall be accompanied by a certificate describing in
reasonable detail the basis and calculation thereof and certifying further that the method used to
calculate such amount is fair and reasonable.

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3.05 Compensation for Losses.

     Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the
Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss,
cost or expense incurred by it as a result of:

     (a) any continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

     (b) any failure by the Borrower (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on
the date or in the amount notified by the Borrower; or

     (c) any assignment of a LIBOR Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to Section
10.13 (other than as a result of a request by the Borrower to replace a Defaulting
Lender);

including any loss or expense arising from the liquidation or reemployment of funds obtained by it
to maintain such Loan or from fees payable to terminate the deposits from which such funds were
obtained (but excluding lost profits). The Borrower shall also pay any customary administrative
fees charged by such Lender in connection with the foregoing.

     For purposes of calculating amounts payable by the Borrower to the Lenders under this
Section 3.05, each Lender shall be deemed to have funded each LIBOR Rate Loan made by it
at the LIBOR Base Rate used in determining the LIBOR Rate for such Loan by a matching deposit or
other borrowing in the LIBOR market for a comparable amount and for a comparable period, whether
or not such LIBOR Rate Loan was in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders.

     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or 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
3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall
use reasonable efforts to designate a different Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii)
in each case, 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) Replacement of Lenders. If any Lender requests compensation under Section
3.04, 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 3.01, the Borrower
may replace such Lender in accordance with Section 10.13.

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3.07 Survival.

     All of the Borrower’s obligations under this Article III shall survive termination of
the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO LOANS

4.01 Conditions to Closing.

     This Agreement shall be effective as of the Closing Date upon satisfaction of each of the
following conditions precedent:

     (a) Loan Documents. Receipt by the Administrative Agent of executed
counterparts of this Agreement and the Notes, each properly executed by a Responsible
Officer and, in the case of this Agreement, by each Lender.

     (b) Opinions of Counsel. Receipt by the Administrative Agent of favorable
opinions of legal counsel to the Borrower, addressed to the Administrative Agent and each
Lender, dated as of the Closing Date, and in form and substance satisfactory to the
Administrative Agent.

     (c) No Material Adverse Change. There shall not have occurred a material
adverse change since September 30, 2005 in the business, assets, liabilities (actual or
contingent), operations or condition (financial or otherwise) of the Borrower.

     (d)
Resolutions, Etc. Receipt by the Administrative Agent of such
certificates of resolutions or other action, incumbency certificates and/or other
certificates of Responsible Officers of the Borrower as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this Agreement and the other
Loan Documents.

     (e) Closing Certificate. Receipt by the Administrative Agent of a certificate
signed by a Responsible Officer certifying that the conditions specified in Section
4.01(c) and (f) and Sections 4.02(a), (b) and (c) have been
satisfied.

     (f) Senior Unsecured Debt Rating. Receipt by the Administrative Agent of
evidence that the Borrower’s senior unsecured long term non-credit enhanced debt is rated
AAA (with a stable outlook) by S&P and Aaa (with a stable outlook) from Moody’s.

     (g) Fees. Receipt by the Administrative Agent and the Lenders of any fees
required to be paid on or before the Closing Date.

     (h) Attorney Costs. The Borrower shall have paid all reasonable fees, charges
and disbursements of counsel to the Administrative Agent to the extent invoiced prior to or
on the Closing Date, plus such additional amounts of such fees, charges and disbursements
as shall constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).

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4.02 Conditions to all Loans.

     The obligation of each Lender to honor any Loan Notice is subject to the following conditions
precedent:

     (a) The representations and warranties of the Borrower contained in Article V
(other than Section 5.05(d)) or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith, shall be true
and correct on and as of the date of such Loan, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they
shall be true and correct as of such earlier date.

     (b) No Event of Default shall exist or would result from such proposed Loan or from the
application of the proceeds thereof.

     (c) There shall not have been commenced against the Borrower an involuntary case under
any applicable Debtor Relief Law, now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such involuntary case or
other case, proceeding or other action shall remain undismissed.

     (d) The Administrative Agent shall have received a Loan Notice in accordance with the
requirements hereof.

     Each Loan Notice submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a), (b) and (c) have been
satisfied on and as of the date of the applicable Loan Notice.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

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

5.01
Existence, Qualification and Power.

     The Borrower (a) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (i) own or use its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan Documents to which
it is a party, and (b) to the extent applicable to an agency of the United States, is duly
qualified and is licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease, use or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (a)(i) or (b), to the extent
that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention.

     The execution, delivery and performance by the Borrower of each Loan Document have been duly
authorized by all necessary action, and do not (a) conflict with or result in any breach or

26

 

contravention of, or the creation of any Lien under, or require any payment to be made under (i)
any Contractual Obligation to which the Borrower is a party or affecting the Borrower or any of
its Properties or (ii) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which the Borrower or its property is subject; or (b) violate any Law
(including, without limitation, the TVA Act and Regulation U or Regulation X issued by the FRB).

5.03
Governmental Authorization; Other Consents.

     No approval, consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, the Borrower of any Loan
Document other than those that have already been obtained and are in full force and effect.

5.04 Binding Effect.

     Each Loan Document has been duly executed and delivered by the Borrower. Each Loan Document
constitutes a legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms.

5.05 Financial Statements; No Material Adverse Effect.

     (a) The Annual Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present the financial condition of the Borrower as of the date thereof
and their results of operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower
as of the date thereof, including liabilities for taxes, commitments and indebtedness.

     (b) The Interim Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present the financial condition of the Borrower as of the date thereof
and their results of operations for the period covered thereby, subject, in the case of clauses (i)
and (ii), to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all
material indebtedness and other liabilities, direct or contingent, of the Borrower as of the date
thereof, including liabilities for taxes, material commitments and indebtedness.

     (c) The financial statements delivered pursuant to Section 6.01 (a) and (b) have been
prepared in accordance with GAAP (except as otherwise expressly noted therein or as may be
permitted under Section 6.01 (a) and (b)) and present fairly (on the basis disclosed in
the footnotes to such financial statements) the financial condition, results of operations and
cash flows of the Borrower as of the dates thereof and for the periods covered thereby.

     (d) Since the date of the Annual Financial Statements, there has been no event or
circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

5.06 Litigation.

     There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, by or against the Borrower or against any of
its or the United

27

 

States’ properties or revenues that (a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or (b) are reasonably likely
to be determined adversely and, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

5.07 No Default.

     No Default has occurred and is continuing.

5.08 Ownership of Property; Liens.

     The Borrower or the United States has good record and marketable title in fee simple to,
valid leasehold interests in, or other right to use, all real property used in the ordinary
conduct of its business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Property of the Borrower
is subject to no Liens, other than Permitted Liens.

5.09 Environmental Compliance.

Except as could not reasonably be expected to have a Material Adverse Effect:

     (a) Each of the Facilities and all operations at the Facilities are in compliance with
all applicable Environmental Laws, and there is no violation of any Environmental Law with
respect to the Facilities or the Businesses, and there are no conditions relating to the
Facilities or the Businesses that could give rise to liability under any applicable
Environmental Laws.

     (b) The Borrower has not received any written or verbal notice from any Governmental
Authority of, or inquiry from any Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the Facilities or the
Businesses, nor does any Responsible Officer have knowledge or reason to believe that any
such notice will be received or is being threatened.

5.10 Payment of Governmental Charges.

     The Borrower has paid all federal, state and local material taxes, assessments, fees and
other governmental charges of which it is aware that have been levied or imposed upon it or its
properties, income or assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which adequate reserves have
been provided in accordance with GAAP.

5.11 ERISA Compliance.

     If the Borrower or any ERISA Affiliate is subject to ERISA, then:

     (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Internal Revenue Code and other federal or state Laws. Each Plan that is intended to
qualify under Section 401 (a) of the Internal Revenue Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being processed by the IRS
with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would
prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Internal Revenue Code, and no
application for a funding waiver or an

28

 

extension of any amortization period pursuant to Section 412 of the Internal Revenue Code has been
made with respect to any Plan.

     (b) There are no pending or, to the best knowledge of the Borrower, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could
be reasonably be expected to have a Material Adverse Effect. Neither the Borrower, any ERISA
Affiliate nor any fiduciary of any Plan has engaged in a prohibited transaction under Section 406
of ERISA or Section 4975 of the Internal Revenue Code that has resulted or could reasonably be
expected to result in a Material Adverse Effect.

     (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has an Unfunded Pension Liability that could reasonably be expected to result in a Material Adverse
Effect; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, a liability under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA) that could reasonably be expected to result in
a Material Adverse Effect; (iv) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, a liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of
ERISA with respect to a Multiemployer Plan that could reasonably be expected to result in a
Material Adverse Effect; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.

5.12
Margin Regulations; Investment Company Act; Public Utility Holding Company Act.

     (a) The Borrower is not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock. Following the application of the proceeds of each Borrowing, not more than 25% of the
value of the assets of the Borrower subject to the provisions of Section 7.01 or
Section 7.03 or subject to any restriction contained in any agreement or instrument between
the Borrower and any Lender or any Affiliate of any Lender relating to indebtedness and within the
scope of Section 8.01 (e) will be margin stock.

     (b) Neither the Borrower nor any Person Controlling the Borrower (i) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.

5.13 Disclosure.

     No written report, financial statement, certificate or other information furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or
under any other Loan Document (in each case, 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, taken as a whole in the light of the circumstances under
which they were made, not misleading; provided that (a) 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, (b) nothing in this Agreement
shall be deemed to require the Borrower to provide the Administrative Agent or any Lender
projected financial information, except to the extent such projected financial information

29

 

might otherwise be included in Borrower’s annual and interim financial reports and (c) if such
misstatement of fact or omission of a fact relates to a fact that could not reasonably be expected
to have a Material Adverse Effect, then the Borrower can cure such misstatement or omission by
providing modified or supplemented information.

5.14 Compliance with Laws.

     The Borrower is in compliance with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its Property, except in such instances in which (a)
such requirement of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.

ARTICLE VI

AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, the Borrower shall:

6.01 Financial Statements.

     Deliver to the Administrative Agent:

     (a) as soon as available, but in any event within ninety (90) days after the end of
each fiscal year of the Borrower, a balance sheet of the Borrower as of the end of such
fiscal year, and the related statements of income and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and prepared in accordance with GAAP except as expressly noted therein,
audited and accompanied by a report and opinion of PricewaterhouseCoopers or another
independent certified public accountant of nationally recognized standing reasonably
acceptable to the Administrative Agent, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject to any “going
concern” or like qualification or exception or any qualification or exception as to the
scope of such audit; and

     (b) as soon as available, but in any event within forty-five (45) days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower, a balance sheet
of the Borrower as of the end of such fiscal quarter, and the related statements of income
and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year
then ended, setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the previous
fiscal year, all in reasonable detail and certified by a Responsible Officer as fairly
presenting the financial condition, results of operations and cash flows of the Borrower
in accordance with GAAP except as expressly noted therein, subject only to normal year-end
audit adjustments and the absence of footnotes.

6.02 Certificates: Other Information.

     Deliver to the Administrative
Agent:

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     (a) promptly after delivery thereof to Congress, a copy of each quarterly operational
report to Congress;

     (b) promptly after the furnishing thereof, copies of any statement or report furnished
to any holder of debt securities of the Borrower pursuant to the terms of any indenture,
loan or credit or similar agreement and not otherwise required to be furnished to the
Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

     (c) promptly, and in any event within ten (10) Business Days after receipt thereof by
the Borrower, copies of each notice or other correspondence received from the SEC (or
comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or
possible investigation or other inquiry by such agency regarding financial or other
operational results of the Borrower;

     (d) promptly (and in any event, within five (5) Business Days), (i) notice of any
announcement by Moody’s of any change in the Moody’s Debt Rating or of any suspension or
withdrawal of its rating of the Borrower’s senior unsecured long-term non-credit enhanced
debt and (ii) notice of any announcement by S&P of any change in the S&P Debt Rating or of
any suspension or withdrawal of its rating of the Borrower’s senior unsecured long-term
non-credit enhanced debt; and

     (e) promptly, such additional information regarding the business or financial affairs
of the Borrower, or compliance with the terms of the Loan Documents, as the Administrative
Agent or any Lender (through the Administrative Agent) may from time to time reasonably
request.

     Documents required to be delivered pursuant to Section 6.01 (a) or (b) or Section
6.02(b) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto
on the Borrower’s website on the Internet at the website address listed on Schedule 10.02;
or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent);
provided that: (i) the Borrower shall deliver paper copies of such documents to the
Administrative Agent upon request to the Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent and (ii) the
Borrower shall notify the Administrative Agent (by telecopier or electronic mail) of the posting
of any such documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents. The Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents referred to above, and
in any event shall have no responsibility to monitor compliance by the Borrower with any such
request for delivery, and each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.

6.03 Notices.

     (a) Promptly (and in any event, within five (5) Business Days) after obtaining knowledge
thereof, notify the Administrative Agent of the occurrence of any Default.

     (b) Promptly (and in any event, within five (5) Business Days) after obtaining knowledge
thereof, notify the Administrative Agent of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect.

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     (c) Promptly (and in any event, within ten (10) Business Days) notify the Administrative
Agent of any material change in accounting policies or financial reporting practices by the
Borrower.

     Each notice pursuant to this Section 6.03(a) through (c) shall be accompanied
by a statement of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower has taken and proposes to take with respect thereto.
Each notice pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been breached.

6.04 Payment of Obligations.

     Pay and discharge, as the same shall become due and payable, all its applicable federal,
state and local material taxes, assessments, fees and other governmental charges upon it or its
properties, income or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP are being
maintained by the Borrower.

6.05 Preservation of Existence, Etc.

     (a) Preserve, renew and maintain in full force and effect its legal existence.

     (b) Take all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.06 Maintenance of Properties.

     Maintain, preserve and protect all of its material properties and equipment necessary in the
judgment of the Borrower in the operation of its business in good working order and condition,
ordinary wear and tear excepted.

6.07 Maintenance of Insurance.

     (a) At any time the Moody’s Debt Rating is Baal or lower and the S&P Debt Rating is BBB+ or
lower, maintain in full force and effect insurance (including worker’s compensation insurance,
liability insurance, casualty insurance and business interruption insurance) with financially sound
and reputable insurance companies, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrower operates.

     (b) At any time the Moody’s Debt Rating is higher than Baal or the S&P Debt Rating is higher
than BBB+, the Borrower shall maintain in full force and effect nuclear liability and property
insurance in accordance with applicable Law.

6.08 Compliance with Laws.

     Comply with the requirements of all Laws (including, without limitation, the TVA Act) and all
orders, writs, injunctions and decrees applicable to it or to its business or property, except in
such instances in which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to
comply therewith could not reasonably be expected to have a Material Adverse Effect.

32

 

6.09 Books and Records.

     (a) Maintain proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied, except as otherwise expressly noted therein or in any
the Annual Financial Statements, the Interim Financial Statements and the annual and quarterly
financial statements delivered pursuant to Section 6.01, shall be made of all financial
transactions and matters involving the assets and business of the Borrower.

     (b) Maintain such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over the Borrower.

6.10 Inspection Rights.

     To the extent consistent with the Borrower’s safety and security procedures (which procedures
will be applied to the Administrative Agent and each Lender in a manner consistent with the
application to other Persons not employed by the Borrower), permit representatives and independent
contractors of the Administrative Agent and each Lender, at the expense of the Administrative
Agent or such Lender, as the case may be, to visit and inspect any of the Borrower’s properties,
to examine its corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, at such reasonable times during normal business hours not more
than once per year, upon reasonable advance notice to the Borrower; provided,
however, that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any of the foregoing at
the expense of the Borrower at any time during normal business hours upon reasonable advance
notice to the Borrower.

6.11 Use of Proceeds.

     Use the proceeds of the Loans for general corporate purposes, provided that (i) $200
million of the Aggregate Commitments shall be reserved solely to provide funds to the Nuclear
Decommissioning Trust and (ii) in no event shall the proceeds of the Loans be used in contravention
of any Law.

ARTICLE VII

NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, the Borrower shall not:

7.01 Liens.

     Create, incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the Permitted Liens.

7.02 Indebtedness.

     Create, incur, assume or suffer to exist any indebtedness or similar financial obligation,
except for (a) indebtedness permitted under the TVA Act and (b) indebtedness specifically
permitted to be incurred by the Borrower under any other applicable federal Law.

33

 

7.03 Fundamental Changes; Subsidiaries.

     (a) Merge, dissolve, liquidate, consolidate with or into another Person, or sell, lease or
otherwise transfer (whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of any Person.

     (b) Form or acquire any Subsidiary.

7.04 Change in Nature of Business.

     Engage in any material line of business substantially different from those lines of business
conducted by the Borrower on the Closing Date or any business substantially related or incidental
thereto.

7.05 Use of Proceeds.

     Use the proceeds of any Loan, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U
of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default.

     Any of the following shall constitute an Event of Default:

     (a) Non-Payment. The Borrower fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan, including any required prepayment thereof,
or (ii) within three days after the same becomes due, any interest on any Loan, or any fee
due hereunder, or (iii) within five days after the same becomes due, any other amount
payable hereunder or under any other Loan Document; or

     (b) Specific Covenants.

     (i) The Borrower fails to perform or observe any term, covenant or agreement
contained in any of Section 6.10 and such failure continues for five (5)
Business Days after notice thereof is provided to the Borrower by the
Administrative Agent; or

     (ii) The Borrower fails to perform or observe any term, covenant or agreement
contained in any of Section 6.02(d), 6.03(a),
6.03(b), 6.05(a), 6.11 or
Article VII; or

     (c) Other Defaults. The Borrower fails to perform or observe any other covenant
or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document
on its part to be performed or observed and such failure continues for thirty (30) days; or

34

 

     (d) Representations and Warranties. Any representation, warranty, certification or statement
of fact made or deemed made by or on behalf of the Borrower herein, in any other Loan Document, or
in any document delivered in connection herewith or therewith shall be incorrect or misleading when
made or deemed made; or

     (e) Cross-Acceleration to Power Resolution.

     (i) The occurrence of an “Event of Default” under, and as defined in, the Power
Resolution with respect to the payment of principal or interest on bonds, notes and other
evidences of indebtedness issued under the Power Resolution that constitute more than five
percent (5%) of the aggregate principal amount of all bonds, notes and other evidences of
indebtedness issued under the Power Resolution; or

     (ii) The occurrence of any other “Event of Default” under, and as defined in, the
Power Resolution, the result of which is the acceleration of bonds, notes and other
evidences of indebtedness issued under the Power Resolution that constitute the greater of
(A) $1 billion or (B) more than five percent (5%) of the aggregate principal amount of all
bonds, notes and other evidences of indebtedness issued under the Power Resolution; or

     (f) Insolvency Proceedings, Etc. The Borrower institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of
its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for sixty calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for sixty calendar days,
or an order for relief is entered in any such proceeding; or

     (g) Inability to Pay Debts; Attachment. (i) The Borrower becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied against all or any
material part of the property of any such Person and is not released, vacated or fully bonded
within thirty days after its issue or levy; or

     (h) Judgments. There is entered against the Borrower (i) one or more final judgments
or orders for the payment of money in an aggregate amount exceeding the Threshold Amount (to the
extent not covered by independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there
is a period of ten (10) consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or

     (i) ERISA. If the Borrower or any ERISA Affiliate is subject to ERISA: (i) an ERISA Event
occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii)
the Borrower or any ERISA Affiliate fails to pay when due, after the

35

 

expiration of any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of the Threshold Amount; or

     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full of all the Obligations, ceases to be in full force and
effect; or the Borrower contests in any manner the validity or enforceability of any Loan
Document; or the Borrower denies that it has any or further liability or obligation under
any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

     (k) Change of Control. The United States of America shall fail to own at least
(i) ninety percent (90%) of the equity interests of the Borrower and (ii) ninety percent
(90%) of the equity interests of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully diluted basis (it being
understood that as of the Closing Date the Borrower is a wholly owned corporate agency and
instrumentality of the United States of America); or

     (l) Debt Ratings.

     (i) The Moody’s Debt Rating is lower than A3 and the S&P Debt Rating is
lower than A-; or

     (ii) Moody’s and S&P suspends or withdraws their rating of the
Borrower’s senior unsecured long-term non-credit enhanced debt.

8.02 Remedies Upon Event of Default.

     If any Event of Default occurs and is continuing, the Administrative Agent shall, at the
request of, or may, with the consent of, the Required Lenders, take any or all of the following
actions:

     (a) declare the commitment of each Lender to make Loans to be terminated, whereupon
such commitments and obligation shall be terminated;

     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower; and

     (c) exercise on behalf of itself and the Lenders all rights and remedies available to
it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically
become due and payable, in each case without further act of the Administrative Agent or any Lender.

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8.03 Application of Funds.

     After the exercise of remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article III) payable
to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the Lenders
(including fees, charges and disbursements of counsel to the respective Lenders and amounts
payable under Article III), ratably among them in proportion to the amounts described in
this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and fees, premiums and scheduled periodic payments, and any
interest accrued thereon, due under any Swap Contract between the Borrower and any Lender,
or any Affiliate of a Lender, to the extent such Swap Contract is permitted by Section
7.02, ratably among the Lenders (and, in the case of such Swap Contracts, Affiliates of
Lenders) in proportion to the respective amounts described in this clause Third
held by them;

Fourth, to (a) payment of that portion of the Obligations constituting unpaid
principal of the Loans, (b) payment of breakage, termination or other payments, and any
interest accrued thereon, due under any Swap Contract between the Borrower and any Lender,
or any Affiliate of a Lender, to the extent such Swap Contract is permitted by this
Section 8.03. and (c) payments of amounts due under any Treasury Management
Agreement between the Borrower and any Lender, or any Affiliate of a Lender, ratably among
the Lenders (and, in the case of such Swap Contracts, Affiliates of Lenders) in proportion
to the respective amounts described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been paid in full, to
the Borrower or as otherwise required by Law.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority.

     Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders, and the Borrower shall not have rights as a third party
beneficiary of any of such provisions.

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9.02 Rights and Obligations as a Lender.

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

     (b) If the Person serving as the Administrative Agent hereunder is also a Lender, such
Person’s status as Administrative Agent shall not affect such Person’s obligations as a Lender
(including such Person’s obligation to fund Loans in its capacity as a Lender).

9.03 Exculpatory Provisions.

     The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Loan Documents. Without limiting the generality of the foregoing,
the Administrative Agent:

     (a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

     (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be expressly provided for herein or in the other Loan Documents),
provided that the Administrative Agent shall not be required to take any action
that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

     (c) shall not, except as expressly set forth herein and in the other Loan Documents,
have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its Affiliates in any
capacity.

     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the
absence of its own gross negligence or willful misconduct. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by the Borrower.

     The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan

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Document or any other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

9.04 Reliance by Administrative Agent.

     The Administrative Agent shall be entitled to rely upon, and shall not incur any liability
for relying upon, any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person. The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a
Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender
unless the Administrative Agent shall have received notice to the contrary from such Lender prior
to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected by it, and shall not
be liable for any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

9.05 Delegation of Duties.

     The Administrative Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their respective
Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and
to the Related Parties of the Administrative Agent and any such sub-agent.

9.06 Resignation of Administrative Agent.

     The Administrative Agent may at any time give notice of its resignation to the Lenders and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an
office in the United States, or an Affiliate of any such bank with an office in the United States.
If no such successor shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the Lenders appoint a
successor Administrative Agent meeting the qualifications set forth above; provided that if
the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become effective in accordance
with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent shall instead be made
by or to each Lender directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative
Agent, and the retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already discharged therefrom as
provided above in this Section). The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and

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such successor. After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

9.07 Non-Reliance on Administrative Agent and Other Lenders.

     Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document furnished hereunder or
thereunder.

9.08 No Other Duties; Etc.

     Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers,
syndication agents, documentation agents or co-agents shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except in its capacity,
as applicable, as the Administrative Agent or a Lender hereunder.

9.9 Administrative Agent May File Proofs of Claim.

     In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then
be due and payable as herein expressed or by declaration or otherwise and irrespective of whether
the Administrative Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise:

     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans and all other Obligations (other than obligations under
Swap Contracts or Treasury Management Agreements to which the Administrative Agent is not a
party) that are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements and
advances of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent under
Sections 2.07 and 10.04) allowed in such judicial proceeding; and

     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable

40

 

compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Sections 2.07
and 10.04.

     Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender or to authorize
the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc.

     No amendment or waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given; provided, further, that

     (a) no such amendment, waiver or consent shall:

     (i) extend or increase the Commitment of a Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such
Lender whose Commitment is being extended or increased (it being understood and
agreed that a waiver of any condition precedent set forth in Section 4.02
or of any Default or a mandatory reduction in Commitments is not considered an
extension or increase in the Commitment of any Lender);

     (ii) postpone any date fixed by this Agreement or any other Loan Document for
any payment of principal (excluding mandatory prepayments), interest, fees or other
amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction
of the Commitments hereunder or under any other Loan Document without the written
consent of each Lender entitled to receive such payment or whose Commitment is to be
reduced;

     (iii) reduce the principal of, or the rate of interest specified herein on, any
Loan, or (subject to clause (i) of the final proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document without
the written consent of each Lender entitled to receive such payment of principal,
interest, fees or other amounts; provided, however, that only the consent of
the Required Lenders shall be necessary to (A) amend the definition of “Default
Rate”, (B) to waive any obligation of the Borrower to pay interest at the Default
Rate, (C) to waive the increase in the Applicable Rate set forth in the last
paragraph of the definition of “Applicable Rate” and (D) to waive the Liquidity
Premium for any Borrowing, conversion or continuation;

     (iv) change Section 2.11 or Section 8.03 in a manner that
would alter the pro rata sharing of payments required thereby without the written
consent of each Lender directly affected thereby;

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     (v) change any provision of this Section 10.01(a) or the definition of
“Required Lenders” without the written consent of each Lender directly affected
thereby; or

     (vi) release the Borrower from its obligations under the Loan Documents
without the written consent of each Lender; and

     (b) unless also signed by the Administrative Agent, no amendment, waiver or consent
shall affect the rights or duties of the Administrative Agent under this Agreement or any
other Loan Document;

provided, however, that notwithstanding anything to the contrary herein, (i) no Defaulting
Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended without the consent of
such Lender, (ii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent
provisions set forth herein and (iii) the Required Lenders shall determine whether or not to allow
the Borrower to use cash collateral in the context of a bankruptcy or insolvency proceeding and
such determination shall be binding on all of the Lenders.

10.02 Notices and Other Communications; Facsimile Copies.

     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), 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 telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

     (i) if to the Borrower or the Administrative Agent, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on Schedule
10.02; and

     (ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

     Notices sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received; notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the extent provided in
subsection (b) below, shall be effective as provided in such subsection (b).

     (b) Electronic Communications. Notices and other communications to the Lenders may be
delivered or furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender
has notified the Administrative Agent that it is incapable of receiving notices under such Article
by electronic communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

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     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business
day for the recipient, and (ii) notices or communications posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.

     (c) Change of Address, Etc. The Borrower and the Administrative Agent may change its
address, telecopier or telephone number for notices and other communications hereunder by notice to
the other parties hereto. Each Lender may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the Borrower and the Administrative Agent.

     (d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices)
purportedly given by or on behalf of a Responsible Officer of the Borrower. All telephonic
notices to and other telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such recording.

10.03
No Waiver; Cumulative Remedies.

     No failure by any Lender or the Administrative Agent to exercise, and no delay by any such
Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

10.04 Expenses; Indemnity; and Damage Waiver.

     (a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent) in connection with the
preparation, negotiation, execution, delivery and administration of this Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the
reasonable fees, charges and disbursements of any counsel for the Administrative Agent or any
Lender) in connection with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans, including all such reasonable out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Loans.

     (b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each Related Party of any of the
foregoing Persons (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
reasonable fees, charges and disbursements of any outside counsel for any Indemnitee) incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower arising out
of, in connection with, or as a

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result of (i) the execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of
their respective obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds
therefrom, (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, whether
brought by a third party or by the Borrower, 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.

     (c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails
to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by
them to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent)
or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party
of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this subsection (c)
are subject to the provisions of Section 2.10(d).

     (d) Waiver
of Consequential Damages, Etc.

     (i) To the fullest extent permitted by applicable law, the Borrower shall not assert,
and the Borrower 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, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

     (ii) To the fullest extent permitted by applicable law, no Indemnitee shall assert,
and each Indemnitee hereby waives, any claim against the Borrower, 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, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

     (iii) Neither the Borrower nor any Indemnitee shall be liable for any damages arising
from the use by unintended recipients of any information or other materials distributed by
it through telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby.

     (e) Payments. All amounts due under this Section shall be payable not later than
thirty (30) days after the Borrower’s receipt of an invoice demanding such payment.

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     (f) Survival. The agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all the other Obligations.

10.05 Payments Set Aside.

     To the extent that any payment by or on behalf of the Borrower is made to the Administrative
Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and
such payment or the proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with any proceeding under any Debtor
Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (b) each Lender severally
agrees to pay to the Administrative Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum equal to the Federal
Funds Rate from time to time in effect. The obligations of the Lenders under clause (b) of the
preceding sentence shall survive the payment in full of the Obligations and the termination of
this Agreement.

10.06 Successors and Assigns.

     (a) Successors and Assigns Generally. The provisions of this Agreement and the other
Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto 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 or thereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto 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,
Participants to the extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

     (b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including all or a portion of its Commitment and the Loans at the time owing
to it); provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of
an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender,
the aggregate amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the
Loans of the assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent
or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than $5,000,000 unless each of the Administrative Agent and, so long as no Event of Default
has occurred and is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as an

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assignment of a proportionate part of all the assigning Lender’s Loans and Commitments, and rights
and obligations with respect thereto, assigned; (iii) any assignment of a Commitment must be
approved by the Administrative Agent unless the Person that is the proposed assignee is itself a
Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of $3,500 and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Subject to acceptance and recording thereof by the Administrative
Agent pursuant to subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease
to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04,
3.05 and 10.04 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section. The Borrower reserves the right to
propose potential Eligible Assignees and the Lenders agree to consider, in their sole discretion,
the Borrower’s proposed Eligible Assignees.

     (c) Register. The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and 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, and the Borrower, the Administrative Agent and the Lenders 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 at any reasonable time and from time to time upon reasonable prior
notice. In addition, at any time that a request for a consent for a material or substantive change
to the Loan Documents is pending, any Lender wishing to consult with other Lenders in connection
therewith may request and receive from the Administrative Agent a copy of the Register.

     (d) Participations. Any Lender may at any time, without the consent of, or notice
to, and without cost or expense to, the Borrower or the Administrative Agent, sell participations
to any Person (other than (i) a natural person, (ii) the Borrower or any of the Borrower’s
Affiliates or (iii) any Person that is primarily in the business of producing or transmitting
electricity) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the Loans;
provided that (i) such Lender’s obligations under this Agreement 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 this Agreement. 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 this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, waiver or other modification described in
clauses (i) through (vi) of the Section 10.01(a) that affects such Participant. Subject
to subsection (e) of this Section, the Borrower agrees that

46

 

each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and
3.05 to the same extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (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 such Participant agrees to be subject to Section 2.11 as though it were a
Lender.

     (e) Limitation on Participant Rights. A Participant shall not be entitled to receive
any greater payment under Section 3.01 or 3.04 than the applicable 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 3.01 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
Section 3.01(e) as though it were a Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

     (g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act

10.07
Treatment of Certain Information; Confidentiality.

     Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to its Affiliates and
to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors
and representatives and to any direct or indirect contractual counterparty (or such contractual
counterparty’s professional advisor) under any Swap Contract relating to Loans outstanding under
this Agreement (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party hereto (such other party acknowledges
that it is subject to the confidentiality obligations hereunder with respect to such Information),
(e) in connection with the exercise of any remedies hereunder or under any other Loan Document or
any action or proceeding relating to this Agreement or any other Loan Document or the enforcement
of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating
to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates
on a nonconfidential basis from a source other than the Borrower.

47

 

     For purposes of this Section, “Information” means all information received from the Borrower
relating to the Borrower or any of its businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure
by the Borrower, provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of delivery as
confidential.

10.08 Set-off.

     If an Event of Default shall have occurred and be continuing, each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to the fullest
extent permitted by applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and other obligations
(in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit
or the account of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower are owed to a branch or office of such
Lender different from the branch or office holding such deposit or obligated on such indebtedness.
The rights of each Lender and their respective Affiliates under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender or their respective
Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.

10.09 Interest Rate Limitation.

     Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the
Borrower. In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted
by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.

10.10
Counterparts; Integration; Effectiveness.

     This Agreement may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents 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 4.0.1, this Agreement shall become effective when it shall
have been executed by a Responsible Officer and the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

48

 

10.11
Survival of Representations and Warranties.

     All representations and warranties made hereunder and in any other Loan Document or other
document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of any investigation
made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of
any Loan, and shall continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied.

10.12
Severability.

     If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid
or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of
this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that
of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.

10.13
Replacement of Lenders.

     If
any Lender requests compensation under Section 3.04, 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 3.01, or if any Lender is a Defaulting Lender, 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, and consents required by,
Section 10.06), all of its
interests, rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment), provided that:

     (a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in
Section 10.06(b);

     (b) 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 and
under the other Loan Documents (including any amounts under Section 3.05) 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);

     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to
Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and

     (d) such assignment does not conflict with applicable Laws.

     A Lender shall not be required to make any such assignment or 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.

49

 

10.14
Governing Law; Jurisdiction; Etc.

     (a) GOVERNING
LAW. EXCEPT FOR THOSE SECTIONS THAT SPECIFICALLY REFERENCE A
FEDERAL STATUTE OR REGULATION, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF TENNESSEE. THE FOREGOING NOTWITHSTANDING, TO THE EXTENT
THE FOLLOWING DEFENSES WOULD BE AVAILABLE TO THE BORROWER UNDER FEDERAL LAW, THEN SUCH DEFENSES
SHALL BE AVAILABLE TO THE BORROWER IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS:
(i) NON-LIABILITY FOR PUNITIVE DAMAGES, (ii) EXEMPTION FROM ANTI-TRUST LAWS, (iii) THE BORROWER
CANNOT BE CONTRACTUALLY BOUND BY REPRESENTATION OF AN EMPLOYEE MADE WITHOUT ACTUAL AUTHORITY, (iv)
PRESUMPTION THAT GOVERNMENT OFFICIALS HAVE ACTED IN GOOD FAITH AND (v) LIMITATION ON THE
APPLICATION OF THE DOCTRINE OF EQUITABLE ESTOPPEL TO THE GOVERNMENT.

     (b) SUBMISSION
TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDCTION OF THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF TENNESSEE OR ANY APPELLATE COURT TAKING APPEALS THEREFROM
FOR ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. 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.

     (c) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN THE 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) SERVICE
OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15
Waiver of Right to Trial by Jury.

     EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,

50

 

SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 USA PATRIOT Act Notice.

     Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act.

10.17 Statement of Borrower regarding the Bankruptcy Code of the United States.

     The Borrower takes the position that as a government agency the Borrower cannot be a “debtor”
under the Bankruptcy Code of the United States. The agreement of the Borrower to include the
Bankruptcy Code of the United States in the definition of “Debtor Relief Laws” is not to be
interpreted as a recognition, acknowledgment or agreement by the Borrower of a contrary position.

10.18 TVA Related Provisions.

     In connection with this Agreement each Lender agrees to comply with (i) the Affirmative
Action for Disabled Veterans and Veterans of the Vietnam-Era clause, 41 C.F.R. § 60-250.4, (ii)
the Affirmative Action for Handicapped Workers clause, 41 C.F.R. § 60-741.4, (iii) the Equal
Opportunity clause, 41 C.F.R. § 60-1.4, and all amendments to these clauses and all applicable
regulations, rules, and orders issued thereunder. Each Lender that executes this Agreement, and
each Lender that becomes a party to this Agreement by execution of an Assignment and Assumption,
agrees that upon its execution of this Agreement or such Assignment and Assumption, as applicable,
it shall be deemed to have executed the Certification for Contracts, Grants, Loans, and
Cooperative Agreements attached hereto Exhibit 10.18.

[SIGNATURE PAGES FOLLOW]

51

 

     IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly
executed as of the date first above written.

	 	 	 	 	 	 	 
	BORROWER:	 	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael E. Rescoe	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael E. Rescoe	 	 
	 

	 	Title:
	 	Chief Financial Officer and Executive
Vice President, Financial Services	 	 
	 
	 	 	 	 	 	 
	ADMINISTRATIVE
	 	 	 	 	 	 
	AGENT:	 	BANK OF AMERICA, N.A., as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John M. Hall	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John M. Hall	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	LENDER:	 	BANK OF AMERICA, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John M. Hall	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John M. Hall	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

 

 

Schedule 2.01

COMMITMENTS AND APPLICABLE PERCENTAGES

	 	 	 	 	 	 	 	 	 
	Lender	 	Applicable Percentage	 	Commitment
	Bank of America, N.A.
	 	 	100.00000000%	 	 	 	$1,250,000,000	 
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	100.00000000%	 	 	 	$1,250,000,000	 

 

 

Schedule 7.01

OTHER PERMITTED LIENS

     None.

 

 

Schedule 10.02

CERTAIN ADDRESS FOR NOTICES

	1.	 	 To the Borrower:

Tennessee Valley Authority 

400 West Summit Hill Drive 

Knoxville, TN 37902 

Attention: Treasurer 

Telephone: 865-632-3366

Facsimile: 865-632-6673

	2.	 	 To the Administrative Agent:

Loan Notices and Payments

Bank of America, N.A., as Administrative Agent

9000 South Side Blvd.

Jacksonville, FL 32256

Telephone: 888-841-8159

Facsimile: 888-841-8160

with a copy to:

Bank of America, N.A., as Administrative Agent

550 West Main Street, Suite 800

Knoxville, TN 37902

Attention: John Hall

Telephone: 865-541-6102

Facsimile: 865-546-2865

All Other Notices

Bank of America, N.A., as Administrative Agent

550 West Main Street, Suite 800

Knoxville, TN 37902

Attention: John Hall

Telephone: 865-541-6102

Facsimile: 865-546-2865

 

 

Exhibit 2.02 

FORM OF LOAN NOTICE

Date:
                    ,      

			
	To:	 	Bank of America, N.A., as Administrative Agent

			
	Re:	 	Fall Maturity Credit Agreement (as amended, modified and supplemented from time to
time, the “Credit Agreement”) dated as of May 17, 2006 among Tennessee Valley
Authority, a wholly owned corporate agency and instrumentality of the United States of
America (the “Borrower”), the Lenders from time to time party thereto and Bank of
America, N.A., as a Lender and as Administrative Agent. Capitalized terms used but not
otherwise defined herein have the meanings provided in the Credit Agreement.

Ladies and Gentlemen:

The undersigned hereby requests (select one):

o A Borrowing of Loans

o A conversion or continuation of Loans

	 	1.	 	On                      (a Business Day).
	 
	 	2.	 	In the amount of $
                    .
	 
	 	3.	 	Comprised of                     .
[Type of Loan requested]

	4.	 	For LIBOR Rate Loans: with an Interest Period of       months.

With respect to any Borrowing or conversion or continuation requested herein, the undersigned
Borrower hereby represents and warrants that (i) in the case of a Borrowing of Loans, such request
complies with the requirements of the proviso to the first sentence of Section 2.01 of the Credit
Agreement and (ii) each of the conditions set forth in Section 5.02 of the Credit Agreement
have been satisfied on and as of the date of such Borrowing or such conversion or continuation.

	 	 	 	 	 	 	 
	 	 	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

 

 

Exhibit 2.09 

FORM OF NOTE

May 17,
2006

FOR VALUE RECEIVED, TENNESSEE VALLEY AUTHORITY, a wholly owned corporate agency and
instrumentality of the United States of America (the “Borrower”), hereby promises to pay to
                                                            
or registered assigns (the “Lender”), in accordance with the provisions of the
Credit Agreement (as hereinafter defined), the principal amount of each Loan from time to time
made by the Lender to the Borrower under the Fall Maturity Credit Agreement, dated as of May 17,
2006 (as amended, modified and supplemented from time to time, the “Credit Agreement”) among the
Borrower, the Lenders from time to time party thereto and Bank of America, N.A., as a Lender and
as Administrative Agent.

The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of
such Loan until such principal amount is paid in full, at such interest rates and at such times as
provided in the Credit Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately available funds at
the Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the
date of actual payment (and before as well as after judgment) computed at the per annum rate set
forth in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable all as provided in the Credit Agreement. Loans made by
the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this Note and endorse
thereon the date, amount and maturity of its Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest
and demand and notice of protest, demand, dishonor and non-payment of this Note.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE.

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, each of the undersigned has executed this Note as of the date set forth above.

	 	 	 	 	 	 	 
	 	 	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

 

 

Exhibit 10.07 

FORM OF ASSIGNMENT AND ASSUMPTION

     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement identified below
(the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and Assumption as if set
forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the
Assignor’s rights and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of the Assignor under
the respective facilities identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to
herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty by the Assignor.

	 	 	 	 	 	 	 
	1.

	 	Assignor:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	Assignee:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	[and is an Affiliate/ Approved Fund of [identify Lender]1]
	 
	 	 	 	 	 	 
	3.	 	Borrower:	 	Tennessee Valley Authority
	 
	 	 	 	 	 	 
	4.	 	Agent:	 	Bank of America, N.A., as the administrative agent
	 
	 	 	 	 	 	 
	5.	 	Credit Agreement:	 	Fall Maturity Credit Agreement dated as of May 17, 2006 among Borrower, the
Lenders parties thereto and Bank of America, N.A., as Administrative Agent
	 
	 	 	 	 	 	 
	6.

	 	Assigned Interest:	 	 	 	 

	 	 	 	 	 
	Aggregate Amount of	 	Amount of Commitment/	 	Percentage Assigned of
	Commitment/Loans for all Lenders	 	Loans Assigned	 	Commitment/Loans
	 

	 	 
	 	 

 

1 Select
as applicable.

 

 

[7.      Trade Date:                                ]

Effective Date:                           , 20       [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	 	 	 	 	 	 	 
	 	 	ASSIGNOR	 	 
	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

	 	 	 	 	 
	[Consented to and]2 Accepted:	 	 
	 
	 	 	 	 
	BANK OF AMERICA, N.A. as Administrative Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	[Consented
to:]3	 	 
	 
	 	 	 	 
	[BANK OF AMERICA, N.A., as L/C Issuer]	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 

 

			
	2	 	To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

	 
	3	 	To be added only if the consent of the Borrower and/or other parties (e.g. L/C
Issuer) is required by the terms of the Credit Agreement.

 

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

     1. Representations
and Warranties.

     1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.

     1.2.
Assignee. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.

     3. General
Provisions. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Tennessee.

 

 

Exhibit 10.18

Certification for Contracts, Grants, Loans, and Cooperative Agreements

The undersigned certifies, to the best of his or her knowledge and belief, that:

(1) No federal appropriated funds have been paid or will be paid by or on behalf of the
undersigned to any person for influencing or attempting to influence an officer or employee
of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any federal contract, the making of
any federal grant, the making of any federal loan, the entering into of any cooperative
agreement, and the extension, continuation, renewal, amendment, or modification of any
federal contract, grant, loan, or cooperative agreement.

(2) If any funds other than federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence an officer or employee of any agency, a
Member of Congress, an officer or employee of Congress, or an employee of a Member of
Congress in connection with this federal contract, grant, loan, or cooperative agreement,
the undersigned shall complete and submit Standard Form-LLL, “Disclosure of Lobbying
Activities,” in accordance with its instructions.

(3) The undersigned shall require that the language of this certification be included in the
award documents for all subawards at all tiers (including subcontracts, subgrants, and
contracts under grants, loans, and cooperative agreements) and that all subrecipients shall
certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this
transaction was made or entered into. Submission of this certification is a prerequisite for
making or entering into this transaction imposed by 31 U.S.C. 1352. Any person who fails to file
the required certification shall be subject to a civil penalty of not less than $10,000 and not
more than $100,000 for each such failure.Ex-10.2 Spring Maturity Credit Agreement

 

Exhibit 10.2

This Credit Agreement has been filed to provide investors with information regarding its terms. It
is not intended to provide any other factual information about the Tennessee Valley Authority. The
representations and warranties of the parties in this Credit Agreement were made to, and solely for
the benefit of, the other parties to this Credit Agreement. The assertions embodied in the
representations and warranties may be qualified by information included in schedules, exhibits or
other materials exchanged by the parties that may modify or create exceptions to the
representations and warranties. Accordingly, investors should not rely on the representations and
warranties as characterizations of the actual state of facts at the time they were made or
otherwise.

 

 

 

SPRING MATURITY CREDIT AGREEMENT

Dated as of May 17, 2006

Among

TENNESSEE VALLEY AUTHORITY,

as the Borrower

BANK OF AMERICA, N.A.,

as Administrative Agent

BANK OF AMERICA, N.A.,

as a Lender

and

THE OTHER LENDERS PARTY HERETO

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS	 	 	1	 
	1.01

	 	Defined Terms
	 	 	1	 
	1.02

	 	Other Interpretive Provisions
	 	 	13	 
	1.03

	 	Accounting Terms
	 	 	14	 
	1.04

	 	Times of Day
	 	 	14	 
	ARTICLE II THE
COMMITMENTS AND LOANS	 	 	14	 
	2.01

	 	Loans
	 	 	14	 
	2.02

	 	Borrowings, Conversions and Continuations of Loans
	 	 	14	 
	2.03

	 	Prepayments
	 	 	15	 
	2.04

	 	Termination or Reduction of Aggregate Commitments; Availability
	 	 	16	 
	2.05

	 	Repayment of Loans
	 	 	17	 
	2.06

	 	Interest
	 	 	17	 
	2.07

	 	Commitment Fee
	 	 	17	 
	2.08

	 	Computation of Interest and Fees
	 	 	18	 
	2.09

	 	Evidence of Debt
	 	 	18	 
	2.10

	 	Payments Generally; Administrative Agent’s Clawback
	 	 	18	 
	2.11

	 	Sharing of Pavments by Lenders
	 	 	19	 
	ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	20	 
	3.01

	 	Taxes
	 	 	20	 
	3.02

	 	Illegality
	 	 	22	 
	3.03

	 	Inability to Determine Rates
	 	 	22	 
	3.04

	 	Increased Costs
	 	 	23	 
	3.05

	 	Compensation for Losses
	 	 	24	 
	3.06

	 	Mitigation Obligations; Replacement of Lenders
	 	 	24	 
	3.07

	 	Survival
	 	 	25	 
	ARTICLE IV CONDITIONS PRECEDENT TO LOANS	 	 	25	 
	4.01

	 	Conditions to Closing
	 	 	25	 
	4.02

	 	Conditions tn all Loans
	 	 	26	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES	 	 	26	 
	5.01

	 	Existence, Qualification and Power
	 	 	26	 
	5.02

	 	Authorization; No Contravention
	 	 	26	 
	5.03

	 	Governmental Authorization; Other Consents
	 	 	27	 
	5.04

	 	Binding Effect
	 	 	27	 
	5.05

	 	Financial Statements; No Material Adverse Effect
	 	 	27	 
	5.06

	 	Litigation
	 	 	27	 
	5.07

	 	No Default
	 	 	28	 
	5.08

	 	Ownership of Property; Liens
	 	 	28	 
	5.09

	 	Environmental Compliance
	 	 	28	 
	5.10

	 	Payment of Governmental Charges
	 	 	28	 
	5.11

	 	ERISA Compliance
	 	 	28	 
	5.12

	 	Margin Regulations; Investment Company Act; Public Utility Holding Company Act
	 	 	29	 
	5.13

	 	Disclosure
	 	 	29	 
	5.14

	 	Compliance with Laws
	 	 	30	 
	ARTICLE VI AFFIRMATIVE COVENANTS	 	 	30	 
	6.01

	 	Financial Statements
	 	 	30	 
	6.02

	 	Certificates; Other Information
	 	 	30	 
	6.03

	 	Notices
	 	 	31	 

  i

 

 

	 	 	 	 	 	 	 
	6.04

	 	Payment of Obligations
	 	 	32	 
	6.05

	 	Preservation of Existence, Etc
	 	 	32	 
	6.06

	 	Maintenance of Properties
	 	 	32	 
	6.07

	 	Maintenance of Insurance
	 	 	32	 
	6.08

	 	Compliance with Laws
	 	 	32	 
	6.09

	 	Books and Records
	 	 	33	 
	6.10

	 	Inspection Rights
	 	 	33	 
	6.11

	 	Use of Proceeds
	 	 	33	 
	ARTICLE VII NEGATIVE COVENANTS	 	 	33	 
	7.01

	 	Liens
	 	 	33	 
	7.02

	 	Indebtedness
	 	 	33	 
	7.03

	 	Fundamental Changes; Subsidiaries
	 	 	34	 
	7.04

	 	Change in Nature of Business
	 	 	34	 
	7.05

	 	Use of Proceeds
	 	 	34	 
	ARTICLE VIII EVENTS OF
DEFAULT AND REMEDIES	 	 	34	 
	8.01

	 	Events of Default
	 	 	34	 
	8.02

	 	Remedies Upon Event of Default
	 	 	36	 
	8.03

	 	Application of Funds
	 	 	37	 
	ARTICLE IX ADMINISTRATIVE AGENT	 	 	37	 
	9.01

	 	Appointment and Authority
	 	 	37	 
	9.02

	 	Rights and Obligations as a Lender
	 	 	38	 
	9.03

	 	Exculpatory Provisions
	 	 	38	 
	9.04

	 	Reliance by Administrative Agent
	 	 	39	 
	9.05

	 	Delegation of Duties
	 	 	39	 
	9.06

	 	Resignation of Administrative Agent
	 	 	39	 
	9.07

	 	Non-Reliance on Administrative Agent and Other Lenders
	 	 	40	 
	9.08

	 	No Other Duties; Etc
	 	 	40	 
	9.09

	 	Administrative Agent May File Proofs of Claim
	 	 	40	 
	ARTICLE X MISCELLANEOUS	 	 	41	 
	10.01

	 	Amendments, Etc
	 	 	41	 
	10.02

	 	Notices and Other Communications; Facsimile Copies
	 	 	42	 
	10.03

	 	No Waiver; Cumulative Remedies
	 	 	43	 
	10.04

	 	Expenses; Indemnity; and Damage Waiver
	 	 	43	 
	10.05

	 	Payments Set Aside
	 	 	45	 
	10.06

	 	Successors and Assigns
	 	 	45	 
	10.07

	 	Treatment of Certain Information; Confidentiality
	 	 	47	 
	10.08

	 	Set-off
	 	 	48	 
	10.09

	 	Interest Rate Limitation
	 	 	48	 
	10.10

	 	Counterparts; Integration; Effectiveness
	 	 	48	 
	10.11

	 	Survival of Representations and Warranties
	 	 	49	 
	10.12

	 	Severability
	 	 	49	 
	10.13

	 	Replacement of Lenders
	 	 	49	 
	10.14

	 	Governing Law; Jurisdiction; Etc
	 	 	50	 
	10.15

	 	Waiver of Right to Trial by Jury
	 	 	50	 
	10.16

	 	USA PATRIOT Act Notice
	 	 	51	 
	10.17

	 	Statement of Borrower regarding the Bankruptcy Code of the United States
	 	 	51	 
	10.18

	 	TVA Related Provisions
	 	 	51	 

  ii

 

 

	 	 	 
	SCHEDULES	 	 
	2.01
	 	Commitments and Applicable Percentages
	7.01
	 	Other Permitted Liens
	10.02
	 	Certain Addresses for Notices

	 	 	 
	EXHIBITS 	 	 
	2.02

	 	Form of Loan Notice
	2.09

	 	Form of Note
	10.07

	 	Form of Assignment and Assumption
	10.18

	 	Certification for Contracts, Grants, Loans, and
Cooperative Agreements

  iii

 

 

SPRING MATURITY CREDIT AGREEMENT

     This SPRING MATURITY CREDIT AGREEMENT is entered into as of May 17, 2006 among TENNESSEE
VALLEY AUTHORITY, a wholly owned corporate agency and instrumentality of the United States of
America (the “Borrower”), the Lenders (defined herein) and BANK OF AMERICA, N.A., as a Lender and
as Administrative Agent.

     The Borrower has requested that the Lenders provide $1.25 billion in credit facilities for the
purposes set forth herein, and the Lenders are willing to do so on the terms and conditions set
forth herein.

     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms.

     As used in this Agreement, the following terms shall have the meanings set forth below:

     “Administrative Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.

     “Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02 or such other address or account as the
Administrative Agent may from time to time notify to the Borrower and the Lenders.

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

     “Affiliate” means, with respect to any 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.

     “Aggregate Commitments” means the aggregate of the Commitments of all the Lenders. The
initial amount of the Aggregate Commitments in effect on the Closing Date is ONE BILLION TWO
HUNDRED FIFTY MILLION DOLLARS ($1,250,000,000).

     “Agreement” means this Spring Maturity Credit Agreement.

     “Annual Financial Statements” means the balance sheet of the Borrower as of the end of
the fiscal year ended September 30, 2005, and the related statements of income and cash flows for
such fiscal year.

     “Applicable Percentage” means with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s
Commitment at such time; provided that if the commitment of each Lender to make Loans has been
terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is

 

 

set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

     “Applicable
Rate” means, for any day, the following percentages per annum based upon the S&P
Debt Rating and the Moody’s Debt Rating then in effect:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pricing Tier	 	S&P Debt Rating	 	Moody’s Debt Rating	 	LIBOR Rate Loans	 	Base Rate Loans	 	Commitment Fee
	1

	 	AAA
	 	Aaa
	 	 	0.12	%	 	 	0.00	%	 	 	0.08	%
	2

	 	AAA but on

CreditWatch
	 	Aaa but on Watchlist
	 	 	0.20	%	 	 	0.00	%	 	 	0.10	%
	3

	 	AA+
	 	Aal
	 	 	0.35	%	 	 	0.00	%	 	 	0.20	%
	4

	 	AA
	 	Aa2
	 	 	0.35	%	 	 	0.00	%	 	 	0.20	%
	5

	 	AA-
	 	Aa3
	 	 	0.45	%	 	 	0.00	%	 	 	0.30	%

The Applicable Rate shall be determined by the Administrative Agent based on the lower of
the S&P Debt Rating and Moody’s Debt Rating then in effect. Each change in the Applicable Rate
shall be effective on and as of the date of such change and shall be applicable to all existing
Loans and to any new Loans made on and after the date thereof.

Notwithstanding
the foregoing, at any time that either the Moody’s Debt Rating
is lower than Aa3 or
the S&P Debt Rating is lower than AA-, the Applicable Rate shall be increased to (a) with respect
to the LIBOR Rate Loans, two and one-half percent (2.50%), (b) with respect to Base Rate Loans,
one-half of one percent (0.50%), and (c) with respect to the Commitment Fee, one-half of one
percent (0.50%).

     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.

     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is required by
Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of
Exhibit 10.07 or any other form approved by the Administrative Agent and the Borrower.

     “Availability Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments
pursuant to Section 2.04, and (c) the date of termination of the commitment of each Lender
to make Loans pursuant to Section 8.02.

     “Bank of America” means Bank of America, N.A. and its successors.

     “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the
Federal Funds Rate plus one-half of one percent (0.5%) and (b) the rate of interest in effect for
such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime
rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs
and desired return, general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced rate. Any change in
the “prime rate” announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.

     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.

2

 

     “Borrower” has the meaning specified in the introductory paragraph hereto.

     “Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and,
in the case of LIBOR Rate Loans, having the same Interest Period, made by each of the Lenders
pursuant to Section 2.01.

     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agent’s Office is located and, if such day relates to any LIBOR Rate Loan,
means any such day on which dealings in Dollar deposits are conducted by and between banks in the
LIBOR market.

     “Businesses” means, at any time, a collective reference to the businesses operated by
the Borrower at such time.

     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any guideline or directive
by any Governmental Authority.

     “Closing Date” means the date hereof.

     “Commitment” means, as to each Lender, its obligation to make Loans to the Borrower
pursuant to Section 2.01 in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as
such amount may be adjusted from time to time in accordance with this Agreement.

     “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.

     “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.
“Controlling” and “Controlled” have meanings
correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to
be Controlled by another Person if such other Person possesses, directly or indirectly, power to
vote five percent (5%) or more of the securities having ordinary voting power for the election of
directors, managing general partners or the equivalent.

     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

     “Default” means any event or condition that constitutes an Event of Default or that,
with the giving of any notice, the passage of time, or both, would be an Event of Default.

     “Default Rate” means (a) with respect to any Loan, the interest rate (including any
Applicable Rate and any applicable Liquidity Premium) otherwise applicable to such Loan plus two
percent (2%) per annum and (b) with respect to any other Obligation, an interest rate equal to the
sum of (i) the Base Rate

3

 

plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) two
percent (2%) per annum, in each case to the fullest extent permitted by applicable Laws.

     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Loans required to be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within one (1) Business Day of
the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.

     “Dollar”
and “$” mean lawful money of the United States.

     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative
Agent and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include (i) the Borrower or any of the Borrower’s
Affiliates or (ii) without the consent of the Borrower, any Person that is primarily in the
business of producing or transmitting electricity.

     “Environmental Laws” means to the extent relating to pollution and the protection of
the environment or the release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public sewer systems: any
and all applicable federal, state, local and foreign statutes, laws, regulations, ordinances, rules
or judgments; any and all applicable administrative orders, decrees, permits, concessions, grants,
franchises, licenses or agreements made with or issued by any governmental authority; and any and
all applicable governmental restrictions.

     “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.

     “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
Internal Revenue Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Internal Revenue Code, is treated as a single employer under Section 414 of the Internal Revenue
Code.

     “ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001 (a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an

4

 

event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

     “Event of Default” has the meaning specified in Section 8.01.

     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) 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 or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than
an assignee pursuant to a request by the Borrower under Section 10.13), any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s
failure or inability (other than as a result of a Change in Law occurring after such Foreign Lender
becomes a party hereto) to comply with Section 3.01(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 assignment), to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 3.01 (a).

     “Facilities” means, at any time, a collective reference to the facilities and real properties
owned, leased or operated by the Borrower.

     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of one-hundredth of
one percent (1/100 of 1%)) charged to Bank of America on such day on such transactions as
determined by the Administrative Agent.

     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

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

     “Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.

     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board, including, without limitation, Financial Accounting Standards Board Statement No.
71, Accounting for the Effects of Certain Types of Regulation, consistently applied and as in
effect from time to time.

5

 

     “Governmental Authority” means the government of the United States or any other
nation, or of 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 (including any supranational bodies such as the European Union or the European Central
Bank).

     “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.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitees” has the meaning specified in Section 10.04(b).

     “Interest Payment Date” means (a) as to any LIBOR Rate Loan, the last day of each
Interest Period applicable to such Loan and the Maturity Date; provided, however, that if
any Interest Period for a LIBOR Rate Loan exceeds one month, the respective dates that fall every
month after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as
to any Base Rate Loan, the last Business Day of each calendar month and the Maturity Date.

     “Interest Period” means, as to each LIBOR Rate Loan, the period commencing on the date
such LIBOR Rate Loan is disbursed or converted to or continued as a LIBOR Rate Loan and ending on
the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice;
provided that:

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

     (ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and

     (iii) no Interest Period shall extend beyond the Maturity Date.

     “Interim Financial Statements” means the balance sheet of the Borrower as of the end
of the fiscal quarter ended December 31, 2005, and the related statements of income and cash flows
for such fiscal year.

     “Internal Revenue Code” means the Internal Revenue Code of 1986.

     “IRS” means the
United States Internal Revenue Service.

     “Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and binding administrative or judicial
precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable binding administrative orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental Authority.

6

 

     “Lender” means each of Bank of America and the other Persons identified as a “Lender”
on the signature pages hereto and its successors and assigns and, as the context requires.

     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrower and the Administrative Agent.

     “LIBOR
Base Rate” means, for any Interest Period with respect to a
LIBOR Rate Loan,
the rate per annum equal to the British Bankers Association LIBOR
Rate (“BBA LIBOR”), as published
by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated
by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery
on the first day of such Interest Period) with a term equivalent to such Interest Period. If such
rate is not available at such time for any reason, then the “LIBOR Rate” for such Interest Period
shall be the rate per annum determined by the Administrative Agent (and agreed to by the Borrower)
to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period
in same day funds in the approximate amount of the LIBOR Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period would be offered by
Bank of America’s London Branch to major banks in the LIBOR market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest
Period.

     “LIBOR Rate” means, for any Interest Period with respect to any LIBOR Rate Loan, a
rate per annum determined by the Administrative Agent to be equal to the quotient obtained by
dividing (a) the LIBOR Base Rate for such LIBOR Rate Loan for such Interest Period by (b) one (1)
minus the LIBOR Reserve Percentage for such LIBOR Rate Loan for such Interest Period.

     “LIBOR Rate Loan” means a Loan that bears interest at a rate based on the LIBOR Rate.

     “LIBOR Reserve Percentage” means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, carried out to five (5) decimal places) in effect on such day,
whether or not applicable to any Lender, under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to eurocurrency funding (currently referred to as
“eurocurrency liabilities”). The LIBOR Rate for each outstanding LIBOR Rate Loan shall be adjusted
automatically as of the effective date of any change in the LIBOR Reserve Percentage.

     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

     “Liquidity Premium” means, for any day, the following percentages per annum based upon
the Notice Period and the principal amount of any Borrowing, any conversion of Loans from one Type
to the other and any continuation of LIBOR Rate Loans:

7

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Size of Borrowing, Conversion or Continuation
	 	 	 	 	 	 	3 $500 Million but less	 	3 $1 Billion but less than
	Notice Period	 	< $500 Million	 	than $l Billion	 	$1.25 Billion
	Same Day
	 	 	0.05	%	 	 	0.05	%	 	 	0.10	%
	One Day
	 	 	0.05	%	 	 	0.05	%	 	 	0.05	%
	Two or More Days
	 	 	0.00	%	 	 	0.00	%	 	 	0.00	%

The Liquidity Premium shall apply to each Borrowing, each conversion of Loans from one Type
to the other, and each continuation of LIBOR Rate Loans. As used herein, “Notice Period” means the
period equal to the number of Business Days notice that the Borrower provides to the Administrative
Agent pursuant to Section 2.02 prior to the date of the applicable Borrowing, conversion or
continuation (any such notice provided after 1:00 pm on any Business Day shall for purposes hereof
be deemed to have been provided on the immediately succeeding Business Day). If the Borrower fails
to give a timely notice requesting a conversion or continuation of an outstanding Loan and such
Loan is converted to, or continued as, a LIBOR Rate Loan with an Interest Period of one month
pursuant to Section 2.02, then, for purposes of the Liquidity Premium, the Borrower shall be deemed
to have given same day notice for such conversion or continuation.

     “Loan” has the meaning specified in Section 2.01.

     “Loan Documents” means this Agreement and each
Note.

     “Loan Notice” means a notice of (a) a Borrowing of Loans, (b) a conversion of Loans
from one Type to the other, or (c) a continuation of LIBOR Rate Loans, in each case pursuant to
Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit 2.02.

     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Borrower; (b) a material impairment of the ability of the
Borrower to perform its obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or enforceability against the
Borrower of any Loan Document. The parties agree that a downgrade of the S&P Debt Rating or the
Moody’s Debt Rating shall not itself constitute a Material Adverse Effect.

     “Maturity
Date” means May 16, 2007 (being the date 364 days following the
Closing Date).

     “Moody’s” means Moody’s Investors Service, Inc. and any
successor thereto.

     “Moody’s Debt Rating” means, at any time, the rating (if any) assigned to the
Borrower’s senior unsecured long term non-credit enhanced debt by Moody’s.

     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001 (a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.

     “Note” has the meaning specified in Section 2.09.

8

 

     “Nuclear Decommissioning Trust” means the Nuclear Decommissioning Trust established
by the Borrower to fund the future decommissioning of nuclear power facilities operated by the
Borrower.

     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, the Borrower arising under any Loan Document, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the commencement by or against
the Borrower of any proceeding under any Debtor Relief Laws naming the Borrower as the debtor in
such proceeding, regardless of whether such interest and fees are allowed claims in such
proceeding.

     “Other Taxes” means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

     “Participant” has the meaning specified in Section 10.06(d).

     “PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.

     “Permitted Liens” means any of the following:

     (a) Liens pursuant to any Loan Document;

     (b) the pledge by the Borrower of Net Power Proceeds (as defined under the
Power Resolution) to secure bonds, notes and other evidences of indebtedness issued under the
Power Resolution;

     (c) Liens existing on the date hereof and listed on Schedule 7.01;

     (d)
Liens for taxes (other than Liens imposed under ERISA), assessments or governmental
charges or levies not yet due or which are being contested in good
faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on
the books of the applicable Person in accordance with GAAP;

     (e) Liens imposed under Law, including statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics, materialmen and suppliers, and Liens imposed pursuant
to customary reservations or retentions of title arising in the ordinary course of business,
provided that such Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the same or are being
contested in good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established;

9

 

     (f)
pledges or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance, Pension Plan, Nuclear
Decommissioning Trust and other social
security legislation, other than any Lien imposed by ERISA;

     (g) deposits to secure the performance of bids, trade contracts and leases (other
than indebtedness), statutory obligations, surety bonds (other than bonds related to judgments
or litigation), performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

     (h) easements, rights-of-way, restrictions, licenses, permits and other similar encumbrances
affecting real property which, in the aggregate, do not materially interfere with the ordinary
conduct of the Borrower’s power program;

     (i) Liens securing judgments for the payment of money (or appeal or other surety bonds
relating to such judgments) not in excess of the Threshold Amount (except to the extent covered by
independent third-party insurance as to which the insurer has acknowledged in writing its
obligation to cover), unless any such judgment remains undischarged for a period of more than
thirty consecutive days during which execution is not effectively stayed;

     (j) Liens securing Indebtedness incurred to provide funds for the construction, acquisition,
enlargement, improvement, replacement, operation and maintenance of the Borrower’s power system;
provided that (i) such Liens do not at any time encumber any Property other than (A) the
Property financed by such indebtedness, (B) supporting and other related facilities, including
without limitation, facilities that are shared or used in common by multiple units or facilities
and that are necessary for or otherwise used in the operation of the Property being financed and
(C) other Property to the extent such Liens would otherwise be Permitted Liens, (ii) the
indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of
the Property being acquired on the date of acquisition and (iii) such Liens attach to such
Property concurrently with or within one year after (A) the later of the completion of such
construction or commencement of full operation of such Property or (B) ninety (90) days from the
acquisition thereof, as applicable;

     (k) leases, subleases, licenses or easements involving real or personal property, whether or
not the economic equivalent of a sale, where the Borrower obtains a sublease, service contract or
other arrangements giving the Borrower a right to the output or use of related Property which is
the subject of such lease, sublease, license or easement
(“Lease Transactions”), and Liens granted
in such leaseholds, subleaseholds, licenses or easements in connection with such Lease
Transactions;

     (1) leases or subleases granted to others not interfering in any material respect with the
business of the Borrower;

     (m) any interest of title of a lessor under, and Liens arising from UCC financing statements
(or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases
permitted by this Agreement;

     (n) Liens deemed to exist in connection with investments in repurchase agreements;

     (o) normal and customary rights of setoff upon deposits of cash in favor of banks or other
depository institutions;

10

 

     (p) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial
Code on items in the course of collection;

     (q) Liens of sellers of goods to the Borrower arising under Article 2 of the Uniform
Commercial Code or similar provisions of applicable law in the ordinary course of business,
covering only the goods sold and securing only the unpaid purchase price for such goods and
related expenses;

     (r) Liens existing on Property at the time of the acquisition thereof by the Borrower,
provided that such Liens are not created in contemplation of such acquisition; and

     (s) any renewals or extensions of any Liens permitted under (b), (c), (j), or (1)
above, provided that (i) any renewal or extension is limited to the Property
subject to such Lien, (ii) the amount secured or benefited thereby is not increased, (iii)
the direct or any contingent obligor with respect to the Lien is not changed and (iv) any
renewal or extension of any indebtedness secured or benefited thereby is permitted by
Section 7.02.

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

     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is subject to Section
412 of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate.

     “Power Resolution” means the Basic Tennessee Valley Authority Power Bond Resolution,
as amended from time to time.

     “Property” means any interest of any kind in any property or asset, whether real,
personal or mixed, or tangible or intangible.

     “Register” has the meaning specified in Section 10.06(c).

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

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the thirty-day notice period has been waived.

     “Required Lenders” means, at any time, Lenders holding in the aggregate more than 50%
of (a) the unfunded Commitments and the outstanding Loans and participations therein or (b) if the
Commitments have been terminated, the outstanding Loans and participations therein. The unfunded
Commitments of, and the outstanding Loans held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.

     “Responsible Officer” means the Chief Financial Officer, the Treasurer, the Senior
Manager, Finance, or the Senior Manager, Cash Management, of the Borrower. Any document delivered
hereunder that is signed by a Responsible Officer shall be conclusively presumed to have been
authorized by all necessary action on the part of the Borrower and such Responsible Officer shall
be conclusively presumed to have acted on behalf of the Borrower.

11

 

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

     “S&P Debt Rating” means, at any time, the rating (if any) assigned to the Borrower’s
senior unsecured long term non-credit enhanced debt by S&P.

     “SEC” means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.

     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of Voting Stock is at
the time beneficially owned, directly, or indirectly through one or more intermediaries, or both,
by such Person.

     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are subject to the terms
and conditions of, or governed by, any form of master agreement published by the International
Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or
any other master agreement (any such master agreement, together with any related schedules, a
“Master Agreement”), including any such obligations or liabilities under any Master Agreement.

     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).

     “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority (other than
Other Taxes), including any interest, additions to tax or penalties applicable thereto.

     “Threshold Amount” means $1 billion.

     “Treasury Management Agreement” means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled disbursement,
lockbox, account reconciliation and reporting and trade finance services.

     “TVA Act” means the Tennessee Valley Authority Act of 1933, as amended.

     “Type” means, with respect to any Loan, its character as a Base Rate Loan or a LIBOR
Rate Loan.

12

 

     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding that Pension Plan pursuant to
Section 412 of the Internal Revenue Code for the applicable plan year.

     “United States” and “U.S.” mean the United States of America.

     “Voting Stock” means, with respect to any Person, capital stock or other ownership
and equity interests issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even though the right so to vote has been suspended by the happening of
such a contingency.

1.02 Other Interpretive Provisions.

     With reference to this Agreement and each other Loan Document, unless otherwise specified
herein or in such other Loan Document:

     (a)
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” shall be deemed to be followed by the phrase “without
limitation.” The word “will”shall be construed to have the same meaning and effect
as the word “shall.” Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document 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 or in any other Loan Document),(ii) any reference herein to
any Person shall be construed to include such Person’s
successors and assigns, (iii) the
words “herein,” “hereof” and “hereunder,” and words of similar
import when used in any Loan Document, shall be construed to refer to such Loan Document in
its entirety and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such
references appear, (v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending replacing or interpreting such law and any reference to
any law or regulation shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time, and (vi) 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.

     (b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through”
means “to and including.”

     (c)
Section headings herein and in the other Loan Documents are included for convenience
of reference only and shall not affect the interpretation of this
Agreement or any other Loan
Document.

13

 

1.03 Accounting Terms.

     (a) Generally. Except as otherwise specifically provided herein, all accounting
terms not specifically or completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a
consistent basis, as in effect from time to time, applied in a manner consistent with that used in
preparing the Annual Financial Statements.

     (b) Changes in GAAP. If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or
the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower
shall negotiate in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to be computed
in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations
of such ratio or requirement made before and after giving effect to such change in GAAP.

1.04 Times of Day.

     Unless otherwise specified, all references herein to times of day shall be references to
Eastern time (daylight or standard, as then applicable).

ARTICLE II

THE COMMITMENTS AND LOANS

2.01 Loans.

     Subject to the terms and conditions set forth herein, each Lender severally agrees to
make loans (each such loan, a “Loan”) to the Borrower in Dollars from time to time on any
Business Day during the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of such Lender’s Commitment; provided,  however, that after
giving effect to any Borrowing of Loans, the outstanding principal amount of Loans shall not
exceed the Aggregate Commitments. Within the limits of each Lender’s Commitment, and subject to
the other terms and conditions hereof, the Borrower may borrow under
this Section 2.01,
prepay under Section 2.03, and reborrow under this Section 2.01. Loans may be Base
Rate Loans or LIBOR Rate Loans, as further provided herein.

2.02 Borrowings, Conversions and Continuations of Loans.

     (a) Each Borrowing, each conversion of Loans from one Type to the other, and each
continuation of LIBOR Rate Loans shall be made upon the Borrower’s irrevocable notice to the
Administrative Agent, which may be given by telephone by an individual identifying himself or
herself as a Responsible Officer. Each such notice must be received by the Administrative Agent
not later than 1:00 p.m. on the date of the requested Borrowing, conversion or continuation. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed
and signed by a Responsible Officer. Each Borrowing of, conversion to or continuation of Loans
shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof.
Each Loan Notice (whether telephonic or written) shall

14

 

specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to
the other, or a continuation of LIBOR Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be
borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify a Type of a Loan in a
Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Loan shall be made as, converted to, or continued as, a LIBOR
Rate Loan with an Interest Period of one month. Any such automatic conversion to a LIBOR Rate Loan
with an Interest Period of one month shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable LIBOR Rate Loan. If the Borrower requests a
Borrowing of, conversion to, or continuation of LIBOR Rate Loans in any Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

     (b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify
each Lender of the amount of its Applicable Percentage of the applicable Loans, and if no timely
notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall
notify each Lender of the details of any automatic conversion to a LIBOR Rate Loan with an Interest
Period of one month as described in the preceding subsection. In the case of a Borrowing, each
Lender shall make the amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent’s Office not later than 3:00 p.m. on the Business Day
specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 4.02, the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent either by (i) crediting the account
of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer
of such funds, in each case in accordance with instructions provided to (and reasonably acceptable
to) the Administrative Agent by the Borrower.

     (c) Except
as otherwise provided herein, a LIBOR Rate Loan may be continued or converted only
on the last day of the Interest Period for such LIBOR Rate Loan. During the existence of a
Default, no Loans may be requested as, converted to or continued as LIBOR Rate Loans without the
consent of the Required Lenders, and the Required Lenders may demand that any or all of the then
outstanding LIBOR Rate Loans be converted immediately to Base Rate Loans.

     (d) The
Administrative Agent shall promptly notify the Borrower and the Lenders of the interest
rate applicable to any Interest Period for LIBOR Rate Loans upon determination of such
interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such change.

     (e) After
giving effect to all Borrowings, all conversions of Loans from one Type to the other,
and all continuations of Loans as the same Type, there shall not be more than eight (8)
Interest Periods in effect with respect to Loans (for purposes hereof, LIBOR Rate Loans with
separate or different Interest Periods will be considered as separate Loans even if their Interest
Periods expire on the same date).

2.03 Prepayments.

     (a) Voluntary Prepayments. The Borrower may, upon notice from the Borrower to the
Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 1:00 p.m. (A) one (1) Business Day prior to the date of
prepayment; and (ii) any such prepayment shall be in a principal amount of $1,000,000 or a whole
multiple of $1,000,000 in excess

15

 

thereof (or, if less, the entire principal amount thereof then outstanding). Each such notice
shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of
the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Any prepayment of a LIBOR Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together with any additional
amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the
Loans of the Lenders in accordance with their respective Applicable Percentages.

     (b) Mandatory Prepayments of Loans. If for any reason the outstanding principal
amount of the Loans at any time exceeds the Aggregate Commitments then in effect, the Borrower
shall immediately prepay Loans in an aggregate amount equal to such excess. Prepayments shall be
applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.03(b) and Section 2.04(a)(ii)
shall be subject to Section 3.05, but otherwise without premium or penalty, and shall be
accompanied by interest on the principal amount prepaid through the date of prepayment.

2.04
Termination or Reduction of Aggregate Commitments; Availability.

     (a) Termination or Reduction of Aggregate Commitments.

     (i) Optional. The Borrower may, upon written notice to the Administrative Agent,
terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate
Commitments to an amount not less than the aggregate outstanding principal amount of Loans;
provided that (i) any such notice shall be received by the Administrative Agent not
later than 12:00 noon five (5) Business Days prior to the date of termination or reduction,
and (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof. The Administrative Agent will promptly
notify the Lenders of any such notice of termination or reduction of the Aggregate
Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment
of each Lender according to its Applicable Percentage. All fees accrued with respect thereto
until the effective date of any termination or reduction of the Aggregate Commitments shall
be paid on the effective date of such termination or reduction.

     (ii) Mandatory. If at any time the Moody’s Debt Rating is reduced to lower
than Aa3 and the S&P Debt Rating is reduced to lower than AA-, the Required Lenders
may, in their sole discretion, upon written notice to the Borrower
(the “Commitment
Termination Notice”), terminate the Aggregate Commitments and require the prepayment of the
Loans and other Obligations in full on the date ninety (90) days after the effective date
of such reduction in the Moody’s Debt Rating and S&P Debt Rating.

     (b) Availability. Notwithstanding any provision in this Agreement or any other
Loan Document to the contrary, if at any time either the Moody’s Debt Rating is reduced to lower
than Aa3 or the S&P Debt Rating is reduced to lower than AA-, then the Borrower shall not be
permitted to request, and the Lenders shall not be obligated to make, any new Loans (although the
Borrower shall be permitted to continue and convert existing Loans); provided that so long
as the Required Lenders have not delivered the Termination Notice to the Borrower, the Borrower
shall be permitted to request, and the Lenders shall be obligated to make, new Loans upon the
occurrence of one of the following: (i) the Moody’s Debt Rating is raised to Aa3 or higher
and the S&P Debt Rating is raised to AA- or higher
or (ii) the Required Lenders consent to
the Borrower making new Loan borrowings.

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2.05 Repayment of Loans.

     The Borrower shall repay to the Administrative Agent, for the account of the Lenders, on the
Maturity Date the aggregate principal amount of all Loans outstanding on such date.

2.06 Interest.

     (a) Subject to the provisions of subsection (b) below, (i) each LIBOR Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest Period at a rate per
annum equal to the sum of (A) the LIBOR Rate for such Interest Period plus (B) the
Applicable Rate plus (C) the applicable Liquidity Premium; and (ii) each Base Rate Loan
shall bear interest on the outstanding principal amount thereof from the applicable borrowing date
at a rate per annum equal to the sum of (A)the Base Rate plus
(B) the Applicable Rate plus
(C) the applicable Liquidity Premium.

     (b)
(i) If any amount payable by the Borrower under any Loan Document is not paid when
due (without regard to any applicable grace periods), whether at stated maturity,
by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

     (ii) Upon the request of the Required Lenders, while any Event of Default exists, the
Borrower shall pay interest on the principal amount of all outstanding Obligations
hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable Laws.

     (iii) Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment
Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall
be due and payable in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

2.07 Commitment Fee.

     The Borrower shall pay to the Administrative Agent, for the account of each Lender in
accordance with its Applicable Percentage, a commitment fee (the “Commitment Fee”) equal to
the product of the Applicable Rate times (ii) the actual daily amount by which the
Aggregate Commitments exceed the aggregate outstanding principal amount of the Loans. The
Commitment Fee shall accrue at all times during the Availability Period, including at any time
during which one or more of the conditions in Article IV is not met, and shall be due and
payable in arrears on the first Business Day of each calendar month, commencing with the first such
date to occur after the Closing Date, and on the Maturity Date. The Commitment Fee shall be
calculated monthly in arrears, and if there is any change in the Applicable Rate during any
calendar month, the actual daily amount shall be computed and multiplied by the Applicable Rate
separately for each period during such calendar month that such Applicable Rate was in effect.

17

 

2.08 Computation of Interest and Fees.

     All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of
America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall be made on the
basis of a 360-day year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on
each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that any Loan
that is repaid on the same day on which it is made shall, subject to
Section 2.10(a), bear
interest for one day.

2.09
Evidence of Debt.

     The Loans made by each Lender shall be evidenced by one or more accounts or records maintained
by such Lender and by the Administrative Agent in the ordinary course of business. Any failure to
so record or any error in doing so shall not, however, limit or otherwise affect the obligation of
the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a promissory note, which shall evidence such Lender’s Loans in addition to
such accounts or records. Each such promissory note shall be in the form of Exhibit 2.09 (a
“Note”). Each Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.

2.10 Payments Generally; Administrative Agent’s Clawback.

     (a) General. All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office. All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. Subject to the definition of “Interest
Period”, if any payment to be made by the Borrower shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.

     (b) (i) Funding by Lenders; Presumption by Administrative Agent.
Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative
Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with Section 2.02 and
may, in reliance upon such assumption, make available to the Borrower a corresponding amount.
In such event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and including the date
such amount is made available to the Borrower

18

 

to but excluding the date of payment to the Administrative Agent, at (A) in the case of a
payment to be made by such Lender, the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of such interest paid
by the Borrower for such period. If such Lender pays its share of the applicable Borrowing
to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan
included in such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such payment to
the Administrative Agent.

     (ii)
Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the 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 of the Lenders severally agrees
to repay to the Administrative Agent forthwith on demand the amount so distributed to such
Lender in immediately available funds 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 Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation.

     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as provided in the
foregoing provisions of this Article II, and such funds are not made available to the
Borrower by the Administrative Agent because the conditions to the applicable Loan set forth in
Article IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from such Lender) to such
Lender, without interest.

     (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Loan, to fund any such participation or to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be responsible for the failure
of any other Lender to so make its Loan, to purchase its participation or to make its payment under
Section 10.04(c).

     (e) Funding Source. Subject to Section 3.06(a), nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or
to constitute a representation by any Lender that it has obtained or will obtain the funds for any
Loan in any particular place or manner.

2.11 Sharing of Payments by Lenders.

     If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Loans made by it resulting in such
Lender’s receiving payment of a proportion of the aggregate amount of such Loans or participations
and accrued interest thereon greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such
fact, and (b) purchase

19

 

(for cash at face value) participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

     (i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and

     (ii) the provisions of this Section shall not be construed to apply to (x) any payment
made by the Borrower pursuant to and in accordance with the express terms of this Agreement
or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other than to the
Borrower (as to which the provisions of this Section shall apply).

     The Borrower consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any 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 Lender were a direct creditor of the Borrower in the amount
of such participation.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

     (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of
the Borrower hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if
the Borrower shall be required by applicable law to deduct any Indemnified Taxes or any 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 Administrative Agent or any Lender, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

     (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

     (c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) paid by the Administrative Agent or such Lender, as the case may be, 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. If the Administrative Agent or any Lender desires indemnification
under this Section 3.01(c), the Administrative Agent or such Lender, as the case may be,
shall notify the Borrower of the payment of the

20

 

applicable Indemnified Taxes or Other Taxes as promptly as is practicable, and in no event later
than one hundred twenty (120) days after the later of the date of such payment (or, if later, the
date the Administrative Agent or such Lender, as the case may be, is notified of its obligation to
make such payment by the applicable Governmental Authority). If the Administrative Agent or such
Lender, as the case may be, fails to prove such notice to the Borrower within one hundred twenty
(120) days after the date of such payment (or, if later, the date the Administrative Agent or such
Lender, as the case may be, is notified of its obligation to make such payment by the applicable
Governmental Authority), the Administrative Agent or such Lender, as the case may be, shall not be
entitled to indemnification under this Section 3.01(c) for such payment. Payment by the
Borrower pursuant to this Section 3.01(c) shall be made within thirty (30) days after the
date the Administrative Agent or such Lender, as the case may be, makes written demand therefore
(submitted through the Administrative Agent in the case of a demand by a Lender) which demand
shall be accompanied by a certificate describing in reasonable detail the amount of the payment
and the basis thereof.

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

     (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for
tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation
prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as
will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is
subject to backup withholding or
information reporting requirements.

     Without limiting the generality of the foregoing, in the event that the Borrower is resident
for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the request of the Borrower or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is applicable:

     (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a party,

     (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN, or

21

 

     (iv) any other form prescribed by applicable law as a basis for claiming exemption
from or a reduction in United States Federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by applicable law to permit the
Borrower to determine the withholding or deduction required to be made.

     (f) Treatment of Certain Refunds. If the Administrative Agent or any Lender has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to this Section, it
shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund), provided that
the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to its taxes that it
deems confidential) to the Borrower or any other Person.

3.02 Illegality.

     If any Lender determines that any Law has made it unlawful, or that any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to
make, maintain or fund LIBOR Rate Loans, or to determine or charge interest rates based upon the
LIBOR Rate, or any Governmental Authority has imposed material restrictions after the Closing Date
on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, any obligation of such Lender to make or continue LIBOR Rate Loans or to
convert Base Rate Loans to LIBOR Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), have the option to either prepay or, if applicable, convert
all LIBOR Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such LIBOR Rate Loans to such
day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount
so prepaid or converted.

3.03 Inability to Determine Rates.

     If the Required Lenders determine that for any reason in connection with any request for a
LIBOR Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the LIBOR market for the applicable amount and Interest Period of such LIBOR
Rate Loan, (b) adequate and reasonable means do not exist for determining the LIBOR Base Rate for
any requested Interest Period with respect to a proposed LIBOR Rate Loan, or (c) the LIBOR Base
Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the Administrative
Agent will promptly notify the Borrower and all Lenders. Thereafter, the obligation of the Lenders
to make or maintain LIBOR Rate Loans shall be suspended until the Administrative Agent revokes such
notice. Upon receipt of such notice, the Borrower may (a) revoke any pending request for a
Borrowing, conversion or continuation of LIBOR Rate Loans or (b) prepay any affected Loans,
including accrued interest. If the Borrower fails to

22

 

do (a) or (b) above, the Borrower’s request will be deemed to have converted into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

3.04 Increased Costs.

	 	(a)	 	Increased Costs Generally. If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
reflected in the LIBOR Rate);

     (ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any LIBOR Rate Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender); or

     (iii) impose on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or LIBOR Rate Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any LIBOR Rate Loan (or of maintaining its obligation to make any such
Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or any other amount) then, upon request of such Lender, 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) Capital Requirements. If any Lender determines that any Change in Law affecting
such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, 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, the Commitments of such Lender 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) Certificates for Reimbursement. Each Lender that desires compensation under
this Section 3.04 shall notify the Borrower of the occurrence of the event entitling such
Lender to compensation pursuant to this Section 3.04 as promptly as is practicable, and in
no event later than one hundred twenty (120) days after the date of the occurrence of such event.
Each Lender shall be entitled to compensation with respect to such event under this Section 3.04
only for compensation accruing as a result of such event during the period one hundred twenty (120)
days prior to the date such Lender provides notice to the Borrower pursuant to the foregoing
sentence. Payment by the Borrower pursuant to this Section 3.04 shall be made within thirty
(30) days from the date such Lender makes written demand therefore (submitted through the
Administrative Agent) which demand shall be accompanied by a certificate describing in reasonable
detail the basis and calculation thereof and certifying further that
the method used to calculate
such amount is fair and reasonable.

23

 

3.05 Compensation for Losses.

     Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the
Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss,
cost or expense incurred by it as a result of:

     (a)
any continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

     (b) any failure by the Borrower (for a reason other than the failure of such Lender
to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan
on the date or in the amount notified by the Borrower; or

     (c)
any assignment of a LIBOR Rate Loan on a day other than the last day of the Interest
Period therefor as a result of a request by the Borrower pursuant to Section 10.13
(other than as a result of a request by the Borrower to replace a Defaulting Lender);

including any loss or expense arising from the liquidation or reemployment of funds obtained by it
to maintain such Loan or from fees payable to terminate the deposits from which such funds were
obtained (but excluding lost profits). The Borrower shall also pay any customary administrative
fees charged by such Lender in connection with the foregoing.

     For purposes of calculating amounts payable by the Borrower to the Lenders under this
Section 3.05, each Lender shall be deemed to have funded each LIBOR Rate Loan made by it
at the LIBOR Base Rate used in determining the LIBOR Rate for such Loan by a matching deposit or
other borrowing in the LIBOR market for a comparable amount and for a comparable period, whether
or not such LIBOR Rate Loan was in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders.

     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or 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 3.01, or if
any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable
efforts to designate a different Lending Office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.01 or 3.04. as the case may be, in the future, or
eliminate the need for the notice pursuant to
Section 3.02, as applicable, and (ii) in each
case, 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) Replacement of Lenders. If any Lender requests compensation under Section
3.04, 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 3.01, the Borrower
may replace such Lender in accordance with Section 10.13.

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3.07 Survival.

     All of the Borrower’s obligations under this Article III shall survive termination of
the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO LOANS

4.01 Conditions to Closing.

     This Agreement shall be effective as of the Closing Date upon satisfaction of each of the
following conditions precedent:

     (a)
Loan Documents. Receipt by the Administrative Agent of executed counterparts of this
Agreement and the Notes, each properly executed by a Responsible
Officer and, in the case of
this Agreement, by each Lender.

     (b) Opinions of Counsel. Receipt by the Administrative Agent of favorable
opinions of legal counsel to the Borrower, addressed to the Administrative Agent and each
Lender, dated as of the Closing Date, and in form and substance satisfactory to the
Administrative Agent.

     (c) No Material Adverse Change. There shall not have occurred a material
adverse change since September 30, 2005 in the business, assets, liabilities (actual or
contingent), operations or condition (financial or otherwise) of the Borrower.

     (d) Resolutions, Etc. Receipt by the Administrative Agent of such
certificates of resolutions or other action, incumbency certificates and/or other
certificates of Responsible Officers of the Borrower as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this Agreement and the other
Loan Documents.

     (e) Closing Certificate. Receipt by the Administrative Agent of a certificate
signed by a Responsible Officer certifying that the conditions specified in Section
4.01(c) and (f) and Sections 4.02(a), (b) and (c) have been
satisfied.

     (f) Senior Unsecured Debt Rating. Receipt by the Administrative Agent of
evidence that the Borrower’s senior unsecured long term non-credit enhanced debt is rated AAA
(with a stable outlook) by S&P and Aaa (with a stable outlook) from Moody’s.

     (g) Fees. Receipt by the Administrative Agent and the Lenders of any fees
required to be paid on or before the Closing Date.

     (h) Attorney Costs. The Borrower shall have paid all reasonable fees, charges
and disbursements of counsel to the Administrative Agent to the extent invoiced prior to or
on the Closing Date, plus such additional amounts of such fees, charges and disbursements as
shall constitute its reasonable estimate of such fees, charges and disbursements incurred or
to be incurred by it through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Borrower and the Administrative
Agent).

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4.02 Conditions to all Loans.

     The obligation of each Lender to honor any Loan Notice is subject to the following conditions
precedent:

     (a) The representations and warranties of the Borrower contained in Article V
(other than Section 5.05(d)) or any other Loan Document, or which are contained in
any document furnished at any time under or in connection herewith or therewith, shall be
true and correct on and as of the date of such Loan, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they
shall be true and correct as of such earlier date.

     (b)
No Event of Default shall exist or would result from such proposed Loan or from the
application of the proceeds thereof.

     (c)
There shall not have been commenced against the Borrower an involuntary case under
any applicable Debtor Relief Law, now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of such Person or for any substantial part of its Property
or for the winding up or liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed.

     (d)
The Administrative Agent shall have received a Loan Notice in accordance with the
requirements hereof.

     Each Loan Notice submitted by the Borrower shall be deemed to be a representation and warranty
that the conditions specified in Sections 4.02(a), (b) and (c) have been satisfied
on and as of the date of the applicable Loan Notice.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

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

	5.01	 	Existence, Qualification and Power.

     The Borrower (a) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (i) own or use its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan Documents to which
it is a party, and (b) to the extent applicable to an agency of the United States, is duly
qualified and is licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease, use or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (a)(i) or (b), to the extent
that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention.

     The execution, delivery and performance by the Borrower of each Loan Document have been duly
authorized by all necessary action, and do not (a) conflict with or result in any breach or

26

 

contravention of, or the creation of any Lien under, or require any payment to be made under (i)
any Contractual Obligation to which the Borrower is a party or affecting the Borrower or any of
its Properties or (ii) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which the Borrower or its property is subject; or (b) violate any Law
(including, without limitation, the TVA Act and Regulation U or Regulation X issued by the FRB).

5.03 Governmental Authorization; Other Consents.

     No approval, consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, the Borrower of any Loan
Document other than those that have already been obtained and are in full force and effect.

5.04 Binding Effect.

     Each Loan Document has been duly executed and delivered by the Borrower. Each Loan Document
constitutes a legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms.

5.05
Financial Statements; No Material Adverse Effect.

     (a) The Annual Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein; (ii) fairly present the financial condition of the Borrower as of the date thereof and
their results of operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower
as of the date thereof, including liabilities for taxes, commitments and indebtedness.

     (b) The Interim Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein; (ii) fairly present the financial condition of the Borrower as of the date thereof and
their results of operations for the period covered thereby, subject, in the case of clauses (i) and
(ii), to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all
material indebtedness and other liabilities, direct or contingent, of the Borrower as of the date
thereof, including liabilities for taxes, material commitments and indebtedness.

     (c) The financial statements delivered pursuant to Section 6.01 (a) and (b) have been
prepared in accordance with GAAP (except as otherwise expressly noted therein or as may be permitted
under Section 6.01 (a) and (b)) and present fairly (on the basis disclosed in the footnotes
to such financial statements) the financial condition, results of operations and cash flows of the
Borrower as of the dates thereof and for the periods covered thereby.

     (d) Since
the date of the Annual Financial Statements, there has been no event or circumstance
that has had or could reasonably be expected to have a Material Adverse Effect.

5.06 Litigation.

     There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, by or against the Borrower or against any of
its or the United

27

 

States’ properties or revenues that (a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or (b) are reasonably likely
to be determined adversely and, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

	5.07	 	No Default.

     No Default has occurred and is continuing.

	5.08	 	Ownership of Property; Liens.

     The Borrower or the United States has good record and marketable title in fee simple
to, valid leasehold interests in, or other right to use, all real property used in the ordinary
conduct of its business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Property of the Borrower
is subject to no Liens, other than Permitted Liens.

5.09 Environmental Compliance.

     Except as could not reasonably be expected to have a Material Adverse Effect:

     (a) Each of the Facilities and all operations at the Facilities are in compliance with
all applicable Environmental Laws, and there is no violation of any Environmental Law with
respect to the Facilities or the Businesses, and there are no conditions relating to the
Facilities or the Businesses that could give rise to liability under any applicable
Environmental Laws.

     (b) The Borrower has not received any written or verbal notice from any
Governmental Authority of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any of the
Facilities or the Businesses, nor does any Responsible Officer have knowledge or reason to
believe that any such notice will be received or is being threatened.

5.10 Payment of Governmental Charges.

     The Borrower has paid all federal, state and local material taxes, assessments, fees and
other governmental charges of which it is aware that have been levied or imposed upon it or its
properties, income or assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which adequate reserves have
been provided in accordance with GAAP.

5.11 ERISA Compliance.

     If the Borrower or any ERISA Affiliate is subject to ERISA, then:

     (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Internal Revenue Code and other federal or state Laws. Each Plan that is intended to
qualify under Section 401 (a) of the Internal Revenue Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being processed by the IRS
with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would
prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Internal Revenue Code, and no
application for a funding waiver or an

28

 

extension of any amortization period pursuant to Section 412 of the Internal Revenue Code has been
made with respect to any Plan.

     (b) There
are no pending or, to the best knowledge of the Borrower, threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan that could
be reasonably be expected to have a Material Adverse Effect. Neither the Borrower, any ERISA
Affiliate nor any fiduciary of any Plan has engaged in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Internal Revenue Code that has resulted or could reasonably be expected
to result in a Material Adverse Effect.

     (c) (i) No
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has an Unfunded Pension Liability that could reasonably be expected to result in a Material
Adverse Effect; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, a liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA) that could reasonably be expected to
result in a Material Adverse Effect; (iv) neither the Borrower nor any ERISA Affiliate has incurred,
or reasonably expects to incur, a liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of
ERISA with respect to a Multiemployer Plan that could reasonably be expected to result in a Material
Adverse Effect; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.

5.12 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.

     (a) The Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock. Following the application of the proceeds of each Borrowing, not more than 25% of the
value of the assets of the Borrower subject to the provisions of Section 7.01 or Section
7.03 or subject to any restriction contained in any agreement or instrument between the Borrower
and any Lender or any Affiliate of any Lender relating to indebtedness and within the scope of
Section 8.01(e) will be margin stock.

     (b) Neither
the Borrower nor any Person Controlling the Borrower (i) is a “holding company,” or
a “subsidiary company” of a “holding company,” or
an “affiliate” of a “holding company” or of a
“subsidiary company” of a “holding company,” within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an “investment company”
under the Investment Company Act of 1940.

5.13 Disclosure.

     No written report, financial statement, certificate or other information furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or
under any other Loan Document (in each case, 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, taken as a whole in the light of the circumstances under which they
were made, not misleading; provided that (a) 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, (b) nothing in this Agreement shall be
deemed to require the Borrower to provide the Administrative Agent or any Lender projected
financial information, except to the extent such projected financial information

29

 

might otherwise be included in Borrower’s annual and interim financial reports and (c) if such
misstatement of fact or omission of a fact relates to a fact that could not reasonably be expected
to have a Material Adverse Effect, then the Borrower can cure such misstatement or omission by
providing modified or supplemented information.

5.14 Compliance with Laws.

     The Borrower is in compliance with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its Property, except in such instances in which (a)
such requirement of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.

ARTICLE VI

AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, the Borrower shall:

6.01 Financial Statements.

     Deliver to the Administrative Agent:

     (a)
as soon as available, but in any event within ninety (90) days after the end of each
fiscal year of the Borrower, a balance sheet of the Borrower as of the end of such fiscal
year, and the related statements of income and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP except as expressly noted therein, audited and
accompanied by a report and opinion of PricewaterhouseCoopers or another independent
certified public accountant of nationally recognized standing reasonably acceptable to the
Administrative Agent, which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of such audit;
and

     (b) as soon as available, but in any event within forty-five (45) days after the end
of each of the first three fiscal quarters of each fiscal year of the Borrower, a balance
sheet of the Borrower as of the end of such fiscal quarter, and the related statements of
income and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal
year then ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by a Responsible Officer as
fairly presenting the financial condition, results of operations and cash flows of the
Borrower in accordance with GAAP except as expressly noted therein, subject only to normal
year-end audit adjustments and the absence of footnotes.

6.02
Certificates; Other Information.

     Deliver to the
Administrative Agent:

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     (a) promptly after delivery thereof to Congress, a copy of each quarterly
operational report to Congress;

     (b) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of the Borrower pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be furnished to
the Lenders pursuant to Section 6.01 or any other clause of this Section
6.02;

     (c) promptly, and in any event within ten (10) Business Days after receipt thereof
by the Borrower, copies of each notice or other correspondence received from the SEC
(or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation
or possible investigation or other inquiry by such agency regarding financial or other
operational results of the Borrower;

     (d) promptly (and in any event, within five (5) Business Days), (i) notice of
any announcement by Moody’s of any change in the Moody’s Debt Rating or of any suspension
or withdrawal of its rating of the Borrower’s senior unsecured long-term non-credit enhanced
debt and (ii) notice of any announcement by S&P of any change in the S&P Debt Rating or of
any suspension or withdrawal of its rating of the Borrower’s senior unsecured long-term
non-credit enhanced debt; and

     (e)
promptly, such additional information regarding the business or financial affairs of
the Borrower, or compliance with the terms of the Loan Documents, as
the Administrative Agent
or any Lender (through the Administrative Agent) may from time to
time reasonably request.

     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(b) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower posts such documents, or provides a link
thereto on the Borrower’s website on the Internet at the website address listed on Schedule
10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent);
provided that: (i) the Borrower shall deliver paper copies of such documents to the
Administrative Agent upon request to the Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent and (ii) the
Borrower shall notify the Administrative Agent (by telecopier or electronic mail) of the posting
of any such documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to above, and in any event
shall have no responsibility to monitor compliance by the Borrower with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

6.03 Notices.

     (a) Promptly (and in any event, within five (5) Business Days) after obtaining
knowledge thereof, notify the Administrative Agent of the occurrence of any Default.

     (b) Promptly (and in any event, within five (5) Business Days) after obtaining
knowledge thereof, notify the Administrative Agent of any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

31

 

     (c) Promptly (and in any event, within ten (10) Business Days) notify the Administrative
Agent of any material change in accounting policies or financial reporting practices by the
Borrower.

     Each notice pursuant to this Section 6.03(a) through (c) shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence referred to therein and
stating what action the Borrower has taken and proposes to take with respect thereto. Each notice
pursuant to Section 6.03(a) shall describe with particularity any and all provisions of
this Agreement and any other Loan Document that have been breached.

6.04 Payment of Obligations.

     Pay and discharge, as the same shall become due and payable, all its applicable federal,
state and local material taxes, assessments, fees and other governmental charges upon it or its
properties, income or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP are being
maintained by the Borrower.

6.05 Preservation of Existence, Etc.

     (a) Preserve, renew and maintain in full force and effect its legal existence.

     (b) Take all reasonable action to maintain all rights, privileges, permits, licenses
and franchises necessary or desirable in the normal conduct of its business, except to the extent
that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.06 Maintenance of Properties.

     Maintain, preserve and protect all of its material properties and equipment necessary in the
judgment of the Borrower in the operation of its business in good working order and condition,
ordinary wear and tear excepted.

6.07 Maintenance of Insurance.

     (a) At
any time the Moody’s Debt Rating is Baal or lower and the S&P Debt Rating is BBB+ or
lower, maintain in full force and effect insurance (including worker’s compensation insurance,
liability insurance, casualty insurance and business interruption insurance) with financially sound
and reputable insurance companies, in such amounts, with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning similar properties in
localities where the Borrower operates.

     (b) At any time the Moody’s Debt Rating is higher than Baal or the S&P Debt Rating is
higher than BBB+, the Borrower shall maintain in full force and effect nuclear liability and
property insurance in accordance with applicable Law.

6.08 Compliance with Laws.

     Comply with the requirements of all Laws (including, without limitation, the TVA Act)
and all orders, writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which (a) such requirement of Law or order, writ, injunction or decree
is being contested in good faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

32

 

6.09 Books and Records.

     (a) Maintain proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied, except as otherwise expressly noted therein or in any
the Annual Financial Statements, the Interim Financial Statements and the annual and quarterly
financial statements delivered pursuant to Section 6.01, shall be made of all financial
transactions and matters involving the assets and business of the Borrower.

     (b) Maintain such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over the Borrower.

6.10 Inspection Rights.

     To the extent consistent with the Borrower’s safety and security procedures (which procedures
will be applied to the Administrative Agent and each Lender in a manner consistent with the
application to other Persons not employed by the Borrower), permit representatives and independent
contractors of the Administrative Agent and each Lender, at the expense of the Administrative Agent
or such Lender, as the case may be, to visit and inspect any of the Borrower’s properties, to
examine its corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, at such reasonable times during normal business hours not more than
once per year, upon reasonable advance notice to the Borrower; provided, however, that when
an Event of Default exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours upon reasonable advance notice to the Borrower.

6.11 Use of Proceeds.

     Use the proceeds of the Loans for general corporate purposes, provided that (i) $200
million of the Aggregate Commitments shall be reserved solely to provide funds to the Nuclear
Decommissioning Trust and (ii) in no event shall the proceeds of the Loans be used in
contravention of any Law.

ARTICLE VII

NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, the Borrower shall not:

7.01 Liens.

     Create, incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the Permitted Liens.

7.02 Indebtedness.

     Create, incur, assume or suffer to exist any indebtedness or similar financial obligation,
except for (a) indebtedness permitted under the TVA Act and (b) indebtedness specifically
permitted to be incurred by the Borrower under any other applicable federal Law.

33

 

7.03 Fundamental Changes; Subsidiaries.

     (a) Merge, dissolve, liquidate, consolidate with or into another Person, or sell, lease or
otherwise transfer (whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of any Person.

     (b) Form or acquire any Subsidiary.

7.04 Change in Nature of Business.

     Engage in any material line of business substantially different from those lines of business
conducted by the Borrower on the Closing Date or any business substantially related or incidental
thereto.

7.05 Use of Proceeds.

     Use the proceeds of any Loan, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U
of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default.

     Any of the following shall constitute an Event of Default:

     (a) Non-Payment. The Borrower fails to pay (i) when and as required to be
paid herein, any amount of principal of any Loan, including any required prepayment thereof,
or (ii) within three days after the same becomes due, any interest on any Loan, or any fee
due hereunder, or (iii) within five days after the same becomes due, any other amount
payable hereunder or under any other Loan Document; or

     (b) Specific Covenants.

     (i) The Borrower fails to perform or observe any term, covenant or agreement
contained in any of Section 6.10 and such failure continues for five (5)
Business Days after notice thereof is provided to the Borrower by the
Administrative Agent; or

     (ii) The Borrower fails to perform or observe any term, covenant or agreement
contained in any of Section 6.02(d), 6.03(a), 6.03(b), 6.05(a), 6.11 or
Article VII; or

     (c) Other Defaults. The Borrower fails to perform or observe any other covenant
or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document
on its part to be performed or observed and such failure continues for thirty (30) days; or

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     (d) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith shall be incorrect or
misleading when made or deemed made; or

     (e) Cross-Acceleration to Power Resolution.

     (i) The occurrence of an “Event of Default” under, and as defined in, the
Power Resolution with respect to the payment of principal or interest on bonds, notes and
other evidences of indebtedness issued under the Power Resolution that constitute more
than five percent (5%) of the aggregate principal amount of all bonds, notes and other
evidences of indebtedness issued under the Power Resolution; or

     (ii) The occurrence of any other “Event of Default” under, and as defined in, the
Power Resolution, the result of which is the acceleration of bonds, notes and other
evidences of indebtedness issued under the Power Resolution that constitute the greater of
(A) $1 billion or (B) more than five percent (5%) of the aggregate principal amount of all
bonds, notes and other evidences of indebtedness issued under the Power Resolution; or

     (f)
Insolvency Proceedings, Etc. The Borrower institutes or consents to the institution of
any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for sixty calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for sixty calendar days,
or an order for relief is entered in any such proceeding; or

     (g)
Inability to Pay Debts; Attachment. (i) The Borrower becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied against all or any
material part of the property of any such Person and is not released, vacated or fully bonded
within thirty days after its issue or levy; or

     (h) Judgments. There is entered against the Borrower (i) one or more final judgments
or orders for the payment of money in an aggregate amount exceeding the Threshold Amount (to the
extent not covered by independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there
is a period of ten (10) consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or

     (i)
ERISA. If the Borrower or any ERISA Affiliate is subject to ERISA: (i) an ERISA Event
occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii)
the Borrower or any ERISA Affiliate fails to pay when due, after the

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expiration of any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of the Threshold Amount; or

     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full of all the Obligations, ceases to be in full force and
effect; or the Borrower contests in any manner the validity or enforceability of any Loan
Document; or the Borrower denies that it has any or further liability or obligation under
any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

     (k) Change of Control. The United States of America shall fail to own at least
(i) ninety percent (90%) of the equity interests of the Borrower and (ii) ninety percent
(90%) of the equity interests of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully diluted basis (it being
understood that as of the Closing Date the Borrower is a wholly owned corporate agency and
instrumentality of the United States of America); or

     (l) Debt Ratings.

     (i) The Moody’s Debt Rating is lower than A3 and the S&P Debt Rating is
lower than A-; or

     (ii) Moody’s and S&P suspends or withdraws their rating of the
Borrower’s senior unsecured long-term non-credit enhanced debt.

8.02 Remedies Upon Event of Default.

     If any Event of Default occurs and is continuing, the Administrative Agent shall, at the
request of, or may, with the consent of, the Required Lenders, take any or all of the following
actions:

     (a) declare the commitment of each Lender to make Loans to be terminated, whereupon
such commitments and obligation shall be terminated;

     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower; and

     (c) exercise on behalf of itself and the Lenders all rights and remedies available to
it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an order for
relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation
of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall automatically become due
and payable, in each case without further act of the Administrative Agent or any Lender.

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8.03 Application of Funds.

     After the exercise of remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article III) payable
to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the Lenders
(including fees, charges and disbursements of counsel to the respective Lenders and amounts
payable under Article III), ratably among them in proportion to the amounts described in
this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and fees, premiums and scheduled periodic payments, and any interest
accrued thereon, due under any Swap Contract between the Borrower and any Lender, or any
Affiliate of a Lender, to the extent such Swap Contract is permitted by Section
7.02, ratably among the Lenders (and, in the case of such Swap Contracts, Affiliates of
Lenders) in proportion to the respective amounts described in this clause Third
held by them;

Fourth, to (a) payment of that portion of the Obligations constituting unpaid
principal of the Loans, (b) payment of breakage, termination or other payments, and any
interest accrued thereon, due under any Swap Contract between the Borrower and any Lender,
or any Affiliate of a Lender, to the extent such Swap Contract is permitted by this
Section 8.03, and (c) payments of amounts due under any Treasury Management
Agreement between the Borrower and any Lender, or any Affiliate of a Lender, ratably among
the Lenders (and, in the case of such Swap Contracts, Affiliates of Lenders) in proportion
to the respective amounts described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been paid in full, to
the Borrower or as otherwise required by Law.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority.

     Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders, and the Borrower shall not have rights as a third party
beneficiary of any of such provisions.

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9.02 Rights and Obligations as a Lender.

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

     (b) If the Person serving as the Administrative Agent hereunder is also a Lender, such
Person’s status as Administrative Agent shall not affect such Person’s obligations as a Lender
(including such Person’s obligation to fund Loans in its capacity as a Lender).

9.03 Exculpatory Provisions.

     The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Loan Documents. Without limiting the generality of the foregoing,
the Administrative Agent:

     (a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

     (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be expressly provided for herein or in the other Loan Documents),
provided that the Administrative Agent shall not be required to take any action
that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

     (c) shall not, except as expressly set forth herein and in the other Loan Documents,
have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its Affiliates in any
capacity.

     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in
Sections 10.01 and 8.02) or (ii) in the
absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until notice describing such Default is given to
the Administrative Agent by the Borrower.

     The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan

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Document or any other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

9.04 Reliance by Administrative Agent.

     The Administrative Agent shall be entitled to rely upon, and shall not incur any liability
for relying upon, any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person. The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a
Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender
unless the Administrative Agent shall have received notice to the contrary from such Lender prior
to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected by it, and shall not
be liable for any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

9.05 Delegation of Duties.

     The Administrative Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their respective
Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and
to the Related Parties of the Administrative Agent and any such sub-agent.

9.06 Resignation of Administrative Agent.

     The Administrative Agent may at any time give notice of its resignation to the Lenders and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an
office in the United States, or an Affiliate of any such bank with an office in the United States.
If no such successor shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the Lenders appoint a
successor Administrative Agent meeting the qualifications set forth above; provided that if
the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become effective in accordance
with such notice and (l) the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent shall instead be made
by or to each Lender directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative
Agent, and the retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already discharged therefrom as
provided above in this Section). The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and

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such successor. After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.

9.07 Non-Reliance on Administrative Agent and Other Lenders.

     Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document furnished hereunder or
thereunder.

9.08
No Other Duties; Etc.

     Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers,
syndication agents, documentation agents or co-agents shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except in its capacity,
as applicable, as the Administrative Agent or a Lender hereunder.

9.09 Administrative Agent May File Proofs of Claim.

     In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then
be due and payable as herein expressed or by declaration or otherwise and irrespective of whether
the Administrative Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise:

     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans and all other Obligations (other than obligations under
Swap Contracts or Treasury Management Agreements to which the Administrative Agent is not a
party) that are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances of the
Lenders and the Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under
Sections 2.07 and 10.04)
allowed in such judicial proceeding; and

     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable

40

 

compensation, expenses, disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under
Sections 2.07 and 10.04.

     Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender or to authorize
the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc.

     No amendment or waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given; provided, further, that

     (a) no such amendment, waiver or consent shall:

     (i) extend or increase the Commitment of a Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such
Lender whose Commitment is being extended or increased (it being understood and
agreed that a waiver of any condition precedent set forth in Section 4.02
or of any Default or a mandatory reduction in Commitments is not considered an
extension or increase in the Commitment of any Lender);

     (ii) postpone any date fixed by this Agreement or any other Loan Document for
any payment of principal (excluding mandatory prepayments), interest, fees or other
amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction
of the Commitments hereunder or under any other Loan Document without the written
consent of each Lender entitled to receive such payment or whose Commitment is to be
reduced;

     (iii) reduce the principal of, or the rate of interest specified herein on, any
Loan, or (subject to clause (i) of the final proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document without
the written consent of each Lender entitled to receive such payment of principal,
interest, fees or other amounts; provided, however, that only the consent of
the Required Lenders shall be necessary to (A) amend the definition of “Default
Rate”, (B) to waive any obligation of the Borrower to pay interest at the Default
Rate, (C) to waive the increase in the Applicable Rate set forth in the last
paragraph of the definition of “Applicable Rate” and (D) to waive the Liquidity
Premium for any Borrowing, conversion or continuation;

     (iv) change Section 2.11 or Section 8.03 in a manner that
would alter the pro rata sharing of payments required thereby without the written
consent of each Lender directly affected thereby;

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     (v) change any provision of this Section 10.01 (a) or the definition
of “Required Lenders” without the written consent of each Lender directly affected
thereby; or

     (vi) release the Borrower from its obligations under the Loan Documents
without the written consent of each Lender; and

     (b) unless also signed by the Administrative Agent, no amendment, waiver or consent
shall affect the rights or duties of the Administrative Agent under this Agreement or any
other Loan Document;

provided, however, that notwithstanding anything to the contrary herein, (i) no Defaulting
Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended without the consent of
such Lender, (ii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent
provisions set forth herein and (iii) the Required Lenders shall determine whether or not to allow
the Borrower to use cash collateral in the context of a bankruptcy or insolvency proceeding and
such determination shall be binding on all of the Lenders.

10.02 Notices and Other Communications; Facsimile Copies.

     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), 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 telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

     (i) if to the Borrower or the Administrative Agent, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on Schedule
10.02; and

     (ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

     Notices sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received; notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the extent provided in
subsection (b) below, shall be effective as provided in such subsection (b).

     (b) Electronic Communications. Notices and other communications to the Lenders may be
delivered or furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender
has notified the Administrative Agent that it is incapable of receiving notices under such Article
by electronic communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

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     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business
day for the recipient, and (ii) notices or communications posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.

     (c) Change
of Address; Etc. The Borrower and the Administrative Agent may change its
address, telecopier or telephone number for notices and other communications hereunder by notice to
the other parties hereto. Each Lender may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the Borrower and the Administrative Agent.

     (d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices)
purportedly given by or on behalf of a Responsible Officer of the Borrower. All telephonic
notices to and other telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such recording.

10.03 No Waiver; Cumulative Remedies.

     No failure by any Lender or the Administrative Agent to exercise, and no delay by any
such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

10.04
Expenses; Indemnity; and Damage Waiver.

     (a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent) in connection with the
preparation, negotiation, execution, delivery and administration of this Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the
reasonable fees, charges and disbursements of any counsel for the Administrative Agent or any
Lender) in connection with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans, including all such reasonable out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Loans.

     (b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender and each Related Party of any of the foregoing
Persons (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
reasonable fees, charges and disbursements of any outside counsel for any Indemnitee) incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower arising out
of, in connection with, or as a

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result of (i) the execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of
their respective obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds
therefrom, (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, whether
brought by a third party or by the Borrower, 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.

     (c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails
to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by
them to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent)
or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party
of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this subsection (c)
are subject to the provisions of Section 2.10(d).

     (d) Waiver
of Consequential Damages, Etc.

     (i) To the fullest extent permitted by applicable law, the Borrower shall not assert,
and the Borrower 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, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

     (ii) To the fullest extent permitted by applicable law, no Indemnitee shall assert,
and each Indemnitee hereby waives, any claim against the Borrower, 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, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

     (iii) Neither the Borrower nor any Indemnitee shall be liable for any damages arising
from the use by unintended recipients of any information or other materials distributed by
it through telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby.

     (e) Payments. All amounts due under this Section shall be payable not later than
thirty (30) days after the Borrower’s receipt of an invoice demanding such payment.

44

 

     (f) Survival. The agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all the other Obligations.

10.05 Payments Set Aside.

     To the extent that any payment by or on behalf of the Borrower is made to the Administrative
Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and
such payment or the proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with any proceeding under any Debtor
Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (b) each Lender severally
agrees to pay to the Administrative Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum equal to the Federal
Funds Rate from time to time in effect. The obligations of the Lenders under clause (b) of the
preceding sentence shall survive the payment in full of the Obligations and the termination of
this Agreement.

10.06 Successors and Assigns.

     (a) Successors and Assigns Generally. The provisions of this Agreement and the other
Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto 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 or thereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto 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,
Participants to the extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

     (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement and the other Loan
Documents (including all or a portion of its Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the
Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000
unless each of the Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or
delayed); (ii) each partial assignment shall be made as an

45

 

assignment of a proportionate part of all the assigning Lender’s Loans and Commitments, and rights
and obligations with respect thereto, assigned; (iii) any assignment of a Commitment must be
approved by the Administrative Agent unless the Person that is the proposed assignee is itself a
Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of $3,500 and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Subject to acceptance and recording thereof by the Administrative
Agent pursuant to subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease
to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section. The Borrower reserves the right to
propose potential Eligible Assignees and the Lenders agree to consider, in their sole discretion,
the Borrower’s proposed Eligible Assignees.

     (c) Register. The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and 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, and the Borrower, the Administrative Agent and the Lenders 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 at any reasonable time and from time to time upon reasonable prior
notice. In addition, at any time that a request for a consent for a material or substantive change
to the Loan Documents is pending, any Lender wishing to consult with other Lenders in connection
therewith may request and receive from the Administrative Agent a copy of the Register.

     (d) Participations. Any Lender may at any time, without the consent of, or notice
to, and without cost or expense to, the Borrower or the Administrative Agent, sell participations
to any Person (other than (i) a natural person, (ii) the Borrower or any of the Borrower’s
Affiliates or (iii) any Person that is primarily in the business of producing or transmitting
electricity) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the Loans;
provided that (i) such Lender’s obligations under this Agreement 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 this Agreement. 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 this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, waiver or other modification described in
clauses (i) through (vi) of the Section 10.01 (a) that affects such Participant. Subject
to subsection (e) of this Section, the Borrower agrees that

46

 

each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05
to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to
subsection (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
such Participant agrees to be subject to Section 2.11 as though it were a Lender.

     (e) Limitation on Participant Rights. A Participant shall not be entitled to receive
any greater payment under Section 3.01 or 3.04 than the applicable 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 3.01 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
Section 3.01(e) as though it were a Lender.

     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.

     (g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act

10.07 Treatment of Certain Information; Confidentiality.

     Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and representatives and to any direct or indirect contractual counterparty (or
such contractual counterparty’s professional advisor) under any Swap Contract relating to Loans
outstanding under this Agreement (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority purporting to
have jurisdiction over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party hereto (such other
party acknowledges that it is subject to the confidentiality obligations hereunder with respect to
such Information), (e) in connection with the exercise of any remedies hereunder or under any other
Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee of or Participant
in, or any prospective assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender
or any of their respective Affiliates on a nonconfidential basis from a source other than the
Borrower.

47

 

     For
purposes of this Section, “Information” means all information received from the Borrower
relating to the Borrower or any of its businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure
by the Borrower, provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of delivery as
confidential.

10.08 Set-off.

     If an Event of Default shall have occurred and be continuing, each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to the fullest
extent permitted by applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and other obligations
(in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit
or the account of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower are owed to a branch or office of such
Lender different from the branch or office holding such deposit or obligated on such indebtedness.
The rights of each Lender and their respective Affiliates under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender or their respective
Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.

10.09 Interest Rate Limitation.

     Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded
to the Borrower. In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal as an expense,
fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness.

     This Agreement may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents 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 4.01, this Agreement shall become effective when it shall
have been executed by a Responsible Officer and the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

48

 

10.11 Survival of Representations and Warranties.

     All representations and warranties made hereunder and in any other Loan Document or other
document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of any investigation
made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of
any Loan, and shall continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied.

10.12 Severability.

     If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid
or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of
this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that
of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.

10.13 Replacement of Lenders.

     If
any Lender requests compensation under Section 3.04, 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 3.01, or if any Lender is a Defaulting Lender, 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, and consents required by, Section 10.06), all of
its interests, rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment), provided that:

     (a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in
Section 10.06(b);

     (b) 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 and
under the other Loan Documents (including any amounts under Section 3.05) 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);

     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and

     (d) such assignment does not conflict with applicable Laws.

     A Lender shall not be required to make any such assignment or 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.

49

 

10.14
Governing Law; Jurisdiction; Etc.

     (a) GOVERNING LAW. EXCEPT FOR THOSE SECTIONS THAT SPECIFICALLY REFERENCE A FEDERAL STATUTE
OR REGULATION, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF TENNESSEE. THE FOREGOING NOTWITHSTANDING, TO THE EXTENT THE FOLLOWING DEFENSES WOULD
BE AVAILABLE TO THE BORROWER UNDER FEDERAL LAW, THEN SUCH DEFENSES SHALL BE AVAILABLE TO THE
BORROWER IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS: (i) NON-LIABILITY FOR
PUNITIVE DAMAGES, (ii) EXEMPTION FROM ANTI-TRUST LAWS, (iii) THE BORROWER CANNOT BE CONTRACTUALLY
BOUND BY REPRESENTATION OF AN EMPLOYEE MADE WITHOUT ACTUAL AUTHORITY, (iv) PRESUMPTION THAT
GOVERNMENT OFFICIALS HAVE ACTED IN GOOD FAITH AND (v) LIMITATION ON THE APPLICATION OF THE DOCTRINE
OF EQUITABLE ESTOPPEL TO THE GOVERNMENT.

     (b) SUBMISSION TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDCTION OF THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF TENNESSEE OR ANY APPELLATE COURT TAKING APPEALS THEREFROM
FOR ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. 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.

     (c) WAIVER
OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN THE 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) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Right to Trial by Jury.

     EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,

50

 

SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 USA PATRIOT Act Notice.

     Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act.

10.17 Statement of Borrower regarding the Bankruptcy Code of the United States.

     The Borrower takes the position that as a government agency the Borrower cannot be a “debtor”
under the Bankruptcy Code of the United States. The agreement of the Borrower to include the
Bankruptcy Code of the United States in the definition of “Debtor Relief Laws” is not to be
interpreted as a recognition, acknowledgment or agreement by the Borrower of a contrary position.

10.18 TVA Related Provisions.

     In connection with this Agreement each Lender agrees to comply with (i) the Affirmative Action
for Disabled Veterans and Veterans of the Vietnam-Era clause, 41 C.F.R. § 60-250.4, (ii) the
Affirmative Action for Handicapped Workers clause, 41 C.F.R. § 60-741.4, (iii) the Equal
Opportunity clause, 41 C.F.R. § 60-1.4, and all amendments to these clauses and all applicable
regulations, rules, and orders issued thereunder. Each Lender that executes this Agreement, and
each Lender that becomes a party to this Agreement by execution of an Assignment and Assumption,
agrees that upon its execution of this Agreement or such Assignment and Assumption, as applicable,
it shall be deemed to have executed the Certification for Contracts, Grants, Loans, and Cooperative
Agreements attached hereto Exhibit 10.18.

[SIGNATURE PAGES FOLLOW]

51

 

     IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed
as of the date first above written.

	 	 	 	 	 	 	 
	BORROWER:	 	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael E. Rescoe	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael E. Rescoe	 	 
	 

	 	Title:
	 	Chief Financial Officer
and Executive Vice President,
Financial Services	 	 
	 
	 	 	 	 	 	 
	ADMINISTRATIVE AGENT:	 	BANK OF AMERICA, N.A., as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John M. Hall	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John M. Hall	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	LENDER:	 	BANK OF AMERICA, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John M. Hall	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John M. Hall	 	 
	 

	 	Title:
	 	Senior Vice President
	 	 

 

 

Schedule 2.01

COMMITMENTS AND APPLICABLE PERCENTAGES

	 	 	 	 	 	 	 	 	 
	Lender	 	Applicable Percentage	 	Commitment
	Bank of America, N.A.
	 	 	100.00000000	%	 	$	1,250,000,000	 
	Total
	 	 	100.00000000	%	 	$	1,250,000,000	 

 

 

Schedule 7.01

OTHER PERMITTED LIENS

None.

 

 

Schedule 10.02

CERTAIN ADDRESS FOR NOTICES

	1.	 	To the Borrower:
	 
	 	 	Tennessee Valley Authority 
400 West
Summit Hill Drive 

Knoxville, TN 37902

Attention: Treasurer 

Telephone: 865-632-3366 

Facsimile: 865-632-6673
	 
	2.	 	To the Administrative Agent:
	 
	 	 	Loan Notices and Payments

Bank of America, N.A., as Administrative Agent

9000 South Side Blvd.

Jacksonville, FL 32256

Telephone: 888-841-8159

Facsimile: 888-841-8160
	 
	 	 	with a copy to:
	 
	 	 	Bank of America, N.A., as Administrative Agent

550 West Main Street, Suite 800

Knoxville, TN 37902

Attention: John Hall

Telephone: 865-541-6102

Facsimile: 865-546-2865
	 
	 	 	All Other Notices

Bank of America, N.A., as Administrative Agent

550 West Main Street, Suite 800

Knoxville, TN 37902

Attention: John Hall

Telephone: 865-541-6102

Facsimile: 865-546-2865

 

 

Exhibit 2.02 

FORM OF LOAN NOTICE

Date:
          
          ,
           

			
	To:	 	Bank of America, N.A., as Administrative Agent

			
	Re:	 	Spring Maturity Credit Agreement (as amended, modified and supplemented from time to
time, the “Credit Agreement”) dated as of May 17, 2006 among Tennessee Valley Authority, a
wholly owned corporate agency and instrumentality of the United States of America (the
“Borrower”). the Lenders from time to time party thereto and Bank of America, N.A., as a
Lender and as Administrative Agent. Capitalized terms used but not otherwise defined herein
have the meanings provided in the Credit Agreement.

Ladies and Gentlemen:

The undersigned hereby requests (select one):

o A Borrowing of Loans

o A conversion or continuation of Loans

	 	1.	 	On                                          (a Business Day).
	 
	 	2.	 	In the amount of $                     .
	 
	 	3.	 	Comprised of                     .

[Type of Loan requested]

	4.	 	For LIBOR Rate Loans: with an Interest Period of                      months.

With respect to any Borrowing or conversion or continuation requested herein, the undersigned
Borrower hereby represents and warrants that (i) in the case of a Borrowing of Loans, such request
complies with the requirements of the proviso to the first sentence
of Section 2.01 of the Credit
Agreement and (ii) each of the conditions set forth in Section 5.02 of the Credit Agreement
have been satisfied on and as of the date of such Borrowing or such conversion or continuation.

	 	 	 	 	 	 	 
	 	 	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

Exhibit 2.09

FORM OF NOTE

May 17, 2006

FOR VALUE RECEIVED, TENNESSEE VALLEY AUTHORITY, a wholly owned corporate agency and
instrumentality of the United States of America (the “Borrower”), hereby promises to pay
to
                             or
 registered assigns (the “Lender”), in accordance with the provisions of the
Credit Agreement (as hereinafter defined), the principal amount of each Loan from time to time
made by the Lender to the Borrower under the Spring Maturity Credit Agreement, dated as of May 17,
2006 (as amended, modified and supplemented from time to time, the “Credit Agreement”)
among the Borrower, the Lenders from time to time party thereto and Bank of America, N.A., as a
Lender and as Administrative Agent.

The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of
such Loan until such principal amount is paid in full, at such interest rates and at such times as
provided in the Credit Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately available funds at the
Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid
amount shall bear interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum rate set forth in
the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable all as provided in the Credit Agreement. Loans made by
the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this Note and endorse
thereon the date, amount and maturity of its Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TENNESSEE.

[Signature Page Follows]

 

 

     IN WITNESS WHEREOF, each of the undersigned has executed this Note as of the date set forth above.

	 	 	 	 	 	 	 
	 	 	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

 

 

Exhibit 10.07 

FORM OF ASSIGNMENT AND ASSUMPTION

     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but
not defined herein shall have the meanings given to them in the Credit Agreement identified below
(the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and Assumption as if set
forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the
Assignor’s rights and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of the Assignor under
the respective facilities identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to
herein collectively as, the “Assigned
Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty by the Assignor.

	 	 	 	 	 
	1.

	 	Assignor:
	 	                                                            
	 
	 	 	 	 
	2.

	 	Assignee:
	 	                                                            
	 

	 	 	 	[and is an Affiliate/ Approved Fund of [identify Lender]1]
	 
	 	 	 	 
	3.

	 	Borrower:
	 	Tennessee Valley Authority
	 
	 	 	 	 
	4.

	 	Agent:
	 	Bank of America, N.A., as the administrative agent
	 
	 	 	 	 
	5.

	 	Credit Agreement:
	 	Spring Maturity Credit Agreement dated as of May 17, 2006 among
Borrower, the Lenders parties thereto and Bank of America, N.A., as
Administrative Agent
	 
	 	 	 	 
	6.

	 	Assigned Interest:	 	 

	 	 	 	 	 
	Aggregate Amount of	 	Amount of Commitment/	 	Percentage Assigned of
	Commitment/Loans for all Lenders	 	Loans Assigned	 	Commitment/Loans
	 	 	 	 	 

 

			
	1	 	Select as applicable.

 

 

	 	 	 	 	 
	[7.

	 	Trade Date:
	 	                    ]

Effective
Date:                      ___, 20 ___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	 	 	 	 	 	 	 
	 	 	ASSIGNOR	 	 
	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

	 	 	 	 	 
	[Consented to and]2 Accepted:	 	 
	 
	 	 	 	 
	BANK OF AMERICA, N.A. as Administrative Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	[Consented to:]3	 	 
	 
	 	 	 	 
	[BANK OF AMERICA, N.A., as L/C Issuer]	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 

 

			
	2	 	To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.
	 
	3	 	To be added only if the consent of the Borrower and/or other parties (e.g. L/C Issuer)
is required by the terms of the Credit
Agreement.

 

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

     1. Representations and Warranties.

     1.1.
Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.

     1.2.
Assignee. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.

     3. General
Provisions. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Tennessee.

 

 

Exhibit 10.18

Certification for Contracts, Grants, Loans, and Cooperative Agreements

The undersigned certifies, to the best of his or her knowledge and belief, that:

(1) No federal appropriated funds have been paid or will be paid by or on behalf of the
undersigned to any person for influencing or attempting to influence an officer or employee
of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any federal contract, the making of
any federal grant, the making of any federal loan, the entering into of any cooperative
agreement, and the extension, continuation, renewal, amendment, or modification of any
federal contract, grant, loan, or cooperative agreement.

(2) If any funds other than federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence an officer or employee of any agency, a
Member of Congress, an officer or employee of Congress, or an employee of a Member of
Congress in connection with this federal contract, grant, loan, or cooperative agreement,
the undersigned shall complete and submit Standard Form-LLL, “Disclosure of Lobbying
Activities,” in accordance with its instructions.

(3) The undersigned shall require that the language of this certification be included in the
award documents for all subawards at all tiers (including subcontracts, subgrants, and
contracts under grants, loans, and cooperative agreements) and that all subrecipients shall
certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this
transaction was made or entered into. Submission of this certification is a prerequisite for
making or entering into this transaction imposed by 31 U.S.C. 1352. Any person who fails to file
the required certification shall be subject to a civil penalty of not less than $10,000 and not
more than $100,000 for each such failure.

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