Document:

Exhibit
4.4

WJ COMMUNICATIONS, INC.  2001

EMPLOYEE STOCK PURCHASE PLAN

I.                                         PURPOSE
OF THE PLAN

This
Employee Stock Purchase Plan is intended to promote the interests of WJ
Communications, Inc. and its stockholders by providing Eligible Employees with
the opportunity to acquire a proprietary interest in the Corporation through
participation in a payroll-deduction based employee stock purchase plan
designed to qualify under Section 423 of the Code.

Capitalized
terms herein shall have the meanings assigned to such terms in the attached
Appendix.

II.                                     ADMINISTRATION
OF THE PLAN

A.                                   The Plan
Administrator shall have full authority to interpret and construe any provision
of the Plan and any form of agreement or other document employed by the
Corporation in the administration of the Plan in a manner consistent with the
requirements of Code Section 423. 
The Plan Administrator shall determine all of the relevant terms and
conditions of purchase rights granted under the Plan; provided, however, that
all Participants granted purchase rights shall have the same rights and
privileges within the meaning of Code Section 423(b)(5).  Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.

B.                                     The
Plan Administrator may, consistent with the Plan and Code Section 423,
establish, change or terminate such rules, guidelines, policies, procedures,
limitations or adjustments as deemed advisable by the Plan Administrator, in
its discretion, for the proper administration of the Plan.

III.                                 STOCK
SUBJECT TO PLAN

A.                                   The stock
purchasable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares of Common Stock purchased on the open
market.  The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed One
Million Five Hundred Thousand (1,500,000) shares.  If any outstanding purchase right for any
reason expires or is terminated or cancelled, the Common Stock allocable to the
unexercised portion of that purchase right shall again be available for
issuance under the Plan.

B.                                     Should any change
be made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, then appropriate adjustments shall be made to
(i) the maximum number and class of securities issuable under the Plan,
(ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date, (iii) the maximum number and class
of securities purchasable in the aggregate on any one Purchase Date and
(iv) the

 

number and class of securities and the price per share in effect under
each outstanding purchase right in order to prevent the dilution or enlargement
of benefits thereunder.  Notwithstanding
the foregoing, any fractional shares resulting from an adjustment pursuant to
this Section shall be rounded down to the nearest whole number, and in no event
may the purchase price be decreased to an amount less than par value; if any,
of the Common Stock subject to the purchase right.

C.                                     If
the outstanding shares of Common Stock are increased, decreased, changed into
or exchanged for a different number or kind of shares or securities of the
Corporation or a successor entity, or for other property (including without
limitation, cash), through reorganization, merger, recapitalization,
reclassification, stock combination, stock dividend, stock split, reverse stock
split, spin off or other similar transaction, an appropriate and proportionate
adjustment will be made in the maximum number and kind of shares as to which
purchase rights may be granted under this Plan. 
A corresponding adjustment changing the number or kind of shares
allocated to purchase rights that have been granted prior to any such change
will likewise be made.  Any such
adjustment in the outstanding purchase rights will be made without change in
the aggregate purchase price applicable to the unexercised portion of the
purchase rights but with a corresponding adjustment in the price for each share
or other unit of any security covered by the purchase right. Where an
adjustment under this Section is made, the adjustment will be made in a manner
which will not be considered a “modification” under the provisions of
subsection 424(h)(3) of the Code.

D.
                                 The
adjustments determined by the Plan Administrator pursuant to this Article shall
be final, binding and conclusive.

IV.                                 OFFERING
PERIODS

A.                                   Shares of Common
Stock shall be offered for purchase under the Plan through a series of
successive offering periods until such time as (i) the maximum number of
shares of Common Stock available for issuance under the Plan shall have been
purchased or (ii) the Plan shall have been sooner terminated.

B.                                     Each offering
period shall be of approximately six (6) months duration or such other duration
as the Plan Administrator may determine. The initial offering period shall
commence at the Effective Time and terminate on the last payroll on or before
October 31, 2001.  The next offering
period shall commence on the first payroll day on or after November 1, 2001 and
terminate on the last payroll day on or prior to April 30, 2002.  Subsequent offering periods shall commence as
designated by the Plan Administrator; provided, however, that no offering
period may have a duration exceeding twenty-seven (27) months.

V.                                     ELIGIBILITY
AND PARTICIPATION

A.                                   Each individual who
is an Eligible Employee on the first day of any offering period under the Plan
may enter that offering period on such date, provided he or she (1) remains an
Eligible Employee, (2) completes the forms prescribed by the Plan
Administrator, and (3) files such forms with the Plan Administrator (or its
designate) on or before his or her scheduled Entry Date.

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B.                                     A Participant
shall automatically participate in the next offering period commencing
immediately after the Purchase Date of each offering period in which the
Participant participates provided that the Participant remains an Eligible
Employee on the first day of the of the new offering period and has not either
(a) withdrawn from the Plan pursuant to Article VII.7.(i), or (b) terminated
employment with a Participating Corporation. 
A Participant who may automatically participate in a subsequent offering
period, as provided in this section, is not required to deliver any additional
forms to the Plan Administrator for the subsequent offering period in
accordance with the procedures set forth in Article V.A.  However, a Participant may deliver a new
enrollment/change form for a subsequent offering period, in accordance with the
procedures set forth in Article VI if the Participant desires to change any
elections contained in the Participant’s then effective enrollment/change form.

C.                                     Each individual
who first becomes an Eligible Employee after the first day of an offering
period may not enter that offering period, but may enter the next offering
period, provided he or she (1) remains an Eligible Employee, (2) completes the
forms prescribed by the Plan Administrator, and (3) files such forms with the
Plan Administrator (or its designate) on or before his or her scheduled Entry
Date.

VI.                                 PAYROLL
DEDUCTIONS

A.                                   The payroll
deduction authorized by the Participant for purposes of acquiring shares of
Common Stock during an offering period may be any multiple of one percent (1%)
of the Total Compensation paid to the Participant during such offering period,
up to a maximum of fifteen percent (15%); provided that, the amount of Participant’s
deferral may not exceed Ten Thousand Six Hundred Twenty-Five Dollars
($10,625.00) per offering period.  Except
that for the initial offering period, the amount of Participant’s deferral may
not exceed Seventeen Thousand Five Hundred Dollars ($17,500.00).  The deduction rate so authorized shall
continue in effect throughout the offering period, except to the extent the
Participant makes a new election to change such rate.  The number of times a Participant may, during
any offering period, elect to reduce or increase his or her rate of payroll
deduction shall be one time during any one offering period.

B.                                     Payroll deductions
shall begin on the first pay day following the Participant’s Entry Date into
the offering period and shall (unless sooner terminated by the Participant)
continue through the pay day ending with or immediately prior to the last day
of that offering period.  The amounts so
collected shall be credited to the Participant’s book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account.  The amounts collected from
the Participant shall not be required to be held in any segregated account or
trust fund and may be commingled with the general assets of the Corporation and
used for general corporate purposes.

C.                                     The Participant’s
acquisition of Common Stock under the Plan on any Purchase Date shall neither
limit nor require the Participant’s acquisition of Common Stock on any
subsequent Purchase Date of a different offering period.

D.                                    The Participant’s
payroll deductions shall cease during military leave or other approved leave of
absence.

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VII.                             PURCHASE
RIGHTS

A.                                   GRANT OF PURCHASE
RIGHT.  A Participant shall be granted a
separate purchase right for each offering period in which he or she
participates.  The purchase right shall
be granted on the Participant’s Entry Date into the offering period and shall
provide the Participant with the right to purchase shares of Common Stock on
the Purchase Date of the offering period, upon the terms set forth below.  If the Plan Administrator so requests, the
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.

Under
no circumstances shall purchase rights be granted under the Plan to any
Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate, as determined in accordance with Code Section
423(b).

B.                                     EXERCISE OF THE
PURCHASE RIGHT.  Each purchase right shall
be automatically exercised on the Purchase Date of the offering period, and
shares of Common Stock shall accordingly be purchased on behalf of each
Participant on each such Purchase Date. 
The purchase shall be effected by applying the Participant’s payroll
deductions for the offering period ending on such Purchase Date to the purchase
of whole shares of Common Stock at the purchase price in effect for the
Participant for that Purchase Date.

Shares
of Common Stock acquired pursuant to the exercise of purchase right may be paid
only by means of payroll deductions from the Participant’s Total Compensation
accumulated during an offering period for which such purchase right was
granted.

C.                                     PURCHASE
PRICE.  The purchase price at which each
share of Common Stock may be acquired in an offering period upon the exercise
of any or all outstanding purchase rights shall be established by the Plan
Administrator; provided, however, that the purchase price shall not be less
than to eighty-five percent (85%) of the lower of (i) the Fair Market
Value per share of Common Stock on the Participant’s Entry Date into that
offering period or (ii) the Fair Market Value per share of Common Stock on
that Purchase Date. Unless otherwise provided by the Plan Administrator prior
to the commencement of an offering period, the purchase price per share at
which Common Stock will be purchased on the Participant’s behalf on the
Purchase Date of an offering period shall be equal to eighty-five percent (85%)
of the lower of (i) the Fair Market Value per share of Common Stock on the
Participant’s Entry Date into that offering period or (ii) the Fair Market
Value per share of Common Stock on that Purchase Date.

D.                                    NUMBER OF
PURCHASABLE SHARES.  The number of shares
of Common Stock purchasable by a Participant on the Purchase Date of an
offering period shall be the number of whole shares obtained by dividing the
amount collected from the Participant through payroll deductions during the
offering period ending with that Purchase Date by the purchase price in effect
for the Participant for that Purchase Date; provided that, the Participant may
not purchase more than 25,000
shares of Common Stock.

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E.                                      EXCESS PAYROLL
DEDUCTIONS.  Any payroll deductions not
applied to the purchase of shares of Common Stock on any Purchase Date because
they are not sufficient to purchase a whole share of Common Stock shall be held
for the purchase of Common Stock on the next Purchase Date.

F.                                      TERMINATION OF
PURCHASE RIGHT.  The following provisions
shall govern the termination of outstanding purchase rights:

(i)                                     A
Participant may, at any time prior to the Purchase Date of an offering period,
terminate his or her outstanding purchase right by filing the appropriate form
with the Plan Administrator (or its designate), and no further payroll
deductions shall be collected from the Participant with respect to the
terminated purchase right.  Any payroll
deductions collected during the offering period in which such termination
occurs shall, at the Participant’s election, be immediately refunded or held
for the purchase of shares on the next Purchase Date.  If no such election is made at the time such
purchase right is terminated, then the payroll deductions collected with
respect to the terminated right shall be refunded as soon as possible.

(ii)                                  The
termination of such purchase right shall be irrevocable, and the Participant
may not subsequently rejoin the offering period for which the terminated
purchase right was granted.  In order to
resume participation in any subsequent offering period, such individual must
re-enroll in the Plan (by making a timely filing of the prescribed enrollment
forms) on or before his or her scheduled Entry Date into that offering period.

(iii)                               Should
the Participant cease to remain an Eligible Employee for any reason (including
death, disability or change in status) while his or her purchase right remains
outstanding, then that purchase right shall immediately terminate, and all of
the Participant’s payroll deductions for the offering period in which the purchase
right so terminates shall be immediately refunded.

G.                                     CHANGE IN
CONTROL.  The Board may, in its sole
discretion, provide that in the event of a Change in Control one or more of the
following will occur: (1) each outstanding purchase right shall automatically
be exercised, immediately prior to the effective date of any Change in Control,
by applying the payroll deductions of each Participant for the offering period
in which such Change in Control occurs to the purchase of whole shares of
Common Stock at a purchase price per share equal to eighty-five percent (85%)
of the lower of (i) the Fair Market Value per share of Common Stock on the
Participant’s Entry Date into the offering period in which such Change in
Control occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Change in Control (the
Corporation shall use its best efforts to provide at least ten (10)-days prior
written notice of the occurrence of any Change in Control, and Participants shall,
following the receipt of such notice, have the right to terminate their
outstanding purchase rights prior to the effective date of the Change in
Control); (2) provide that all outstanding purchase rights shall terminate
effective the date of any Change in Control, or such other date as the Plan
Administrator may deem advisable, and all payroll deductions for the offering
period in which such Change in Control occurs shall be returned

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to each Participant as soon as possible; (3) the surviving, continuing,
successor, or purchasing corporation or parent corporation, thereof, as the
case may be, may assume the Corporation’s rights and obligations under the
Plan; or (4) such other alternative the Board deems advisable and which is in
accordance with the Plan and Code Section 423.

H.                                    PRORATION OF
PURCHASE RIGHTS.  Should the total number
of shares of Common Stock to be purchased pursuant to outstanding purchase
rights on any particular date exceed the number of shares then available for
issuance under the Plan, the Plan Administrator shall make a pro-rata
allocation of the available shares on a uniform and nondiscriminatory basis,
and the payroll deductions of each Participant, to the extent in excess of the
aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded.

I.                                         ASSIGNABILITY.  The purchase right shall be exercisable only
by the Participant during the Participant’s lifetime, and shall not be
assignable or transferable by the Participant other than by the laws of descent
and distribution.

J.                                        STOCKHOLDER
RIGHTS.  A Participant shall have no
stockholder rights with respect to the shares subject to his or her outstanding
purchase right until the shares are purchased on the Participant’s behalf in
accordance with the provisions of the Plan and the Participant has become a
holder of record of the purchased shares.

VIII.                         ACCRUAL LIMITATIONS

A.                                   No Participant shall
be entitled to accrue rights to acquire Common Stock pursuant to any purchase
right outstanding under this Plan if and to the extent such accrual, when
aggregated with (i) rights to purchase Common Stock accrued under any
other purchase right granted under this Plan and (ii) similar rights
accrued under other employee stock purchase plans (within the meaning of Code
Section 423) of the Corporation or any Corporate Affiliate, would otherwise
permit such Participant to purchase more than Twenty-Five Thousand Dollars
($25,000) worth of stock of the Corporation or any Corporate Affiliate
(determined on the basis of the Fair Market value per share on the date or
dates such rights are granted) for each calendar year such rights are at any
time outstanding.

B.                                     For purposes of
applying such accrual limitations to the purchase rights granted under the
Plan, the following provisions shall be in effect:

(i)                                     The
right to acquire Common Stock under each outstanding purchase right shall
accrue on the Purchase Date of an offering period on which such right remains
outstanding.

(ii)                                  No
right to acquire Common Stock under any outstanding purchase right shall accrue
to the extent the Participant has already accrued in the same calendar year the
right to acquire Common Stock under one (1) or more other purchase rights at a
rate equal to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock
(determined on the basis of the Fair Market Value per share on the date or
dates of grant) for each calendar year such rights were at any time
outstanding.

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C.                                     If by reason of
such accrual limitations, any purchase right of a Participant does not accrue
for a particular Purchase Date, then the payroll deductions which the
Participant made during that offering period with respect to such purchase
right shall be promptly refunded.

D.                                    In the event there
is any conflict between the provisions of this Article and one or more
provisions of the Plan or any instrument issued thereunder, the provisions of
this Article shall be controlling.

IX.                                EFFECTIVE
DATE AND TERM OF THE PLAN

A.                                   The Plan was adopted
by the Board on February 13, 2001 and shall become effective at the Effective
Time, provided no purchase rights granted under the Plan shall be exercised,
and no shares of Common Stock shall be issued hereunder, until the
Corporation shall have complied with all applicable requirements of the 1933 Act
(including the registration of the shares of Common Stock issuable under the
Plan on a Form S-8 registration statement filed with the Securities and
Exchange Commission), all applicable listing requirements of any Stock Exchange
or the Nasdaq National Market on which the Common Stock is listed for trading
and all other applicable requirements established by law or regulation.  In the event such stockholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate
and have no further force or effect, and all sums collected from Participants
during the initial offering period hereunder shall be refunded.

B.                                     Unless sooner
terminated by the Board, the Plan shall terminate upon the earliest of
(i) the date on which all shares available for issuance under the Plan
shall have been sold pursuant to purchase rights exercised under the Plan or
(ii) the date on which all purchase rights are exercised or terminate in
connection with a Change in Control.  No
further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan, following such termination.

X.                                    AMENDMENT
OF THE PLAN

The
Board may alter, amend, suspend or discontinue the Plan at any time to become
effective immediately following the close of any offering period.  However, the Board may not, without the
approval of the Corporation’s stockholders, (i) increase the number of
shares of Common Stock issuable under the Plan, except for permissible
adjustments in the event of certain changes in the Corporation’s
capitalization, (ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of Common Stock purchasable under the
Plan or (iii) modify eligibility requirements for participation in the
Plan.

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XI.                                GENERAL
PROVISIONS

A.                                   The Corporation
shall pay all costs and expenses incurred in the administration of the Plan;
however, each Plan Participant shall bear all costs and expenses incurred by
such individual in the sale or other disposition of any shares purchased under
the Plan.

B.                                     Nothing in the
Plan shall confer upon the Participant any right to continue in the employ of
the Corporation or any Corporate Affiliate for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Corporate Affiliate employing such person) or of the
Participant, which rights are hereby expressly reserved by each, to terminate
such person’s employment at any time for any reason, with or without cause.

C.                                     The laws of the
State of Delaware shall govern the provisions of the Plan without resort to
that State’s conflict-of-laws rules.

D.                                    The Corporation and
each Participating Corporation shall have the right to take whatever steps the
Plan Administrator deems necessary or appropriate to comply with all applicable
federal, state, local, employment or other tax withholding requirements, and
the Corporation’s obligations to deliver shares under this Plan shall be
conditioned upon compliance with all such withholding tax requirements.  Without limiting the generality of the
foregoing, the Corporation and each Participating Employer shall have the right
to withhold taxes from any other compensation or other amounts which it may owe
to the Participant, or to require the Participant to pay to the Corporation or
the Participating Corporation the amount of any taxes which the Corporation or
the Participating Corporation  may be
required to withhold with respect to such shares.  In this connection, the Plan Administrator
may require the Participant to notify the Plan Administrator, the Corporation,
or a Participating Corporation before the Participant sells or otherwise
disposes of any shares acquired under the Plan.

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PLAN HISTORY

	
  February 13, 2001

  	
   

  	
  Board adopts Plan, with an initial reserve of
  1,500,000 shares.

  
	
   

  	
   

  	
   

  
	
  May 23, 2001

  	
   

  	
  Stockholders approve the Plan.

  
	
   

  	
   

  	
   

  
	
  November 1, 2001

  	
   

  	
  Board approves Amendment 1

  
	
   

  	
   

  	
   

  
	
  July 20, 2006

  	
   

  	
  Stockholders approve Amendment 2 to increase the
  authorized shares for issuance from 1,500,000 shares to 2,250,000 shares

  

 

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SCHEDULE A

CORPORATIONS
PARTICIPATING IN

EMPLOYEE STOCK PURCHASE PLAN

AS OF THE EFFECTIVE TIME

WJ Communications Inc., a
Delaware corporation

APPENDIX

The
following definitions shall be in effect under the Plan:

A.                                   BOARD shall mean the
Corporation’s Board of Directors.

B.                                     TOTAL COMPENSATION
shall mean the (i) base salary payable to a Participant by one or more
Participating Companies during such individual’s period of participation in one
or more offering periods under the Plan plus (ii) all overtime payments,
bonuses, commissions, current profit-sharing distributions and other
incentive-type payments.  Such Total
Compensation shall be calculated before deduction of (A) any income or
employment tax withholdings or (B) any pre-tax contributions made by the
Participant to any Code Section 401(k) salary deferral plan or any Code Section
125 cafeteria benefit program now or hereafter established by the Corporation
or any Corporate Affiliate.  However,
Total Compensation shall NOT include any contributions (other than Code Section
401(k) or Code Section 125 contributions) made on the Participant’s behalf by
the Corporation or any Corporate Affiliate to any employee benefit or welfare
plan now or hereafter established.

C.                                     CHANGE IN CONTROL
shall mean the occurrence of any of the following:

(i)                                     Any
“Person” or “Group” (as such terms are defined in Section 13(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and
regulations promulgated thereunder), other than the Corporation or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Corporation, becomes the “Beneficial Owner” (within the
meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation, or of any entity resulting from a merger or
consolidation involving the Corporation, representing more than fifty percent
(50%) of the combined voting power of the then outstanding securities of the
Corporation or such entity.

(ii)                                  The
consummation of (x) a merger, consolidation or reorganization to which the
Corporation is a party, whether or not the Corporation is the Person surviving
or resulting therefrom, or (y) a sale, assignment, lease, conveyance or
other disposition of all or substantially all of the assets of the Corporation,
in one transaction or a series of related transactions, to any Person other
than the Corporation, where any such transaction or series of related
transactions as is referred to in clause (x) or clause (y) above in
this subparagraph (ii) (singly or collectively, a “Transaction”) does not
otherwise result in a “Change in Control” pursuant to subparagraph (i) of
this definition of “Change in Control”; provided, however, that no such
Transaction shall constitute a “Change in Control” under this
subparagraph (ii) if the Persons who were the stockholders of the
Corporation immediately before the consummation of such Transaction are the
Beneficial Owners, immediately following the consummation of such Transaction,
of fifty percent (50%) or more of the combined voting power of the then
outstanding voting securities of the Person surviving or resulting from any
merger, consolidation or reorganization referred to in clause (x) above in
this subparagraph (ii) or the Person to whom the assets of the Corporation
are sold, assigned, leased, conveyed or 

 

disposed of in
any transaction or series of related transactions referred in clause (y)
above in this subparagraph (ii), in substantially the same proportions in
which such Beneficial Owners held voting stock in the Corporation immediately
before such Transaction.

D.                                    CODE shall mean the
Internal Revenue Code of 1986, as amended.

E.                                      COMMON STOCK
shall mean the Corporation’s common stock.

F.                                      CORPORATE
AFFILIATE shall mean any parent or subsidiary corporation of the Corporation
(as determined in accordance with Code Section 424), whether now existing or
subsequently established.

G.                                     CORPORATION shall
mean WJ Communications, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of WJ
Communications, Inc. which shall by appropriate action adopt the Plan.

H.                                    EFFECTIVE TIME
shall mean May 1, 2001.  Any Corporate
Affiliate which becomes a Participating Corporation after such Effective
Time shall designate a subsequent Effective Time with respect to its
employee-Participants.

I.                                         ELIGIBLE
EMPLOYEE shall mean any Employee who has completed 3 months of service with a
Participating Corporation.

J.                                        EMPLOYEE
shall mean a person treated as an employee of a Participating Corporation for
purposes of Code Section 423.  A
Participant shall be deemed to have ceased to be an Employee either upon actual
termination of employment or upon a Corporate Affiliate or Affiliates employing
the Participant ceasing to be a Participating Corporation.  For purposes of the Plan, an individual shall
not de deemed to have ceased to be an Employee while on any military leave,
sick leave, or other bona fide leave of absence approved by the Corporation of
ninety (90) days or less.  If an
individual’s leave of absence exceeds ninety (90) days, the individual shall be
deemed to have ceased to be an Employee under the Plan on the ninety-first (91)
day of such leave unless the individuals right to reemployment with the
Participating Corporation is guaranteed either by statute or by contract.  The Plan Administrator shall determine in
good faith and in the exercise of its discretion whether an individual has
become or has ceased to be an Employee and the effective date of such
individual’s employment or termination of employment, as the case may be, and
such determination shall be final, binding and conclusive.

K.                                    ENTRY
DATE shall mean the date an Eligible Employee first commences participation in
the offering period in effect under the Plan. 
The earliest Entry Date under the Plan shall be the Effective Time.

L.                                      FAIR
MARKET VALUE per share of Common Stock on any relevant date shall be determined
in accordance with the following provisions:

(i)                                     If
the Common Stock is at the time traded on the Nasdaq National Market, then the
Fair Market value shall be the closing selling price per share of Common Stock
on the date in question, as such price is reported by the National

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Association of
Securities Dealers on the Nasdaq National Market.  If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.

(ii)                                  If
the Common Stock is at the time listed on any Stock Exchange, then the Fair
market Value shall be the closing selling price per share of Common Stock on
the date in question on the Stock Exchange determined by the Plan Administrator
to be the primary market for the Common stock, as such price is officially
quoted in the composite tape of transactions on such exchange.  If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.

M.                                 1933
ACT shall mean the Securities Act of 1933, as amended.

N.                                    PARTICIPANT
shall mean any Eligible Employee of a Participating Corporation who is actively
participating in the Plan.

O.                                    PARTICIPATING
CORPORATION shall mean the Corporation and such Corporate Affiliate or
Affiliates as may be authorized from time to time by the Board to extend the
benefits of the Plan to their Eligible Employees.  The Participating Corporations in the Plan
are listed in attached Schedule A.

P.                                      PLAN
shall mean the Corporation’s 2001 Employee Stock Purchase Plan, as set forth in
this document.

Q.                                    PLAN
ADMINISTRATOR shall mean the Board, or a committee designated by the Board,
which committee shall consist solely of two (2) or more persons who are “non-employee
directors” within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended.

R.                                     PURCHASE
DATE shall mean the last day of each offering period.

S.                                      STOCK
EXCHANGE shall mean either the American Stock Exchange, or the New York Stock
Exchange.

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FIRST
AMENDMENT TO THE WJ COMMUNICATIONS, INC.

2001 EMPLOYEE STOCK PURCHASE PLAN

WJ Communications, Inc., a
Delaware corporation, hereby makes this First Amendment to the WJ
Communications, Inc. 2001 Employee Stock Purchase Plan, effective as of
November 1, 2001, with reference to the following facts:

A.                                 WJ Communications, Inc. maintains the WJ
Communications, Inc. 2001 Employee Stock Purchase Plan (the “Plan”) for the
benefit of its employees.

B.                                   By Part II of the Plan, the Plan
Administrator has the authority to construe any provision of the Plan in the
administration of the Plan in a manner that is consistent with Section 423 of the
Internal Revenue Code of 1984, as amended.

C.                                   By Part X of the Plan, the Board
of Directors of this corporation may amend the Plan at any time.

D.                                     The Board deems it to be in its best
interests and in the best interests of participants in the Plan for the Plan to
be amended to clarify certain terms of the Plan to reflect the Plan
Administrators interpretation of such terms and the prior administration of the
Plan.

E.                                    The
Board wishes to delegate to its Executive Committee the authority to amend the
Plan.

NOW, THEREFORE, the Plan is
hereby amended, effective as of November 1, 2001, as follows:

1.                                     Section B of Part IV of the Plan is hereby amended to provide in its entirety as follows:

“B                                Each offering period shall be of
approximately six (6) months duration or such other duration as the Plan
Administrator may determine. The initial offering period shall commence at the
Effective Time and terminate on October 31, 2001. The next offering period
shall commence on November 1, 2001 and terminate on April 30, 2002. Subsequent
offering periods shall commence as designated by the Plan Administrator;
provided, however, that no offering period may have a duration exceeding
twenty-seven (27) months.”

2.                                     The first sentence of Section B of Part VI of
the Plan is hereby amended to provide as follows:

“B                                Payroll
deductions shall begin on the first payroll following the Participant’s Entry
Date into the offering period and shall (unless sooner terminated by the Participant) continue through the payroll ending with
or immediately prior to the last day of that offering period.”

 4
 

 

3.                                       Section R of the Appendix is
hereby amended in its entirety as follows:

“R                                PURCHASE DATE shall mean the last day of each
offering period.”

4.                                        The
first sentence of Part X of the Plan is amended as follows:

“ The Board may alter, amend, suspend or
discontinue the Plan at any time to become effective immediately following the
close of any offering period and the Board may, in its sole discretion,
delegate its authority to amend the Plan to the Executive Committee of the
Board, provided that any amendment to the Plan adopted by the Executive
Committee is in compliance with Section 423 of the Code and regulations issued
thereunder.”

5.                                        In
all other respects, the terms and provisions of the Plan are hereby ratified
and declared to be in full force and effect.

IN WITNESS WHEREOF, WJ Communications, Inc. has
executed this First Amendment this day of 31 October, 2001, to be effective as
of November 1, 2001.

 5
 

 

SECOND AMENDMENT TO

WJ COMMUNICATIONS, INC.

2001 EMPLOYEE STOCK PURCHASE PLAN

This Second Amendment to the WJ Communications, Inc.
(the “Company”) 2001 Employee Stock Purchase Plan, (the “Stock Purchase Plan”),
is made pursuant to Section X of the Stock Purchase Plan.

Recitals:

WHEREAS, the 2001 Employee Stock Purchase Plan was originally adopted by
the Company and approved by the stockholders in 2001;

WHEREAS, the 2001 Employee
Stock Purchase Plan was first amended by the board of directors on November 1,
2001 to clarify certain terms of the Stock Purchase Plan to reflect the
administrators interpretation of such terms and the prior administration of the
Stock Purchase Plan; to revise the offering period; to clarify the timing of
payroll deductions; to define the Purchase Date as the last day of each
offering period and to add provisions to delegate to the Company’s executive
committee the authority to amend the Stock Purchase Plan, which modifications
were not deemed necessary to submit to stockholders for approval; and

WHEREAS, the Company approved a second amendment to the Stock Purchase
Plan to increase the shares available under the Stock Purchase Plan from
1,500,000 to 2,250,000;

WHEREAS, the second amendment was submitted to the stockholders at the
Company’s annual meeting on July 20, 2006.

NOW THEREFORE:

The section III, titled “STOCK SUBJECT TO PLAN” of
the Stock Purchase Plan is hereby amended to delete “1,500,000” and insert “2,250,000”
in its place to reflect an increase in the shares reserved for use under the
Stock Purchase Plan.

All other terms and conditions of the Stock Purchase Plan, as amended
remain in full force and effect.

The Second
Amendment to the Stock Purchase Plan was submitted to, and approved by, the
Company’s stockholders in connection with the Company’s July 20, 2006 annual
meeting.

 6Exhibit 10.1

 

CREDIT AGREEMENT

Among

THE DAYTON POWER AND LIGHT COMPANY

as Borrower

THE LENDING INSTITUTIONS NAMED THEREIN

as Lenders

And

KEYBANK NATIONAL ASSOCIATION

as an LC Issuer, the Administrative Agent
and

Lead Arranger

 

 

 

dated as of

November 21, 2006

 

 

$220,000,000 Revolving
Facility

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I.

  	
  DEFINITIONS AND TERMS

  	
   

  	
  1

  
	
  Section 1.1

  	
   

  	
  Certain Defined Terms

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Computation of Time Periods

  	
   

  	
  24

  
	
  Section 1.3

  	
   

  	
  Accounting Terms

  	
   

  	
  24

  
	
  Section 1.4

  	
   

  	
  Terms Generally

  	
   

  	
  24

  
	
  ARTICLE II.

  	
  AMOUNT AND TERMS OF LOANS

  	
   

  	
  25

  
	
  Section 2.1

  	
   

  	
  Establishment of the Credit Facility

  	
   

  	
  25

  
	
  Section 2.2

  	
   

  	
  Commitments for Loans

  	
   

  	
  25

  
	
  Section 2.3

  	
   

  	
  Borrowing, Continuation or Conversion of Loans

  	
   

  	
  25

  
	
  Section 2.4

  	
   

  	
  Letters of Credit

  	
   

  	
  27

  
	
  Section 2.5

  	
   

  	
  Funding Obligations; Disbursement of Funds

  	
   

  	
  32

  
	
  Section 2.6

  	
   

  	
  Evidence of Obligations

  	
   

  	
  34

  
	
  Section 2.7

  	
   

  	
  Interest

  	
   

  	
  34

  
	
  Section 2.8

  	
   

  	
  Increased Costs; Illegality

  	
   

  	
  36

  
	
  Section 2.9

  	
   

  	
  Breakage Compensation

  	
   

  	
  38

  
	
  Section 2.10

  	
   

  	
  Increased Costs to LC Issuers

  	
   

  	
  39

  
	
  Section 2.11

  	
   

  	
  Change of Lending Office; Replacement of Lenders

  	
   

  	
  39

  
	
  ARTICLE III.

  	
  FEES; COMMITMENTS

  	
   

  	
  40

  
	
  Section 3.1

  	
   

  	
  Fees

  	
   

  	
  40

  
	
  Section 3.2

  	
   

  	
  Increase in Commitments

  	
   

  	
  42

  
	
  Section 3.3

  	
   

  	
  Voluntary Termination/Reduction of Commitments

  	
   

  	
  43

  
	
  Section 3.4

  	
   

  	
  Termination of Commitments

  	
   

  	
  43

  
	
  ARTICLE IV.

  	
  PAYMENTS

  	
   

  	
  43

  
	
  Section 4.1

  	
   

  	
  Repayment of Loans

  	
   

  	
  43

  
	
  Section 4.2

  	
   

  	
  Voluntary Prepayments

  	
   

  	
  43

  
	
  Section 4.3

  	
   

  	
  Mandatory Payments and Prepayments

  	
   

  	
  44

  
	
  Section 4.4

  	
   

  	
  Method and Place of Payment

  	
   

  	
  45

  
	
  Section 4.5

  	
   

  	
  Net Payments

  	
   

  	
  46

  
	
  ARTICLE V.

  	
  CONDITIONS PRECEDENT

  	
   

  	
  48

  
	
  Section 5.1

  	
   

  	
  Conditions Precedent at Closing Date

  	
   

  	
  48

  
	
  Section 5.2

  	
   

  	
  Conditions Precedent to the Making of Loans

  	
   

  	
  50

  
	
  Section 5.3

  	
   

  	
  Conditions Precedent to the Conversion or
  Continuation of Loans

  	
   

  	
  51

  

 

  
  
 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE
  VI.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  51

  
	
  Section 6.1

  	
   

  	
  Corporate Status

  	
   

  	
  51

  
	
  Section 6.2

  	
   

  	
  Corporate Power and Authority

  	
   

  	
  51

  
	
  Section 6.3

  	
   

  	
  No Violation

  	
   

  	
  51

  
	
  Section 6.4

  	
   

  	
  Governmental Approvals

  	
   

  	
  52

  
	
  Section 6.5

  	
   

  	
  Litigation, etc

  	
   

  	
  52

  
	
  Section 6.6

  	
   

  	
  Use of Proceeds; Margin Regulations

  	
   

  	
  52

  
	
  Section 6.7

  	
   

  	
  Financial Statements

  	
   

  	
  53

  
	
  Section 6.8

  	
   

  	
  Solvency

  	
   

  	
  53

  
	
  Section 6.9

  	
   

  	
  No Material Adverse Change

  	
   

  	
  53

  
	
  Section 6.10

  	
   

  	
  Tax Returns and Payments

  	
   

  	
  53

  
	
  Section 6.11

  	
   

  	
  Title to Properties

  	
   

  	
  54

  
	
  Section 6.12

  	
   

  	
  Lawful Operations; Compliance with Agreements

  	
   

  	
  54

  
	
  Section 6.13

  	
   

  	
  Environmental Matters

  	
   

  	
  54

  
	
  Section 6.14

  	
   

  	
  ERISA

  	
   

  	
  55

  
	
  Section 6.15

  	
   

  	
  Intellectual Property

  	
   

  	
  55

  
	
  Section 6.16

  	
   

  	
  Investment Company Act; Federal Power Act

  	
   

  	
  55

  
	
  Section 6.17

  	
   

  	
  True and Complete Disclosure

  	
   

  	
  56

  
	
  ARTICLE VII.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  56

  
	
  Section 7.1

  	
   

  	
  Reporting Requirements

  	
   

  	
  56

  
	
  Section 7.2

  	
   

  	
  Books, Records and Inspections

  	
   

  	
  58

  
	
  Section 7.3

  	
   

  	
  Insurance

  	
   

  	
  58

  
	
  Section 7.4

  	
   

  	
  Payment of Taxes and Claims

  	
   

  	
  58

  
	
  Section 7.5

  	
   

  	
  Preservation of Existence, etc

  	
   

  	
  59

  
	
  Section 7.6

  	
   

  	
  Good Repair

  	
   

  	
  59

  
	
  Section 7.7

  	
   

  	
  Compliance with Statutes, Regulations, Orders,
  Restrictions

  	
   

  	
  59

  
	
  Section 7.8

  	
   

  	
  Fiscal Years, Fiscal Quarters

  	
   

  	
  59

  
	
  Section 7.9

  	
   

  	
  Use of Proceeds

  	
   

  	
  59

  
	
  Section 7.10

  	
   

  	
  Senior Debt

  	
   

  	
  60

  
	
  ARTICLE VIII.

  	
  NEGATIVE COVENANTS

  	
   

  	
  60

  
	
  Section 8.1

  	
   

  	
  Changes in Business

  	
   

  	
  60

  
	
  Section 8.2

  	
   

  	
  Merger, Consolidation, Asset Sales

  	
   

  	
  60

  
	
  Section 8.3

  	
   

  	
  Liens

  	
   

  	
  61

  

 

  
  
 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  Section 8.4

  	
   

  	
  Investments

  	
   

  	
  62

  
	
  Section 8.5

  	
   

  	
  Financial Covenant

  	
   

  	
  63

  
	
  Section 8.6

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  63

  
	
  Section 8.7

  	
   

  	
  Material Agreements

  	
   

  	
  63

  
	
  Section 8.8

  	
   

  	
  Use of Proceeds/Margin Regulations

  	
   

  	
  63

  
	
  Section 8.9

  	
   

  	
  No Dividend Restrictions

  	
   

  	
  63

  
	
  Section 8.10

  	
   

  	
  Swap Agreements

  	
   

  	
  63

  
	
  ARTICLE IX.

  	
  EVENTS OF DEFAULT

  	
   

  	
  64

  
	
  Section 9.1

  	
   

  	
  Events of Default

  	
   

  	
  64

  
	
  Section 9.2

  	
   

  	
  Acceleration; Remedies

  	
   

  	
  66

  
	
  Section 9.3

  	
   

  	
  Application of Liquidation Proceeds

  	
   

  	
  67

  
	
  ARTICLE X.

  	
  THE ADMINISTRATIVE AGENT

  	
   

  	
  68

  
	
  Section 10.1

  	
   

  	
  Appointment

  	
   

  	
  68

  
	
  Section 10.2

  	
   

  	
  Delegation of Duties

  	
   

  	
  68

  
	
  Section 10.3

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  68

  
	
  Section 10.4

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  69

  
	
  Section 10.5

  	
   

  	
  Notice of Default

  	
   

  	
  69

  
	
  Section 10.6

  	
   

  	
  Non-Reliance

  	
   

  	
  70

  
	
  Section 10.7

  	
   

  	
  Indemnification

  	
   

  	
  70

  
	
  Section 10.8

  	
   

  	
  The Administrative Agent in Individual Capacity

  	
   

  	
  71

  
	
  Section 10.9

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  71

  
	
  Section 10.10

  	
   

  	
  Other Agents

  	
   

  	
  72

  
	
  ARTICLE XI.

  	
  MISCELLANEOUS

  	
   

  	
  72

  
	
  Section 11.1

  	
   

  	
  Payment of Expenses

  	
   

  	
  72

  
	
  Section 11.2

  	
   

  	
  Right of Setoff

  	
   

  	
  74

  
	
  Section 11.3

  	
   

  	
  Notices

  	
   

  	
  74

  
	
  Section 11.4

  	
   

  	
  Benefit of Agreement

  	
   

  	
  75

  
	
  Section 11.5

  	
   

  	
  No Waiver; Remedies Cumulative

  	
   

  	
  78

  
	
  Section 11.6

  	
   

  	
  Payments Pro Rata; Sharing of Setoffs

  	
   

  	
  78

  
	
  Section 11.7

  	
   

  	
  Governing Law; Submission to Jurisdiction; Venue;
  Waiver of Jury Trial

  	
   

  	
  80

  
	
  Section 11.8

  	
   

  	
  Counterparts

  	
   

  	
  81

  
	
  Section 11.9

  	
   

  	
  Integration

  	
   

  	
  81

  

 

  
  
 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  Section 11.10

  	
   

  	
  Headings Descriptive

  	
   

  	
  81

  
	
  Section 11.11

  	
   

  	
  Amendment or Waiver

  	
   

  	
  81

  
	
  Section 11.12

  	
   

  	
  Survival of Indemnities

  	
   

  	
  82

  
	
  Section 11.13

  	
   

  	
  Domicile of Loans

  	
   

  	
  82

  
	
  Section 11.14

  	
   

  	
  Confidentiality

  	
   

  	
  83

  
	
  Section 11.15

  	
   

  	
  Lender Register

  	
   

  	
  83

  
	
  Section 11.16

  	
   

  	
  General Limitation of Liability

  	
   

  	
  84

  
	
  Section 11.17

  	
   

  	
  Limitations on Liability of the LC Issuers

  	
   

  	
  84

  
	
  Section 11.18

  	
   

  	
  No Duty

  	
   

  	
  85

  
	
  Section 11.19

  	
   

  	
  Lenders and Agent Not Fiduciary to Borrower

  	
   

  	
  85

  
	
  Section 11.20

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  85

  
	
  Section 11.21

  	
   

  	
  Severability

  	
   

  	
  85

  
	
  Section 11.22

  	
   

  	
  Independence of Covenants

  	
   

  	
  86

  
	
  Section 11.23

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  86

  
	
  Section 11.24

  	
   

  	
  Treasury Regulations

  	
   

  	
  86

  
	
  Section 11.25

  	
   

  	
  USA Patriot Act

  	
   

  	
  86

  

 

	
  Exhibit A

  	
  -

  	
  Revolving Note

  
	
  Exhibit B-1

  	
  -

  	
  Notice of Borrowing, Continuation or Conversion

  
	
  Exhibit B-2

  	
   

  	
  LC Request

  
	
  Exhibit C

  	
  -

  	
  Compliance Certificate

  
	
  Exhibit D

  	
  -

  	
  Closing Certificate

  
	
  Exhibit E

  	
  -

  	
  Assignment Agreement

  
	
  Exhibit F

  	
  -

  	
  Legal Opinion of General Counsel of the Borrower

  

 

  
  

 

This CREDIT AGREEMENT,
dated as of November 21, 2006, is entered into by and among the following:

(i)            THE DAYTON POWER AND LIGHT COMPANY, an Ohio
corporation (the “Borrower”);

(ii)           the
Lenders, defined below, from time to time party hereto; and

(iii)          KEYBANK NATIONAL ASSOCIATION, a national banking
association, as the Administrative Agent, defined below, and Lead Arranger.

RECITALS:

A.            The Borrower has applied to the Lenders for a credit
facility to replace its existing senior debt facility and to provide working
capital and funds for other lawful purposes.

B.            Subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the Borrower the credit
facility provided for herein.

AGREEMENT:

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

ARTICLE I.

DEFINITIONS AND TERMS

Section 1.1             Certain Defined Terms.  As
used herein, the following terms shall have the meanings herein specified
unless the context otherwise requires:

“Acquisition”
means any acquisition (a) on a going concern basis (whether by purchase,
lease or otherwise) of assets constituting a business or a division or line of
business of a Person that is not a Subsidiary of the Borrower, and (b) of a majority
of the outstanding equity or other similar interests in any such Person
(whether by merger, stock purchase or otherwise).

 1
 

 

“Adjusted Eurodollar
Rate” means, with respect to each Interest Period for a Eurodollar Loan,
(a) the rate per annum appearing on the applicable electronic page of
Reuters or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided by such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market), at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period, as the rate
for Dollar deposits with a maturity comparable to such Interest Period, divided
(and rounded to the nearest one one hundredth of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves and without benefit of credits for proration, exceptions or
offsets that may be available from time to time) applicable to any member bank
of the Federal Reserve System in respect of Eurocurrency liabilities as defined
in Regulation D (or any successor category of liabilities under Regulation D); provided, however, that if the rate referred to in clause
(a) above is not available at any such time for any reason, then the rate
referred to in clause (a) shall instead be the average (rounded to the nearest
one one hundredth of 1%) of the rates at which Dollar deposits of $5,000,000
are offered to the Reference Banks in the London interbank market at
approximately 11:00 a.m. (London time), two Business Days prior to the commencement
of such Interest Period, for contracts that would be entered into at the
commencement of such Interest Period.

“Administrative Agent”
means KeyBank in its capacity as administrative agent for the Lenders, together
with any successor to the Administrative Agent appointed pursuant to
Section 10.9.

“Affiliate” means,
with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with
such Person, or, in the case of any Lender that is an investment fund, the
investment advisor thereof and any investment fund having the same investment
advisor.  A Person shall be deemed to
control a second Person if such first Person possesses, directly or indirectly,
the power (a) to vote 10% or more of the securities having ordinary voting
power for the election of directors or managers of such second Person or (b) to
direct or cause the direction of the management and policies of such second
Person, whether through the ownership of voting securities, by contract or
otherwise.  Notwithstanding the
foregoing, (i) a director, officer or employee of a Person shall not, solely by
reason of such status, be considered an Affiliate of such Person; and (ii) neither
the Administrative Agent nor any Lender shall in any event be considered an
Affiliate of the Borrower or any of its Subsidiaries.

“Agent Fee Letter”
means the Agent Fee Letter, dated as of the date hereof, between the
Administrative Agent and the Borrower, as the same may from time to time be
amended, restated, supplemented or otherwise modified.

 2
 

 

“Aggregate Revolving
Facility Exposure” means, at any time, the sum of (a) the aggregate
principal amounts of all Loans outstanding at such time and (b) the aggregate
amount of the LC Outstandings at such time.

“Agreement” means
this Credit Agreement, as the same may from time to time be amended, restated,
supplemented or otherwise modified.

“Applicable Facility
Fee Rate” means, on any date of determination, a rate that is determined
based upon the S&P Rating, the Moody’s Rating or the Fitch Rating, as
follows:

	
  S&P Rating

  	
   

  	
  Moody’s

  Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable

  Facility Fee

  Rate

  	
   

  
	
  A or higher

  	
   

  	
  A2
  or higher

  	
   

  	
  A
  or higher

  	
   

  	
  6.00
  basis points

  	
   

  
	
  A–

  	
   

  	
  A3

  	
   

  	
  A–

  	
   

  	
  7.00
  basis points

  	
   

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  8.00
  basis points

  	
   

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  10.00
  basis points

  	
   

  
	
  BBB–

  	
   

  	
  Baa3

  	
   

  	
  BBB–

  	
   

  	
  12.50
  basis points

  	
   

  
	
  Lower than BBB-

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB-

  	
   

  	
  17.50 basis points

  	
   

  

 

If at any time each
Rating Agency issues a different rating, then the Applicable Facility Fee Rate
shall be determined based on the intermediate rating at such time.  If at any time two Rating Agencies issue the
same rating, which is different than the other Rating Agency, the rating issued
by such other Rating Agency shall be disregarded, and the Applicable Facility
Fee Rate shall be determined based on the two identical ratings at such
time.  If there is no S&P Rating and
Fitch Rating, then the Applicable Facility Fee Rate shall be determined based
on the Moody’s Rating.  If there is no
Moody’s Rating and Fitch Rating, then the Applicable Facility Fee Rate shall be
determined based on the S&P Rating. 
If there is no Moody’s Rating and S&P Rating, then the Applicable
Facility Fee Rate shall be determined based on the Fitch Rating.  If at any time only two Rating Agencies issue
a rating and there is a difference of two or more rating levels between such
Rating Agencies, then the Applicable Facility Fee Rate shall
be determined based on the intermediate rating levels at the midpoint between
the ratings issued by such Rating Agencies at such time or, if there is no
midpoint, based on the higher intermediate level.  If (i) there is no S&P Rating, Moody’s
Rating and Fitch Rating or (ii) an Event of Default has occurred and is
continuing, the Applicable Facility Fee Rate shall be the highest rate per
annum indicated therefor in the above table. 
The S&P Rating, Moody’s Rating and Fitch Rating in effect on any
date for purposes of

 3
 

 

determining the
Applicable Facility Fee Rate shall be that S&P Rating, Moody’s Rating and
Fitch Rating in effect at the close of business on such date.  Each change in the Applicable Facility Fee
Rate resulting from a publicly announced change in the S&P Rating, the
Fitch Rating and/or the Moody’s Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the
date immediately preceding the effective date of the next change.

“Applicable Lending
Office” means, with respect to each Lender, the office or offices
designated by such Lender to the Administrative Agent as such Lender’s lending
office or offices for purposes of this Agreement.

“Applicable Margin”
means, on any date of determination, a rate that is determined, based upon the
S&P Rating, the Moody’s Rating or the Fitch Rating, as follows:

	
  S&P Rating

  	
   

  	
  Moody’s

  Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable

  Margin for

  Eurodollar

  Loans

  	
   

  	
  Applicable

  Margin for

  Base Rate

  Loans

  	
   

  
	
  A or higher

  	
   

  	
  A2
  or higher

  	
   

  	
  A
  or higher

  	
   

  	
  19.00
  basis points

  	
   

  	
  0.0
  basis points

  	
   

  
	
  A–

  	
   

  	
  A3

  	
   

  	
  A–

  	
   

  	
  23.00
  basis points

  	
   

  	
  0.0
  basis points

  	
   

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  27.00
  basis points

  	
   

  	
  0.0
  basis points

  	
   

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  35.00
  basis points

  	
   

  	
  0.0
  basis points

  	
   

  
	
  BBB-

  	
   

  	
  Baa3

  	
   

  	
  BBB-

  	
   

  	
  47.50
  basis points

  	
   

  	
  0.0
  basis points

  	
   

  
	
  Lower than BBB-

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB-

  	
   

  	
  60.00 basis points

  	
   

  	
  0.0 basis points

  	
   

  

 

If at any time each
Rating Agency issues a different rating, then the Applicable Margin shall be
determined based on the intermediate rating at such time.  If at any time two Rating Agencies issue the
same rating, which is different than the other Rating Agency, the rating issued
by such other Rating Agency shall be disregarded, and the Applicable Margin
shall be determined based on the two identical ratings at such time.  If there is no S&P Rating and Fitch
Rating, then the Applicable Margin shall be determined based on the Moody’s
Rating.  If there is no Moody’s Rating
and Fitch Rating, then the Applicable Margin shall be determined based on the
S&P Rating.  If there is no Moody’s
Rating and S&P Rating, then the Applicable Margin shall be determined based
on the Fitch Rating.  If at any time only
two Rating Agencies issue a rating and there is a difference of two or more
rating levels between such Rating Agencies, then the Applicable Margin shall be
determined based on the intermediate rating levels at the midpoint between the
ratings issued by such Rating Agencies at such time or, if there is no
midpoint, based on the higher intermediate level.  If (i) there is no S&P Rating, Moody’s
Rating and Fitch Rating or (ii) an Event of Default has

 4
 

 

occurred and is
continuing, the Applicable Margin shall be the highest rate per annum indicated
therefor in the above table.  The S&P
Rating, Moody’s Rating and Fitch Rating in effect on any date for purposes of
determining the Applicable Margin shall be that S&P Rating, Moody’s Rating
and Fitch Rating in effect at the close of business on such date.  Each change in the Applicable Margin
resulting from a publicly announced change in the S&P Rating, the Fitch Rating
and/or the Moody’s Rating shall be effective during the period commencing on
the date of the public announcement thereof and ending on the date immediately
preceding the effective date of the next change.

“Applicable
Utilization Fee Rate” means, on any date of determination, a rate that is
determined based upon the S&P Rating, the Moody’s Rating or the Fitch
Rating, as follows:

	
  S&P Rating

  	
   

  	
  Moody’s

  Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable

  Facility Fee

  Rate

  	
   

  
	
  A or higher

  	
   

  	
  A2
  or higher

  	
   

  	
  A
  or higher

  	
   

  	
  5.00
  basis points

  	
   

  
	
  A–

  	
   

  	
  A3

  	
   

  	
  A–

  	
   

  	
  5.00
  basis points

  	
   

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  5.00
  basis points

  	
   

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  5.00
  basis points

  	
   

  
	
  BBB–

  	
   

  	
  Baa3

  	
   

  	
  BBB–

  	
   

  	
  5.00
  basis points

  	
   

  
	
  Lower than BBB–

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB–

  	
   

  	
  10.00 basis points

  	
   

  

 

If at any time each
Rating Agency issues a different rating, then the Applicable Utilization Fee
Rate shall be determined based on the intermediate rating at such time.  If at any time two Rating Agencies issue the
same rating, which is different than the other Rating Agency, the rating issued
by such other Rating Agency shall be disregarded, and the Applicable
Utilization Fee Rate shall be determined based on the two identical ratings at
such time.  If there is no S&P Rating
and Fitch Rating, then the Applicable Utilization Fee Rate shall be determined
based on the Moody’s Rating.  If there is
no Moody’s Rating and Fitch Rating, then the Applicable Utilization Fee Rate
shall be determined based on the S&P Rating.  If there is no Moody’s Rating and S&P
Rating, then the Applicable Utilization Fee Rate shall be determined based on
the Fitch Rating.  If at any time only
two Rating Agencies issue a rating and there is a difference of two or more
rating levels between such Rating Agencies, then the Applicable Utilization Fee
Rate shall be determined based on the
intermediate rating levels at the midpoint between the ratings issued by such
Rating Agencies at such time or, if there is no midpoint, based on the higher
intermediate level.  If (i) there is no
S&P Rating, Moody’s Rating and Fitch Rating or (ii) an Event of Default has
occurred and is continuing, the Applicable Utilization Fee Rate shall be the
highest rate per annum

 5
 

 

indicated therefor in the
above table.  The S&P Rating, Moody’s
Rating and Fitch Rating in effect on any date for purposes of determining the
Applicable Utilization Fee Rate shall be that S&P Rating, Moody’s Rating
and Fitch Rating in effect at the close of business on such date.  Each change in the Applicable Utilization Fee
Rate resulting from a publicly announced change in the S&P Rating, the
Fitch Rating and/or the Moody’s Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the
date immediately preceding the effective date of the next change.

“Approved Fund”
means a fund that is administered or managed by a Lender or an Affiliate of a
Lender.

“Asset Sale” means
the sale, transfer or other disposition (including by means of Sale and
Lease-Back Transactions, and by means of mergers, consolidations, and
liquidations of a corporation, partnership or limited liability company of the
interests therein of the Borrower or any of its Subsidiaries) by the Borrower
or any of its Subsidiaries to any Person of any of their respective assets, provided that the term Asset Sale specifically excludes any
sales, transfers or other dispositions of inventory, or obsolete or excess
furniture, fixtures, equipment or other Property, real or personal, tangible or
intangible, in each case in the ordinary course of business.

“Assignment Agreement”
means an Assignment Agreement substantially in the form of Exhibit E.

“Augmenting Lender”
has the meaning provided in Section 3.2(a).

“Authorized Officer”
means any of the following officers of the Borrower: the Chief Executive
Officer, the Chief Financial Officer, the President, the Chief Operating
Officer, any Group Vice President, any Vice President or the Treasurer.

“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto.

“Base Rate” means,
for any period, a fluctuating interest rate per annum as shall be in effect
from time to time which rate per annum shall at all times be equal to the
greater of (a) the rate of interest established by KeyBank in Cleveland, Ohio,
from time to time, as its prime rate, whether or not publicly announced, which
interest rate may or may not be the lowest rate charged by it for commercial
loans or other extensions of credit; and (b) the Federal Funds Effective Rate
in effect from time to time, determined one Business Day in arrears, plus 1/2 of 1% per annum.

“Base Rate Loan”
means each Loan bearing interest at a rate based upon the Base Rate.

“Borrower” has the
meaning provided in the first paragraph of this Agreement.

“Borrowing” means
the incurrence of Loans consisting of one Type of Loan, by the Borrower from
all of the Lenders on a pro rata basis
on a given date (or resulting

 6
 

 

from Conversions or
Continuations on a given date), having in the case of Eurodollar Loans the same
Interest Period.

“Business Day”
means, (a) for all purposes other than as covered by clause (b) below, any day
that is not a Saturday, Sunday or day on which commercial banks in the city in
which the Payment Office is located are authorized or required by law or other
governmental actions to close and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day that is a Business Day described in clause (a) and
that is also a day for trading by and between banks in Dollar deposits in the
London interbank market.

“Capital Lease”
means, as applied to any Person, any lease of any Property (whether real,
personal or mixed) by such Person, as lessee, that, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that Person.

“Capitalized Lease
Obligations” means all obligations under Capital Leases of the Borrower or
any of its Subsidiaries in each case taken at the amount thereof accounted for
as liabilities and identified as “capital lease obligations” (or any similar
words) on a consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with GAAP.

“Cash Equivalents”
means any of the following:

(a)           securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;

(b)           Dollar denominated time deposits, certificates of
deposit and bankers’ acceptances of (i) any Lender or (ii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof
(any such bank, an “Approved Bank”), in each case with maturities of not
more than three months from the date of acquisition;

(c)           commercial paper issued by any Lender or Approved Bank
or by the parent company of any Lender or Approved Bank and commercial paper
issued by, or guaranteed by, any industrial or financial company with a short-
term commercial paper rating of at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody’s, or guaranteed by
any industrial company with a long term unsecured debt rating of at least A or
A2, or the equivalent of each thereof, from S&P or Moody’s, as the case may
be, and in each case maturing within 90 days after the date of acquisition;

 7
 

 

(d)           fully collateralized repurchase agreements entered
into with any Lender or Approved Bank having a term of not more than 30 days
and covering securities described in clause (a) above;

(e)           investments in money market funds substantially all
the assets of which are comprised of securities of the types described in
clauses (a) through (d) above;

(f)            investments in money market funds access to which is
provided as part of “sweep” accounts maintained with a Lender or an Approved
Bank;

(g)           investments in industrial development revenue bonds
that (i) “re-set” interest rates not less frequently than quarterly, (ii) are
entitled to the benefit of a remarketing arrangement with an established  broker dealer, and (iii) are supported by a
direct pay letter of credit covering principal and accrued interest that is
issued by an Approved Bank;

(h)           investments in pooled funds or investment accounts
consisting of investments of the nature described in the foregoing clause (g);
and

(i)            other investments not specifically described in any of
clauses (a) through (h) above that have been approved in writing by the
Administrative Agent.

“CERCLA” means the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as the same may be amended from time to time, 42 U.S.C. § 9601 et seq.

“Change of Control”
means any of the following:

(a)           during any 12-month period (or, if less, during the
period beginning on the Closing Date and ending on the date of determination),
individuals who at the beginning of such period constituted the Parent’s Board of Directors (together with any new directors whose
election by the Parent’s Board of Directors or whose nomination for election by
the Parent’s shareholders was approved by a
vote of a majority of the directors who either were directors at the beginning
of such period or whose election or nomination was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of the
Parent;

(b)           any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the 1934 Act, but excluding any employee
benefit plan of such person or its subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the 1934 Act, except that a person or group shall be

 8
 

 

deemed to have “beneficial ownership” of all
securities that such person or group has the right to acquire (such right, an “option
right”), whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 20% or more of the equity
securities of the Parent entitled to vote for members of the board of directors
or equivalent governing body of the Parent on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to
acquire pursuant to any option right); or

(c)           the Parent shall cease to own, free and clear of all
Liens and other encumbrances and on a fully diluted basis, 100% of the
outstanding shares of all classes of stock of the Borrower ordinarily having
the right to vote at an election of directors, or any contingency shall occur
that causes any class of stock of the Borrower, the shares of which are not
owned by the Parent, to have the right to vote at an election of directors.

“Closing Date”
means the date on which the conditions specified in Section 5.1 are satisfied.

“Closing Fee Letter”
means the Closing Fee Letter, dated as of the date hereof, between the Borrower
and the Administrative Agent, for the benefit of the Lenders, as the same may
from time to time be amended, restated, supplemented or otherwise modified.

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

“Commercial Letter of
Credit” means any letter of credit or similar instrument issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of materials, goods or services in the ordinary course of business.

“Commitment”
means, with respect to each Lender, its obligation to make Loans to the
Borrower from time to time pursuant to Section 2.1, in an aggregate principal
amount at any one time outstanding not to exceed the amount, if any, set forth
opposite such Lender’s name on Annex I as its “Commitment” or in
the case of any Lender that becomes a party hereto pursuant to an Assignment
Agreement, the obligation of such Lender to make Loans in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
as the “Amount of Assigned Share” in each Assignment Agreement to which such
Lender is a party thereto as the assignee, as any such Commitments may be
reduced from time to time pursuant to Section 3.3, 3.4 and/or 9.2, increased
from time to time pursuant to Section 3.2, and/or adjusted from time to time as
a result of assignments to or from such Lender pursuant to Section 11.4.

“Compliance
Certificate” means a certificate, substantially in the form of the attached
Exhibit C.

“Consolidated Net
Income” means, for any period, the net income (or loss), without deduction
for minority interests, of the Borrower and its Subsidiaries on a

 9
 

 

consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP.

“Consolidated Net
Worth” means, at any time, all amounts that, in conformity with GAAP, would
be included under the caption “total stockholders’ equity” (or any like
caption) on a consolidated balance sheet of the Borrower as of such time, provided that in no event shall Consolidated Net Worth
include any amounts in respect of Redeemable Stock.

“Consolidated Tangible
Assets” means at any time the consolidated total assets of the Borrower and
its Subsidiaries calculated on a consolidated basis as of such time, but
excluding therefrom goodwill, patents, patent applications, permits,
trademarks, trade names, copyrights, licenses, franchises, experimental
expense, organizational expense, unamortized debt discount and expense, the excess
of cost of shares acquired over book value of related assets and such other
assets that are properly classified as “intangible assets” in accordance with
GAAP.

“Consolidated Total
Capitalization” means the sum of Consolidated Total Debt and Consolidated
Net Worth and, to the extent not otherwise
included, preferred stock of the Borrower.

“Consolidated Total
Debt” means the sum (without duplication) of all Indebtedness of the
Borrower and of each of its Subsidiaries, all as determined on a consolidated
basis.

“Continue”, “Continuation”
and “Continued” each refers to a continuation of Eurodollar Loans for an
additional Interest Period as provided in Section 2.3.

“Controlled Group”
means all members of a controlled group of corporations or other business entities
and all trades or businesses (whether or not incorporated) under common control
that, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.

“Convert”, “Conversion”
and “Converted” each refers to a conversion of Loans of one Type into
Loans of another Type, pursuant to Section 2.3.

“Credit Documents”
means this Agreement, the Notes, if any, the Agent Fee Letter, the Closing Fee
Letter, each Letter of Credit and each other LC Document.

“Credit Event”
means any Borrowing, Conversion, Continuation or any LC Issuance.

“Credit Facility”
means the credit facility established under this Agreement pursuant to which
(a) the Lenders shall make Loans to the Borrower, and shall participate in
LC Issuances, pursuant to the Commitment of each such Lender, and (b) each LC
Issuer shall issue Letters of Credit for the account of the Borrower in
accordance with the terms of this Agreement.

 10
 

 

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

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

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

“Eligible Assignee”
means (a) a Lender (other than a Defaulting Lender), (b) an Affiliate
of a Lender (other than a Defaulting 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 the
Borrower or any of the Affiliates or Subsidiaries of the Borrower.

“Energy-Related
Business” means any business engaged in or directly related to:  (a) the production, sale, brokerage,
management, transportation, delivery or other provision of energy products,
including but not limited to, electricity, natural gas, oil, coal, propane and
renewable energy producing materials, (b) the provision of energy
conservation services, including, but not limited to, energy audits,
installation of energy conservation devices, energy efficient equipment and
related systems, (c) the provision of services and equipment in connection
with the procurement of such energy products or conservation of energy,
(d) engineering, consulting, construction, operational or maintenance
services in connection with such energy products, the conservation of energy or
with equipment utilizing such energy products or (e) the manufacturing of
equipment used in connection with energy production or conservation.

“Environmental Claims”
means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of non-compliance or violation,
investigations or proceedings relating in any way to any Environmental Law or
any permit issued under any such law, including, without limitation, (a) any
and all claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to
any applicable Environmental Law, and (b) any and all claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.

“Environmental Law”
means any applicable Federal, state, foreign or local statute, law, rule,
regulation, ordinance, code, binding and enforceable guideline, binding and
enforceable written policy and rule of common law now or hereafter in effect
and in each case as amended, and any binding and enforceable judicial or
administrative interpretation thereof, including, without limitation, any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and

 11
 

 

safety or Hazardous
Materials, including, without limitation, CERCLA; RCRA; the Federal Water
Pollution Control Act, 33 U.S.C. § 1251 et seq.;
the Clean Air Act, 42 U.S.C. § 7401 et seq.;
the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.;
the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. §
11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. § 5101 et seq. and
the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.
(to the extent it regulates occupational exposure to Hazardous Materials); and
any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.

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

“Eurodollar Loans”
means each Loan bearing interest at a rate based on the Adjusted Eurodollar
Rate.

“Event of Default”
has the meaning provided in Section 9.1.

“Exemption Certificate”
has the meaning provided in Section 4.5(b)(ii).

“Existing Credit
Agreement” means the Credit Agreement, dated as of May 31, 2005, among the
Borrower, the lenders party thereto, and KeyBank, as administrative agent.

“Facility Fees”
has the meaning provided in Section 3.1(a).

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

“Fees” means all
amounts payable pursuant to, or referred to in, Section 3.1, together with any
other fees payable pursuant to this Agreement or any other Credit Document.

“Fitch” means
Fitch Investors Service Inc. and its successors.

“Fitch Rating” means,
on any date of determination, the rating accorded the Borrower’s senior
unsecured long-term debt by Fitch (or if the Obligations are secured, the
rating accorded to the Borrower’s senior secured long-term debt by Fitch), or
if such rating is unavailable, the Borrower’s long-term issuer default rating
accorded to it by Fitch.

 12
 

 

“FPA” means the
Federal Power Act, as amended, and all rules and regulations promulgated
thereunder.

“GAAP” means
generally accepted accounting principles in the United States of America as in
effect from time to time.

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, administrative tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers
or functions of or pertaining to government.

“Guaranty Obligations”
means as to any Person (without duplication) any obligation of such Person
guaranteeing any Indebtedness (“primary Indebtedness”) of any other
Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary Indebtedness or any
Property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary Indebtedness
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase Property, securities or services primarily for the purpose
of assuring the owner of any such primary Indebtedness of the ability of the
primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary
Indebtedness against loss in respect thereof, provided,
however, that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.

“Hazardous Materials”
means (a) any petrochemical or petroleum products, radioactive materials,
asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (b) any chemicals,
materials or substances defined as or included in the definition of “hazardous
substances”, “hazardous wastes”, “hazardous materials”, “restricted hazardous
materials”, “extremely hazardous wastes”, “restrictive hazardous wastes”, “toxic
substances”, “toxic pollutants”, “contaminants” or “pollutants”, or words of
similar meaning and regulatory effect, under any applicable Environmental Law.

“Increasing Lender”
has the meaning provided in Section 3.2(a).

“Indebtedness”
means, with respect to any Person, all of the following (without duplication):

 13
 

 

(a)           all indebtedness of such Person for borrowed money;

(b)           all bonds, notes, debentures and similar debt
securities of such Person;

(c)           the deferred purchase price of capital assets or
services that in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person;

(d)           non-contingent obligations to reimburse any other
Person in respect of amounts paid under a letter of credit or similar
instrument to the extent that such reimbursement obligations remain outstanding
after such obligations become non-contingent;

(e)           all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances;

(f)            all Indebtedness of a second Person secured by any
Lien on any Property owned by such first Person, whether or not such
Indebtedness has been assumed;

(g)           all Capitalized Lease Obligations of such Person;

(h)           the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all Synthetic
Leases of such Person;

(i)            the full outstanding balance of trade receivables,
notes or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other than in
any such case any thereof sold solely for purposes of collection of delinquent
accounts;

(j)            the stated value, or liquidation value if higher, of
all Redeemable Stock of such Person; and

(k)           all Guaranty Obligations of such Person;

provided,
however, that (i) neither trade payables nor other similar
accrued expenses, in each case arising in the ordinary course of business, nor
obligations in respect of insurance policies or performance or surety bonds
that themselves are not guarantees of Indebtedness (nor drafts, acceptances or
similar instruments evidencing the same nor obligations in respect of letters
of credit supporting the payment of the same), shall constitute Indebtedness;
and (ii) the Indebtedness of any Person shall in any event include (without
duplication) the Indebtedness of any other entity (including any general
partnership in which such Person is a general partner) to the extent such
Person is liable thereon as a result of such Person’s ownership interest in or
other relationship

 14
 

 

with
such entity, except to the extent the terms of such Indebtedness provide
expressly that such Person is not liable thereon.

“Interest Period”
means, with respect to each Eurodollar Loan, a period of one, two, three or six
months as selected by the Borrower, provided that
(a) the initial Interest Period for any Borrowing of Eurodollar Loans shall
commence on the date of such Borrowing (the date of a Borrowing resulting from
a Conversion or Continuation shall be the date of such Conversion or
Continuation) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires; (b) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month; (c) if any Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day, provided that if any Interest Period would otherwise expire on a
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
next preceding Business Day; (d) no Interest Period for any Eurodollar Loan may
be selected that would end after the Maturity Date; and (e) if, upon the
expiration of any Interest Period, the Borrower has failed to (or may not)
elect a new Interest Period to be applicable to the respective Borrowing of
Eurodollar Loans as provided above, the Borrower shall be deemed to have
elected to Convert such Borrowing to a Base Rate Loan effective as of the
expiration date of such current Interest Period.

“Investment” means
(a) any direct or indirect purchase or other acquisition by the Borrower or any
of its Subsidiaries of any of the capital stock or other equity interest of any
other Person, including any partnership or joint venture interest in such
Person; (b) any loan or advance to, guarantee or assumption of debt or
purchase or other acquisition of any other debt (other than accounts receivable
arising in the ordinary course of business on terms customary in the trade) of,
any Person by the Borrower or any of its Subsidiaries; or (c) any purchase or
other acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit or all or a substantial part of
the business of, such Person.

“KeyBank” means
KeyBank National Association, a national banking association, together with its
successors and assigns.

“LC Commitment Amount”
means $50,000,000.

“LC Documents”
means, with respect to any Letter of Credit, any documents executed in
connection with such Letter of Credit, including the Letter of Credit itself.

“LC Fee” means any
of the fees payable pursuant to Section 3.1(c) or Section 3.1(d) in respect of
Letters of Credit.

“LC Issuance”
means the issuance of any Letter of Credit by any LC Issuer for the account of
the Borrower in accordance with the terms of this Agreement, and shall

 15
 

 

include any amendment
thereto that increases the Stated Amount thereof or extends the expiry date of
such Letter of Credit.

“LC Issuer” means
KeyBank or any of its Affiliates, or such other Lender that is requested by the
Borrower and agrees to be an LC Issuer hereunder and is approved by the
Administrative Agent.

“LC Outstandings”
means, at any time, the sum, without duplication, of (a) the aggregate Stated
Amount of all outstanding Letters of Credit and (b) the aggregate amount of all
Unpaid Drawings with respect to Letters of Credit.

“LC Participant”
has the meaning provided in Section 2.4(g)(i).

“LC Participation”
has the meaning provided in Section 2.4(g)(i).

“LC Request” has
the meaning provided in Section 2.4(b).

“Leaseholds”
means, with respect to any Person, all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.

“Lenders” means
the Persons listed on Annex I and any other Person that becomes a
party hereto pursuant to an Assignment Agreement, other than any such Person
that ceases to be a party hereto pursuant to an Assignment Agreement.

“Lender Default”
means (a) the refusal (which has not been retracted) of a Lender in violation
of the requirements of this Agreement to make available its portion of any
incurrence of Loans or (b) a Lender having notified the Administrative
Agent and/or the Borrower that it does not intend to comply with its
obligations under Section 2.2.

“Lender Register”
has the meaning provided in Section 11.15.

“Letter of Credit”
means any Standby Letter of Credit or Commercial Letter of Credit, in each case
issued by any LC Issuer under this Agreement pursuant to Section 2.4 for the
account of the Borrower.

“Lien” means any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof).

“Loan” has the
meaning provided in Section 2.2.

“Margin Stock” has
the meaning provided in Regulation U.

“Material Adverse
Effect” means any or all of the following: 
(a) a material adverse effect on the business, operations,
Property, assets, liabilities, financial or other condition, or prospects of
the Borrower and its Subsidiaries, taken as a whole, or when used with
reference to any other Person, such Person and its Subsidiaries, taken as a

 16

 

whole, as the case may
be; (b) a material adverse effect on the ability of the Borrower to
perform its obligations under the Credit Documents to which it is a party; (c)
a material adverse effect on the ability of the Borrower and its Subsidiaries, taken
as a whole, to pay their liabilities and obligations as they mature or become
due; or (d) a material adverse effect on the validity, effectiveness or
enforceability, as against the Borrower, of any of the Credit Documents to
which it is a party.

“Maturity Date”
means the earlier to occur of (a) November 21, 2011, or (b) the date on which
(i) the Total Commitment is terminated pursuant to Section 9.2(a) and/or (ii)
all Loans and other Obligations are declared due and payable pursuant to
Section 9.2(b).

“Minimum Borrowing
Amount” means (a) for Base Rate Loans, $1,000,000, with minimum increments
thereafter of $500,000, and (b) for Eurodollar Loans, $5,000,000, with minimum
increments thereafter of $500,000.

“Moody’s” means
Moody’s Investors Service, Inc. and its successors.

“Moody’s Rating”
means, on any date of determination, the rating accorded the Borrower’s senior
unsecured long-term debt by Moody’s (or if the Obligations are secured, the
rating accorded to the Borrower’s senior secured long-term debt by Moody’s), or
if such rating is unavailable, the Borrower’s long-term issuer credit rating
accorded to it by Moody’s.

“Multiemployer Plan”
means a Plan maintained pursuant to a collective bargaining agreement or any
other arrangement as to which the Borrower or any member of the Controlled
Group is a party to which more than one employer is obligated to make
contributions.

“1933 Act” means
the Securities Act of 1933, as amended.

“1934 Act” means
the Securities Exchange Act of 1934, as amended.

“Non-Defaulting Lender”
means each Lender other than a Defaulting Lender.

“Non-Increasing Lender”
has the meaning provided in Section 3.2(b).

“Note” has the
meaning provided in Section 2.6(d).

“Notice of Borrowing,
Continuation or Conversion” has the meaning provided in Section 2.3(b).

“Notice Office”
means the office of the Administrative Agent at 127 Public Square, Cleveland,
Ohio 44114, Attention: Yvette M. Dyson-Owens (facsimile: (216) 689-5962), or
such other office of the Administrative Agent, as the Administrative Agent may
designate to the Borrower from time to time.

 17
 

 

“Obligations”
means all amounts, direct or indirect, contingent or absolute, of every type or
description, and at any time existing, owing by the Borrower to the
Administrative Agent or any Lender or any LC Issuer pursuant to the terms of
this Agreement or any other Credit Document (including, without limitation,
interest and fees that accrue after the commencement by or against the Borrower
of any insolvency proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding and any and all indemnification obligations
hereunder).

“Operating Lease”
means, with respect to any Person, any lease of any Property (whether real,
personal or mixed) by such Person as lessee that, in conformity with GAAP, is
not accounted for as a Capital Lease on the balance sheet of such Person.

“Parent” means DPL
Inc., an Ohio corporation.

“Payment Office”
means the office of the Administrative Agent at 127 Public Square, Cleveland,
Ohio 44114, Attention: Yvette M. Dyson-Owens (facsimile: (216) 689-5962), or
such other office of the Administrative Agent, as the Administrative Agent may
designate to the Borrower from time to time.

“PBGC” means the
Pension Benefit Guaranty Corporation established pursuant to Section 4002
of ERISA, or any successor thereto.

“Percentage”
means, at any time for any Lender, the percentage obtained by dividing such
Lender’s Commitment by the Total Commitment, provided,
that if the Total Commitment has been terminated, the Percentage for each
Lender shall be determined by dividing such Lender’s Commitment immediately
prior to such termination by the Total Commitment immediately prior to such
termination.

“Permitted Acquisition”
means and includes any Acquisition as to which all of the following conditions
are satisfied:  (a) such Acquisition
(i) involves a line or lines of an Energy-Related Business, and (ii) involves a
Person or a line or lines of business that are located and operated in the
United States; (b) no Default or Event of Default shall exist prior to or
immediately after giving effect to such Acquisition; (c) such Acquisition
is not being consummated on a hostile basis and has been approved by the Board
of Directors of the target Person and no material challenge to such Acquisition
shall be pending or threatened by any shareholder or director of the seller or
Person to be acquired, and (d) as of the date of the consummation of such
Acquisition, all approvals required in connection therewith shall have been
obtained.

“Permitted Liens”
means Liens permitted by Section 8.3.

“Permitted Restrictive
Covenant” means (a) any covenant or restriction contained in this
Agreement, (b) any covenant or restriction contained in any other agreement
that is less burdensome than any covenant or restriction contained in this
Agreement, (c) in the case of transfers by any Subsidiary of the Borrower
to the Borrower or another Subsidiary of the Borrower of any property or
assets, any agreement setting forth customary restrictions on the subletting,
assignment or transfer of any property or asset that is a lease, license or
conveyance of similar property or assets; (d) in the case of

 18
 

 

transfers by any
Subsidiary of the Borrower to the Borrower or another Subsidiary of the
Borrower of any property or assets, any agreement with the holder of a Lien
otherwise permitted to exist under Section 8.3(e)(ii) restricting on
customary terms the transfer of any property or assets subject thereto;
(e) any agreement evidencing or setting forth the terms of any refunding,
refinancing or replacement Indebtedness the incurrence of which is not
prohibited by this Agreement that contains any such restrictions to the extent
such restrictions are no less favorable to the Borrower or any of its
Subsidiaries or to the rights or interest of the Lenders than the terms in
effect in the Indebtedness being so refunded, refinanced or replaced
immediately prior to such refunding, refinancing or replacement; (f) any
agreement that has been entered into by the Borrower or any of its Subsidiaries
for the sale, lease, transfer or other disposition of any of its property or
assets so long as such sale, lease, transfer or other disposition is otherwise
permitted to be made under Section 8.2; and (g) any agreement
evidencing Indebtedness outstanding on the date a Person first becomes a
Subsidiary of the Borrower; provided, that
such agreement was not created in contemplation of the purchase or other
acquisition of such Person by the Borrower or any of its Subsidiaries and does
not extend to or cover any property or assets other than the property or assets
of the Person becoming such Subsidiary.

“Person” means any
individual, partnership, joint venture, firm, corporation, limited liability
company, association, trust or other entity or any government or political
subdivision or any agency, department or instrumentality thereof.

“Plan” means an
employee pension benefit plan that is covered by Title IV of ERISA or subject
to minimum funding standards under Section 412 of the Code as to which the
Borrower or any member of the Controlled Group may have any liability.

“Property” means,
with respect to any Person, any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased
or operated by such Person.

“Rating Agency”
means any of Fitch, Moody’s or S&P.

“RCRA” means the
Resource Conservation and Recovery Act, as the same may be amended from time to
time, 42 U.S.C. § 6901 et seq.

“Real Property”
means, with respect to any Person, all of the right, title and interest of such
Person in and to land, improvements and fixtures, including Leaseholds.

“Redeemable Stock”
means, with respect to any Person, any capital stock or similar equity
interests of such Person that (a) is by its terms subject to mandatory
redemption, in whole or in part, pursuant to a sinking fund, scheduled
redemption or similar provisions, at any time prior to the latest Maturity
Date; or (b) otherwise is required to be repurchased or retired on a scheduled
date or dates, upon the occurrence of any event or circumstance, at the option
of the holder or holders thereof, or otherwise, at any time prior to the latest
Maturity Date under this Agreement, other

 19
 

 

than any such repurchase
or retirement occasioned by a “change of control” or similar event.

“Reference Banks”
means (a) KeyBank and (b) any other Lender or Lenders selected as a Reference
Bank by the Administrative Agent.

“Regulation D”
means Regulation D of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof
establishing reserve requirements.

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof
establishing margin requirements.

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

“Reportable Event”
means a reportable event as defined in Section 4043 of ERISA and the
regulations issued under such section, with respect a Plan, excluding, however,
such events as to which the PBGC has by regulations waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the occurrence
of such event; provided, however, that a failure
to meet the minimum funding standard of Section 412 of the Code and of Section
302 of ERISA shall be a Reportable Event regardless of the issuance any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.

“Required Lenders”
means, (a) if there are no more than two Lenders, both Lenders or, (b) if there
are more than two Lenders, Non-Defaulting Lenders whose Revolving Facility
Exposure and Unutilized Commitment constitute at least 51% of the sum of the
Aggregate Revolving Facility Exposure and Unutilized Commitments of
Non-Defaulting Lenders.

“Revolving Facility
Exposure” means, for any Lender at any time, the sum of (a) the principal
amount of Loans made by such Lender and outstanding at such time, and (b) such
Lender’s share of the LC Outstandings at such time.

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

“S&P Rating”
means, on any date of determination, the rating accorded to the Borrower’s
senior unsecured long-term debt by S&P (or if the Obligations are secured,
the rating accorded to the Borrower’s senior secured long-term debt by
S&P).

“Sale and Lease-Back
Transaction” means any arrangement with any Person providing for the
leasing by the Borrower or any Subsidiary of the Borrower of any Property
(except for temporary leases for a term, including any renewal thereof, of not
more than one year and except for leases between the Borrower and a Subsidiary
of

 20
 

 

the Borrower or between
Subsidiaries of the Borrower), which Property has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person.

“SEC” means the
United States Securities and Exchange Commission.

“SEC Regulation D”
means Regulation D as promulgated under the 1933 Act, as the same may be in
effect from time to time.

“Single Employer Plan”
means a Plan maintained by the Borrower or any member of the Controlled Group
for employees of the Borrower or any member of the Controlled Group.

“Standard Permitted
Liens” means the following:

(a)           Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which adequate
reserves in accordance with GAAP have been established;

(b)           Liens in respect of Property or assets imposed by law
that were incurred in the ordinary course of business, such as carriers’,
warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens
arising in the ordinary course of business, that (i) do not secure payment
obligations more than 60 days past due; (ii) do not, in the aggregate,
materially detract from the value of such Property or assets or materially
impair the use thereof in the operation of the business of the Borrower or any
of its Subsidiaries and do not secure any Indebtedness; or (iii) are
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the books of the Borrower or its respective
Subsidiary, as the case may be;

(c)           bankers’ Liens and rights of setoff arising by
operation of law and contractual rights of setoff;

(d)           Liens arising from judgments, decrees or attachments
in circumstances not constituting an Event of Default under Section 9.1(g);

(e)           Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security; and
mechanic’s Liens, carrier’s Liens, and other Liens to secure the performance of
tenders, statutory obligations, contract bids, government contracts,
performance and return-of-money bonds and other similar obligations, incurred
in the ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money), whether pursuant to statutory requirements, common
law or consensual arrangements;

 21
 

 

(f)            leases or subleases granted in the ordinary course of
business to others not interfering in any material respect with the business of
the Borrower or any of its Subsidiaries and any interest or title of a lessor
under any lease not in violation of this Agreement;

(g)           easements, rights-of-way, zoning or other
restrictions, charges, encumbrances, defects in title, prior rights of other
Persons, and obligations contained in similar instruments, in each case that do
not involve, and are not likely to involve at any future time, either
individually or in the aggregate, (i) a substantial and prolonged interruption
or disruption of the business activities of the Borrower and its Subsidiaries
considered as an entirety, or (ii) a Material Adverse Effect;

(h)           precautionary filing of Uniform Commercial Code
financing statements by lessors in connection with Operating Leases;

(i)            Liens arising from the rights of lessors under leases
(including financing statements regarding Property subject to lease) permitted
under this Agreement, provided that
such Liens are only in respect of the Property subject to, and secure only, the
respective lease (and any other lease with the same or an affiliated lessor);
and

(j)            rights of consignors of goods, whether or not
perfected by the filing of a financing statement under the UCC.

“Standby Letter of
Credit” means any standby letter of credit issued for the purpose of
supporting workers compensation, liability insurance, releases of contract
retention obligations, contract performance guarantee requirements and other
bonding obligations or for other lawful purposes.

“Stated Amount” of
each Letter of Credit shall mean the maximum amount available to be drawn
thereunder (regardless of whether any conditions or other requirements for
drawing could then be met).

“Subsidiary”
means, with respect to any Person, (a) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether at the time stock of any class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency)
is at the time owned by such Person directly or indirectly through Subsidiaries
and (b) any partnership, limited liability company, association, joint venture
or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time or in which the
Borrower, one or more other Subsidiaries of the Borrower, or the Borrower and
one or more Subsidiaries of the Borrower, directly or indirectly, has the power
to direct the policies, management and affairs thereof.  Unless otherwise expressly provided, all references herein to “Subsidiary” shall mean a
Subsidiary of the Borrower.

 22
 

 

“Substantial Portion”
means, with respect to the Property of the Borrower and its Subsidiaries,
Property that (a) represents more than 10% of the Consolidated Tangible Assets
of the Borrower and its Subsidiaries as would be shown in the consolidated
financial statements of the Borrower and its Subsidiaries as at the beginning
of the twelve-month period ending with the month in which such determination is
made or (b) is responsible for more than 10% of the consolidated net sales or
of the Consolidated Net Income of the Borrower and its Subsidiaries as
reflected in the financial statements referred to in clause (a) above.

“Swap Agreement”
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), irrespective of whether 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, that 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.

“Synthetic Lease”
means any lease (a) that is accounted for by the lessee as an Operating Lease,
and (b) under which the lessee is intended to be the “owner” of the leased
Property for Federal income tax purposes.

“Taxes” has the
meaning provided in Section 4.5(a).

“Total Commitment”
means the sum of the Commitments of the Lenders.

“Type” means any
type of Loan determined with respect to the interest option applicable thereto,
i.e., a Base Rate Loan or Eurodollar
Loan.

“UCC” means the
Uniform Commercial Code as in effect from time to time.  Unless otherwise specified, the UCC shall
refer to the UCC as in effect in the State of Ohio.

“Unfunded Liabilities”
means the amount, if any, by which the present value of all vested and unvested
accrued benefits under all Single Employer Plans exceeds the fair market value
of all such Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans using PBGC actuarial assumptions
for single employer plan terminations.

“United States”
and “U.S.” each means United States of America.

 23
 

 

“Unpaid Drawing”
means, with respect to any Letter of Credit, the aggregate amount of the draws
made on such Letter of Credit that have not been reimbursed by the Borrower or
converted to a Loan pursuant to Section 2.4(f)(i), and, in each case, all
interest that accrues thereon pursuant to this Agreement.

“Unutilized Commitment”
means, at any time, with respect to any Lender, the excess of (a) such
Lender’s Commitment at such time over (b) such Lender’s Revolving Facility
Exposure at such time.

“Unutilized Total
Commitment” means, at any time, the excess of (a) the Total Commitment at
such time over (b) the Aggregate Revolving Facility Exposure at such time.

“USA Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001.

“Utilization Fees”
has the meaning provided in Section 3.1(b).

“Wholly-Owned
Subsidiary” means each Subsidiary of the Borrower at least 95% of whose
capital stock, equity interests and partnership interests, other than director’s
qualifying shares or similar interests, are owned directly or indirectly by the
Borrower.

Section 1.2             Computation of Time Periods.  In
this Agreement 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 means “to but excluding,” and the word “through” means “through
and including.”

Section 1.3             Accounting Terms. 
Except as otherwise specifically provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time.

Section 1.4             Terms Generally.  The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”,
“includes” and “including” 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, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, restatements, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed
to include such Person’s successors and assigns, (c)
the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references
herein to Sections, Annexes, Schedules and Exhibits shall be construed to refer
to Sections of, and Annexes, Schedules and Exhibits to, this Agreement, and (e) the

 24
 

 

words “asset” and “property” (or “Property”)
shall be construed to have the same meaning and effect and to refer to any and
all Real Property, tangible and intangible assets and properties, including
cash, securities, accounts and contract rights, and interests in any of the
foregoing.

ARTICLE II.

AMOUNT AND TERMS OF LOANS

Section 2.1             Establishment of the Credit Facility.  On
the Closing Date, and subject to and upon the terms and conditions set forth in
this Agreement and the other Credit Documents, the Administrative Agent, the
Lenders, and each LC Issuer agree to establish the Credit Facility for the
benefit of the Borrower; provided, however, that at no time will (i) the Aggregate
Credit Facility Exposure exceed the Total Credit Facility Amount, or (ii) the
Credit Facility Exposure of any Lender exceed the aggregate amount of such
Lender’s Commitment.

Section 2.2             Commitments for Loans. 
Subject to and upon the terms and conditions herein set forth, each Lender
severally agrees to make a revolving loan or revolving loans (each a “Loan”
and, collectively, the “Loans”) to the Borrower, which Loans (a) may be incurred by the Borrower at any time and from
time to time on and after the Closing Date and prior to the Maturity Date; (b) except as otherwise provided herein, may, at the
option of the Borrower, be incurred and maintained as, or Converted into, Loans
that are Base Rate Loans or Eurodollar Loans, in each case denominated in
Dollars, provided that all Loans made
as part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Loans of the same Type; (c) may
be repaid or prepaid and re-borrowed in accordance with the provisions hereof;
and (d) shall not be made if, after giving effect to any such Loan, (i)
the Revolving Facility Exposure of any Lender would exceed such Lender’s
Commitment, (ii) the Aggregate Revolving Facility Exposure would exceed the
Total Commitment, or (iii) the Borrower would be required to prepay Loans or
cash collateralize Letters of Credit pursuant to 4.3(a).

Section 2.3             Borrowing, Continuation or Conversion of
Loans.

(a)           Borrowings, Continuations and Conversions.  The
Borrower may, in accordance with the provisions set forth in this Section and
subject to the other terms and conditions of this Agreement, (i) request
Borrowings, (ii) Convert all or a portion of the outstanding principal amount
of Loans of one Type into a Borrowing or Borrowings of another Type of Loans
that can be made pursuant to the terms of this Agreement and (iii) Continue a
Borrowing of Eurodollar Loans at the end of the applicable Interest Period as a
new Borrowing of Eurodollar Loans with a new Interest Period, provided that (A) any Conversion of Eurodollar Loans
into Base Rate Loans shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Loans, (B) Base Rate Loans may only be Converted
into Eurodollar Loans if no Default under Section 9.1(a) or Event of Default is
in existence on the date of the Conversion unless the Required Lenders
otherwise agree, and (C) Base Rate Loans may not be Converted into

 25
 

 

Eurodollar Loans during any period when such
Conversion is not permitted under Section 2.8.

(b)           Notice of Borrowings, Continuation and
Conversion.  Each Borrowing, Continuation or Conversion of
a Loan shall be made upon notice in the form provided for below, which notice
shall be provided by the Borrower to the Administrative Agent at the Notice
Office not later than (i) in the case of each Borrowing of or Continuation of
or Conversion into a Eurodollar Loan, 12:00 noon (local time at its Notice
Office) at least three Business Days’ prior to the date of such Borrowing,
Continuation or Conversion and (ii) in the case of each Borrowing of or
Conversion into a Base Rate Loan, 12:00 noon (local time at its Notice Office)
on the proposed date of such Borrowing or Conversion.  Each such request shall be made by an
Authorized Officer delivering written notice of such request substantially in
the form of Exhibit B (each such notice, a “Notice of Borrowing,
Continuation or Conversion”) or by telephone (to be confirmed immediately
in writing by delivery of an Authorized Officer of a Notice of Borrowing,
Continuation or Conversion), and in any event each such request shall be irrevocable
and shall specify (A) the aggregate principal amount of the Loans to be made
(which shall be in the Minimum Borrowing Amount) pursuant to such Borrowing or,
if applicable, the Borrowings to be Continued or Converted, (B) the date of the
Borrowing, Continuation or Conversion (which shall be a Business Day),
(C) whether the Borrowing will consist of Base Rate Loans or Eurodollar
Loans or, in the case of a Continuation or Conversion, the Loans to be
Continued or Converted, and (D) if applicable, the initial Interest Period
thereto or, in the case of a Continuation, the new Interest Period.  Without in any way limiting the obligation of
the Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may act prior to receipt of written
confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized
Officer entitled to give telephonic notices under this Agreement on behalf of
the Borrower.  In each such case, the
Administrative Agent’s record of the terms of such telephonic notice shall be
conclusive absent manifest error.

(c)           Minimum Borrowing Amount.  The
aggregate principal amount of each Borrowing by the Borrower shall not be less
than the Minimum Borrowing Amount.  No
partial Conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto.

(d)           Maximum Borrowings.  More
than one Borrowing may be incurred by the Borrower on any day, provided that (i) if there are two or more Borrowings on a single
day by the Borrower that consist of Eurodollar Loans, each such Borrowing shall
have a different initial Interest Period, and (ii) at no time shall there be
more than six Borrowings of Eurodollar Loans outstanding hereunder.

(e)           Notice to Lenders. The Administrative Agent shall promptly
give each Lender written notice (or telephonic notice promptly confirmed in
writing) of (i) each proposed Borrowing, (ii) such Lender’s
proportionate share thereof and (iii) the other

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matters covered by the Notice of Borrowing,
Continuation or Conversion relating thereto.

Section 2.4             Letters of Credit.

(a)           LC Issuances.  Subject to
and upon the terms and conditions set forth herein, the Borrower may request an
LC Issuer at any time and from time to time to issue, for the account of the
Borrower, and each LC Issuer agrees to issue from time to time, Letters of
Credit in a form acceptable to such LC Issuer and the Administrative Agent and
denominated and payable in Dollars; provided,
however, that notwithstanding the
foregoing, no LC Issuance shall be made if, after giving effect thereto, (i)
the LC Outstandings would exceed the LC Commitment Amount, (ii) the Revolving
Facility Exposure of any Lender would exceed such Lender’s Commitment, (iii)
the Aggregate Revolving Facility Exposure would exceed the Total Commitment, or
(iv) the Borrower would be required to prepay Loans or cash collateralize
Letters of Credit pursuant to Section 4.3(a). Subject to Section 2.4(c), each
Letter of Credit shall have an expiry date (including any renewal periods)
occurring not later than the earlier of (y) one year from the date of issuance
thereof, or (z) 30 Business Days prior to the Maturity Date.

(b)           LC Requests.  Whenever the
Borrower desires that a Letter of Credit be issued for its account, the
Borrower shall give the Administrative Agent and the applicable LC Issuer written
or telephonic notice (in the case of telephonic notice, promptly confirmed in
writing if so requested by the Administrative Agent) which, if in the form of
written notice, shall be substantially in the form of Exhibit B-2 (each
such request, a “LC Request”), or transmit by electronic communication
(if arrangements for doing so have been approved by the applicable LC Issuer),
prior to 11:00 A.M. (local time at the Notice Office) at least three Business
Days (or such shorter period as may be acceptable to the relevant LC Issuer)
prior to the proposed date of issuance (which shall be a Business Day), which
LC Request shall include such supporting documents that such LC Issuer
customarily requires in connection therewith. 
In the event of any inconsistency between any of the terms or provisions
of any LC Document and the terms and provisions of this Agreement respecting
Letters of Credit, the terms and provisions of this Agreement shall control.

(c)           Auto-Renewal Letters of Credit. 
If the Borrower so requests in any applicable LC Request, each LC Issuer
shall agree to issue a Letter of Credit that has automatic renewal provisions; provided, however,
that any Letter of Credit that has automatic renewal provisions must permit
such LC Issuer to prevent any such renewal at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day in each
such twelve-month period to be agreed upon at the time such

 27
 

 

Letter of Credit is issued.  Once any such Letter of Credit that has
automatic renewal provisions has been issued, the Lenders shall be deemed to
have authorized (but may not require) such LC Issuer to permit the renewal of
such Letter of Credit at any time to an expiry date not later than 30 Business
Days prior to the Maturity Date; provided,
however, that such LC Issuer
shall not permit any such renewal if (i) such LC Issuer has determined that it
would have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof, or (ii) it has received notice (which may
be by telephone or in writing) on or before the day that is two Business Days
before the date that such LC Issuer is permitted to send a notice of
non-renewal from the Administrative Agent, any Lender or the Borrower that one
or more of the applicable conditions specified in Section 5.2 is not then
satisfied.

(d)           Applicability of ISP98 and UCP. 
Unless otherwise expressly agreed by the applicable LC Issuer and the Borrower,
when a Letter of Credit is issued, (i) the rules of the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance) shall apply to each Standby Letter of Credit, and (ii) the rules of
the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance
(including the International Chamber of Commerce’s decision published by the
Commission on Banking Technique and Practice on April 6, 1998 regarding the
European single currency (euro)) shall apply to each Commercial Letter of
Credit.

(e)           Notice of LC Issuance.  Each LC
Issuer shall, on the date of each LC Issuance by it, give the Administrative
Agent, each applicable Lender and the Borrower written notice of such LC
Issuance, accompanied by a copy to the Administrative Agent of the Letter of
Credit or Letters of Credit issued by it. 
Each LC Issuer shall provide to the Administrative Agent a quarterly (or
monthly if requested by any applicable Lender) summary describing each Letter
of Credit issued by such LC Issuer and then outstanding and an identification
for the relevant period of the daily aggregate LC Outstandings represented by
Letters of Credit issued by such LC Issuer.

(f)            Reimbursement Obligations.

(i)            The Borrower hereby agrees to reimburse
each LC Issuer, by making payment directly to such LC Issuer in immediately
available funds at the payment office of such LC Issuer, for any Unpaid Drawing
with respect to any Letter of Credit immediately after, and in any event on the
date on which, such LC Issuer notifies the Borrower of such payment or
disbursement (which notice to the Borrower shall be delivered reasonably
promptly after

 28
 

 

any
such payment or disbursement), such payment to be made in Dollars, with
interest on the amount so paid or disbursed by such LC Issuer, to the extent
not reimbursed prior to 1:00 P.M. (local time at the payment office of the
applicable LC Issuer) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such LC
Issuer is reimbursed therefor at a rate per annum that shall be the rate then
applicable to Loans pursuant to Section 2.09(a)(i) that are Base Rate Loans or,
if not reimbursed on the date of such payment or disbursement, at the Default
Rate, any such interest also to be payable on demand.  If by 11:00 A.M. on the Business Day
immediately following notice to it of its obligation to make reimbursement in
respect of an Unpaid Drawing, the Borrower has not made such reimbursement out
of its available cash on hand or, in the case of the Borrower, a
contemporaneous Borrowing hereunder (if such Borrowing is otherwise available
to the Borrower), (x) the Borrower will in each case be deemed to have given a
Notice of Borrowing for Loans that are Base Rate Loans in an aggregate
principal amount sufficient to reimburse such Unpaid Drawing (and the
Administrative Agent shall promptly give notice to the Lenders of such deemed
Notice of Borrowing), (y) the Lenders shall, unless they are legally prohibited
from doing so, make the Loans contemplated by such deemed Notice of Borrowing
(which Loans shall be considered made under Section 2.02), and (z) the proceeds
of such Loans shall be disbursed directly to the applicable LC Issuer to the
extent necessary to effect such reimbursement and repayment of the Unpaid
Drawing, with any excess proceeds to be made available to the Borrower in
accordance with the applicable provisions of this Agreement.

(ii)           Obligations Absolute. 
The Borrower’s obligation under this Section to reimburse each LC Issuer
with respect to Unpaid Drawings (including, in each case, interest thereon)
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against such LC Issuer, the Administrative Agent
or any Lender, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the beneficiary of
the proceeds of such drawing; provided,
however, that the Borrower shall
not be obligated to reimburse an LC Issuer for any wrongful payment made by
such LC Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such LC
Issuer.

 29
 

 

(g)           LC Participations.

(i)            Immediately upon each LC Issuance, the LC
Issuer of such Letter of Credit shall be deemed to have sold and transferred to
each Lender with a Commitment, and each such Lender (each an “LC Participant”)
shall be deemed irrevocably and unconditionally to have purchased and received
from such LC Issuer, without recourse or warranty, an undivided interest and
participation (an “LC Participation”), to the extent of such Lender’s
Percentage of the Stated Amount of such Letter of Credit in effect at such time
of issuance, in such Letter of Credit, each substitute Letter of Credit, each
drawing made thereunder, the obligations of the Borrower under this Agreement
with respect thereto (although LC Fees relating thereto shall be payable
directly to the Administrative Agent for the account of the Lenders as provided
in Section 3.1(c) and the LC Participants shall have no right to receive any
portion of any fees of the nature contemplated by Section 3.1(d) or in the
Agent Fee Letter), the obligations of the Borrower under any LC Documents
pertaining thereto, and any security for, or guaranty pertaining to, any of the
foregoing.

(ii)           In determining whether to pay under any
Letter of Credit, an LC Issuer shall not have any obligation relative to the LC
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit.  Any action taken or omitted to be taken by an
LC Issuer under or in connection with any Letter of Credit, if taken or omitted
in the absence of gross negligence or willful misconduct, shall not create for
such LC Issuer any resulting liability.

(iii)          If
an LC Issuer makes any payment under any Letter of Credit and the Borrower
shall not have reimbursed such amount in full to such LC Issuer pursuant to
Section 2.4(f), such LC Issuer shall promptly notify the Administrative Agent,
and the Administrative Agent shall promptly notify each LC Participant of such
failure, and each LC Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of such LC Issuer, the amount of such LC
Participant’s Percentage of such payment in Dollars and in same-day funds; provided, however,
that no LC Participant shall be obligated to pay to the Administrative Agent
its Percentage of such unreimbursed amount for any wrongful payment made by
such LC Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such LC
Issuer.  If the Administrative Agent so
notifies any LC Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (local time at its Notice Office) on any Business Day, such
LC Participant shall make available to the Administrative Agent for the account
of 

 30
 

 

the
relevant LC Issuer such LC Participant’s Percentage of the amount of such
payment on such Business Day in same-day funds. 
If and to the extent such LC Participant shall not have so made its
Percentage of the amount of such payment available to the Administrative Agent
for the account of the relevant LC Issuer, such LC Participant agrees to pay to
the Administrative Agent for the account of such LC Issuer, forthwith on demand,
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent for the account of
such LC Issuer at the Federal Funds Effective Rate.  The failure of any LC Participant to make available
to the Administrative Agent for the account of the relevant LC Issuer its
Percentage of any payment under any Letter of Credit shall not relieve any
other LC Participant of its obligation hereunder to make available to the
Administrative Agent for the account of such LC Issuer its Percentage of any
payment under any Letter of Credit on the date required, as specified above,
but no LC Participant shall be responsible for the failure of any other LC
Participant to make available to the Administrative Agent for the account of
such LC Issuer such other LC Participant’s Percentage of any such payment.

(iv)          Whenever an LC Issuer receives a payment
of a reimbursement obligation as to which the Administrative Agent has received
for the account of such LC Issuer any payments from the LC Participants
pursuant to subpart (iii) above, such LC Issuer shall pay to the Administrative
Agent and the Administrative Agent shall promptly pay to each LC Participant
that has paid its Percentage thereof, in same-day funds, an amount equal to
such LC Participant’s Percentage of the principal amount thereof and interest
thereon accruing after the purchase of the respective LC Participations, as and
to the extent so received.

(v)           The obligations of the LC Participants to
make payments to the Administrative Agent for the account of each LC Issuer
with respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any of
the following circumstances:

(A)          any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;

(B)           the existence of any claim, set-off defense or other
right that the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the

 31

 

Administrative
Agent, any LC Issuer, any Lender, or other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit), other than
any claim that the Borrower may have against any applicable LC Issuer for gross
negligence or willful misconduct of such LC Issuer in making payment under any
applicable Letter of Credit;

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

(D)          the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit Documents;
or

(E)           the occurrence of any Default or Event of Default.

(vi)          To the extent any LC Issuer is not
indemnified by the Borrower, the LC Participants will reimburse and indemnify
such LC Issuer, in proportion to their respective Percentages, for and against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, costs, expenses or disbursements of whatsoever kind or nature
that may be imposed on, asserted against or incurred by such LC Issuer in
performing its respective duties in any way related to or arising out of LC
Issuances by it; provided, however, that no LC Participants shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements
resulting from such LC Issuer’s gross negligence or willful misconduct.

Section
2.5             Funding Obligations; Disbursement of Funds.

(a)           Several Nature of Funding Obligations.  The
Commitments of each Lender hereunder and the obligation of each Lender to make
Loans and acquire and fund LC Participations, as the case may be, are several
and not joint obligations.  No Lender
shall be responsible for any default by any other Lender in its obligation to
make Loans or fund any participation hereunder and each Lender shall be
obligated to make the Loans provided to be made by it and fund its
participations required to be funded by it hereunder, regardless of the failure
of any other Lender to fulfill any of its Commitments hereunder.  Nothing herein and no subsequent termination
of the Commitments pursuant to Section 3.4 shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder and in
existence from time to time or to prejudice any rights that the Borrower may
have against any Lender as a result of any default by such Lender hereunder.

 32
 

 

(b)           Borrowings Pro Rata.  All
Loans made, and LC Participations acquired by each Lender, shall be made or
acquired, as the case may be, on a pro rata basis
based upon each Lender’s Percentage of the amount of such Borrowing or Letter
of Credit in effect on the date the applicable Borrowing is to be made or the
Letter of Credit is to be issued.

(c)           Notice to Lenders. The Administrative Agent shall promptly
give each Lender, as applicable, written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, or Conversion or Continuation
thereof, and LC Issuance, and of such Lender’s proportionate share thereof or
participation therein and of the other matters covered by the Notice of
Borrowing, Continuation or Conversion, or LC Request, as the case may be,
relating thereto.

(d)           Funding of Loans.  No
later than 2:00 P.M. (local time at the Payment Office) on the date
specified in each Notice of Borrowing, Continuation or Conversion, each Lender
will make available its pro rata share,
if any, of each Borrowing requested to be made on such date in the manner
provided below.  All amounts shall be
made available to the Administrative Agent in Dollars and immediately available
funds at the Payment Office and the Administrative Agent promptly will make
available to the Borrower by depositing to its account at the Payment Office the
aggregate of the amounts so made available in the type of funds received.

(e)           Advance Funding. 
Unless the Administrative Agent shall have been notified by any Lender
prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on such
date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount.  If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Lender.  If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent.  The Administrative
Agent shall also be entitled to recover from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the overnight Federal Funds Effective Rate or (y) if paid by
the Borrower, the then applicable rate of interest, calculated in accordance
with Section 2.7, for the respective Loans (but without any requirement to pay
any amounts in respect thereof pursuant to Section 2.7).

(f)            Rights Not Prejudiced. Nothing herein and no subsequent
termination of the Commitments pursuant to Section 3.3 or 3.4 shall be deemed
to relieve any Lender

 33
 

 

from its obligation to fulfill its
commitments hereunder and in existence from time to time or to prejudice any
rights that the Borrower may have against any Lender as a result of any default
by such Lender hereunder.

Section 2.6             Evidence of Obligations.

(a)           Loan Accounts of Lenders.  The
Obligations of the Borrower owing to each Lender shall be evidenced by, and
each Lender shall maintain in accordance with its usual practice, an account or
accounts established by such Lender, which account or accounts shall include
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.

(b)           Loan Accounts of Administrative Agent.  The
Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type
thereof and the Interest Period and applicable interest rate if such Loan is a
Eurodollar Loan, (ii) the amount of any
principal due and payable or to become due and payable from the Borrower to
each Lender hereunder, and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender’s share thereof.

(c)           Effect of Loan Accounts.  The
entries made in the accounts maintained pursuant to Section 2.6(a) and (b)
shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay or prepay the Loans or any other amounts in accordance
with the terms of this Agreement.

(d)           Notes.  Upon request of any Lender,
the Borrower’s obligation to pay the principal of, and interest on, the Loans
made to it by each Lender shall be evidenced by a
promissory note of the Borrower substantially in the form of Exhibit A
with blanks appropriately completed in conformity herewith (each a “Note”
and, collectively, the “Notes”), provided that
the decision of any Lender not to request a Note shall in no way detract from
the Borrower’s obligation to repay the Loans and other amounts owing by the
Borrower to such Lender.  Any Note issued
by the Borrower to a Lender shall:  (i) be executed by the Borrower; (ii) be payable to the order of such Lender and be dated
on or prior to the Closing Date; (iii) be payable in
the principal amount of the Loans evidenced thereby; (iv)
mature on the Maturity Date; (v) bear interest as
provided in Section 2.7 in respect of the Base Rate Loans or Eurodollar
Loans, as the case may be, evidenced thereby; (vi) be
subject to mandatory prepayment as provided in Section 4.3; and (vii) be entitled to the benefits of this Agreement and
the other Credit Documents.

Section 2.7             Interest.

(a)           Interest on Base Rate Loans. 
During such periods as a Loan is a Base Rate Loan, it shall bear
interest at a fluctuating rate per annum that shall at all times be equal to
the Base Rate in effect from time to time plus the
Applicable Margin in effect from time to time for such Loan.

 34
 

 

(b)           Interest on Eurodollar Loans. 
During such periods as a Loan is a Eurodollar Loan, it shall bear
interest at a rate per annum that shall at all times during an Interest Period
therefor be the relevant Adjusted Eurodollar Rate for such Eurodollar Loan for
such Interest Period plus the
Applicable Margin in effect from time to time for such Loan.

(c)           Default Interest. 
Notwithstanding the above provisions, if a Default under Section 9.1(a)
or an Event of Default has occurred and is continuing, then, upon written
notice by the Administrative Agent (which notice the Administrative Agent shall
give at the direction of the Required Lenders), (i) all outstanding amounts of
principal and, to the extent permitted by law, all overdue interest, in respect
of each Loan shall bear interest, payable on demand, at a rate per annum equal
to 2% per annum above the interest rate that is or would be applicable from
time to time pursuant to Section 2.7(a), and (ii) the LC Fees shall be
increased by an additional 2% per annum in excess of the LC Fees otherwise
applicable thereto.  If any amount (other
than the principal of and interest on the Loans) payable by the Borrower under
the Credit Documents is not paid when due, upon written notice by the
Administrative Agent (which notice the Administrative Agent shall give at the
direction of the Required Lenders), such amount shall bear interest, payable on
demand, at a rate per annum equal to 2% per annum above the interest rate that
is or would be applicable from time to time pursuant to Section 2.7(a).

(d)           Accrual and Payment of Interest. 
Interest shall accrue from and including the date of any Borrowing to
but excluding the date of any prepayment or repayment thereof and shall be
payable:

(i)            in
respect of each Base Rate Loan, in arrears on the last Business Day of each
December, March, June and September and on the Maturity Date;

(ii)           in
respect of each Eurodollar Loan, on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on the dates that are successively 90 days after the commencement of
such Interest Period and on the Maturity Date;

(iii)          in
respect of any repayment or prepayment of any Loan (other than a prepayment of
a Base Rate Loan), on the date of such repayment or prepayment;

(iv)          in
respect of any Conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, on the effective date of such Conversion; and

(v)           in
respect of any interest payment pursuant to Section 2.7(c), on demand.

(e)           Computations of Interest.  All
computations of interest on Eurodollar Loans and other amounts (other than Base
Rate Loans) hereunder shall be made on the actual number of days elapsed over a
year of 360 days, and all computations of interest

 35
 

 

on Base Rate Loans and Unpaid Drawings
hereunder shall be made on the actual number of days elapsed over a year of 365
or 366 days, as applicable.

(f)            Information as to Interest Rates.  The
Administrative Agent upon determining the interest rate for any Borrowing or
any change in interest rate applicable to any Borrowing as a result of a change
in the Applicable Margin, a change in the Base Rate, the implementation of the
default rate or otherwise, shall promptly notify the Borrower and the Lenders
thereof, provided that (i) any such change
shall be immediately effective as and when such change occurs without regard to
when the Administrative Agent provides any such notice, and (ii) the
failure of the Administrative Agent to give any such notice shall in no way
detract from or affect the obligation of the Borrower to pay interest at the
changed rate.  If the Administrative
Agent is unable to determine the Adjusted Eurodollar Rate for any Borrowing of
Eurodollar Loans based on the quotation service referred to in clause (i) of
the definition of the term Adjusted Eurodollar Rate, it will promptly so notify
the Reference Banks and each Reference Bank will furnish the Administrative
Agent timely information for the purpose of determining the Adjusted Eurodollar
Rate for such Borrowing.  If any one or
more of the Reference Banks shall not timely furnish such information, the
Administrative Agent shall determine the Adjusted Eurodollar Rate for such
Borrowing on the basis of timely information furnished by the remaining
Reference Banks.

Section
2.8             Increased Costs; Illegality.

(a)           If (x) in the case of clause (i) below, the Administrative Agent or (y)
in the case of clauses (ii) and (iii) below, any Lender, shall have determined
on a reasonable basis (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):

(i)            on
any date for determining the Adjusted Eurodollar Rate for any Interest Period
that, by reason of any changes arising after the Closing Date affecting the
London interbank market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Adjusted Eurodollar Rate; or

(ii)           at
any time, that such Lender shall incur increased costs or reductions in the
amounts received or receivable hereunder in an amount that such Lender deems
material with respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the imposition of
or a change in the rate of taxes or similar charges) because of (x) any change
since the Closing Date in any applicable law, governmental rule, regulation,
guideline, order or request (whether or not having the force of law), or in the
interpretation or administration thereof and including the introduction of any
new law or governmental rule, regulation, guideline, order or request (such as,
for example, but not limited to, a change in official reserve requirements,
but, in all events, excluding reserves includable in the Adjusted Eurodollar
Rate pursuant to the definition thereof) and/or (y) other circumstances

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adversely affecting the London interbank market or the position of such
Lender in such market; or

(iii)          at
any time, that the making or continuance of any Eurodollar Loan has become
unlawful by compliance by such Lender in good faith with any change since the
Closing Date in any law, governmental rule, regulation, guideline or order, or
the interpretation or application thereof, or would conflict with any thereof
not having the force of law but with which such Lender customarily complies or
has become impracticable as a result of a contingency occurring after the
Closing Date that materially adversely affects the London interbank market;

then, and in each such event, such Lender (or
the Administrative Agent in the case of clause (i) above) shall (x) on or
promptly following such date or time and (y) within 10 Business Days of the
date on which such event no longer exists give notice (by telephone confirmed
in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders).  Thereafter
(x) in the case of clause (i) above, Eurodollar Loans shall no longer be
available until such time as the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing, Continuation
or Conversion given by the Borrower with respect to Eurodollar Loans that have
not yet been incurred, Converted or Continued shall be deemed rescinded by the
Borrower or, in the case of a Notice of Borrowing, Continuation or Conversion,
shall, at the option of the Borrower, be deemed converted into a Notice of
Borrowing, Continuation or Conversion for Base Rate Loans to be made on the
date of Borrowing contained in such Notice of Borrowing, Continuation or
Conversion, (y) in the case of clause (ii) above, the Borrower shall pay to
such Lender, upon written demand therefor, such additional amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender shall determine) as shall be required to compensate
such Lender, for such increased costs or reductions in amounts receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing the basis for the calculation thereof, which basis must be reasonable,
submitted to the Borrower by such Lender shall, absent manifest error, be final
and conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified
in Section 2.8(b) as promptly as possible and, in any event, within the time
period required by law.

(b)           At any time that any Eurodollar Loan is affected by the circumstances
described in Section 2.8(a)(ii) or (iii), the Borrower may (and in the
case of a Eurodollar Loan affected pursuant to Section 2.8(a)(iii) the
Borrower shall) either (i) if the affected
Eurodollar Loan is then being made pursuant to a Borrowing, by giving the
Administrative Agent telephonic notice (confirmed promptly in writing) thereof
on the same date that the Borrower was notified by a Lender pursuant to Section 2.8(a)(ii)
or (iii), cancel such Borrowing, convert the related Notice of Borrowing,
Continuation or Conversion into one requesting a Borrowing of Base Rate Loans
or require the affected Lender to make its requested Loan as a Base Rate Loan,
or (ii) if the affected

 37
 

 

Eurodollar Loan is then outstanding, upon at
least one Business Day’s notice to the Administrative Agent, require the
affected Lender to Convert each such Eurodollar Loan into a Base Rate Loan, provided that if more than one Lender is affected at any
time, then all affected Lenders must be treated the same pursuant to this
Section 2.8(b).

(c)           If any Lender shall have determined that after the Closing Date, the
adoption of any applicable law, rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged by law with the interpretation or administration thereof, or compliance
by such Lender or its parent corporation with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank, or comparable agency, in each case made subsequent to
the Closing Date, has or would have the effect of reducing by an amount
reasonably deemed by such Lender to be material the rate of return on such
Lender’s or its parent corporation’s capital or assets as a consequence of such
Lender’s commitments or obligations hereunder to a level below that which such
Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender’s or
its parent corporation’s policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction.  Each Lender, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 2.8(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth, in reasonable detail, the basis of the
calculation of such additional amounts, which basis must be reasonable,
although the failure to give any such notice shall not release or diminish any
of the Borrower’s obligations to pay additional amounts pursuant to this
Section 2.6(c) upon the subsequent receipt of such notice.

(d)           Notwithstanding anything in this Agreement to the contrary, no Lender shall be entitled to compensation or payment or
reimbursement of other amounts under Section 2.8 or 4.5 for any amounts
incurred or accruing prior to the Closing Date or more than 270 days prior to
the giving of notice to the Borrower of additional costs or other amounts of
the nature described in such Sections.

Section 2.9             Breakage Compensation.  The
Borrower shall compensate each applicable Lender, upon its written request
(which request shall set forth the detailed basis for requesting and the method
of calculating such compensation), for all reasonable losses, costs, expenses
and liabilities (including, without limitation, any loss, cost, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Lender to fund its Eurodollar Loans that such
Lender may sustain): 
(i) if for any reason (other than a default by such Lender or the
Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing, Conversion or Continuation
(whether or not withdrawn by the Borrower); (ii) if
any repayment, prepayment, Conversion or Continuation of any of its Eurodollar
Loans occurs on a date that is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of
any of its Eurodollar

 38
 

 

Loans is not made on any date specified in a
notice of prepayment given by the Borrower; (iv) as
a result of an assignment by a Lender of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto pursuant to a request by the
Borrower pursuant to Section 2.8(b); or (v) as
a consequence of (x) any other default by the Borrower to repay or prepay its
Eurodollar Loans when required by the terms of this Agreement or (y) an
election made pursuant to Section 2.8(b). 
The Borrower shall pay such Lender the amount shown as due on any such
request within 10 days after receipt thereof.

Section 2.10           Increased Costs to LC Issuers.  If
after the Closing Date, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
LC Issuer or any Lender with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency (in
each case made subsequent to the Closing Date) shall either (i) impose, modify
or make applicable any reserve, deposit, capital adequacy or similar
requirement against Letters of Credit issued by such LC Issuer or such Lender’s
participation therein, or (ii) impose on such LC Issuer or any Lender any other
conditions affecting this Agreement, any Letter of Credit or such Lender’s
participation therein; and the result of any of the foregoing is to increase
the cost to such LC Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such LC Issuer or such Lender hereunder (other than
any increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes or similar charges),
then, upon demand to the Borrower by such LC Issuer or such Lender (a copy of
which notice shall be sent by such LC Issuer or such Lender to the
Administrative Agent), the Borrower shall pay to such LC Issuer or such Lender
such additional amount or amounts as will compensate any such LC Issuer or such
Lender for such increased cost or reduction. 
A certificate submitted to the Borrower by any LC Issuer or any Lender,
as the case may be (a copy of which certificate shall be sent by such LC Issuer
or such Lender to the Administrative Agent), setting forth, in reasonable
detail, the basis for the determination of such additional amount or amounts
necessary to compensate any LC Issuer or such Lender as aforesaid shall be
conclusive and binding on the Borrower absent manifest error, although the
failure to deliver any such certificate shall not release or diminish the
Borrower’s obligations to pay additional amounts pursuant to this Section 3.04.

Section
2.11           Change of Lending Office; Replacement of Lenders.

(a)           Each Lender agrees that, upon the occurrence of any event giving rise
to the operation of Section 2.8(a)(ii) or (iii) or 2.8(c) with respect to
such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
Applicable Lending Office for any Loans or Commitment affected by such event, provided that such designation is made on such terms that
such Lender and its Applicable Lending Office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section.

 39
 

 

(b)           If any Lender requests any compensation, reimbursement or other payment
under Section 2.8(a)(ii) or (iii), 2.8(c) or 3.2(b) with respect to such
Lender, 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 the restrictions contained in Section 11.4(c)), all its
interests, rights and obligations under this Agreement to an Eligible Assignee
that shall assume such obligations; provided that (i) the Borrower shall have received the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts, including
any breakage compensation under Section 2.7 and any amounts accrued and
owing to such Lender under Section 2.8(a)(ii) or (iii), 2.8(c) or 3.2(b)),
and (iii) in the case of any such assignment
resulting from a claim for compensation, reimbursement or other payments
required to be made under Section 2.8(a)(ii) or (iii), 2.8(c) or 3.2(b)
with respect to such Lender, such assignment will result in a reduction in such
compensation, reimbursement or payments. 
A Lender shall not be required to make any such assignment and delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

(c)           Nothing in this Section 2.11 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in
Section 2.8.

ARTICLE III.

FEES; COMMITMENTS

Section 3.1             Fees.

(a)           Facility Fees.  The
Borrower agrees to pay to the Administrative Agent facility fees (“Facility
Fees”) for the account of each Non-Defaulting Lender that has a Commitment
for the period from the Closing Date to the Maturity Date, computed for each
day at a rate per annum equal to the Applicable Facility Fee Rate in effect for
such day times the amount of such Non-Defaulting Lender’s Commitment in effect
on such day.  Facility Fees shall be due
and payable in arrears on the last Business Day of each December, March, June
and September and on the Maturity Date.

(b)           Utilization Fee.  The
Borrower agrees to pay to the Administrative Agent utilization fees (the “Utilization
Fees”) for the account of each Non-Defaulting Lender that has a Commitment
for each day on which the Aggregate Revolving Facility Exposure exceeds 50% of
the Total Commitment, computed for each such day at a rate per annum equal to
the Applicable Utilization Fee Rate times the Revolving Facility Exposure of
such Non-Defaulting Lender on such day. 
Utilization Fees, if any, shall be due and payable quarterly in arrears
on the last Business Day of each December, March, June and September and on the
Maturity Date.

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(c)           LC Fees.

(i)            Standby
Letters of Credit.  The Borrower agrees to pay to the
Administrative Agent, for the ratable benefit of each Lender with a Commitment
based upon each such Lender’s Percentage, a fee in respect of each Letter of
Credit issued hereunder that is a Standby Letter of Credit for the period from
the date of issuance of such Letter of Credit until the expiration date thereof
(including any extensions of such expiration date that may be made at the
election of the account party or the beneficiary), computed for each day at a
rate per annum equal to (A) the Applicable Margin for Loans that are Eurodollar
Loans in effect on such day times (B) the Stated Amount of such Letter of
Credit on such day.  The foregoing fees
shall be payable quarterly in arrears on the last Business Day of each
December, March, June and September and on the Maturity Date.

(ii)           Commercial
Letters of Credit.  The Borrower agrees to pay to the
Administrative Agent for the ratable benefit of each Lender based upon each
such Lender’s Percentage, a fee in respect of each Letter of Credit issued
hereunder that is a Commercial Letter of Credit in an amount equal to (A) the
Applicable Margin for Loans that are Eurodollar Loans in effect on the date of
issuance times (B) the Stated Amount of such Letter of Credit.  The foregoing fees shall be payable on the
date of issuance of such Letter of Credit.

(d)           Fronting Fees.  The
Borrower agrees to pay directly to each LC Issuer, for its own account, a fee
in respect of each Letter of Credit issued by it, payable on the date of
issuance (or any increase in the amount, or renewal or extension) thereof,
computed at the rate of 0.125% per annum on the Stated Amount thereof for the
period from the date of issuance (or increase, renewal or extension) to the
expiration date thereof (including any extensions of such expiration date which
may be made at the election of the beneficiary thereof).

(e)           Additional Charges of LC Issuer.  The
Borrower agrees to pay directly to each LC Issuer upon each LC Issuance,
drawing under, or amendment, extension, renewal or transfer of, a Letter of
Credit issued by it such amount as shall at the time of such LC Issuance,
drawing under, amendment, extension, renewal or transfer be the processing
charge that such LC Issuer is customarily charging for issuances of, drawings
under or amendments, extensions, renewals or transfers of, letters of credit
issued by it.

(f)            Other Fees.  The Borrower shall pay to the
Administrative Agent, on the Closing Date and thereafter, for its own account
and/or for distribution to the Lenders, such fees as heretofore agreed by the
Borrower and the Administrative Agent or the Lenders as set forth in the Agent
Fee Letter, the Closing Fee Letter or any other similar agreement.

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(g)           Computations of Fees.  All
computations of Facility Fees, Utilization Fees, LC Fees and other Fees
hereunder shall be made on the actual number of days elapsed over a year of 360
days.

Section 3.2             Increase in Commitments.

(a)           At any time after the Closing Date, the Borrower may, by written notice
to the Administrative Agent, request that the Total Commitment be increased by
an amount not to exceed $50,000,000 in the aggregate for all such increases
from the Closing Date until the Maturity Date, provided
that no Default or Event of Default has occurred and is continuing at the time
of such request and on the date of any such increase.  The Administrative Agent shall deliver a copy
of such request to each Lender.  The
Borrower shall set forth in such request the amount of the requested increase
in the Total Commitment (which shall be in minimum increments of $10,000,000
and a minimum amount of $10,000,000) and the date on which such increase is
requested to become effective (which shall be not less than 10 Business Days
nor more than 60 days after the date of such notice and that, in any event,
must be at least 60 days prior to the Maturity Date).  The Borrower may arrange for one or more
banks or other entities that are Eligible Assignees to provide a Commitment
hereunder pursuant to this Section 3.2(a) (each such Person so agreeing being
an “Augmenting Lender”) and/or the Borrower may offer to each Lender the
opportunity to increase its Commitment by its Percentage of the proposed
increased amount.  Each Lender shall, by
notice to the Borrower and the Administrative Agent given not more than 10 days
after the date of the Administrative Agent’s notice, either agree to increase
its Commitment by all or a portion of the offered amount (each such Lender so
agreeing being an “Increasing Lender”) or decline to increase its
Commitment (and any such Lender that does not deliver such a notice within such
period of 10 days shall be deemed to have declined to increase its Commitment
and each Lender so declining or being deemed to have declined being a “Non-Increasing
Lender”).  Each Augmenting Lender
shall execute all such documentation as the Administrative Agent shall
reasonably specify to evidence its Commitment and/or its status as a Lender
with a Commitment hereunder.  Any
increase in the Total Commitment may be made in an amount that is less than the
increase requested by the Borrower if the Borrower is unable to arrange for, or
chooses not to arrange for, Augmenting Lenders.

(b)           Each of the parties hereto agrees that the Administrative Agent may
take any and all actions as may be reasonably necessary to ensure that after
giving effect to any increase in the Total Commitment pursuant to this Section
3.2(b), the outstanding Loans (if any) are held by the Lenders with Commitments
in accordance with their new Percentages. This may be accomplished at the
discretion of the Administrative Agent:  (w) by requiring the
outstanding Loans to be prepaid with the proceeds of new Borrowings; (x) by
causing the Non-Increasing Lenders to assign portions of their outstanding
Loans to Increasing Lenders and Augmenting Lenders; (y) by permitting the
Borrowings outstanding at the time of any increase in the Total Commitment
pursuant to this Section 3.2(b) to remain outstanding until the last days
of the respective Interest Periods therefor, even though the Lenders would hold
such Borrowings other than in accordance with their new Percentages; or
(z) by any combination of the

 42
 

 

foregoing.  Any prepayment or
assignment described in this paragraph (ii) shall be subject to Section
2.7 hereof but otherwise without premium or penalty.  In addition, in connection with any increase
in the Total Commitment pursuant to this Section the Administrative Agent may,
in consultation with the Borrower, appoint any Lender as a Syndication Agent,
Documentation Agent, Co-Agent or other similar title.

Section 3.3             Voluntary Termination/Reduction of
Commitments.  Upon at least three Business Days’ prior
irrevocable written notice (or telephonic notice confirmed in writing) to the
Administrative Agent at the Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), the Borrower shall have
the right to:

(a)           terminate in whole the Total Commitment, provided
that (i) all outstanding Loans and Unpaid Drawings
are contemporaneously prepaid in accordance with Section 4.2, and (ii) either there are no
outstanding Letters of Credit or the Borrower shall
contemporaneously cause all outstanding Letters of Credit to be surrendered for
cancellation (any such Letters of Credit to be replaced by letters of credit
issued by other financial institutions acceptable to each LC Issuer and the
Lenders); or

(b)           partially and permanently reduce the Unutilized Total Commitment, provided that (i) any such
reduction shall apply to proportionately and permanently reduce the Commitment
of each of the Lenders; (ii) such reduction shall
apply to proportionately and permanently reduce the LC Commitment Amount, but
only to the extent that the Unused Total Commitment would be reduced below any
such limits; (iii) no such reduction shall be permitted if the Borrower would
be required to make a mandatory prepayment of Loans or cash collateralize
Letters of Credit pursuant to Section 4.3(a), and
(iv) any partial reduction of the Unutilized Total Commitment
pursuant to this Section 3.3(b) shall be in the amount of at least
$10,000,000 (or, if greater, in integral multiples of $500,000).

Section 3.4             Termination of Commitments.  The
Total Commitment (and the Commitment of each Lender) shall terminate on the
Maturity Date.

ARTICLE IV.

PAYMENTS

Section 4.1             Repayment of Loans.  The
Borrower shall repay the aggregate principal amount of each outstanding Loan to
the Administrative Agent for the ratable account of the Lenders on the earlier
of (a) 364 days after the date such Loan is made or deemed made and (b) the
Maturity Date.

Section 4.2             Voluntary Prepayments.  The
Borrower shall have the right to prepay any of its Loans, in whole or in part,
without premium or penalty (except as specified below), from time to time on
the following terms and conditions:

(a)           the Borrower shall give the Administrative Agent at the Notice Office
written or telephonic notice (in the case of telephonic notice, promptly
confirmed in

 43
 

 

writing if so requested by the Administrative
Agent) of its intent to prepay the Loans, the amount of such prepayment and (in
the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made,
which notice shall be received by the Administrative Agent by (i) 12:00 noon (local
time at the Notice Office) three Business Days prior to the date of such
prepayment, in the case of any prepayment of Eurodollar Loans, or
(ii) 12:00 noon (local time at the Notice Office) one Business Day prior
to the date of such prepayment, in the case of any prepayment of Base Rate
Loans, and which notice shall promptly be transmitted by the Administrative
Agent to each of the Lenders;

(b)           in the case of prepayment of any Borrowings, each partial prepayment of
any such Borrowing shall be in an aggregate principal of at least $2,000,000 or
an integral multiple of $1,000,000 in excess thereof, in the case of Base Rate
Loans, and at least $1,000,000 or an integral multiple of $500,000 in excess
thereof, in the case of Eurodollar Loans;

(c)           no partial prepayment of any Loans made pursuant to a Borrowing shall
reduce the aggregate principal amount of such Loans outstanding pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto;

(d)           each prepayment in respect of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans; and

(e)           each prepayment of Eurodollar Loans pursuant to this Section 4.2
on any date other than the last day of the Interest Period applicable thereto,
in the case of Eurodollar Loans shall be accompanied by any amounts payable in
respect thereof under Section 2.7.

Section 4.3             Mandatory Payments and Prepayments.  The
Loans shall be subject to mandatory repayment or prepayment in accordance with
the following provisions:

(a)           Mandatory Payments. The Loans shall be subject to mandatory
repayment or prepayment (in the case of any partial prepayment conforming to
the requirements as to the amounts of partial prepayments set forth in Section
4.2(b))), and the LC Outstandings shall be subject to cash collateralization
requirements, in accordance with the following provisions:

(i)            Maturity
Date.  The entire principal amount of all
outstanding Loans shall be repaid in full on the Maturity Date.

(ii)           Loans
Exceed the Commitments.  If on any date (after giving effect to any
other payments on such date) (A) the Aggregate Credit Facility Exposure exceeds
the Total Credit Facility Amount, or (B) the Revolving Facility Exposure of any
Lender exceeds such Lender’s Commitment, then, in the
case of each of the foregoing, the Borrower shall, on such day, prepay on such
date the principal amount of Loans and, after Loans have been paid in full,
Unpaid Drawings, in an aggregate amount at least equal to such excess.

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(iii)          LC
Outstandings Exceed LC Commitment  If on any date the LC
Outstandings exceed the LC Commitment Amount, then
the Borrower shall, on such day, pay to the Administrative Agent an amount in
cash equal to such excess and the Administrative Agent shall hold such payment
as security for the reimbursement obligations of the Borrower hereunder in
respect of Letters of Credit pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the
Administrative Agent, each LC Issuer and the Borrower (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative
Agent, each LC Issuer and the Borrower until the proceeds are applied to any
Unpaid Drawings or to any other Obligations in accordance with any such cash
collateral agreement).

(b)           Particular Loans to be Prepaid.  With
respect to each repayment or prepayment of Loans required by this
Section 4.3, the Borrower shall designate the Types of Loans that are to
be repaid or prepaid and the specific Borrowing(s) pursuant to which such
repayment or prepayment is to be made, provided that (i) the Borrower shall first so designate all Loans that
are Base Rate Loans and Eurodollar Loans with Interest Periods ending on the
date of repayment or prepayment prior to designating any other Eurodollar Loans
for repayment or prepayment, (ii) if the outstanding
principal amount of Eurodollar Loans made pursuant to a Borrowing is reduced
below the applicable Minimum Borrowing Amount as a result of any such repayment
or prepayment, then all the Loans outstanding pursuant to such Borrowing shall
be Converted into Base Rate Loans, and (iii) each
repayment and prepayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans. In the
absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no obligation, to minimize
breakage costs owing under Section 2.7. Any repayment or prepayment of
Eurodollar Loans pursuant to this Section 4.3 shall in all events be
accompanied by such compensation as is required by Section 2.7.

Section 4.4             Method and Place of Payment.

(a)           Except as otherwise specifically provided herein, all payments under this
Agreement shall be made to the Administrative Agent for the ratable (based on
its pro rata share) account of the Lenders
entitled thereto, not later than 12:00 noon (local time at the Payment Office)
on the date when due and shall be made at the Payment Office in immediately
available funds and in lawful money of the United States of America, it being
understood that written notice by the Borrower to the Administrative Agent to
make a payment from the funds in the Borrower’s account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account.  Any payments under this
Agreement that are made later than 12:00 noon (local time at the Payment
Office) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day
that is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be

 45
 

 

payable during such extension at the
applicable rate in effect immediately prior to such extension.

(b)           If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and Fees then
due hereunder and an Event of Default is not then in existence, such funds
shall be applied (i)  first,
towards payment of interest and Fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and Fees
then due to such parties, and (ii)  second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.

Section
4.5             Net Payments.

(a)           All payments made by the Borrower hereunder, under any Note or any
other Credit Document, will be made without setoff, counterclaim or other
defense.  Except as provided for in
Section 4.5(b), all such payments will be made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but excluding any
tax imposed on or measured by the net income or net profits of a Lender
pursuant to the laws of the jurisdiction under which such Lender is organized
or the jurisdiction in which the Applicable Lending Office of such Lender is located
or any subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees assessments or other charges being referred to
collectively as “Taxes”).  If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes and such additional amounts as may be necessary so that every
payment by it of all amounts due hereunder, under any Note or under any other
Credit Document, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note or in such
other Credit Document.  Subject to Section 2.8(d),
the Borrower will furnish to the Administrative Agent within 45 days after the
date the payment of any Taxes (or any withholding or deduction on account
thereof) is made, certified copies of tax receipts, or other evidence
satisfactory to the Lender, evidencing such payment by the Borrower.  The Borrower will indemnify and hold harmless
the Administrative Agent and each Lender, and reimburse the Administrative
Agent or such Lender upon its written request, for the amount of any Taxes
levied against, imposed on, or paid by the Administrative Agent or any Lender
within 30 days of any written request therefor.

(b)           Each Lender that is not incorporated under the laws of the United
States of America or any State thereof (each a “Non-U.S. Lender”) agrees
to provide to the Borrower and the Administrative Agent on or prior to the
Closing Date, or in the case of a Lender that is an assignee or transferee of
an interest under this Agreement pursuant to Section 11.4 (unless the
respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with

 46

 

the provisions of this Section 4.5(b)),
on the date of such assignment or transfer to such Lender, and from time to
time thereafter if required by the Borrower or the Administrative Agent: (i) an accurate and complete original signed copy of
Internal Revenue Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY (or
successor, substitute or other appropriate form and, in the case of
Form W-8IMY, any related documentation necessary to establish the claimed
exemption) certifying to such Lender’s entitlement to a complete exemption from
U.S. withholding tax with respect to payments to be made under this Agreement,
any Note or any other Credit Document, and (ii) in the case of a Lender
seeking to qualify for the portfolio interest exemption, a certificate in form and
substance acceptable to the Administrative Agent (any such certificate, an “Exemption
Certificate”) certifying to such Lender’s entitlement to such
exemption.  In addition, each Lender
agrees that from time to time after the Closing Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent a new accurate and complete original signed copy of the
applicable Internal Revenue Service Form, including any related documentation
or Exemption Certificate, and such other forms as may be required to confirm or
establish the entitlement of such Lender to a continued exemption from U.S.
withholding tax with respect to payments under this Agreement, any Note or any
other Credit Document.  Notwithstanding
anything to the contrary contained in Section 4.5(a), but subject to
Section 11.4(c) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or
other amounts payable hereunder for the account of any Non-U.S. Lender that has
not provided to the Borrower such forms or such Exemption Certificate and
related documentation that establish a complete exemption from such deduction
or withholding and (y) the Borrower shall not be obligated pursuant to
Section 4.5(a) to gross-up payments to be made to a Lender in respect of
Taxes imposed by the United States or any additional amounts with respect
thereto (I) to the extent such Taxes result from a Lender’s failure to
provide the Borrower the Internal Revenue Service forms required to be provided
to the Borrower pursuant to this Section 4.5(b) or (II) to the extent
that such forms do not establish a complete exemption from withholding of such
Taxes at the time the Lender first became a Lender under this Agreement.  The Borrower agrees to pay additional amounts
and indemnify each Lender in the manner set forth in Section 4.5(a)
(without regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any Taxes deducted or withheld by it as a result of
any changes after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of income or similar Taxes.

(c)           The Borrower will indemnify and hold harmless the Administrative Agent
and each Lender, and reimburse each upon its written request within 30 days
thereof, for the amount of any documentary, excise, stamp, property or other
similar taxes, duties, fees, assessments or other charges imposed with respect
to the execution, delivery, filing or enforcement of any Credit Document.

 47
 

 

(d)           If any Lender, in its sole opinion, determines that it has finally and
irrevocably received or been granted a refund in respect of any Taxes paid as
to which indemnification has been paid by the Borrower pursuant to this
Section, it shall promptly remit such refund (including any interest received
in respect thereof), net of all out-of-pocket costs and expenses; provided, that the Borrower agrees to promptly return any
such refund (plus interest) to such Lender if such Lender is required to repay
such refund to the relevant taxing authority. Any such Lender shall provide the
Borrower with a copy of any notice of assessment from the relevant taxing
authority (redacting any unrelated confidential information contained therein)
requiring repayment of such refund.  Nothing contained herein shall
impose an obligation on any Lender to apply for any such refund.

(e)           If the Borrower is required to pay additional amounts to the Administrative
Agent or any Lender pursuant to this Section 4.5, then the Administrative Agent
or such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its office, branch,
subsidiary or affiliate, or take other appropriate action, so as to eliminate
any additional payment by the Borrower that may thereafter accrue, if such
change or other action, in the judgment of the Administrative Agent or such
Lender, as the case may be, is not otherwise disadvantageous to the
Administrative Agent or such Lender.

ARTICLE V.

CONDITIONS PRECEDENT

Section 5.1             Conditions Precedent at Closing Date.  This
Agreement shall become effective upon the satisfaction of each of the following
conditions:

(a)           Credit Agreement.  This
Agreement shall have been executed by the Borrower, the Administrative Agent,
each LC Issuer and each of the Lenders.

(b)           Notes.  The Borrower shall have
executed and delivered to the Administrative Agent a Note for the account of
each Lender that has requested a Note.

(c)           Fees and Expenses.  The
Borrower shall have (i) executed and delivered to the Administrative Agent the
Agent Fee Letter and the Closing Fee Letter and (ii) paid or caused to be paid
all Fees required to be paid by it on the Closing Date pursuant to Section 3.1
and all reasonable fees and expenses of the Administrative Agent and of special
counsel to the Administrative Agent that have been invoiced at least two
Business Days prior to such date in connection with the preparation, negotiation,
execution and delivery of this Agreement and the other Credit Documents and the
consummation of the transactions contemplated hereby and thereby.

(d)           Corporate Resolutions and Approvals.  The
Administrative Agent shall have received certified copies of the resolutions of
the Board of Directors of the Borrower, approving the Credit Documents, and of
all documents evidencing other necessary corporate action, governmental
approvals, if any, and other consents or

 48
 

 

approvals with respect to the execution,
delivery and performance by the Borrower of the Credit Documents.

(e)           Incumbency Certificates.  The
Administrative Agent shall have received a certificate of the Secretary or an
Assistant Secretary of the Borrower, certifying the names and true signatures
of the officers of the Borrower authorized to sign the Credit Documents and any
other documents to which the Borrower is a party that may be executed and
delivered in connection herewith.

(f)            Corporate Charter and Good Standing
Certificates.  The Administrative Agent shall have
received:  (i) an original certified copy
of the Articles of Incorporation of the Borrower and any and all amendments and
restatements thereof, certified as of a recent date by the relevant Secretary
of State and certified by the Secretary or an Assistant Secretary of the
Borrower as being true, correct and complete and in full force and effect as of
the Closing Date; (ii) the code of regulations of the Borrower and any and
all amendments and restatements thereof certified by the Secretary or an
Assistant Secretary of the Borrower as being true, correct, and complete and in
full force and effect as of the Closing Date; and (iii) an original good
standing certificate from the Secretary of State of the state of incorporation,
dated as of a recent date, certifying as to the good standing of the Borrower.

(g)           Opinions of Counsel.  The
Administrative Agent shall have received opinions of counsel, which shall be
addressed to the Administrative Agent and each of the Lenders and dated the
Closing Date, from the General Counsel of the Borrower, in substantially the
form of Exhibit F.

(h)           Existing Credit Agreement.  The
Borrower shall have terminated the commitments of the lenders under each of the
Existing Credit Agreement, repaid any borrowings thereunder and terminated or
released all Liens granted in connection therewith and provided evidence, in
form and substance satisfactory to the Administrative Agent, of the same to the
Administrative Agent.

(i)            Financial Statements.  The
Administrative Agent and the Lenders shall have received the financial
statements referred to in Section 6.7(a), which financial statements shall be
acceptable to the Administrative Agent and the Lenders.

(j)            Borrower’s Closing Certificate.  The
Administrative Agent shall have received a certificate in the form attached
hereto as Exhibit D, dated the Closing Date, of an Authorized Officer of
the Borrower to the effect that, at and as of the Closing Date and both before
and after giving effect to the initial Borrowings hereunder, if any, on the
Closing Date, and the application of the proceeds thereof:  (i) all conditions set forth in Section
5.1 have been satisfied; (ii) no Default or Event of Default has occurred
or is continuing; and (iii) all representations and warranties of the Borrower
contained herein or in the other Credit Documents are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the Closing Date, except that as to any
such representations and warranties that expressly relate to an earlier
specified date, such representations and warranties are

 49
 

 

only represented as having been true and
correct in all material respects as of the date when made.

Section 5.2             Conditions Precedent to the Making of Loans.

(a)           The obligations of the Lenders and each LC Issuer to make or
participate in each Loan and/or LC Issuance are subject, at the time thereof,
to the satisfaction of the following conditions:

(i)            Notice
of Borrowing, Continuation or Conversion.  The Administrative Agent (and
in the case of subpart (B) below, the applicable LC Issuer) shall have
received, as applicable, (A) a Notice of Borrowing, Continuation or Conversion
meeting the requirements of Section 2.3 with respect to the Borrowing of a
Loan, or (B) an LC Request meeting the requirements of Section 2.4(b) with
respect to each LC Issuance.

(ii)           No
Default; Representations and Warranties.  At the time of the making of a
Loan to the Borrower or LC Issuance and after giving effect thereto, (A) there shall exist no Default or Event of Default, (B) all representations and warranties of the
Borrower contained herein (other than the representation and warranty contained
in Section 6.9) or in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date such Loan is made, except to the
extent that such representations and warranties expressly relate to an earlier
specified date, in which case such representations and warranties shall have
been true and correct in all material respects as of the date when made, and
(C) the aggregate of the principal amount of all outstanding Loans and LC
Outstandings shall not exceed the amount authorized under the Borrower’s order
of The Public Utilities Commission of Ohio (or any successor thereto) in effect
at such time that authorizes the Borrower to incur Indebtedness hereunder.

(iii)          Other
Documents. The Borrower
shall have delivered to the Administrative Agent copies of such approvals and
other documents as the Administrative Agent, the LC Issuer or any Lender
(through the Administrative Agent) may reasonably request.

(b)           The acceptance of the benefits of each Loan shall constitute a representation
and warranty by the Borrower to each of the Lenders and each LC Issuer that all
of the applicable conditions specified in Sections 5.1 and 5.2 have been
satisfied as of the times referred to in such Sections.  All of the certificates, legal opinions and
other documents and papers referred to in this Article V, unless otherwise
specified, shall be delivered to the Administrative Agent for the account of
each of the Administrative Agent and the Lenders and, except for the Notes, in
sufficient counterparts for the Administrative Agent and the Lenders, and the
Administrative Agent will promptly distribute to the Lenders their respective
Notes and the copies of such other certificates, legal opinions and documents.

 50
 

 

Section 5.3             Conditions Precedent to the Conversion or
Continuation of Loans.  The obligations of the Lenders to Convert or
Continue any Loan are subject, at the time thereof, to the receipt by the
Administrative Agent of a Notice of Borrowing, Continuation or Conversion
meeting the requirements of Section 2.3 with respect to the Conversion or
Continuation, as applicable, of a Loan.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

To induce the Lenders and
each LC Issuer to enter into this Agreement and to make the Loans and to issue
and to participate in the Letters of Credit provided for herein, the Borrower
makes the following representations and warranties to, and agreements with, the
Lenders and each LC Issuer, all of which shall survive the execution and
delivery of this Agreement and the making of each Loan:

Section 6.1             Corporate Status.  Each
of the Borrower and its Subsidiaries (a) is a duly
organized or formed and validly existing corporation, partnership or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its formation and has the corporate, partnership or limited
liability company power and authority, as applicable, to own its Property and
assets and to transact the business in which it is engaged, and (b) has been duly qualified and is authorized to do
business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse
Effect.  Each Subsidiary of the Borrower
(and the direct and indirect ownership interest of the Borrower therein) as of
the date hereof and the jurisdiction of incorporation of Borrower and each such
Subsidiary as of the date hereof is listed on Schedule 6.1.

Section 6.2             Corporate Power and Authority.  The
Borrower has the corporate or other organizational power and authority to
execute, deliver and carry out the terms and provisions of the Credit Documents
to which it is party and has taken all necessary corporate or other
organizational action to authorize the execution, delivery and performance of
the Credit Documents to which it is party. 
The Borrower has duly executed and delivered each Credit Document to
which it is party and each Credit Document to which it is party constitutes the
legal, valid and binding agreement or obligation of the Borrower enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors’ rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).

Section 6.3             No Violation. 
Neither the execution, delivery and performance by the Borrower of the
Credit Documents to which it is party nor compliance with the terms and provisions
thereof (a) will contravene any provision of
any law, statute, rule, regulation, order, writ, injunction or decree of any
Governmental Authority applicable to the Borrower or its properties and assets, (b) will conflict with or result in any breach of,
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien

 51
 

 

upon any of the Property or assets of the
Borrower pursuant to the terms of any material promissory note, bond,
debenture, indenture, mortgage, deed of trust, credit or loan agreement, or any
other agreement or other instrument, to which the Borrower is a party or by
which it or any of its Property or assets are bound or to which it may be
subject, or (c) will violate any provision of
the certificate or articles of incorporation, regulations or bylaws, or other
charter documents of the Borrower.

Section 6.4             Governmental Approvals.  No
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any Governmental Authority is
required in connection with (i) any extension of credit hereunder when made,
(ii) the execution, delivery and performance by the Borrower of any Credit
Document to which it is a party or (iii) the legality, validity, binding effect
or enforceability of any Credit Document to which the Borrower is a party,
except for orders, consents, approvals, licenses, authorizations, validations,
filings, recordings, registrations and/or exemptions required with respect to
such extension of credit that have been obtained or made and are in full force
and effect at the time of such extension of credit.

Section 6.5             Litigation, etc.

(a)           There are no actions, suits or proceedings pending or, to, the
knowledge of the Borrower, threatened with respect to the Borrower or any of
its Subsidiaries (i) that have, or could
reasonably be expected to have, a Material Adverse Effect except as set forth
on Schedule 6.5, or (ii) that question
the validity or enforceability of any of the Credit Documents, or of any action
to be taken by any of the Borrower pursuant to any of the Credit Documents.

(b)           No action, suit, proceeding or investigation has been instituted, or to
the knowledge of the Borrower or any of its Subsidiaries, threatened, and no
rule, regulation, order, judgment or decree has been issued or proposed to be
issued by any Governmental Authority that, solely as a result of the incurrence
of Indebtedness or the entering into this Agreement or any other Credit
Document or any transaction contemplated hereby or thereby, would cause or deem
the Administrative Agent or the Lenders or any Affiliate of any of them to be
subject to, or not exempted from, regulation under the FPA.

Section
6.6             Use of Proceeds; Margin Regulations.

(a)           The proceeds of all Loans and LC Issuances will be utilized to provide
working capital and funds for general corporate and other lawful purposes not
inconsistent with the requirements of this Agreement (including, without
limitation, to backstop the issuance of commercial paper).

(b)           The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.  At no time would more than 25% of the value
of the assets of the Borrower or its consolidated Subsidiaries that are

 52
 

 

subject to any “arrangement” (as such term is
used in Section 221.2(g) of such Regulation U) hereunder be represented by
Margin Stock.

Section 6.7             Financial Statements.  The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (a) the audited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as of December 31, 2005 and the
related audited consolidated statements of income, shareholders’ equity, and
cash flows of the Borrower and its consolidated Subsidiaries for the fiscal
years then ended, accompanied by the report thereon of KPMG LLP; and (b) the condensed consolidated balance sheets of
the Borrower and its consolidated Subsidiaries as of September 30, 2006, and
the related condensed consolidated statements of income and of cash flows of
the Borrower and its consolidated Subsidiaries for the fiscal period then
ended.  All such financial statements
have been prepared in accordance with GAAP, consistently applied (except as
stated therein), and fairly present in all material respects the financial
position of the entities described in such financial statements as of the
respective dates indicated and the consolidated results of their operations and
cash flows for the respective periods indicated, subject in the case of any
such financial statements that are unaudited, to normal audit adjustments, none
of which shall be material.  As of the
Closing Date, the Borrower and its Subsidiaries do not have any material or
significant contingent liability (other than any liability incident to any
litigation, arbitration or proceeding that could not reasonably be expected to
have a Material Adverse Effect) that is not reflected in the foregoing
financial statements or the notes thereto in accordance with GAAP.

Section 6.8             Solvency.  The Borrower is not insolvent
as defined in any applicable state or federal statute, nor will the Borrower be
rendered insolvent by the execution and delivery of this Agreement or any of
the Credit Documents to the Administrative Agent, each LC Issuer and the
Lenders.

Section 6.9             No Material Adverse Change.  At
no time during the period from December 31, 2005 through the date of this
Agreement has there been a change in the financial or other condition,
business, affairs or prospects of the Borrower and its Subsidiaries taken as a
whole, or their properties and assets considered as an entirety, except for changes none of which, individually or in the aggregate,
has had or could reasonably be expected to have, a Material Adverse Effect.

Section 6.10           Tax Returns and Payments.  The
Borrower and each of its Subsidiaries has filed all federal income tax returns
and all other material tax returns, domestic and foreign, required to be filed
by it and has paid all material taxes and assessments payable by it that have
become due, other than those not yet delinquent and except for those contested
in good faith.  The Borrower and each of
its Subsidiaries has established on its books such charges, accruals and
reserves in respect of taxes, assessments, fees and other governmental charges
for all fiscal periods as are required by GAAP. 
The Borrower does not know of any proposed assessment for additional
federal, foreign or state taxes for any period, or of any basis therefor, that,
individually or in the aggregate, taking into account such charges, accruals
and reserves in respect

 53
 

 

thereof as the Borrower and its Subsidiaries
have made, could reasonably be expected to have a Material Adverse Effect.

Section 6.11           Title to Properties.  The
Borrower and each of its Subsidiaries has good and marketable title, in the
case of Real Property, and good title (or valid Leaseholds, in the case of any
leased Property), in the case of all other Property, to all of its material
properties and assets free and clear of Liens other than Liens permitted under
Section 8.3.  The interests of the
Borrower and each of its Subsidiaries in the properties reflected in the most
recent balance sheet referred to in Section 6.7, taken as a whole, were
sufficient, in the judgment of the Borrower, as of the date of such balance
sheet for purposes of the ownership and operation of the businesses conducted
by the Borrower and such Subsidiaries.

Section 6.12           Lawful Operations; Compliance with Agreements.  The
Borrower and each of its Subsidiaries:  (a) holds
all necessary federal, state and local governmental licenses, registrations,
certifications, permits and authorizations necessary to conduct its business; (b) is in full compliance with all material
requirements imposed by law, regulation or rule, whether federal, state or
local, that are applicable to it, its operations, or its properties and assets,
including without limitation, applicable requirements of Environmental Laws;
and (c) is in full compliance with all material terms, covenants and
conditions of any promissory note, bond, debenture, indenture, mortgage, deed
of trust, credit or loan agreement, or any other agreement or other instrument,
to which it is a party or by which it or any of its Property or assets are
bound or to which it may be subject, except in the case of clause (a), (b) or
(c) of this Section 6.12 for any failure to obtain and maintain in effect, or
noncompliance, that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

Section 6.13           Environmental Matters.  The Borrower and each of its
Subsidiaries is in compliance with all Environmental Laws governing its
business, except to the extent that any such failure to comply (together with
any resulting penalties, fines or forfeitures) would not reasonably be expected
to have a Material Adverse Effect.  All
licenses, permits, registrations or approvals required for the conduct of the
business of the Borrower and each of its Subsidiaries under any Environmental
Law have been secured and the Borrower and each of its Subsidiaries is in
substantial compliance therewith, except for such licenses, permits,
registrations or approvals the failure to secure or to comply therewith is not
reasonably likely to have a Material Adverse Effect.  Neither the Borrower nor any of its
Subsidiaries has received written notice, or otherwise knows, that it is in any
respect in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which the Borrower or such Subsidiary
is a party or that would affect the ability of the Borrower or such Subsidiary
to operate any Real Property and no event has occurred and is continuing that,
with the passage of time or the giving of notice or both, would constitute
noncompliance, breach of or default thereunder, except in each such case, such
noncompliance, breaches or defaults as would not reasonably be expected to, in the
aggregate, have a Material Adverse Effect. 
There are no Environmental Claims pending or, to the best knowledge of
the Borrower, threatened wherein an unfavorable

 54
 

 

decision, ruling or finding would reasonably
be expected to have a Material Adverse Effect. 
There are no facts, circumstances, conditions or occurrences on any Real
Property now or at any time owned, leased or operated by the Borrower or any of
its Subsidiaries or on any Property adjacent to any such Real Property, that
are known by the Borrower or as to which the Borrower or any such Subsidiary
has received written notice, that could reasonably be expected:  (i) to form
the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property of the Borrower or any of its Subsidiaries;
or (ii) to cause such Real Property to be subject to
any restrictions on the ownership, occupancy, use or transferability of such
Real Property under any Environmental Law, except in each such case, such
Environmental Claims or restrictions that individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect.

Section 6.14           ERISA.

(a)           Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other member of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and
no steps have been taken to reorganize or terminate any Plan.

(b)           Neither the Borrower nor any of its Subsidiaries is an entity deemed to
hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an employee
benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or any plan (within the meaning of Section 4975 of the Code), and
neither the execution of this Agreement nor the making of Loans hereunder gives
rise to a prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code.

Section 6.15           Intellectual Property.  The
Borrower and each of its Subsidiaries has obtained or has the right to use all
material patents, trademarks, service marks, trade names, copyrights, licenses
and other rights with respect to the foregoing necessary for the present and
planned future conduct of its business, without any known conflict with the
rights of others, except for such patents, trademarks, service marks, trade
names, copyrights, licenses and rights, the loss of which, and such conflicts,
that in any such case individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.

Section 6.16           Investment Company Act; Federal Power Act.  None of the Borrower or any of its Subsidiaries is
subject to regulation with respect to the creation or incurrence of Indebtedness
under the Investment Company Act of 1940, as amended.  None of the Borrower or any of its
Subsidiaries, or any Affiliate of any of them, is subject to regulation under the FPA or under applicable state or
other laws and regulations respecting the rates or the financial or
organizational regulation of electric utilities, as a result of the creation or incurrence of the Obligations or
the entering into this Agreement or any other Credit Document or the
consummation of any transaction contemplated hereby or thereby.

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Section 6.17           True and Complete Disclosure.  All
factual information (taken as a whole) heretofore or contemporaneously
furnished by or on behalf of the Borrower or any of its Subsidiaries in writing
to the Administrative Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated herein is, and all other such
factual information (taken as a whole) hereafter furnished by or on behalf of
such Person in writing to any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of pro forma information and financial
projections prepared by the Borrower is only represented herein as being based
on good faith estimates and assumptions believed by such Persons to be
reasonable at the time made, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
materially from the projected results.

ARTICLE VII.

AFFIRMATIVE COVENANTS

The Borrower hereby
covenants and agrees that on the Closing Date and thereafter so long as this
Agreement is in effect and until such time as the Total Commitment has been terminated,
no Notes remain outstanding and the Loans, together with interest, Fees and all
other Obligations incurred hereunder and under the other Credit Documents, have
been paid in full:

Section 7.1             Reporting Requirements.

The Borrower will furnish
to each Lender and the Administrative Agent:

(a)           Annual Financial Statements.  As
soon as available and in any event within 90 days after the close of each
fiscal year of the Borrower, commencing with the fiscal year ending December
31, 2006, the consolidated and consolidating balance sheets of the Borrower and
its consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income, of stockholders’ equity
and of cash flows for such fiscal year, in each case setting forth comparative
figures for the preceding fiscal year, all in reasonable detail and accompanied
by an opinion with respect to such consolidated financial statements of
independent public accountants of recognized national standing selected by the
Borrower, which opinion shall be unqualified and shall (i)
state that such accountants audited such consolidated financial statements in
accordance with generally accepted auditing standards, that such accountants
believe that such audit provides a reasonable basis for their opinion, and that
in their opinion such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for such fiscal year in
conformity with

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generally accepted accounting principles, or (ii) contain such statements as are customarily included
in unqualified reports of independent accountants in conformity with the
recommendations and requirements of the American Institute of Certified Public
Accountants (or any successor organization).

(b)           Quarterly Financial Statements.  As
soon as available and in any event within 45 days after the close of each of
the first three quarterly accounting periods in each fiscal year of the
Borrower, the unaudited consolidated and consolidating balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such quarterly
period and the related unaudited consolidated and consolidating statements of
income and of cash flows for such quarterly period and/or for the fiscal year
to date, and setting forth, in the case of such unaudited consolidated
statements of income and of cash flows, comparative figures for the related
periods in the prior fiscal year, and that shall be certified on behalf of the
Borrower by the Chief Financial Officer or other Authorized Officer, subject to
changes resulting from normal year-end audit adjustments.

(c)           Officer’s Compliance Certificates.  At
the time of the delivery of the financial statements provided for in
Sections 7.1(a) and (b), a Compliance Certificate signed by an Authorized
Officer, which shall include calculations of the financial covenants set forth
in Section 8.5.

(d)           Notice of Default, Litigation or Material
Adverse Effect.  Promptly, and in any event within three
Business Days, in the case of clause (i) below, or five Business Days, after
the Borrower or any of its Subsidiaries obtains knowledge thereof, notice of
(i) the occurrence of any event that constitutes a Default or Event of
Default, which notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower has taken or proposes to take with respect
thereto, and (ii) the commencement of, or any other material development
concerning, any litigation, governmental or regulatory proceeding pending
against the Borrower or any of its Subsidiaries, or any other event that could
reasonably be expected to have a Material Adverse Effect.

(e)           ERISA.  As soon as possible and in any
event within ten days after the Borrower knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed by an Authorized
Officer, describing such Reportable Event and the action that the Borrower
proposes to take with respect thereto.

(f)            Single Employer Plans. Within 270 days after the close of each
fiscal year of the Borrower, the Borrower will deliver to each of the Lenders a
statement of the Unfunded Liabilities, certified as correct by an actuary
enrolled under ERISA.

(g)           Environmental Notices. 
Promptly, and in any event within 10 days after receipt thereof by the
Borrower or any Subsidiary of the Borrower, a copy of (a) any notice or claim
to the effect that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any Hazardous Materials into the
environment, and (b) any notice alleging any violation of any Environmental Law
by the Borrower or any of its

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Subsidiaries, which in the case of either (a)
or (b) above could reasonably be expected to have a Material Adverse Affect.

(h)           Annual and Quarterly Reports, Proxy
Statements and other Reports Delivered to Stockholders Generally. 
Promptly after transmission thereof to its stockholders, copies of all
annual, quarterly and other reports and all proxy statements that the Borrower
furnishes to its stockholders generally.

(i)            Other Information. 
Promptly, but in any event within 10 Business Days upon request
therefor, such other information or documents (financial or otherwise) relating
to the Borrower or any of its Subsidiaries as the Administrative Agent or any
Lender (through the Administrative Agent) may reasonably request from time to
time.

Section 7.2             Books, Records and Inspections.  The
Borrower will, and will cause each of its Subsidiaries to,
(a) keep proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and business
of the Borrower or such Subsidiaries, as the case may be, in accordance with
GAAP; and (b) permit, upon at least two
Business Days’ notice to the Chief Financial Officer of the Borrower, officers
and designated representatives of the Administrative Agent or any of the
Lenders to visit and inspect any of the properties or assets of the Borrower
and any of its Subsidiaries in whomsoever’s possession (but only to the extent
the Borrower or such Subsidiary has the right to do so to the extent in the
possession of another Person), to examine the books of account of the Borrower
and any of its Subsidiaries, and make copies thereof and take extracts
therefrom, and to discuss the affairs, finances and accounts of the Borrower and
of any of its Subsidiaries with, and be advised as to the same by, its and
their officers and independent accountants and independent actuaries, if any,
all at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any of the Lenders may request. All costs and expenses
incurred by the Administrative Agent or any Lender in connection with any of
the foregoing shall be paid by the Administrative Agent or such Lender, as the
case may be, unless an Event of Default shall have occurred and be continuing
at the time such costs and/or expenses are incurred, in which case all such
costs and expenses shall be paid by the Borrower.

Section 7.3             Insurance.  The Borrower will, and will
cause each of its Subsidiaries to, (i) maintain
insurance coverage by such insurers and in such forms and amounts and against
such risks as are generally consistent with the insurance coverage maintained
by the Borrower and its Subsidiaries at the date hereof, and (ii) forthwith upon any Lender’s written request, furnish
to such Lender such information about such insurance as such Lender may from
time to time reasonably request, which information shall be prepared in form
and detail satisfactory to such Lender and certified by an Authorized Officer.

Section 7.4             Payment of Taxes and Claims.  The
Borrower will pay and discharge, and will cause each of its Subsidiaries to pay
and discharge, all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties belonging
to it, prior to the date on which penalties attach

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thereto, and all lawful claims that, if
unpaid, might become a Lien or charge upon any properties of the Borrower or
any of its Subsidiaries; provided
that neither the Borrower nor any of its Subsidiaries shall be required to pay
any such tax, assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP. 
Without limiting the generality of the foregoing, the Borrower will, and
will cause each of its Subsidiaries to, pay in full all of its wage obligations
to its employees in accordance with the Fair Labor Standards Act (29 U.S.C.
Sections 206-207) and any comparable provisions of applicable law.

Section 7.5             Preservation of Existence, etc.  The
Borrower will, and will cause each of its Subsidiaries to, (a) preserve,
renew and maintain in full force and effect its legal existence and good
standing under the laws of the jurisdiction of its organization except in a
transaction permitted by Section 8.2; (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
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.

Section 7.6             Good Repair.  The Borrower will, and will
cause each of its Subsidiaries to, ensure that its material properties and
equipment used or useful in its business in whomsoever’s possession they may
be, are kept in good repair, working order and condition, normal wear and tear
excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements, thereto, to the extent and in the
manner customary for companies in similar businesses.

Section 7.7             Compliance with Statutes, Regulations,
Orders, Restrictions.  The Borrower will, and will cause each of its
Subsidiaries to, comply, in all material respects, with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all Governmental Authorities, in respect of the conduct of its business and
the ownership of its Property, including, without limitation, ERISA and all
applicable Environmental Laws other than those the noncompliance with which
would not have, and that would not be reasonably expected to have, a Material
Adverse Effect.

Section 7.8             Fiscal Years, Fiscal Quarters.  The
Borrower shall not change any of its or any of its Subsidiaries’ fiscal years
or fiscal quarters (other than the fiscal year or fiscal quarters of a Person
that becomes a Subsidiary, made at the time such Person becomes a Subsidiary to
conform to the Borrower’s fiscal year and fiscal quarters).

Section 7.9             Use of Proceeds.  The
Borrower will, and will cause each of its Subsidiaries to, use LC Issuances and
the proceeds of all Loans for working capital and for general corporate and
other lawful purposes not inconsistent with the requirements of this Agreement
(including, without limitation, to backstop the issuance of commercial paper).

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Section 7.10           Senior Debt.  The Borrower will at all times
ensure that (a) the claims of the Lenders in
respect of the Obligations of the Borrower will not be subordinate to, and will
in all respects rank at least pari passu
with or senior to, the claims of every unsecured creditor of the Borrower, and (b) any Indebtedness of the Borrower that is
subordinated in any manner to the claims of any other creditor of the Borrower
will be subordinated in like manner to such claims of the Lenders.

ARTICLE VIII.

NEGATIVE COVENANTS

The Borrower hereby
covenants and agrees that on the Closing Date and thereafter for so long as
this Agreement is in effect and until such time as the Total Commitment has
been terminated, no Notes remain outstanding and the Loans, together with
interest, Fees and all other Obligations incurred hereunder and under the other
Credit Documents, have been paid in full:

Section 8.1             Changes in Business. 
Neither the Borrower nor any of its Subsidiaries will engage in any
business if, as a result, the general nature of the business, taken on a
consolidated basis, that would then be engaged in by the Borrower and its
Subsidiaries, would be substantially changed from the general nature of the
business engaged in by the Borrower and its Subsidiaries on the Closing Date.

Section 8.2             Merger, Consolidation, Asset Sales.  The
Borrower will not, and will not permit any of its Subsidiaries to, (a) wind up,
liquidate or dissolve its affairs, (b) enter into any transaction of merger or
consolidation, (c) make or otherwise effect any Asset Sale, or (d) agree to do
any of the foregoing at any future time, except that the following shall be
permitted:

(i)            a
Subsidiary of the Borrower may merge with the Borrower, provided
that the surviving Person in any such merger shall be the Borrower;

(ii)           any
Subsidiary of the Borrower may merge with another Subsidiary of the Borrower;

(iii)          any
Subsidiary of the Borrower may merge with any Person (other than the Borrower
or any other Subsidiary of the Borrower), provided that
(A) the surviving Person in any such merger shall be such Subsidiary and (B)
immediately before and after such merger there shall not exist any Default or
Event of Default;

(iv)          the
Borrower may merge with any Person (other than a Subsidiary of the Borrower), provided that (A) the surviving Person in any such merger
shall be the Borrower and (B) immediately before and after such merger there
shall not exist any Default or Event of Default;

(v)           any
Subsidiary of the Borrower may make or effect any Asset Sale to the Borrower or
another Wholly-Owned Subsidiary of the Borrower;

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(vi)          the
Borrower may wind up, voluntarily liquidate or dissolve any Subsidiary if (A)
such Subsidiary is not a “Significant Subsidiary” (as defined in Regulation S-X
under the 1933 Act), and (B) the winding up, voluntary liquidation or
dissolution of such Subsidiary will not result in an Event of Default hereunder
or otherwise have a Material Adverse Effect;

(vii)         in
addition to any Asset Sale permitted pursuant to any other subpart in this
Section 8.2, the Borrower and its Subsidiaries may make or effect other Asset
Sales so long as (A) the aggregate amount (based upon the fair market value of
the assets) of all Property sold or otherwise disposed pursuant to all such
Asset Sales on and after the Closing Date does not constitute a Substantial
Portion of the Property of the Borrower and its Subsidiaries at the time of and
after giving effect to any such Asset Sale and (B) at least 80% of the total
consideration received by the Borrower or any of its Subsidiaries, as
applicable, for such Asset Sale or series of Asset Sales consists of cash or
Cash Equivalents;

(viii)        the
Borrower and its Subsidiaries shall be permitted to create, incur, assume and
suffer to exist Liens permitted pursuant to Section 8.3; and

(ix)           the
Borrower and its Subsidiaries shall be permitted to make and dispose of the
Investments permitted pursuant to Section 8.4.

Section 8.3             Liens.  The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon or with respect to any Property or assets of any kind (real
or personal, tangible or intangible) of the Borrower or any such Subsidiary
whether now owned or hereafter acquired, or sell any such Property or assets
subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property or assets (including, without limitation, sales of
accounts receivable or notes with or without recourse to the Borrower or any of
its Subsidiaries, other than for purposes of collection of delinquent accounts
in the ordinary course of business) or assign any right to receive income, or
file or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute, except
that the foregoing restrictions shall not apply to:

(a)           the Standard Permitted Liens;

(b)           Liens (i) in existence on the Closing Date
that are listed, and the Indebtedness secured thereby and the Property subject
thereto on the Closing Date described, on Schedule 8.3, or (ii) arising out of the refinancing, extension, renewal
or refunding of any Indebtedness secured by any such Liens, provided that the principal amount of such Indebtedness is
not increased and such Indebtedness is not secured by any additional assets;

(c)           Liens on Property of the Borrower securing the Borrower’s First
Mortgage Bonds issued pursuant to the Indenture, dated as of October 1, 1935,
as amended,

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supplemented or otherwise modified from time to time, between the
Borrower and The Bank of New York;

(d)           Liens
on Property of the Borrower in connection with collateralized pollution
control bonds;

(e)           any
(i) Lien existing on any Property at the time such
Property is acquired by the Borrower or any of its Subsidiaries or on any
Property of any Person at the time such Person becomes, or is merged into, a
Subsidiary of the Borrower, provided that (A) such Lien is not created in contemplation of or
in connection with such acquisition or such Person becoming, or being merged
into, such Subsidiary, as the case may be, (B) such
Lien shall not attach or apply to any other Property or assets of the Borrower
or any of its Subsidiaries, and (C) such Lien shall
secure only those obligations that it secures on the date of such acquisition
or the date such Person becomes, or is merged into, such Subsidiary, as the
case may be, and any extension or refinancing thereof, so long as the aggregate
principal amount so extended or refinanced is not increased, and (ii) Lien
securing Indebtedness in respect of purchase money obligations for the
acquisition, lease, construction or improvement of fixed assets or Capital
Lease Obligations, provided that
(A) such Lien only attaches to such fixed assets being acquired, leased,
constructed or improved and (B) the Indebtedness secured by such Lien does not
exceed the cost or fair market value, whichever is lower, of the fixed assets
being acquired, leased, constructed or improved on the date of acquisition,
lease, construction or improvement; provided, however,
that the aggregate principal amount of Indebtedness at any time outstanding
secured by a Lien described in this subsection (e) shall not exceed an amount
equal to 5% of the Consolidated Tangible Assets at such time.

Section 8.4             Investments.  The Borrower will not, and will not permit
any of its Subsidiaries to, make or hold any Investments, except (a)
Investments held by the Borrower or any of its Subsidiaries in cash or Cash
Equivalents; (b) Investments of the Borrower in any of its Subsidiaries; (c)
Investments of a Subsidiary of the Borrower in the Borrower or another
Subsidiary of the Borrower; (d) Permitted Acquisitions; (e) Investments by the
Borrower and its Subsidiaries in account debtors received in connection with
the bankruptcy or reorganization, or in settlement of the delinquent
obligations of financially troubled suppliers or customers, in the ordinary
course of business; (f) promissory notes, earn-outs, other contingent payment
obligations and other non-cash consideration received by Borrower or any of its
Subsidiaries as partial payment of the total consideration of any Asset Sale
made in accordance with Section 8.2(vii); (g) loans and advances by the
Borrower and its Subsidiaries to their respective employees in an aggregate
amount not to exceed $1,000,000, at any time outstanding; (h) Investments
comprised of the purchase of receivables from other energy marketers as
required from time to time by one or more applicable Governmental Authorities;
(i) other Investments held by the Borrower or its Subsidiaries on the
Closing Date that are listed on Schedule 8.4; and (j) Investments
by the Borrower and its Subsidiaries not otherwise permitted under this Section
8.4 in an aggregate amount not to exceed $5,000,000, at any time.

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Section 8.5             Financial
Covenant.  The Borrower will not at
any time permit the ratio of (i) Consolidated Total
Debt to (ii) Consolidated Total Capitalization to
exceed 0.65 to 1.00.

Section 8.6             Transactions
with Affiliates.  The Borrower will
not, and will not permit any of its Subsidiaries to, enter into any transaction
or series of transactions with any Affiliate (other than, in the case of the
Borrower, any Subsidiary of the Borrower, and in the case of a Subsidiary of
the Borrower, the Borrower or another Subsidiary of the Borrower) other than in
the ordinary course of business of and pursuant to the reasonable requirements
of the Borrower’s or such Subsidiary’s business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than would be
obtained in a comparable arm’s-length transaction with a Person other than an
Affiliate, except (i) sales of goods to an
Affiliate for use or distribution outside the United States that in the good
faith judgment of the Borrower complies with any applicable legal requirements
of the Code, or (ii) agreements and transactions
with and payments to officers, directors and shareholders that are either (A) entered into in the ordinary course of business and
not prohibited by any of the provisions of this Agreement, or (B) entered into outside the ordinary course of
business, approved by the directors or shareholders of the Borrower, and not
prohibited by any of the provisions of this Agreement.

Section 8.7             Material
Agreements.  Neither the Borrower nor
any Subsidiary of the Borrower shall default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement, instrument or other document to which the Borrower or such
Subsidiary, as applicable, is a party, which default could reasonably be
expected to have a Material Adverse Effect.

Section 8.8             Use
of Proceeds/Margin Regulations.  The
Borrower will not, and will not permit any of its Subsidiaries to, use any part
of the proceeds of any Borrowing, directly or indirectly, to purchase or carry
Margin Stock, or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock, in violation of any of the provisions of Regulation
T, U or X of the Board of Governors of the Federal Reserve System.

Section 8.9             No
Dividend Restrictions.  The Borrower
shall not permit any of its Subsidiaries to enter into any agreement or
otherwise create or cause or permit to exist or become effective any consensual
restriction limiting the ability (whether by covenant, event of default or
otherwise) of such Subsidiary to (i) pay dividends or make any other
distributions on shares of such Subsidiary’s capital stock held by the Borrower
or any other Subsidiary of the Borrower or (ii) pay any other obligation owed
to the Borrower or any other Subsidiary of the Borrower, provided, however,
that this clause (ii) shall not apply to Permitted Restrictive Covenants.

Section 8.10           Swap
Agreements.  The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any Swap Agreement
other than Swap Agreements pursuant to which the Borrower or such Subsidiary
has hedged its reasonably estimated interest rate, foreign currency or
commodity exposure, and not for speculative purposes.

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ARTICLE IX.

EVENTS OF DEFAULT

Section 9.1             Events
of Default.  Any of the following
specified events shall constitute an Event of Default (each an “Event of
Default”):

(a)           Payments:  the Borrower shall (i)
default in the payment when due (whether at maturity, on a date fixed for a
scheduled repayment, on a date on which a required prepayment is to be made,
upon acceleration or otherwise) of any principal of the Loans or any
reimbursement obligation in respect of any Unpaid Drawing; or (ii) default, and such default shall continue for five or
more days, in the payment when due of any interest on the Loans or any Fees or
any other amounts owing hereunder or under any other Credit Document;

(b)           Representations:  any representation, warranty or statement
made by the Borrower herein or in any other Credit Document (other than
pursuant to Section 6.14(b)) or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made;

(c)           Certain
Covenants:  the Borrower shall
default in the due performance or observance by it of any term, covenant or
agreement contained in Section 7.1, 7.2(b), 7.5, 7.9 or 7.10 or Article
VIII of this Agreement;

(d)           Other Covenants:  the
Borrower shall default in the due performance or observance by it of any term,
covenant or agreement contained in this Agreement or any other Credit Document,
other than those referred to in Section 9.1(a), (b) or (c) above, and such
default is not remedied within 30 days after the date on
which the Borrower receives written notice of such default from the
Administrative Agent or any Lender (any such notice to be identified as a “notice
of default” and to refer specifically to this paragraph);

(e)           Cross Default Under Other Agreements:  the
Borrower or any of its Subsidiaries shall (i) default
in any payment with respect to any Indebtedness (other than the Obligations),
and all grace periods applicable to such payment shall have expired, in an
aggregate amount in excess of $10,000,000, regardless of whether the holder or
holders of said Indebtedness (or a trustee or agent on behalf of such holder or
holders) exercises its rights, if any, to cause such Indebtedness to become due
and payable prior to its stated maturity; or (ii)
default in the observance or performance of any agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto (and all grace periods applicable to
such observance, performance or condition shall have expired), or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause any such Indebtedness to become due prior to its stated maturity, or any
such Indebtedness of the Borrower or 

 64
 

 

any of its Subsidiaries shall be declared to be due and payable, or
shall be required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof).

(f)            Invalidity
of Credit Documents:  any material
provision of any Credit Document, at any time after its execution and delivery
and for any reason other than as expressly permitted hereunder or under such
Credit Document or satisfaction in full of all the Obligations, ceases to be in
full force and effect; or the Borrower or any other Person (other than the
Administrative Agent or any Lender) contests in any manner the validity or
enforceability of any provision of any Credit Document; or the Borrower denies
in writing that it has any or further liability or obligation under any Credit
Document, or purports to revoke, terminate or rescind any Credit Document;

(g)           Judgments:  one or more
judgments, orders or decrees shall be entered against the Borrower and/or any
of its Subsidiaries involving a liability (other than a liability covered by
insurance, as to which the carrier has adequate claims paying ability and has
not effectively reserved its rights) of $10,000,000 or more in the aggregate
for all such judgments, orders and decrees for the Borrower and its
Subsidiaries, and any such judgments or orders or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 30 days from the
entry thereof;

(h)           Bankruptcy:  any of the following shall occur:

(i)            the Borrower or any
of its Subsidiaries (the Borrower and each such Subsidiary, each a “Principal
Party”) shall commence a voluntary case concerning itself under the
Bankruptcy Code;

(ii)           an involuntary case
is commenced against any Principal Party under the Bankruptcy Code and the
petition is not dismissed within 60 days after commencement of the case;

(iii)          a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of, a
Substantial Portion of the Property of any Principal Party;

(iv)          any Principal Party
commences (including by way of applying for or consenting to the appointment
of, or the taking of possession by, a rehabilitator, receiver, custodian,
trustee, conservator or liquidator (collectively, a “conservator”) of
itself or all or a Substantial Portion of its Property) any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation, conservatorship or
similar law of any jurisdiction whether now or hereafter in effect relating to
such Principal Party;

(v)           any such proceeding
of the type set forth in clause (iv) above is commenced against any Principal
Party to the extent such proceeding is consented to by such Person or remains
undismissed for a period of 60 days;

(vi)          any Principal Party
is adjudicated insolvent or bankrupt;

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(vii)         any order of relief
or other order approving any such case or proceeding is entered;

(viii)        any Principal Party
suffers any appointment of any conservator or the like for it or any
Substantial Portion of its Property that continues undischarged or unstayed for
a period of 60 days;

(ix)           any Principal Party
makes a general assignment for the benefit of creditors;

(x)            any Principal Party
generally does not pay its debts as such debts become due; or

(xi)           any corporate (or
similar organizational) action is taken by any Principal Party for the purpose
of effecting any of the foregoing;

(i)            ERISA:  (i) the Unfunded
Liabilities of all Single Employer Plans shall exceed in the aggregate
$30,000,000 or any Reportable Event that would reasonably be expected to have a
Material Adverse Effect shall occur in connection with any Plan; (ii) the
Borrower or any member of the Controlled Group shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred withdrawal liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower or any other
member of the Controlled Group as withdrawal liability (determined as of the
date of such notification), exceeds $10,000,000 or requires payment exceeding
$10,000,000 per annum; or (iii) the Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer
Plan that such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such reorganization
or termination the aggregate annual contribution of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans that
are then in reorganization or being terminated have been or will be increased
over the amounts contributed to such Multiemployer Plans for the respective
plan years of each such Multiemployer Plan immediately preceding the plan in
year in which the reorganization or termination occurs by an amount exceeding
$10,000,000; or

(j)            Change
of Control:  there occurs a Change of
Control.

Section 9.2             Acceleration;
Remedies.  Upon the occurrence of any
Event of Default, and at any time thereafter, if any Event of Default shall
then be continuing, the Administrative Agent shall, upon the written request of
the Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Administrative Agent
or any Lender to enforce its claims against the Borrower in any manner
permitted under applicable law:

(a)           declare
the Total Commitment terminated, whereupon the Commitment of each Lender shall
forthwith terminate immediately without any other notice of any kind;

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(b)           declare
the principal of and any accrued interest in respect of all Loans, all Unpaid
Drawings and all other Obligations owing hereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;

(c)           terminate
any Letter of Credit that may be terminated in accordance with its terms;
and/or

(d)           exercise
any other right or remedy available under any of the Credit Documents or applicable
law; provided that, if an Event of Default
specified in Section 9.1(h) (other than Section 9.1(h)(x)) shall
occur, the result that would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (a) and/or (b) above shall occur
automatically without the giving of any such notice.

Section 9.3             Application
of Liquidation Proceeds.  All monies
received by the Administrative Agent or any Lender from the exercise of
remedies hereunder or under the other Credit Documents or under any other
documents relating to this Agreement shall, unless otherwise required by the
terms of the other Credit Documents or by applicable law, be applied as
follows:

(a)           first, to the payment of all
expenses (to the extent not otherwise paid by the Borrower) incurred by the
Administrative Agent and the Lenders in connection with the exercise of such
remedies, including, without limitation, all reasonable costs and expenses of
collection, reasonable documented attorneys’ fees, court costs and any foreclosure
expenses;

(b)           second, to the payment pro rata of interest then accrued on the outstanding Loans
and Unpaid Drawings;

(c)           third, to the payment pro rata of any fees then accrued and payable to the
Administrative Agent or any Lender under this Agreement in respect of the Loans
and/or Letters of Credit;

(d)           fourth, to the payment pro rata of the principal balance
then owing on the outstanding Loans and Unpaid Drawings;

(e)           fifth, to the payment to the Lenders
of any amounts then accrued and unpaid under Sections 2.6, 2.7, and 4.5,
and if such proceeds are insufficient to pay such amounts in full, to the
payment of such amounts pro rata;

(f)            sixth, to the Administrative Agent
for the benefit of each LC Issuer to cash collateralize the Stated Amount of
outstanding Letters of Credit;

(g)           seventh, to the payment pro rata of all other amounts owed by the Borrower to the
Administrative Agent or any Lender or LC Issuer under this Agreement or any
other Credit Document; and

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(h)           finally, any remaining surplus after
all of the Obligations have been paid in full, to the Borrower or to whomsoever
shall be lawfully entitled thereto.

ARTICLE X.

THE ADMINISTRATIVE AGENT

Section 10.1           Appointment.  Each Lender hereby irrevocably designates and
appoints KeyBank as Administrative Agent to act as specified herein and in the
other Credit Documents, and each such Lender hereby irrevocably authorizes
KeyBank as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental
thereto. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article X. 
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in the other Credit Documents, nor
any fiduciary relationship with any Lender or LC Issuer, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the Administrative
Agent.  The provisions of this
Article X are solely for the benefit of the Administrative Agent, and the
Lenders, and neither the Borrower nor any of its Subsidiaries shall have any
rights as a third party beneficiary of any of the provisions hereof.  In performing its functions and duties under
this Agreement, the Administrative Agent shall act solely as agent of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Borrower or any
of its Subsidiaries.

Section 10.2           Delegation
of Duties.  The Administrative Agent
may execute any of its duties under this Agreement or any other Credit Document
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 10.3.

Section 10.3           Exculpatory
Provisions.  Neither the
Administrative Agent nor any of its respective officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Credit Document (except for its or
such Person’s own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any of its Subsidiaries
or any of their respective officers contained in this Agreement, any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Agreement or any other Credit Document or for any
failure of the Borrower or any Subsidiary of the Borrower or any of 

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their respective officers to perform its obligations hereunder or
thereunder.  The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries. 
The Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any Credit Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection
herewith or therewith furnished or made by the Administrative Agent to the
Lenders or by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.

Section 10.4           Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, e-mail or other electronic
transmission, facsimile transmission, telex or teletype message, statement,
order or other document or conversation believed by it, in good faith, to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower or any of its Subsidiaries), independent
accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.  The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Credit Documents in accordance with a request of
the Required Lenders (or all of the Lenders, or all of the Lenders (other than
any Defaulting Lender), as applicable, as to any matter that, pursuant to Section 11.11,
can only be effectuated with the consent of all Lenders, or all Lenders (other
than any Defaulting Lender), as the case may be), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.

Section 10.5           Notice
of Default.  The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Administrative Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a “notice
of default.” If the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Lenders.  The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders, provided
that unless and until the Administrative Agent shall have received such
directions, the 

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Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

Section 10.6           Non-Reliance.  Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates have made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any of its respective
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. 
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its respective Subsidiaries and made its
own decision to make its Loans hereunder and enter into this Agreement.  Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries.  The Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial
and other conditions, prospects or creditworthiness of the Borrower or any of its
Subsidiaries that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.

Section 10.7           Indemnification.  The Lenders agree to indemnify the
Administrative Agent and its Related Parties ratably according to their
respective Loans and Percentages of the Unutilized Total Commitment, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever that may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Administrative Agent or such Related Party in any way
relating to or arising out of this Agreement or any other Credit Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by the
Administrative Agent or such Related Party under or in connection with any of
the foregoing, but only to the extent that any of the foregoing is not paid by
the Borrower, provided that no
Lender shall be liable to the Administrative Agent or such Related Party for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Administrative Agent’s or such Related Party’s
gross negligence or willful misconduct. 
If any indemnity furnished to the Administrative Agent or any Related
Party for any purpose shall, in the opinion of the Administrative Agent, be
insufficient or become impaired, the 

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Administrative Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional
indemnity is furnished.  The agreements
in this Section 10.7 shall survive the payment of all Obligations.

Section 10.8           The
Administrative Agent in Individual Capacity.  The Administrative Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower, its Subsidiaries and their Affiliates as though not
acting as Administrative Agent hereunder. 
With respect to the Loans made by it and all Obligations owing to it,
the Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in its individual capacity.

Section 10.9           Successor
Administrative Agent.  The
Administrative Agent may resign at any time upon not less than 30 days notice
to the Lenders, each LC Issuer and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right to appoint a successor, provided that, so long as no Event of
Default shall have occurred and be continuing, the Borrower shall have the
right to consent to any such successor Administrative Agent, such consent not
to be unreasonably withheld.  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 and each LC Issuer, appoint a successor
Administrative Agent, provided
that if the Administrative Agent shall notify the Borrower and the Lenders that
no such successor is willing to accept such appointment, then such resignation
shall nonetheless become effective in accordance with such notice and
(i) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Credit Documents (except that in
the case of any collateral security held by the Administrative Agent on behalf
of the Lenders or any LC Issuer under any of the Credit Documents, the retiring
Administrative Agent shall continue to hold such collateral security for the
benefit of the Lenders until such time as a successor Administrative Agent is
appointed) and (ii) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender and LC Issuer directly, until such time as the
Required Lenders (with the consent of the Borrower, if applicable) appoint a
successor Administrative Agent as provided for above in this paragraph.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties 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 Credit Documents (if not already discharged therefrom as
provided above in this paragraph).  The
fees payable by the Borrower to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor.  After the
retiring Administrative Agent’s resignation hereunder and under the other
Credit Documents, the provisions of this Article and Section 11.1 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 

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omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

Section 10.10         Other
Agents.  Any Lender identified herein
as a Co-Agent, Syndication Agent, Documentation Agent, Co-Documentation Agent,
Managing Agent, Manager, Lead Arranger, Arranger or any other corresponding
title, other than “Administrative Agent,” shall have no right, power,
obligation, liability, responsibility or duty under this Agreement or any other
Credit Document except those applicable to all Lenders as such. Each Lender
acknowledges that it has not relied, and will not rely, on any Lender so
identified in deciding to enter into this Agreement or in taking or not taking
any action hereunder.

ARTICLE XI.

MISCELLANEOUS

Section 11.1           Payment of Expenses.

(a)           Irrespective
of whether the transactions contemplated hereby are consummated, the Borrower
agrees to pay (or reimburse the Administrative Agent for) all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, syndication, administration and execution and
delivery of the Credit Documents and the documents and instruments referred to
therein and the syndication of the Commitments, including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent
and its Affiliates.

(b)           The
Borrower agrees to pay, or reimburse the Administrative Agent for, all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with any amendment, waiver, consent or other modification of or
relating to any of the Credit Documents, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent.

(c)           The
Borrower agrees to pay, or reimburse the Administrative Agent and the Lenders
for, all reasonable out-of-pocket costs and expenses of the Administrative
Agent and the Lenders in connection with the enforcement of any of the Credit
Documents  or the other documents and
instruments referred to therein, including, without limitation, the reasonable fees and disbursements of each counsel to
the Administrative Agent and any Lender (including allocated costs of internal
counsel).

(d)           Without
limitation of the preceding Section 11.1(c), in the event of the
bankruptcy, insolvency, rehabilitation or other similar proceeding in respect
of the Borrower or any of its Subsidiaries, the Borrower agrees to pay all
costs of collection and defense, including reasonable attorneys’ fees in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, which shall be due and payable together
with all required service or use taxes.

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(e)           Without
duplication of any of the Borrower’s obligations under Section 4.5(c), the
Borrower agrees to pay and hold the Administrative Agent and each of the
Lenders harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save the
Administrative Agent and each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to any such indemnified Person) to pay such
taxes.

(f)            The
Borrower agrees to indemnify the Administrative Agent, each Lender, and their
respective Related Parties (collectively, the “Indemnitees”) from and
hold each of them harmless against any and all losses, liabilities, claims,
damages or expenses reasonably incurred by any of them as a result of, or
arising out of, or in any way related to, or by reason of

(i)            any investigation,
litigation or other proceeding (whether or not any Lender is a party thereto)
related to the entering into and/or performance of any Credit Document or the
use of the proceeds of any Loans hereunder or the consummation of any
transactions contemplated in any Credit Document, other than any such
investigation, litigation or proceeding arising out of transactions solely
between or among one or more of the Lenders and/or the Administrative Agent
(except any such investigation, litigation or other proceeding brought by one
or more Lenders against or involving the Administrative Agent), transactions
solely involving the assignment by a Lender of all or a portion of its Loans
and Commitments, or the granting of participations therein, as provided in this
Agreement, or arising solely out of any examination of a Lender by any regulatory
or other governmental authority having jurisdiction over it, or

(ii)           the actual or
alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned, leased
or at any time operated by the Borrower or any of its Subsidiaries, the
release, generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by the Borrower or
any of its Subsidiaries, if the Borrower or any such Subsidiary could have or
is alleged to have any responsibility in respect thereof, the non-compliance of
any such Real Property with foreign, federal, state and local laws, regulations
and ordinances (including, without limitation, applicable permits thereunder)
applicable thereto, or any Environmental Claim asserted against the Borrower or
any of its Subsidiaries, in respect of any such Real Property,

including, in each case,
without limitation, the reasonable documented fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding in each case under this clause (f) any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
the gross negligence or willful misconduct of the Person to be indemnified or
of any other Indemnitee who is such Person or an Affiliate of such Person). To
the extent that the undertaking to indemnify, pay or hold harmless any Person
set forth in the preceding 

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sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities that is permissible under applicable law.

Section 11.2           Right
of Setoff.  In addition to any rights
now or hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of an Event of Default, each Lender and each LC Issuer is hereby authorized at
any time or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held
or owing by such Lender or such LC Issuer (including, without limitation, by
branches, agencies and Affiliates of such Lender or LC Issuer wherever located)
to or for the credit or the account of the Borrower against and on account of
the Obligations and liabilities of the Borrower to such Lender or LC Issuer
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations of the Borrower purchased by
such Lender pursuant to Section 11.4(c), and all other claims of any
nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether such Lender or LC Issuer shall
have made any demand hereunder and although such Obligations, liabilities or
claims, or any of them, shall be contingent or unmatured.  Each Lender and LC Issuer agrees promptly to
notify the Borrower after any such set off and application, provided, however, that the failure to
give such notice shall not affect the validity of such set off and application.

Section 11.3           Notices.

(a)           Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subparagraph (c) 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:

(i)            if to the Borrower,
to The Dayton Power and Light Company, 1065 Woodman Drive, Dayton, Ohio  45432, Attention: Joseph R. Boni III
(Telecopier No. (937) 259-7147; Telephone No. (937) 259-7230);

(ii)           if to the
Administrative Agent, to KeyBank National Association, 127 Public Square,
Cleveland, Ohio 44114, Attention: Yvette M. Dyson-Owens (Telecopier No.
(216) 689-5962; Telephone No. (216) 689-4358); and

(iii)          if to a Lender, to
it at its address (or telecopier number) set forth on Annex I
hereto or, in the case of any Lender that becomes a party to this Agreement by
way of assignment under Section 11.4 of this Agreement, to it at the
address set forth in the Assignment Agreement to which it is a party;

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(b)           Receipt
of Notices.  Notices and
communications 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 and
receipt has been confirmed by telephone. 
Notices delivered through electronic communications to the extent
provided in subparagraph (c) below, shall be effective as provided in such
subparagraph (c).

(c)           Electronic
Communications.  Notices and other
communications to the Administrative Agent, an LC Issuer or any Lender pursuant
to Section 7.1(a), (b), (c), (h), (i) or (j) may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent.  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. 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.

(d)           Change
of Address.  Any party hereto may
change its address or telecopier number for notices and other communications
hereunder by notice to each of the other parties hereto.

Section 11.4           Benefit
of Agreement.

(a)           Successors
and Assigns Generally.  This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns, provided that the Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of all
the Lenders (other than any Defaulting Lender), and, provided,
further, that any assignment by a Lender of its rights and
obligations hereunder shall be effected in accordance with
Section 11.4(c).

(b)           Participations.  Notwithstanding the foregoing, each Lender
may at any time grant participations in any of its rights hereunder or under
any of the Notes to any Person (other than the Borrower or any of its
Affiliates or a natural Person), provided that
in the case of any such participation,

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(i)            the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including, without limitation,
rights of consent, approval or waiver (the participant’s rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto),

(ii)           such Lender’s obligations under this Agreement (including,
without limitation, its Commitment hereunder) shall remain unchanged,

(iii)          such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,

(iv)          such Lender shall remain the holder of any Note for all
purposes of this Agreement, and

(v)           the Borrower, the Administrative Agent, and the other Lenders
shall continue to deal solely and directly with the selling Lender in
connection with such Lender’s rights and obligations under this Agreement, and
all amounts payable by the Borrower hereunder shall be determined as if such
Lender had not sold such participation, except that the participant shall be
entitled to the benefits of Sections 2.6, 2.7 and 4.5 of this Agreement to
the extent that such Lender would be entitled to such benefits if the
participation had not been entered into or sold (provided
that the participant shall only be entitled to the benefits of Section 4.5
to the extent that it complies with the requirements of that section as though
it were a Lender),

and, provided
further, that no Lender shall transfer, grant or sell any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (w) extend the final scheduled maturity of the Loans
in which such participant is participating, or reduce the rate or extend the
time of payment of interest or Fees thereon (except in connection with a waiver
of the applicability of any post-default increase in interest rates), or reduce
the principal amount thereof, or increase such participant’s participating
interest in any Commitment over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any such Commitment), (x) release any
guarantor from its guaranty of any of the Obligations, except strictly in
accordance with the terms of the Credit Documents, or (y) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.

(c)           Assignments by
Lenders.  Any Lender may assign all,
or if less than all, a fixed portion, of its Loans, LC Participations and/or
Commitment and its rights and obligations hereunder to one or more Eligible
Assignees, each of which shall become a party to this Agreement as a Lender by
execution of an Assignment Agreement, provided that

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(i)            except in the case of (x) an assignment of the entire
remaining amount of the assigning Lender’s Loans and/or Commitment or (y) an
assignment to another Lender, an Affiliate of such Lender or an Approved Fund
with respect to such Lender, the aggregate amount of each such assignment of
such Commitment (which for this purpose includes the Loans outstanding
thereunder), shall not be less than $5,000,000 (or, if greater, in integral
multiples of $1,000,000),

(ii)           in the case of any assignment to an Eligible Assignee at
the time of any such assignment the Lender Register shall be deemed modified to
reflect the Commitments of such new Lender and of the existing Lenders,

(iii)          upon surrender of the old Notes, if any, upon request of
the new Lender, new Notes will be issued, at the Borrower’s expense, to such
new Lender and to the assigning Lender, such new Notes to be in conformity with
the requirements of Section 2.6 (with appropriate modifications) to the extent
needed to reflect the revised Commitments,

(iv)          unless waived by the Administrative Agent, the
Administrative Agent shall receive at the time of each such assignment, from
the assigning or assignee Lender, the payment of a non-refundable assignment
fee of $3,500,

and, provided
further, that such transfer or assignment will not be effective
until the Assignment Agreement in respect thereof is recorded by the
Administrative Agent on the Lender Register maintained by it as provided
herein.

To the extent of any
assignment pursuant to this Section 11.4(c) the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Commitments.

At the time of each
assignment pursuant to this Section 11.4(c) to a Person that is not already a
Lender hereunder and that is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Lender shall provide to the Borrower and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if applicable, an
Exemption Certificate) described in Section 4.5(b).  To the extent that an assignment of all or
any portion of a Lender’s Commitment and related outstanding Obligations pursuant
to this Section 11.4(c) would, at the time of such assignment, result in
increased costs under Section 4.5 from those being charged by the respective
assigning Lender prior to such assignment, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective assignment).

Nothing in this Section
11.4(c) shall prevent or prohibit (i) any Lender that is a bank, trust company
or other financial institution from pledging its Notes or Loans to a Federal
Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank, or (ii) any Lender that is a trust, limited liability company, 

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partnership or other
investment company from pledging its Notes or Loans to a trustee or agent for
the benefit of holders of certificates or debt securities issued by it.  No such pledge, or any assignment pursuant to
or in lieu of an enforcement of such a pledge, shall relieve the transferor
Lender from its obligations hereunder.

(d)           No SEC
Registration or Blue Sky Compliance. 
Notwithstanding any other provisions of this Section 11.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the “Blue Sky” laws of any State.

(e)           Representations
of Lenders.  Each Lender initially
party to this Agreement hereby represents, and each Person that becomes a
Lender pursuant to an assignment permitted by this Section 11.4 will, upon
its becoming party to this Agreement, represent that it is a commercial lender,
other financial institution or other “accredited” investor (as defined in SEC
Regulation D) that makes or acquires loans in the ordinary course of its
business and that it will make or acquire Loans for its own account in the
ordinary course of such business, provided that
subject to the preceding Sections 11.4(b) and (c), the disposition of any
promissory notes or other evidences of or interests in Indebtedness held by
such Lender shall at all times be within its exclusive control.

Section 11.5           No
Waiver; Remedies Cumulative.  No
failure or delay on the part of the Administrative Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower and the Administrative
Agent or any Lender shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder.  No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand. 
Without limiting the generality of the foregoing, the making of a Loan
or any LC Issuance shall not be construed as a waiver of any Default or Event
of Default, regardless of whether the Administrative Agent, any Lender or any
LC Issuer may have had notice or knowledge of such Default or Event of Default
at the time.  The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies that the Administrative Agent or any Lender would otherwise have.

Section 11.6           Payments Pro
Rata; Sharing of Setoffs.

(a)           The Administrative
Agent agrees that promptly after its receipt of each payment from or on behalf
of the Borrower in respect of any Obligations, it shall distribute such payment
to the Lenders (other than any Lender that has expressly waived in writing its
right to receive its pro rata share
thereof) pro rata based upon their respective
shares, if any, of the Obligations with respect to which such payment was
received.  As to any such payment
received by the Administrative Agent prior to 1:00 

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P.M.
(local time at the Payment Office) in funds that are immediately available on
such day, the Administrative Agent will use all reasonable efforts to
distribute such payment in immediately available funds on the same day to the
Lenders as aforesaid.

(b)           Each of the Lenders
agrees that, if it should receive any amount hereunder (whether by voluntary
payment, by realization upon security, by the exercise of the right of setoff
or banker’s lien, by counterclaim or cross action, by the enforcement of any
right under the Credit Documents, or otherwise) that is applicable to the
payment of the principal of, or interest on, the Loans, LC Participations or
Fees (other than Fees that are intended to be paid solely to the Administrative
Agent or an LC Issuer and amounts payable to a Lender under Sections 2.8, 2.9
or 2.10), of a sum that with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender receiving
such excess payment shall purchase for cash without recourse or warranty from
the other Lenders an interest in the Obligations to such Lenders in such amount
as shall result in a proportional participation by all of the Lenders in such
amount, provided that (i)
if all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest, and (ii)
the provisions of this Section 11.6(b) shall not be construed to apply to
any payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement, or any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant pursuant to Section 11.4, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this Section 11.6(b) 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 set-off 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.

(c)           Notwithstanding
anything to the contrary contained herein, the provisions of the preceding
Sections 11.6(a) and (b) shall be subject to the express provisions of
this Agreement that require, or permit, differing payments to be made to
Lenders that are not Defaulting Lenders, as opposed to Defaulting Lenders.

(d)           If any Lender shall
fail to make any payment required to be made by it to the Administrative Agent
pursuant to Section 2.3(b), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision of this Agreement), apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender’s obligations to the Administrative Agent
under such Sections until all such unsatisfied obligations are fully paid.

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Section 11.7           Governing Law; Submission to Jurisdiction;
Venue; Waiver of Jury Trial.

(a)           THIS AGREEMENT AND
THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.  TO
THE FULLEST EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS.  Any legal action or
proceeding with respect to this Agreement or any other Credit Document may be brought
in the Supreme Court of the State of New York sitting in New York County or in
the United States District Court of the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its Property, generally and
unconditionally, the jurisdiction of the aforesaid courts.  The Borrower hereby further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Borrower at its address for notices
pursuant to Section 11.3, such service to become effective 30 days after such
mailing or at such earlier time as may be provided under applicable law.  Nothing herein shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Borrower in any other jurisdiction.

(b)           The Borrower hereby
irrevocably waives any objection that it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement or any other Credit Document brought in the
courts referred to in Section 11.7(a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.

(c)           EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
CREDIT DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR
OTHER MODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.  EACH
PARTY HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS PARAGRAPH.

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Section 11.8           Counterparts.  This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same agreement.

Section 11.9           Integration.  This Agreement, the other Credit Documents
and any separate letter agreements with respect to fees payable to the
Administrative Agent, for its own account and benefit and/or for the account,
benefit of, and distribution to, the Lenders, constitute the entire contract
among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof or thereof.

Section 11.10         Headings
Descriptive.  The headings of the
several sections and other portions of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.

Section 11.11         Amendment
or Waiver.

(a)           Neither this
Agreement nor any other Credit Document, nor the terms hereof or thereof, may
be amended, changed, waived or otherwise modified unless such amendment,
change, waiver or other modification is in writing and signed by the Borrower
and the Administrative Agent, and also signed (or consented to in writing by)
the Required Lenders, provided that

(i)            no change in, or waiver or other modification otherwise
affecting, the amount or time of any scheduled or mandatory reduction in or
termination of the Total Commitment provided for in Section 3.3 to which a
Lender shall be entitled, shall be made without the written consent of each
Lender;

(ii)           no change, waiver or other modification shall:

(A)          increase (1) the Commitment of any Lender hereunder,
without the written consent of such Lender, or (2) the Total Commitment,
without the consent of all of the Lenders;

(B)           extend or postpone the Maturity Date or any other maturity
date provided for herein that is applicable to any Loan of any Lender, extend
or postpone any scheduled expiration or termination date provided for herein
that is applicable to a Commitment of any Lender, or extend or postpone the
expiration date of any Letter of Credit as to which such Lender is an LC
Participant beyond the latest expiration date for a Letter of Credit provided
for herein, without the written consent of such Lender;

(C)           reduce the principal amount of any Loan made by any
Lender, or reduce the rate or extend the time of payment of, or excuse the
payment of, interest thereon (other than as a result of waiving the
applicability of any post-default increase in interest rates), without the
written consent of such Lender; or

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(D)          reduce the amount of any Unpaid Drawings as to which any
Lender is an LC Participate, or reduce the rate or extend the time of payment
of, or excuse the payment of, interest thereon (other than as a result of
waiving the applicability of any post-default increase in interest rates), without
the written consent of such Lender; or

(E)           reduce the rate or extend the time of payment of, or
excuse the payment of, any Fees to which any Lender is entitled hereunder,
without the written consent of such Lender; and

(iii)          no change, waiver or other modification or termination
shall, without the written consent of each Lender (other than a Defaulting
Lender) affected thereby,

(A)          release the Borrower from any obligations as a guarantor of
its Subsidiaries’ obligations under any Credit Document, except in accordance
with the express terms of this Agreement;

(B)           amend, modify or waive any provision of this
Section 11.11, or Section 9.3, 10.7, 11.1, 11.4 or 11.6, or any other
provision of any of the Credit Documents pursuant to which the consent or approval
of all Lenders, or a number or specified percentage or other required grouping
of Lenders is by the terms of such provision explicitly required;

(C)           reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders; or

(D)          consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement, except in accordance
with the express terms of this Agreement.

Any waiver, consent, amendment or other modification
with respect to this Agreement given or made in accordance with this
Section 11.11 shall be effective only in the specific instance and for the
specific purpose for which it was given or made.

(b)           No provision of
Section 2.4 or any other provision in this Agreement specifically relating to
Letters of Credit may be amended without the consent of any LC Issuer adversely
affected thereby.

(c)           No provision of
Article X may be amended without the consent of the Administrative Agent.

Section 11.12         Survival
of Indemnities.  All indemnities set
forth herein including, without limitation, in Section 2.8, 2.9, 2.10,
4.5, 10.7 or 11.1 shall survive the execution and delivery of this Agreement
and the making and repayment of Loans.

Section 11.13         Domicile
of Loans.  Each Lender may transfer
and carry its Loans at, to or for the account of any branch office, subsidiary
or affiliate of such 

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Lender,
provided that the Borrower shall
not be responsible for costs arising under Section 2.8 resulting from any
such transfer (other than a transfer pursuant to Section 2.11) to the
extent not otherwise applicable to such Lender prior to such transfer.

Section 11.14         Confidentiality.

(a)           The Administrative
Agent, each LC Issuer and the Lenders each agrees to maintain the
confidentiality of all Confidential Information (as defined below), except that
Confidential Information may be disclosed (i) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Confidential Information and instructed to keep such
Confidential Information confidential), (ii) to any
direct or indirect contractual counterparty in any swap, hedge or similar
agreement (or to any such contractual counterparty’s professional advisor, so
long as such contractual counterparty (or such professional advisor) agrees to
be bound by the provisions of this Section 11.14,
(iii) to the extent requested by any regulatory authority, (iv) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process,
(v) to any other party to this Agreement, (vi)
to any other creditor of the Borrower that is a direct or intended beneficiary
of any of the Credit Documents, (vii) in connection
with the exercise of any remedies hereunder or under any of the other Credit
Documents, or any suit, action or proceeding relating to this Agreement or any
of the other Credit Documents or the enforcement of rights hereunder or
thereunder, (viii) subject to an agreement
containing provisions substantially the same as those of this
Section 11.14, to any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this
Agreement, (ix) with the consent of the Borrower, or (x) to the extent such Confidential Information
(A) becomes publicly available other than as a result of a breach of this
Section 11.14, or (B) becomes available to the Administrative Agent,
any LC Issuer or any Lender on a non-confidential basis from a source other
than the Borrower.

(b)           As used in this
Section, “Confidential Information” shall mean all information received
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, any LC Issuer or any
Lender on a non-confidential basis prior to disclosure by the Borrower, provided that in the case of information received from the
Borrower after the Closing Date, such information is clearly identified at the
time of delivery as confidential.

Section 11.15         Lender
Register.  The Borrower hereby
designates the Administrative Agent to serve as its agent, solely for purposes
of this Section 11.15, to maintain a register (the “Lender Register”)
on or in which it will record the names and addresses of the Lenders, and the
Commitments from time to time of each of the Lenders, the Loans made to the
Borrower by each of the Lenders and each repayment and prepayment in respect of
the principal amount of such Loans of each such Lender.  Failure to make any such recordation, or
(absent manifest error) any error in such recordation, shall not affect the
Borrower’s obligations in respect of such Loans.  With 

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respect
to any Lender, the transfer of the Commitment of such Lender and the rights to
the principal of, and interest on, any Loan made pursuant to such Commitment
shall not be effective until such transfer is recorded on the Lender Register
maintained by the Administrative Agent with respect to ownership of such
Commitment and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Loans shall remain owing to the
transferor.  The registration of
assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to Section 11.4(c).  The Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature that may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section 11.15,
except to the extent attributable to the gross negligence or willful misconduct
of the Administrative Agent. The Lender Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.

Section 11.16         General
Limitation of Liability.  No claim
may be made by the Borrower, any Lender, the Administrative Agent, any LC
Issuer or any other Person against the Administrative Agent, any LC Issuer or
any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any damages other than actual compensatory damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the other Credit Documents, or any act, omission or event occurring in
connection therewith; and the Borrower, each Lender, the Administrative Agent
and each LC Issuer hereby, to the fullest extent permitted under applicable
law, waives, releases and agrees not to sue or counterclaim upon any such claim
for any special, consequential or punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor.

Section 11.17         Limitations
on Liability of the LC Issuers.  The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit.  Neither any LC Issuer nor any of
its officers or directors shall be liable or responsible for: (a) the use that
may be made of any Letter of Credit or any acts or omissions of any beneficiary
or transferee in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by an LC Issuer against presentation of documents that do
not comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit, except that the Borrower shall have a claim against
an LC Issuer, and an LC Issuer shall be liable to the Borrower, to the extent
of any direct, but not consequential, damages suffered by the Borrower that the
Borrower proves were caused by (i) such LC Issuer’s willful misconduct or gross
negligence in determining whether documents presented under a Letter of Credit
comply with the terms of such Letter of Credit or (ii) such LC Issuer’s willful
failure to make lawful 

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payment
under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit.  In furtherance and not in limitation of the
foregoing, an LC Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation.

Section 11.18         No Duty.  All attorneys, accountants, appraisers,
consultants and other professional Persons (including, without limitation, the
firms or other entities on behalf of which any such Person may act) retained by
the Administrative Agent or any Lender with respect to the transactions
contemplated by the Credit Documents shall have the right to act exclusively in
the interest of the Administrative Agent or such Lender, as the case may be,
and shall have no duty of disclosure, duty of loyalty, duty of care, or other
duty or obligation of any type or nature whatsoever to the Borrower, to any of
its Subsidiaries, or to any other Person, with respect to any matters within
the scope of such representation or related to their activities in connection
with such representation.  The Borrower
agrees, on behalf of itself and its Subsidiaries, not to assert any claim or
counterclaim against any such Persons with regard to such matters, all such
claims and counterclaims, now existing or hereafter arising, whether known or
unknown, foreseen or unforeseeable, being hereby waived, released and forever
discharged.

Section 11.19         Lenders
and Agent Not Fiduciary to Borrower. 
The relationship among the Borrower and its Subsidiaries, on the one
hand, and the Administrative Agent, each LC Issuer and the Lenders, on the
other hand, is solely that of debtor and creditor, and the Administrative
Agent, each LC Issuer and the Lenders have no fiduciary or other special
relationship with the Borrower and its Subsidiaries, and no term or provision
of any Credit Document, no course of dealing, no written or oral communication,
or other action, shall be construed so as to deem such relationship to be other
than that of debtor and creditor.

Section 11.20         Survival
of Representations and Warranties. 
All representations and warranties herein shall survive the making of
Loans and all LC Issuances hereunder, the execution and delivery of this
Agreement, the Notes and the other documents (the forms of which are attached
as Exhibits hereto), the issue and delivery of the Notes, any disposition
thereof by any holder thereof, and any investigation made by the Administrative
Agent or any Lender or any other holder of any of the Notes or on its
behalf.  All statements contained in any
certificate or other document delivered to the Administrative Agent or any
Lender or any holder of any Notes by or on behalf of the Borrower or of its
Subsidiaries pursuant hereto or otherwise specifically for use in connection
with the transactions contemplated hereby shall constitute representations and
warranties by the Borrower hereunder, made as of the respective dates specified
therein or, if no date is specified, as of the respective dates furnished to
the Administrative Agent or any Lender.

Section 11.21         Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the 

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invalidity
of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.

Section 11.22         Independence
of Covenants.  All covenants
hereunder shall be given independent effect so that if a particular action,
event, condition or circumstance is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be
within the limitations or restrictions of, another covenant, shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
event, condition or circumstance exists.

Section 11.23         Interest
Rate Limitation.  Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) that may be
contracted for, charged, taken, received or reserved by the Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Base Rate to the date
of repayment, shall have been received by such Lender.

Section 11.24         Treasury
Regulations.  The Borrower
acknowledges that the Administrative Agent and/or one or more of the Lenders
may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 1.6011-4 or Section 301.6112-1, and the Administrative Agent
and such Lender or Lenders, as applicable, may file such IRS forms or maintain
such lists and other records as they may determine is required by such Treasury
Regulations.

Section 11.25         USA
Patriot Act.  Each Lender subject to
the USA Patriot Act hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act, it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender to identify the Borrower in accordance with the USA Patriot Act.

[Remainder of page intentionally left blank; signature pages follow.]

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IN WITNESS WHEREOF, each of
the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

	
  

  	
   

  	
  THE DAYTON POWER AND LIGHT 

  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
    as a Lender, LC Issuer and as the 

  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
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  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  FIFTH THIRD BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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Signature Page

to

The Dayton Power and
Light Company Credit Agreement

 

ANNEX
I

INFORMATION
AS TO LENDERS

	
  Name of
  Lender

  	
   

  	
  Commitments

  	
   

  	
  Notice Address

  
	
  KeyBank National
  Association

  	
   

  	
  Commitment:

   

  $80,000,000

  	
   

  	
  KeyBank National Association 127 Public Square
  Cleveland, Ohio 44114

  Facsimile: (216) 689-5962

  Attention: Yvette M. Dyson-Owens

  
	
  JPMorgan Chase
  Bank, N.A.

  	
   

  	
  Commitment:

   

  $70,000,000

  	
   

  	
  JPMorgan Chase Bank, N.A. 10 S. Dearborn, Floor 7

  Mail Code IL1-0010

  Chicago, Illinois 60603

  Facsimile: (312) 385-7096

  Attention: Joyce King

  
	
  Fifth Third Bank

  	
   

  	
  Commitment:

   

  $70,000,000

  	
   

  	
  Fifth Third Bank 5050 Kingsley Drive

  1 MOC 2B

  Cincinnati, Ohio 45263

  

 

 E-1

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