EXHIBIT 10.1
EXECUTION COPY
$700,000,000
CREDIT AGREEMENT
Dated as of June 16, 2005
Among
ALLEGHENY ENERGY, INC.,
and
ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
as Borrowers
and
THE INITIAL LENDERS AND INITIAL ISSUING BANK NAMED HEREIN,
as Initial Lenders and Initial Issuing Bank
and
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
_______________________________________________________________________________
CITIGROUP GLOBAL MARKETS INC., THE BANK OF NOVA SCOTIA,
as Joint Lead Arranger and as Joint Lead Arranger,
Joint Book Runner Joint Book Runner and
Syndication Agent
BANC OF AMERICA SECURITIES CREDIT SUISSE, PNC CAPITAL MARKETS, INC.,
LLC, as Joint Book Runner CAYMAN ISLANDS as Joint Book Runner
BANK OF AMERICA, N.A., BRANCH, PNC BANK, NATIONAL
as Co-Documentation Agent as Joint Book Runner ASSOCIATION,
and Co-Documentation as Co-Documentation Agent
Agent
_______________________________________________________________________________
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms...........................................2
SECTION 1.02. Principles of Interpretation...................................35
SECTION 1.03. Letter of Credit...............................................36
SECTION 1.04. Joint and Several Obligations of AYE...........................36
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND LETTERS OF CREDIT
SECTION 2.01. The Advances...................................................37
(a) Revolving Advance..........................................37
(b) Term Advance...............................................37
(c) Continuance of the Existing L/Cs...........................38
(d) AYE Letters of Credit......................................38
(e) AESC Indirect Letters of Credit............................38
(f) AESC Direct Letters of Credit..............................39
(g) Letters of Credit Generally................................39
SECTION 2.02. Making the Advances............................................40
SECTION 2.03. Issuance of Letters of Credit; Drawings
and Reimbursements; Auto-Extension Letters
of Credit; Funding of Participations.......................42
(a) Procedures for Issuance and Amendment of Letters
of Credit; Auto-Extension Letters of Credit................42
(b) Drawings and Reimbursements; Funding of Participations.....43
(c) Repayment of Participations................................45
(d) Role of Issuing Bank.......................................45
(e) Cash Collateral............................................46
(f) Applicability of ISP and UCP...............................46
(g) Conflict with Issuer Documents.............................47
(h) Letters of Credit Issued for Subsidiaries..................47
(i) Letter of Credit Reports...................................47
(j) Obligations Absolute.......................................47
SECTION 2.04. Repayment of Advances..........................................48
SECTION 2.05. Termination or Reduction of the Commitments....................48
(a) Optional...................................................48
(b) Mandatory..................................................48
SECTION 2.06. Prepayments....................................................49
(a) Optional...................................................49
(b) Mandatory..................................................49
(c) Other Amounts..............................................50
SECTION 2.07. Interest.......................................................50
(a) Scheduled Interest.........................................50
(b) Default Interest...........................................50
(c) Notice of Interest Period and Interest Rate................51
SECTION 2.08. Fees 51
(a) Commitment Fee.............................................51
(b) Letter of Credit Fees......................................51
(c) Fronting Fee and Documentary and Processing
Charges Payable to Issuing Bank, Etc.......................51
(d) Agent Fees.................................................52
SECTION 2.09. Illegality.....................................................52
SECTION 2.10. Interest Elections.............................................52
(a) Optional...................................................52
(b) Mandatory..................................................53
SECTION 2.11. Increased Costs, Etc...........................................54
SECTION 2.12. Payments and Computations......................................55
SECTION 2.13. Taxes 56
SECTION 2.14. Evidence of Debt...............................................59
SECTION 2.15. Use of Proceeds................................................60
ARTICLE III
CONDITIONS TO BORROWING
SECTION 3.01. Conditions Precedent to the Initial Borrowing..................60
SECTION 3.02. Conditions Precedent to Each Borrowing and L/C
Credit Extension...............................................63
SECTION 3.03. Determinations Under Sections 3.01 and 3.02....................64
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers................64
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants of the Borrowers.........................69
(a) Compliance with Laws.......................................69
(b) Compliance with Environmental Laws.........................69
(c) Governmental Approvals.....................................69
(d) Payment of Taxes, Etc......................................69
(e) Insurance..................................................70
(f) Preservation of Corporate Existence, Etc...................70
(g) Visitation Rights..........................................70
(h) Keeping of Books...........................................70
(i) Maintenance of Properties, Etc.............................70
(j) Transactions with Affiliates...............................70
(k) Preparation of Environmental Reports.......................71
(l) Maintenance of Ownership of Subsidiaries...................71
(m) Use of Proceeds............................................72
SECTION 5.02. Negative Covenants of AYE......................................72
(a) Liens, Etc.................................................72
(b) Debt.......................................................74
(c) Change in Nature of Business...............................76
(d) Mergers, Etc...............................................76
(e) Sales, Etc., of Assets.....................................77
(f) Investments in Other Persons...............................79
(g) Restricted Payments........................................82
(h) Payment Restrictions Affecting AYE and its Subsidiaries....82
(i) Sale-Leaseback Transactions................................84
(j) Accounting Changes.........................................84
(k) Prepayments, Etc., of Debt.................................84
(l) Speculative Transactions...................................84
(m) Compliance with ERISA......................................84
SECTION 5.03. Reporting Covenants of AYE.....................................85
(a) Default Notices............................................85
(b) Annual Financials..........................................85
(c) Quarterly Financials.......................................85
(d) Budget.....................................................86
(e) Litigation.................................................86
(f) ERISA......................................................86
(i) ERISA Events and ERISA Reports.............................86
(g) Environmental Conditions...................................87
(h) Other Information..........................................87
SECTION 5.04. Financial Covenants............................................87
(a) Interest Coverage Ratio....................................88
(b) Leverage Ratio.............................................88
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default..............................................88
SECTION 6.02. Actions in Respect of Letters of Credit upon Default...........91
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action.......................................91
SECTION 7.02. Administrative Agent's Reliance, Etc...........................91
SECTION 7.03. CNAI, CGMI, Citibank, BNS, BAS, BofA, CSCI,
PCM, PNC and Affiliates........................................92
SECTION 7.04. Lender Party Credit Decision...................................92
SECTION 7.05. Indemnification................................................92
SECTION 7.06. Successor Administrative Agent.................................94
SECTION 7.07. Liability......................................................94
SECTION 7.08. Treatment of Lenders...........................................95
SECTION 7.09. Miscellaneous..................................................95
(a) Instructions...............................................95
(b) No Obligation..............................................95
SECTION 7.10. Arranger Parties...............................................95
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc................................................96
SECTION 8.02. Notices, Etc...................................................96
SECTION 8.03. No Waiver, Remedies............................................98
SECTION 8.04. Costs and Expenses.............................................98
SECTION 8.05. Right of Set-off..............................................100
SECTION 8.06. Binding Effect................................................100
SECTION 8.07. Assignments and Participations................................100
SECTION 8.08. Execution in Counterparts.....................................105
SECTION 8.09. Jurisdiction, Etc.............................................105
SECTION 8.10. Governing Law.................................................105
SECTION 8.11. Waiver of Jury Trial..........................................105
SECTION 8.12. Confidentiality...............................................105
SECTION 8.13. Benefits of Agreement.........................................107
SECTION 8.14. Severability..................................................107
SECTION 8.15. Limitations...................................................107
SECTION 8.16. Survival......................................................107
SECTION 8.17. USA Patriot Act Notice........................................108
SCHEDULES
Schedule I - Existing AYE Debt, Existing Lenders and Existing
AYE Debt Documents
Schedule II - Commitments and Applicable Lending Offices
Schedule 1.01(a) - Existing L/Cs
Schedule 3.01(b) - Disclosed Litigation
Schedule 4.01(c) - Governmental Approvals and Filings
Schedule 4.01(f) - Disclosed Information
Schedule 4.01(k) - Certain Environmental Matters
Schedule 4.01(n) - Existing Debt
Schedule 4.01(o) - Existing Liens
Schedule 4.01(p) - Investments
Schedule 5.01(j) - Affiliate Transactions
EXHIBITS
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Term Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of June 16, 2005 (as amended, modified or
otherwise supplemented from time to time in accordance with its terms, this
"Agreement"), among ALLEGHENY ENERGY, INC., a Maryland corporation ("AYE"),
ALLEGHENY ENERGY SUPPLY COMPANY, LLC, a Delaware limited liability company
("AESC", and together with AYE, collectively, the "Borrowers"), the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "Initial Lenders"), THE BANK OF NOVA
SCOTIA ("BNS"), as the initial issuing bank for the letters of credit pursuant
to this Agreement (in such capacity, the "Initial Issuing Bank" and, together
with the Initial Lenders, the "Initial Lender Parties"), Joint Lead Arranger,
Joint Book Runner and Syndication Agent, CITIGROUP GLOBAL MARKETS INC.
("CGMI"), as Joint Lead Arranger and Joint Book Runner, BANC OF AMERICA
SECURITIES LLC ("BAS"), as Joint Book Runner, BANK OF AMERICA, N.A. ("BofA"),
as Co-Documentation Agent, CREDIT SUISSE, Cayman Islands Branch ("CSCI"), as
Joint Book Runner and Co-Documentation Agent, PNC CAPITAL MARKETS, INC.
("PCM"), as Joint Book Runner, PNC BANK, NATIONAL ASSOCIATION ("PNC"), as
Co-Documentation Agent, and CITICORP NORTH AMERICA, INC. ("CNAI"), not in its
individual capacity except as expressly set forth hereunder but solely as
administrative agent (together with any successor administrative agent
appointed pursuant to Article VII, the "Administrative Agent") for the Lender
Parties (as hereinafter defined).
PRELIMINARY STATEMENTS
(1) AYE is indebted to certain banks and financial institutions (the
"Existing Lenders") pursuant to that certain credit agreement dated as of March
8, 2004 (as amended through the date hereof, the "Existing Credit Agreement"),
and the aggregate principal amount owed by AYE, if any, as of the date hereof
to each Existing Lender under the Existing Credit Agreement is set forth in
Part A of Schedule I opposite the name of such Existing Lender (all such
amounts, collectively, the "Existing AYE Debt").
(2) The Existing L/Cs (as hereinafter defined) are outstanding and
shall be continued under this Agreement as set forth hereunder.
(3) The Borrowers have requested that the Initial Lender Parties
establish a senior unsecured revolving credit facility in the aggregate amount
of $400,000,000 in favor of the Borrowers, with up to (a) the full amount
thereof to be made available to AYE in the form of Revolving Advances (as
hereinafter defined) or one or more Letters of Credit (as hereinafter defined)
issued at the request of AYE on behalf of itself or any of its Subsidiaries (as
hereinafter defined), including the AESC Companies (as hereinafter defined);
provided that the face amount of all outstanding Letters of Credit issued at
the request of AYE on behalf of AESC or any of AESC's Subsidiaries will not
exceed $125,000,000 in the aggregate and (b) $50,000,000 thereof to be made
available to AESC in the form of Revolving Advances or one or more Letters of
Credit issued at the request of AESC on behalf of AESC or any of its
Subsidiaries; provided that (i) the principal amount of all Revolving Advances
made to AESC, together with the face amount of all Letters of Credit issued at
the request of AESC, in each case outstanding at any time shall not exceed
$50,000,000, (ii) no Revolving Advance shall be made to, or a Letter of Credit
issued at the request of, AESC unless AYE has a minimum of $100,000,000 in pro
forma undrawn availability under the Revolving Facility (as hereinafter
defined) and (iii) AYE is jointly and severally liable for all Revolving
Advances made to and Letters of Credit issued on behalf of, or at the request
of, AESC. The Initial Lender Parties have indicated their willingness to
provide such financing to the Borrowers on the terms and conditions of this
Agreement and the other Loan Documents (as hereinafter defined).
(4) AYE has also requested that the Initial Lender Parties establish a
senior unsecured term credit facility in the aggregate amount of $300,000,000
in favor of AYE. The Initial Lender Parties have indicated their willingness to
provide such financing to AYE on the terms and conditions of this Agreement and
the other Loan Documents (as hereinafter defined).
(5) The proceeds of the Revolving Facility shall be used (a) on the
Closing Date (as hereinafter defined) to (i) refinance the aggregate principal
amount outstanding under the Existing Credit Agreement and (ii) continue the
Existing L/Cs under this Agreement, and (b) after the Closing Date, to provide
working capital for AYE and its Subsidiaries, including AESC.
(6) The proceeds of the Term Facility (as hereinafter defined) shall
be used to refinance the aggregate principal amount outstanding under the 7.75%
Notes (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"1940 Act" means the Investment Company Act of 1940, as amended.
"7.75% Notes" means the 7.75% Notes due August 1, 2005 issued by
Allegheny Energy, Inc. pursuant to that certain Indenture, dated as of
July 26, 2000, between Allegheny Energy, Inc. and Bank One Trust Company
N.A., as Trustee.
"Act" has the meaning specified in Section 8.17.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Citibank,
at its office at 399 Park Avenue, New York, New York (ABA No. 021000089),
Account No. 36852248, Reference: Allegheny Energy, Inc., or such other
account as the Administrative Agent shall specify in writing to the
Borrowers and each of the Lender Parties.
"Advance" means a Revolving Advance or a Term Advance, as the context
may require.
"AESC" has the meaning specified in the recital of parties to this
Agreement.
"AESC Amended and Restated Credit Agreement" means that certain
Amended and Restated Credit Agreement, dated as of October 28, 2004, among
AESC, the other Persons referred to therein as Loan Parties, the financial
institutions referred to therein as Lenders, Citicorp North America, Inc.,
as Administrative Agent and Citibank, N.A., as Collateral Agent and
Intercreditor Agent.
"AESC Amended and Restated Security and Intercreditor Agreement" means
that certain Amended and Restated Security and Intercreditor Agreement
among AESC, the other Persons referred to therein as Grantors, Citicorp
North America, Inc., as Administrative Agent, Law Debenture Trust Company
of New York, as Indenture Trustee, and Citibank, N.A., as Collateral
Agent, Intercreditor Agent and Depositary Bank, dated as of February 21,
2003, as amended and restated in its entirety on March 8, 2004 and as
further amended and restated in its entirety on October 28, 2004.
"AESC Companies" means AESC and its Subsidiaries.
"AESC Direct Advance and L/C Sublimit" means $50,000,000. The AESC
Direct Advance and L/C Sublimit is part of, and not in addition to, the
Revolving Facility.
"AESC Direct L/C Credit Extension" means, with respect to any AESC
Direct Letter of Credit, the issuance thereof or extension of the expiry
date thereof, or the increase of the amount thereof.
"AESC Direct L/C Obligations" means, as at any date of determination,
the aggregate undrawn amount of all outstanding AESC Direct Letters of
Credit plus the aggregate of all Unreimbursed Amounts with respect to AESC
Direct Letters of Credit, including all L/C Borrowings under AESC Direct
Letters of Credit. For all purposes of this Agreement, if on any date of
determination an AESC Direct Letter of Credit has expired by its terms but
any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such AESC Direct Letter of Credit shall be deemed to
be "outstanding" in the amount so remaining available to be drawn.
"AESC Direct Letters of Credit" means letters of credit issued by any
Issuing Bank pursuant to Section 2.01(f).
"AESC Indirect L/C Credit Extension" means, with respect to any AESC
Indirect Letter of Credit, the issuance thereof or extension of the expiry
date thereof, or the increase of the amount thereof.
"AESC Indirect L/C Obligations" means, as at any date of
determination, the aggregate undrawn amount of all outstanding AESC
Indirect Letters of Credit plus the aggregate of all Unreimbursed Amounts
with respect to AESC Indirect Letters of Credit, including all L/C
Borrowings under AESC Indirect Letters of Credit. For all purposes of this
Agreement, if on any date of determination an AESC Indirect Letter of
Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such AESC
Indirect Letter of Credit shall be deemed to be "outstanding" in the
amount so remaining available to be drawn.
"AESC Indirect L/C Sublimit" means $125,000,000. The AESC Indirect L/C
Sublimit is part of, and not in addition to, the Revolving Facility.
"AESC Indirect Letters of Credit" means letters of credit issued by
any Issuing Bank pursuant to Section 2.01(e).
"AESC Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of February 21, 2003, among Citibank as AYE Lender
Agent, New Money Lender Agent, Refinancing Lender Agent and Intercreditor
Agent, BNS, as Springdale Lender Agent, Law Debenture Trust Company of New
York, as Indenture Trustee, and the Borrowers, as amended, modified or
otherwise supplemented from time to time in accordance with its terms.
"AESC Loan Documents" means the AESC Amended and Restated Credit
Agreement and the AESC Amended and Restated Security and Intercreditor
Agreement, as each may be amended, amended and restated, supplemented or
otherwise modified from time to time.
"AESC Sublimits" means the AESC Indirect L/C Sublimit and the AESC
Direct Advance and L/C Sublimit.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"AGC" means Allegheny Generating Company, a Virginia corporation.
"Agent Parties" has the meaning set forth in Section 8.02(d).
"Agreement" has the meaning set forth in the recital of the parties to
this Agreement.
"Agreement Value" means, for each Hedge Agreement, on any date of
determination, an amount determined by AYE in good faith equal to: (a) in
the case of a Hedge Agreement documented pursuant to the ISDA Master
Agreement, the amount, if any, that would be payable by any Borrower or
any Subsidiary of any Borrower to its counterparty to such Hedge Agreement
pursuant to the terms of such Hedge Agreement, as if (i) such Hedge
Agreement was being terminated early on such date of determination, (ii)
such Borrower or Subsidiary was the sole "Affected Party", and (iii) such
Borrower or Subsidiary was the sole party determining such payment amount
(with AYE making such determination pursuant to the provisions of the ISDA
Master Agreement or the Hedge Agreement (whichever is applicable)); or (b)
in the case of a Hedge Agreement traded on an exchange, the mark-to-market
value of such Hedge Agreement, which will be the unrealized loss on such
Hedge Agreement (after any netting permitted pursuant to the terms of such
Hedge Agreement (including any netting across different Hedge Agreements
and ISDA Master Agreements to the extent permitted by contract)) to the
relevant Borrower or any Subsidiary of any Borrower party to such Hedge
Agreement determined by AYE in good faith based on the settlement price of
such Hedge Agreement on such date of determination, or (c) in all other
cases, the mark-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement (after any netting permitted
pursuant to the terms of such Hedge Agreement (including any netting
across different Hedge Agreements and ISDA Master Agreements to the extent
permitted by contract)) to the relevant Borrower or Subsidiary of any
Borrower party to such Hedge Agreement, if any, as determined by AYE in
accordance with the terms of such Hedge Agreement or, if such Hedge
Agreement does not provide a methodology for such determination, the
amount, if any, by which (i) the present value of the future cash flows to
be paid by such Borrower or Subsidiary exceeds (ii) the present value of
the future cash flows to be received by such Borrower or Subsidiary
pursuant to such Hedge Agreement; capitalized terms used and not otherwise
defined in this definition shall have the respective meanings set forth in
the above described ISDA Master Agreement.
"Annualization Factor" means, on any date of determination, (a) if
only one fiscal quarter has elapsed since July 1, 2005, four, (b) if only
two fiscal quarters have elapsed since July 1, 2005, two and (c) if only
three fiscal quarters have elapsed since July 1, 2005, four thirds.
"Applicable Law" means, with respect to any Person, any and all laws,
statutes, regulations, rules, orders, injunctions, decrees, writs,
determinations, awards and judgments issued by any Governmental Authority
applicable to such Person, including all Environmental Laws.
"Applicable Lending Office" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Base Rate
Advance and such Lender Party's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date
as set forth below:
======================================================================
Applicable Applicable Applicable
Public Debt Margin for Margin for Margin for
Rating Base Rate Eurodollar Rate Letters of
S&P/Moody's Advances Advances Credit
======================================================================
Level 1 0.50% 1.50% 1.50%
BB/Ba2
or above
----------------------------------------------------------------------
Level 2 0.75% 1.75% 1.75%
BB-/Ba3
----------------------------------------------------------------------
Level 3 1.00% 2.00% 2.00%
B+/B1
----------------------------------------------------------------------
Level 4 1.50% 2.50% 2.50%
Below B+/B1
=======================================================================
"Appropriate Lender" means, at any time, with respect to (a) the
Revolving Facility, the Borrowing Limit or either AESC Sublimit, a
Revolving Lender, and (b) the Term Facility, a Term Lender.
"Approved Fund" means a Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) a Person or an Affiliate of a
Person that administers or manages a Lender.
"Arranger Parties" means CGMI, as Joint Lead Arranger and Joint Book
Runner, BNS, as Joint Lead Arranger, Joint Book Runner and Syndication
Agent, BAS, as Joint Book Runner, BofA, as Co-Documentation Agent, CSCI,
as Joint Book Runner and Co-Documentation Agent, PCM, as Joint Book
Runner, and PNC, as Co-Documentation Agent.
"Assets" means, with respect to any Person, all or any part of its
business, property, rights, interests and assets, both tangible and
intangible (including Equity Interests in any Person), wherever situated.
"Assignment and Acceptance" means an assignment and acceptance entered
into by any Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially
the form of Exhibit C.
"Auto-Extension Letter of Credit" has the meaning specified in Section
2.03(a)(iii).
"AYE" has the meaning specified in the recital of parties to this
Agreement.
"AYE Funds Flow" means, for any period, the sum for the related period
of (a) cash dividends received by AYE from the Regulated Subsidiaries and
AESC, less (b) any cash equity contributions made by AYE to any
Subsidiaries, plus (c) Net Cash Proceeds received by AYE from the sale or
issuance of any Equity Interests, plus (d) AYE's interest income, less (e)
Capital Expenditures of AYE, less (f) operating expenses of AYE, excluding
AYE Interest Expense and income tax expense, plus (g) Litigation Proceeds
received by AYE, plus (h) AYE Sales Proceeds.
"AYE Interest Expense" means, for any period, (a) the sum of, without
duplication, (i) the interest expense (including imputed interest expense
in respect of Capitalized Leases) of AYE for such period (including all
commissions, discounts and other fees and charges owed by AYE with respect
to letters of credit and bankers' acceptance financing), in each case
determined in accordance with GAAP, plus (ii) any interest accrued during
such period in respect of Debt of AYE that is required to be capitalized
rather than included in interest expense of AYE for such period in
accordance with GAAP, minus (b) to the extent included in such interest
expense referred to in clause (a)(i) for such period, amounts attributable
to the amortization of financing costs and non-cash amounts attributable
to the amortization of debt discounts in respect of Debt of AYE; provided,
however, that neither (i) any payments of up to $47,300,000 in the
aggregate made to holders of the 11?% Mandatorily Convertible Trust
Preferred Securities (the "Preferred Securities") of Allegheny Capital
Trust I in connection with the consummation of the tender for, and
subsequent redemption of, the Preferred Securities and the corresponding
tender and subsequent redemption of the Convertible Bonds and exercise of
warrants attached thereto for shares of common stock par value $1.25 per
share of AYE nor (ii) accrued interest and interest paid under the summary
judgment granted against AYE in the Merrill Lynch Litigation, shall be
included in any determination of the interest expense of AYE. For purposes
of the foregoing, interest expense shall be determined after giving effect
to any net payments made or received by AYE with respect to interest rate
Hedging Agreements.
"AYE L/C Credit Extension" means, with respect to any AYE Letter of
Credit, the issuance thereof or extension of the expiry date thereof, or
the increase of the amount thereof.
"AYE L/C Obligations" means, as at any date of determination, the
aggregate undrawn amount of all outstanding AYE Letters of Credit plus the
aggregate of all Unreimbursed Amounts with respect to AYE Letters of
Credit, including all L/C Borrowings under AYE Letters of Credit. For all
purposes of this Agreement, if on any date of determination an AYE Letter
of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such AYE
Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"AYE Letters of Credit" means (a) the Existing L/Cs, as continued
under this Agreement on the Closing Date, and (b) any other Letters of
Credit issued by any Issuing Bank pursuant to Section 2.01(d).
"AYE Sales Proceeds" means net cash proceeds received by AYE from any
sale, transfer or other disposition of any of AYE's assets.
"BAS" has the meaning specified in the recital of parties to this
Agreement.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate; and
(b) 1/2 of 1% per annum above the Federal Funds
Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Bath County" means the undivided forty percent (40%) interest
(constituting 1010 MW of pumped storage) owned by a Subsidiary of AYE in
the hydroelectric power generating station located in Bath County,
Virginia.
"BofA" has the meaning specified in the recital of parties to this
Agreement.
"BNS" has the meaning specified in the recital of parties to this
Agreement.
"Borrowers" has the meaning specified in the recital of parties to
this Agreement.
"Borrowing Account" means, with respect to any Borrower, such account
as such Borrower shall specify in writing to the Administrative Agent.
"Borrowing" means a Revolving Borrowing or a Term Borrowing.
"Borrowing Limit" means, as of any time with respect to (a) AYE, an
amount equal to the aggregate of the Unused Commitments at such time, and
(b) AESC, the AESC Direct Advance and L/C Sublimit minus (i) the aggregate
principal amount of all outstanding Revolving Advances made to AESC at
such time and (ii) the Outstanding Amount of all AESC Direct L/C
Obligations at such time.
"Buffalo Reserve Project" means the development of property and
mineral rights in Washington County, Commonwealth of Pennsylvania,
including (a) the formation of a legal entity to pursue the development of
such property and mineral rights, and (b) the entering into operating
agreements, joint venture agreements, partnership agreements, working
interests, royalty interests, mineral leases, processing agreements,
contracts for sale, transportation or exchange agreements, unitization
agreements, pooling agreements, area of mutual interest agreements,
production sharing agreements or other similar or customary agreements,
transactions, interests or arrangements, and Investments and expenditures
in connection with the development of such property and mineral rights.
"Business Day" means a day of the year on which banks are not required
or not authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the sum
of, without duplication, all expenditures made, directly or indirectly, by
such Person during such period (whether financed by cash or by Debt
(including Obligations under Capitalized Leases) assumed or incurred to
fund, directly or indirectly, such expenditures) for equipment, fixed
assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be,
in accordance with GAAP, reflected as additions to property, plant or
equipment on a balance sheet of such Person. For purposes of this
definition, the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of
the gross amount of such purchase price less the credit granted by the
seller of such equipment for the equipment being traded in at such time or
the amount of such proceeds, as the case may be.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Collateral Account" means a non-interest bearing securities
account opened, or to be opened by, the Administrative Agent and in which
a Lien has been granted to the Administrative Agent for the benefit of
each Revolving Lender and each Issuing Bank pursuant to documentation in
form and substance satisfactory to the Administrative Agent and each
Issuing Bank (which documents are hereby consented to by the Revolving
Lenders) to the extent that any Letter of Credit is required to be Cash
Collateralized in accordance with this Agreement.
"Cash Collateralize" means to pledge and deposit with or deliver to
the Administrative Agent, for the benefit of each Issuing Bank and each
Revolving Lender, as collateral for the L/C Obligations, cash or deposit
account balances.
"Cash Equivalents" means any of the following, to the extent owned by
any Borrower or any of its Subsidiaries free and clear of all Liens and,
except in the case of clause (d) below, having a maturity of not greater
than one year from the date of issuance thereof: (a) readily marketable
direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the
full faith and credit of the Government of the United States, (b)
certificates of deposit, time deposits, eurodollar deposits and bankers
acceptances with any commercial bank that is a Lender Party or a member of
the Federal Reserve System, is organized under the laws of the United
States or any State thereof and has combined capital and surplus of at
least $500,000,000; provided that the aggregate principal amount of
certificates of deposit, time deposits, eurodollar time deposits and
bankers acceptances of any one bank shall not exceed $50,000,000 at any
one time, (c) commercial paper in an aggregate amount of no more than
$50,000,000 per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated at
least "Prime-1" (or the then equivalent grade) by Moody's or "A-1" (or the
then equivalent grade) by S&P, or (d) mutual funds the sole investments of
which are the cash equivalents identified in clauses (a) through (c) above
(but with a remaining maturity of not greater than 13 months while being
held by the applicable mutual fund) and repurchase obligations for any of
the cash equivalents identified in clause (a) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"CGMI" has the meaning specified in the recital of parties to this
Agreement.
"Change of Control" means the occurrence of any of the following: (a)
any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the SEC under
the Securities Exchange Act of 1934), directly or indirectly, of Voting
Interests of AYE (or other securities convertible into such Voting
Interests) representing 30% or more of the combined voting power of all
Voting Interests of AYE; or (b) during any period of up to 24 consecutive
months, commencing after the date of this Agreement, individuals who at
the beginning of such 24-month period were directors of AYE (the "Original
Directors") shall cease for any reason to constitute a majority of the
board of directors of AYE (unless replaced by individuals nominated or
proposed by the Original Directors); or (c) any Person or two or more
Persons acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation,
will result in its or their acquisition of the power to exercise, directly
or indirectly, a controlling influence over the management or policies of
AYE.
"Chief Financial Officer" of any Person means such Person's chief
financial officer or such other natural Person who is principally
responsible for such Person's financial matters.
"Citibank" means Citibank, N.A.
"Closing Date" has the meaning specified in Section 3.01(a).
"Closing Date Transactions" has the meaning specified in Section
3.01(a)(xiii).
"CNAI" has the meaning specified in the recital of parties to this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
"Commitment" means, as to each Lender, such Lender's Revolving
Commitment or Term Commitment, as the context may require.
"Commitment Fee Rate" means, as of any date, a percentage per annum
determined by reference to the Public Debt Ratings in effect on such date
as set forth below:
===========================================
Public Debt Rating Commitment Fee Rate
S&P/Moody's
===========================================
Level 1 0.250%
BBB-/Baa3
or above
-------------------------------------------
Level 2 0.300%
BB/Ba2 or BB+/Ba1
-------------------------------------------
Level 3 0.375%
BB-/Ba3
-------------------------------------------
Level 4 0.500%
B+/B1 and below
===========================================
"Communications" has the meaning specified in Section 8.02(b).
"Confidential Information" has the meaning specified in Section
8.12(a).
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Constituent Documents" means, with respect to any Person, (a) the
articles or certificate of incorporation, charter or other similar
organizational document of such Person, (b) the by-laws or other similar
document of such Person, (c) any certificate of designation or instrument
relating to the rights of holders (including preferred shareholders) of
Equity Interests in such Person and (d) any shareholder rights agreement
or other similar agreement.
"Contest" means, with respect to the payment of Taxes or any other
claims or liabilities by any Person, to contest the validity or amount
thereof in good faith by appropriate proceedings timely instituted and
diligently pursued within the applicable statutory period and in
accordance with Applicable Law; provided that the following conditions are
satisfied: (a) such Person has posted a bond or other security in
accordance with Applicable Law (if required) or has established adequate
reserves with respect to the contested items in accordance with, and to
the extent required by, GAAP; (b) during the period of such contest, the
enforcement of any contested item is effectively stayed; (c) neither such
Person nor any of its officers, directors or employees nor any Lender
Party, the Administrative Agent or any of their respective officers,
directors or employees is, or could reasonably be expected to become,
subject to any criminal liability or sanction in connection with such
contested items; and (d) no Lien relating to such contest attaches to any
Assets of such Person and becomes enforceable against other creditors of
such Person.
"Contingent Obligation" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including (a) the direct or
indirect guarantee, endorsement (other than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the Obligation of a primary obligor,
(b) the Obligation to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party or parties to an agreement
or (c) any Obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) 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.
"Continuation" and "Continued" each refer to a continuation of
Eurodollar Rate Advances upon the expiration of the Interest Period
therefor as Eurodollar Rate Advances of the same or a different Interest
Period pursuant to Section 2.10.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section
2.10 or 2.11.
"Convertible Bonds" means the convertible bonds issued pursuant to the
Indenture, dated as of July 24, 2003, between AYE and Wilmington Trust
Company, not in its individual capacity, but solely as trustee.
"CSCI" has the meaning specified in the recital of parties to this
Agreement.
"Debt" of any Person (the "obligor") means, without duplication, (a)
all Obligations of such obligor for or in respect of moneys borrowed or
raised (whether or not for cash by whatever means (including acceptances,
deposits, discounting, letters of credit, factoring (other than on a
non-recourse basis), and any other form of financing which is recognized
in accordance with GAAP in the obligor's financial statements as being in
the nature of a borrowing or is treated as "off-balance" sheet financing;
(b) all Obligations of the obligor evidenced by notes, bonds, debentures
or other similar instruments issued in connection with accounts payable
excluded pursuant to the parenthetical in clause (c) below; (c) all
Obligations of the obligor for the deferred purchase price of property or
services (other than accounts payable within 90 days of being incurred
arising in the ordinary course of such obligor's business and not more
than 90 days past due and not subject to a Contest); (d) all Obligations
of such obligor under conditional sale or other title retention agreements
relating to property or assets acquired by such obligor (even though the
rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property);
(e) all Obligations of such obligor under any securitization or
monetization arrangement; (f) all Obligations of such obligor as lessee
under Capitalized Leases; (g) all Obligations of the obligor, contingent
or otherwise, of the obligor under acceptance, letter of credit or similar
facilities other than as issued (i) in connection with Obligations
excluded pursuant to clause (b) above or the parenthetical in clause (c)
above or (ii) as credit support for leases other than Capitalized Leases;
(h) all Obligations of the obligor to purchase, redeem, retire, defease or
otherwise make any payments in respect of any Equity Interests in the
obligor or any other Person or any warrants, rights or options to acquire
such capital stock, valued, in the case of Redeemable Preferred Interests,
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends; (i) all Obligations of the obligor in
respect of Hedge Agreements; (j) all Contingent Obligations of the obligor
with respect to Debt; and (k) all indebtedness and other payment
Obligations referred to in clauses (a) through (j) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights owned by the obligor), even though the
obligor has not assumed or become liable for the payment of such
indebtedness or other payment Obligations. For the avoidance of doubt, any
account payable owed to AYE or any of its Subsidiaries by AYE or any of
its Subsidiaries (an "internal obligor"), as the case may be, with respect
to an account payable of the internal obligor owed to a Person other than
AYE or any of its Subsidiaries that is payable within 90 days of being
incurred arising in the ordinary course of such internal obligor's
business and not more than 90 days past due and not subject to a Contest
shall not constitute Debt.
"Debt for Borrowed Money" means Debt of the types specified in (i)
clauses (a), (b), (d), (e) and (f) of the definition of Debt and (ii) to
the extent relating to Debt of the types specified in one or more of
clauses (a), (b), (d), (e) and (f) of the definition of Debt, clauses (j)
and (k) thereof.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Disclosed Litigation" has the meaning specified in Section 3.01(b).
"Disclosed Matters" means the occurrence of any event in respect of,
or effect upon the business, condition (financial or otherwise),
operations, performance, properties, assets, liabilities (actual or
contingent) results of operation or prospects of AYE or AYE and its
Subsidiaries, taken as a whole, which has been disclosed (a) pursuant to a
public filing by AYE or its Subsidiaries with the SEC or (b) in writing to
the Administrative Agent.
"Dollars" and "$" mean the lawful currency of the United States of
America.
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule II or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such
other office of such Lender Party as such Lender Party may from time to
time specify to AYE and the Administrative Agent.
"Eligible Assignee" means (a) with respect to any Lender, (i) any
other Lender; (ii) an Affiliate of a Lender; (iii) an Approved Fund; (iv)
a commercial bank organized under the laws of the United States, or any
State thereof, and having a combined capital and surplus of at least
$500,000,000; (v) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $500,000,000; (vi) a commercial
bank organized under the laws of any other country that is a member of the
OECD or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow or a
political subdivision of any such country, and having a combined capital
and surplus of at least $500,000,000, so long as such bank is acting
through a branch or agency located in the country in which it is organized
or another country that is described in this clause (vi); (vii) the
central bank of any country that is a member of the OECD; (viii) a finance
company, insurance company or other financial institution or fund (whether
a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having a combined capital and surplus
of at least $500,000,000; or (ix) any other Person approved by (A) to the
extent such Person is to become an Eligible Assignee in respect of any
assignment of any Revolving Commitment, any Revolving Advance, any L/C
Credit Extension or any L/C Borrowing, the Issuing Bank(s) (each acting in
its sole discretion) and the Administrative Agent (such consent not to be
unreasonably withheld or delayed) and, so long as no Default shall have
occurred and be continuing, AYE (such approval not to be unreasonably
withheld or delayed), and (B) to the extent such Person is to become an
Eligible Assignee in respect of any assignment of any Term Commitment or
any Term Advance, the Administrative Agent (such consent not to be
unreasonably withheld) and, so long as no Default shall have occurred and
be continuing, AYE (such approval not to be unreasonably withheld or
delayed), and (b) with respect to any Issuing Bank, a Person that is an
Eligible Assignee under subclause (iv) or (vi) (so long as such bank is
acting through a branch or agency located in the United States) of clause
(a) of this definition and is approved by the Administrative Agent and, so
long as no Default shall have occurred and be continuing, AYE, such
approval, in either case, not to be unreasonably withheld or delayed;
provided that neither AYE nor any Affiliate of AYE shall qualify as an
Eligible Assignee under this definition; and provided further that, for
the avoidance of doubt, notwithstanding whether any Person constitutes an
"Eligible Assignee", the consent of the Issuing Bank(s) under Section
8.07(a) shall be required with respect to any assignment of any Revolving
Commitment, any Revolving Advance, any L/C Credit Extension or any L/C
Borrowing.
"Environmental Action" means any action, suit, demand letter, claim by
any Governmental Authority, notice of non-compliance or violation, notice
of liability or potential liability, investigation, proceeding, consent
order or consent agreement relating to any Environmental Law,
Environmental Permit or Hazardous Material or arising from alleged injury
or threat to health and safety or the environment relating to any
Environmental Law, including (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other
actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Control Property" has the meaning specified in Section
5.02(e)(viii)(B).
"Environmental Control Property Securitization" has the meaning
specified in Section 5.02(e)(viii)(B).
"Environmental Law" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or legally binding judicial or agency interpretation,
policy or guidance relating to pollution or protection of the environment,
health and safety as it relates to Hazardous Materials or natural
resources, including those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person, or warrants, rights or options for the purchase
or other acquisition from such Person of such shares (or such other
interests), other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or
other interests are authorized or otherwise existing on any date of
determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of AYE or any of its
Subsidiaries, or under common control with AYE or any of its Subsidiaries,
within the meaning of Section 414 of the Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043(c) of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA
apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days;
(b) the application for a minimum funding waiver in accordance with
Section 412(d) of the Code with respect to a Plan; (c) the provision by
the administrator of any Plan of a notice of intent to terminate such
Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA);
(d) the cessation of operations at a facility of AYE or any of its
Subsidiaries or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by AYE or any of its
Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (f) a lien has been imposed under Section 302(f) of
ERISA with respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307
of ERISA; or (h) the institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for
the termination of, or the appointment of a trustee to administer, such
Plan, provided, however, that the occurrence of the event or condition
described in Section 4042(a)(4) of ERISA shall be an ERISA Event only if
the PBGC has notified AYE, any Subsidiary of AYE or any ERISA Affiliate
that it intends to institute proceedings to terminate a Plan pursuant to
such Section.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule II or in the Assignment and
Acceptance pursuant to which it became a Lender Party (or, if no such
office is specified, its Domestic Lending Office), or such other office of
such Lender Party as such Lender Party may from time to time specify to
AYE and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the rate
per annum obtained by dividing (a) LIBOR for such Interest Period by (b) a
percentage equal to 1.00 minus the Eurodollar Rate Reserve Percentage.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii). "Eurodollar Rate Reserve Percentage" for
any Interest Period for all Eurodollar Rate Advances comprising part of
the same Borrowing means the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations issued
from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a term
equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Existing AYE Debt" has the meaning specified in Preliminary Statement
(1) of this Agreement.
"Existing Credit Agreement" has the meaning specified in Preliminary
Statement (1) of this Agreement.
"Existing Debt" means all Debt, as of the date hereof, of AYE and its
Subsidiaries.
"Existing Lenders" has the meaning specified in Preliminary Statement
(1) of this Agreement.
"Existing L/Cs" means the letters of credit identified in Schedule
1.01(a).
"Facility" means the Term Facility or the Revolving Facility, as the
context may require.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum 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 for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letters" means, collectively, (a) each fee letter, if any,
between AYE and the Administrative Agent and (b) each fee letter, if any,
between AYE and any Arranger Party.
"FERC" means the Federal Energy Regulatory Commission.
"Final Maturity Date" means the earlier of (a) the date of termination
in whole of the Commitments and the L/C Obligations pursuant to Section
2.05 or 6.01, and (b) the fifth anniversary of the Closing Date.
"Fiscal Year" means a fiscal year of AYE and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"FMB Debt" means, with respect to (a) MPC, Debt under bonds issued
pursuant to the indenture dated as of August 1, 1945, between MPC and
Citibank, N.A. (ultimate successor to City Bank Farmers Trust Company), as
trustee, as amended and supplemented by various supplemental indentures
from time to time, and (b) PEC, Debt under bonds issued pursuant to the
indenture dated as of October 1, 1944 between PEC, JPMorgan Chase Bank
(ultimate successor to Chemical Bank & Trust Company), as corporate
trustee, and Thomas J. Foley, as individual trustee, as amended and
supplemented by various supplemental indentures from time to time.
"Form 10-K" has the meaning set forth in Section 4.01(g).
"Fronting Fee" has the meaning specified in Section 2.08(c).
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course
of its business.
"GAAP" has the meaning specified in Section 1.02(c).
"Governmental Approvals" has the meaning specified in Section 4.01(c).
"Governmental Authority" means any national, state, county, city,
town, village, municipal or other de jure or de facto government
department, commission, board, bureau, agency, authority or
instrumentality of a country or any political subdivision thereof or any
regional transmission authority organized under federal law, and any
Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any of the foregoing
entities, including all commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other Person controlled by any of
the foregoing.
"Granting Lender" has the meaning specified in Section 8.07(h).
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" 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 the foregoing (including any option to enter into any of
the foregoing), whether or not any such transaction is governed by or
subject to any master agreement, and (b) any and all transactions of any
kind, and the related confirmations, which are subject to the terms and
conditions of, or are governed by, any form of master agreement published
by the International Swaps and Derivative Association, Inc., any
International Foreign Exchange Master Agreement or any other master
agreement (including such master agreement, together with any related
schedules, a "Master Agreement") including any such obligations or
liabilities under any Master Agreement.
"Honor Date" has the meaning specified in Section 2.03(b)(i).
"Hunlock Agreement" has the meaning specified in Section 3.01(a)(xiv).
"Hunlock Transaction" means the transactions to be entered into by AYE
as a direct result of either (a) the exercise of a certain put option by
UGI under the Hunlock Agreement that will require Allegheny Energy Supply
Company Hunlock Creek, LLC ("AESC Hunlock Creek") or any Affiliate thereof
to purchase from Hunlock Creek Energy Ventures, an equal partnership
between UGI and AESC Hunlock Creek (the "Hunlock Partnership"), a 48 MW
coal fired steam electric generation facility known as the Hunlock Creek
Electric Generating Station located in Hunlock Township, Commonwealth of
Pennsylvania (the "Hunlock Coal Station"), a 44 MW combustion turbine
electric generation facility located at the same site (the "Hunlock CT"),
or both or (b) the exercise of a certain call option by AESC Hunlock Creek
or any Affiliate thereof under the Hunlock Agreement that will allow AESC
Hunlock Creek or such Affiliate to purchase from the Hunlock Partnership
the Hunlock Coal Station, the Hunlock CT or both.
"Indemnified Costs" has the meaning specified in Section 7.05(a).
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Information Memorandum" means the information memorandum dated May,
2005 used by the Lead Arrangers in connection with the syndication of the
Facilities.
"Initial Borrowing" means the initial Borrowing to be made on the
Closing Date which shall be or is comprised of (a) Revolving Advances and
(b) L/C Credit Extensions pursuant to Section 2.01(c).
"Initial Issuing Bank" has the meaning specified in the recital of
parties to this Agreement.
"Initial Lender Parties" has the meaning specified in the recital of
parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Insolvency Proceeding", with respect to any Person, means (a) any
proceeding shall be instituted against such Person seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and
either such proceeding shall remain undismissed or unstayed for a period
of 60 consecutive days or the entry by any competent Governmental
Authority of any jurisdiction or a court having jurisdiction in the
premises of a decree or order approving or ordering any of the actions
sought in such proceeding (including the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its property); or (b)
commencement by such Person of a voluntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated as bankrupt or
insolvent, or the consent by such Person to the entry of a decree or order
for relief in respect of such Person in an involuntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against such Person, or the filing by such Person of a petition
or answer or consent seeking reorganization or relief under any Applicable
Law; or consent by such Person to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of such Person
or of any substantial part of the property of such Person, or the making
by such Person of an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of such Person, or the admission
by such Person in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by such Person in
furtherance of any such action.
"Intangible Transition Property" has the meaning specified in Section
5.02(e)(viii)(A).
"Interest Coverage Ratio" means at any date of determination, the
ratio of (a) AYE Funds Flow to (b) AYE Interest Expense for (i) if four or
more consecutive fiscal quarters have elapsed since July 1, 2005, for the
period of four consecutive fiscal quarters ending on such date, taken as
one accounting period or (ii) if less than four consecutive fiscal
quarters have elapsed since July 1, 2005, (A) with respect to AYE Funds
Flow, the period of four consecutive fiscal quarters ending on such date,
taken as one accounting period and (B) with respect to AYE Interest
Expense, for the fiscal quarters that have elapsed since July 1, 2005,
taken as one accounting period, provided that, in the case of clause (B)
only, AYE Interest Expense shall be multiplied by the Annualization
Factor.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing to any Borrower, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance, and ending on the
last day of the period selected by such Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the
last day of the period selected by such Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one,
two, three or six months or, if available at the time of selection to all
Lenders owed any of the relevant Advances, nine or twelve months, as the
relevant Borrower may, upon notice received by the Administrative Agent
not later than 11:00 a.m. (New York City time) on the third Business Day
prior to the first day of such Interest Period, select; provided that:
(a) no Borrower may select any Interest Period with respect to
any Eurodollar Rate Advance that ends after the date
specified in clause (b) of the definition of "Final Maturity
Date";
(b) without prejudice to Section 2.10(a), Interest Periods
commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same
duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that, if such extension
would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day; and
(d) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no
numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Intralinks" means the digital internet workspace located at
http://www.intralinks.com.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all
of the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (i) or (j) of the definition of "Debt" in respect of
such Person. Notwithstanding the foregoing, any intercompany loan or
account receivable due to AYE or any of its Subsidiaries (a "payee") by
AYE or any of its Subsidiaries (a "payor"), as the case may be, with
respect to an account payable of a payor and owed to a Person other than
AYE or any of its Subsidiaries that is payable within 90 days of being
incurred arising in the ordinary course of such payor's business and not
more than 90 days past due and not subject to a Contest shall not
constitute an Investment by such payee in such payor.
"ISDA Master Agreement" means the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc.
"ISP" means, with respect to any Letter of Credit, 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).
"Issuer Documents" means with respect to any Letter of Credit, the
Letter of Credit Application, and any other document, agreement and
instrument entered into by any Issuing Bank and the Related Borrower or in
favor of any Issuing Bank and relating to any such Letter of Credit.
"Issuing Bank" means the Initial Issuing Bank, any Revolving Lender
issuing Letters of Credit hereunder and each Person that shall become an
Issuing Bank hereunder pursuant to Section 8.07.
"Joint Venture" means, with respect to any Person, at any date, any
other Person in whom such Person directly or indirectly holds an
Investment consisting of an Equity Interest and whose financial results
would not be considered under GAAP with the financial results of such
Person on the Consolidated financial statements of such Person, if such
statements were prepared in accordance with GAAP as of such date.
"L/C Advance" means, with respect to each Revolving Lender, such
Revolving Lender's funding of its participation in any L/C Borrowing in
accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when
made or refinanced as a Borrowing.
"L/C Credit Extension" means any AYE L/C Credit Extension, AESC
Indirect L/C Credit Extension or AESC Direct L/C Credit Extension.
"L/C Obligations" means any of the AYE L/C Obligations, AESC Indirect
L/C Obligations or AESC Direct L/C Obligations.
"Lead Arrangers" means CGMI and BNS, not in their respective
individual capacities except as expressly set forth herein but solely as
lead arrangers.
"Lender" means each Initial Lender and each Person that shall become a
Lender hereunder pursuant to Section 8.07.
"Lender Parties" means the Lenders and the Issuing Banks.
"Letter of Credit" means any AYE Letter of Credit, AESC Indirect
Letter of Credit or AESC Direct Letter of Credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit to be issued hereunder by
any Issuing Bank in the form from time to time in use by such Issuing
Bank.
"Letter of Credit Expiration Date" means the day that is five Business
Days prior to the date specified in clause (b) of the definition of "Final
Maturity Date" (or, if such day is not a Business Day, the next preceding
Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.08(b).
"Leverage Ratio" means, as of any date of determination, the ratio of
(a) Debt for Borrowed Money of AYE to (b) AYE Funds Flow for the period of
four consecutive fiscal quarters ending on such date, taken as one
accounting period.
"LIBOR" means, for any applicable Interest Period with respect to all
Eurodollar Rate Advances comprising part of the same Borrowing, the
British Bankers' Association Interest Settlement Rate per annum for
deposits in Dollars for a period equal to such Interest Period appearing
on the display designated as Page 3750 on the Dow Jones Markets Service
(or such other page on that service or such other service designated by
the British Banker's Association for the display of such Association's
Interest Settlement Rates for Dollar deposits) as of 11:00 a.m. (London,
England time) on the day that is two Business Days prior to the first day
of the Interest Period or if such Page 3750 is unavailable for any reason
at such time, the rate which appears on the Reuters Screen LIBOR 01 Page
as of such date and such time; provided that if the Administrative Agent
determines that the relevant foregoing sources are unavailable for the
relevant Interest Period, LIBOR shall mean the rate of interest determined
by the Administrative Agent to be the average (rounded upward, if
necessary, to the nearest 1/1000th of 1%) of the rates per annum at which
deposits in Dollars are offered to the Administrative Agent two Business
Days preceding the first day of such Interest Period by leading banks in
the London interbank market as of 10:00 a.m. (New York City time) for
delivery on the first day of such Interest Period, for the number of days
comprised therein and in an amount comparable to the amount of the
Eurodollar Rate Advance of CNAI (in its capacity as a Lender).
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest or other charge or encumbrance of any kind, including the lien or
retained security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property.
"Litigation Proceeds" means any cash received by or paid to any Person
in connection with any final settlement or judgment of any action, suit,
litigation or similar proceeding involving such Person.
"Loan Documents" means this Agreement, the Notes, the Fee Letters and
the Issuer Documents.
"Margin Stock" has the meaning specified in Regulation U of the Board
of Governors of the Federal Reserve System, as in effect from time to
time.
"Material Adverse Change" means any material adverse change in the
business, financial condition, operations or properties of (a) AYE or (b)
AYE and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, financial condition, operations or properties of (i) AYE or (ii)
AYE and its Subsidiaries, taken as a whole, (b) the rights and remedies of
any Lender Party under any Loan Document or (c) the ability of any
Borrower to perform its Obligations under any Loan Document to which it is
or is to be a party.
"Material Governmental Approvals" means those Governmental Approvals
listed in Part A of Schedule 4.01(c).
"Merrill Lynch Litigation" means that litigation arising out of that
complaint filed under the caption Merrill Lynch & Co., Inc., et al. v.
Allegheny Energy, Inc., and Allegheny Energy, Inc., et al. v. Merrill
Lynch & Co., Inc., et al. (02 CV 7689 (HB)).
"Moody's" means Moody's Investors Service, Inc.
"Mountaineer Gas" means Mountaineer Gas Company, a West Virginia
corporation.
"MPC" means Monongahela Power Company, an Ohio Corporation.
"MPC Preferred Stock" means MPC's $7.73 Cumulative Preferred Stock and
all other preferred stock issued by MPC from time to time.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which AYE or any of its Subsidiaries or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of AYE
or any of its Subsidiaries or any ERISA Affiliate and at least one Person
other than AYE, its Subsidiaries and the ERISA Affiliates or (b) was so
maintained and in respect of which AYE and any of its Subsidiaries or any
ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA
in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or property or the sale or issuance of
any Equity Interests (including, without limitation, any capital
contribution) by any Person, the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or
disposition of deferred consideration or received from escrow) by or on
behalf of such Person in connection with such transaction after deducting
therefrom only (without duplication) the following (to the extent directly
and primarily relating to such transaction): (a) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal, consultant
and advisor fees, finder's fees and other similar fees and commissions,
(b) the amount of taxes (or amounts owing pursuant to the Tax Allocation
Agreement) payable in connection with or as a result of such transaction,
and (c) in the case of any sale, lease, transfer or other disposition of
any asset or property, (i) the amount of (A) any Debt secured by a prior
Lien on the asset or property which is the subject of such sale, lease,
transfer or other disposition or (B) Debt outstanding under the Pollution
Control Bonds that is, in either case, repaid, redeemed or defeased upon
such disposition as required pursuant to the terms of (1) the agreement or
instrument governing such Debt or (2) any undertaking or agreement of any
Borrower made on or prior to February 21, 2003 in favor of the issuer of
any guaranty, surety bond or insurance policy issued for the benefit of
the holders of such Debt, including, each of the consents, dated February
21, 2003, entered into among (y) AESC, PEC and MBIA Insurance Corporation
and (z) AESC, WPPC and MBIA Insurance Corporation, (ii) the costs
associated (in AYE's best estimate) with terminating all Hedge Agreements,
if any, entered into in connection with such property or asset, which
Hedge Agreements are not being transferred as part of such sale, lease,
transfer or other disposition, but only to the extent that the amounts so
deducted are, at the time or within a reasonable time (not to exceed ten
days) of receipt of such cash, actually paid to a Person that is not an
Affiliate of such Person and are properly attributable to such transaction
or to the asset or property that is the subject thereof and (iii) any
amounts received from funds that were held in escrow as of the Closing
Date with respect to any sale, lease, transfer or other disposition of any
asset or property consummated prior to the Closing Date; provided, that,
in the case of taxes or termination costs that are deductible under clause
(b) or (c)(ii) above but for the fact that, at the time of receipt of such
cash, such amounts have not been actually paid or are not then payable,
such Person may deduct an amount (the "Reserved Amount") equal to the
amount reserved in accordance with GAAP for such Person's reasonable
estimate of such amounts, other than taxes for such Person is indemnified;
provided further that, at the time such amounts are paid, an amount equal
to the amount, if any, by which the Reserved Amount for such amounts
exceeds the amount of such amounts actually paid shall constitute "Net
Cash Proceeds" of the type for which such amounts were reserved for all
purposes hereunder.
"Non-Extension Notice Date" has the meaning specified in Section
2.03(a)(iii).
"Note" means a Revolving Note or a Term Note, as the context may
require.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Conversion/Continuation" has the meaning specified in
Section 2.10(a)(ii).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including any
liability of such Person on any claim, whether or not the right of any
creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and whether or not
such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 6.01(g). Without limiting the generality of the
foregoing, the Obligations of any Borrower under the Loan Documents
include (a) the obligation of such Borrower to pay principal, interest,
Letter of Credit commissions, charges, expenses, fees, attorneys' and
consultant's fees and disbursements, indemnities and other amounts payable
by such Borrower under any Loan Document and (b) the obligation of such
Borrower to reimburse any amount in respect of any of the foregoing that
any Lender Party, in its sole discretion, may elect to pay or advance on
behalf of such Borrower.
"OECD" means the Organization for Economic Cooperation and
Development.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by a Responsible Officer of such Person.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Outstanding Amount" means (a) with respect to the Revolving Facility
on any date, the aggregate outstanding principal amount thereof after
giving effect to any Revolving Borrowings and prepayments of the Revolving
Facility occurring on such date; and (b) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date
after giving effect to any relevant L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of such L/C Obligations
as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any relevant Letters of Credit or any
reductions in the maximum amount available for drawing under any relevant
Letters of Credit taking effect on such date.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PCM" has the meaning specified in the recital of parties to this
Agreement.
"PEC" means The Potomac Edison Company, a Maryland and Virginia
corporation.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(d); (b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising
in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days, or which are subject to
Contest; (c) Liens or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or statutory
obligations; (d) deposits to secure the performance of bids, leases (other
than Capitalized Leases), trade contracts, public or statutory obligations
(including environmental, municipal and public utility commission
obligations under Applicable Laws), surety bonds (other than bonds related
to judgments or litigation), performance bonds and other obligations of a
like nature incurred in the ordinary course of business; (e) liens
securing judgments for the payment of money not constituting an Event of
Default under Section 6.01(h) or securing appeal or other surety bonds
related to such judgments; (f) easements, rights of way and other
encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes; (g) liens on cash
deposits in the nature of a right of setoff, banker's lien, counterclaim
on netting of cash amounts owed arising in the ordinary course of business
on deposit accounts, commodity accounts or securities accounts; (h)
financing statements filed on a precautionary basis in respect of
operating leases to the extent such lease is otherwise permitted under the
terms of this Agreement; provided that no such financing statement extends
to or refers to as collateral, any property or assets which are not
subject to such operating lease; and (i) rights of first refusal, options
or other contractual rights or obligations to sell, assign or otherwise
dispose of any property or asset or interest therein which right of first
refusal, option or contractual right is in connection with an asset sale
or disposition permitted under Section 5.02(d) or 5.02(e).
"Permitted Refinancing Debt" means Debt issued or incurred (including
by means of the extension or renewal of existing Debt) to refinance,
refund, extend, renew or replace existing Debt ("Refinanced Debt")
concurrently with, or within 90 days after, the issuance or incurrence of
such Debt (so long as all proceeds from the issuance of such Debt (net of
reasonable and customary transaction fees, costs and expenses (including
fees of legal counsel)) are held as a cash deposit in an account of any
Borrower or invested and maintained by such Borrower solely in Cash
Equivalents until applied to repay the Refinanced Debt); provided that
with respect to AYE and its Regulated Subsidiaries (a) the principal
amount of such refinancing, refunding, extending, renewing or replacing
Debt is not greater than the principal amount of such Refinanced Debt plus
the amount of any premiums or penalties and accrued and unpaid interest
paid thereon and reasonable fees and expenses, in each case associated
with such refinancing, refunding, extension, renewal or replacement, (b)
such refinancing, refunding, extending, renewing or replacing Debt has a
scheduled maturity date that is at least six calendar months after the
Final Maturity Date and does not require any scheduled amortization or, if
such Debt is not FMB Debt, mandatory prepayments thereof (other than
pursuant to mandatory prepayment provisions which are substantially
identical to those required in respect of such Refinanced Debt) prior to
such date, (c) the obligors in respect of such Refinanced Debt immediately
prior to such refinancing, refunding, extending, renewing or replacing and
any additional Person are the only obligors on such refinancing,
refunding, extending, renewing or replacing Debt, (d) such refinancing,
refunding, extending, renewing or replacing Debt, if it is not FMB Debt,
contains covenants and events of default which, taken as a whole, are
determined in good faith by a Responsible Officer of AYE to be customary
for similar issuances of Debt by issuers similar in credit rating or
standing as that applicable to AYE, and (e) if the Refinanced Debt was
outstanding under a revolving credit facility, the availability under such
revolving credit facility shall be permanently reduced by an amount equal
to the aggregate principal amount of such Refinanced Debt.
"Permitted Securitization" means (a) a Stranded Cost Securitization,
(b) an Environmental Control Property Securitization or (c) any other
securitization by a Regulated Subsidiary of rights to payments or other
payment intangibles (whether constituting accounts, chattel paper,
instruments, general intangibles or otherwise, and including the right to
payment of any interest or finance charges) from customers of such
Regulated Subsidiary, which in the case of clause (c), such rights (i)
arise after the date of this Agreement and (ii) are identified in the
accounting records of such Regulated Subsidiary as accounts receivable,
regulatory assets or other intangible assets associated with the right to
receive such payments over time in connection with the sale and/or
delivery of electricity and any services related thereto, and which, in
the case of clauses (a), (b) and (c), are permitted by Section
5.02(e)(viii).
"Person" means an individual, partnership, corporation (including a
business or statutory trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.
"Plan" means a Single-Employer Plan or a Multiple Employer Plan.
"Platform" has the meaning specified in Section 8.02(c).
"PNC" has the meaning specified in the recital of parties to
this Agreement.
"Pollution Control Bond Indentures" means (a) the Trust Indenture
dated as of April 15, 1992 between the County Commission of Harrison
County, West Virginia and J.P. Morgan Trust Company, National Association
(formerly Chase Manhattan Trust Company, National Association, successor
trustee to Mellon Bank, N.A.), as Trustee, providing for Solid Waste
Disposal Revenue Bonds (West Penn Power Company Harrison Station Project),
(b) the Trust Indenture dated as of November 1, 1977 between Pleasants
County, West Virginia and J.P. Morgan Trust Company, National Association
(formerly Chase Manhattan Trust Company, National Association, successor
trustee to Mellon Bank, N.A.), as Trustee, providing for Pollution Control
Revenue Bonds (West Penn Power Company Pleasants Station Project), (c) the
Trust Indenture dated as of December 1, 1980 between Washington County
Industrial Development Authority and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National Association,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for
Pollution Control Revenue Bonds (West Penn Power Company Mitchell Station
Project), (d) the Trust Indenture dated as of April 15, 1983 between the
County Commission of Monongalia County, West Virginia and J.P. Morgan
Trust Company, National Association (formerly Chase Manhattan Trust
Company, National Association, successor trustee to Mellon Bank, N.A.), as
Trustee, providing for Pollution Control Revenue Bonds (West Penn Power
Company Fort Martin Station Project), (e) the Trust Indenture dated as of
February 1, 1977 between Greene County Industrial Development Authority
and J.P. Morgan Trust Company, National Association (formerly Chase
Manhattan Trust Company, National Association, successor trustee to Mellon
Bank, N.A.), as Trustee, providing for Pollution Control Revenue Bonds
(West Penn Power Company Hatfield's Ferry Project), (f) the Trust
Indenture dated as of April 15, 1992 between the County Commission of
Harrison County, West Virginia and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National Association,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for Solid
Waste Disposal Revenue Bonds (The Potomac Edison Company Harrison Station
Project), (g) the Trust Indenture dated as of November 1, 1977 between
Pleasants County, West Virginia and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National Association,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for
Pollution Control Revenue Bonds (The Potomac Edison Company Pleasants
Station Project), (h) the Trust Indenture dated as of April 15, 1983
between the County Commission of Monongalia County, West Virginia and J.P.
Morgan Trust Company, National Association (formerly Chase Manhattan Trust
Company, National Association, successor trustee to Mellon Bank, N.A.), as
Trustee, providing for Pollution Control Revenue Bonds (The Potomac Edison
Company Fort Martin Station Project), (i) the Trust Indenture dated as of
February 1, 1977 between Greene County Industrial Development Authority
and J.P. Morgan Trust Company, National Association (formerly Chase
Manhattan Trust Company, National Association, successor trustee to Mellon
Bank, N.A.), as Trustee, providing for Pollution Control Revenue Bonds
(Monongahela Power Company Hatfield's Ferry Project), (j) the Trust
Indenture dated as of November 1, 1977 between Pleasants County, West
Virginia and J.P. Morgan Trust Company, National Association (formerly
Chase Manhattan Trust Company, National Association, successor trustee to
Mellon Bank, N.A.), as Trustee, providing for Pollution Control Revenue
Bonds (Monongahela Power Company Pleasants Station Project), (k) the Trust
Indenture dated as of April 15, 1983 between the County Commission of
Monongalia County, West Virginia and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National Association,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for
Pollution Control Revenue Bonds (Monongahela Power Company Fort Martin
Station Project), and (l) Trust Indenture dated as of April 15, 1992
between the County Commission of Harrison County, West Virginia and J.P.
Morgan Trust Company, National Association (formerly Chase Manhattan Trust
Company, National Association, successor trustee to Mellon Bank, N.A.), as
Trustee, providing for Solid Waste Disposal Revenue Bonds (Monongahela
Power Company Harrison Station Project).
"Pollution Control Bonds" means all notes, bonds and other instruments
evidencing Debt owed by any Borrower in respect of Debt issued pursuant to
the Pollution Control Bond Indentures.
"Preferred Interests" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
"Pro Rata Share" means, with respect to each Revolving Lender at any
time, a fraction (expressed as a percentage, carried out to the ninth
decimal place), the numerator of which is the amount of the Revolving
Commitment of such Revolving Lender and the denominator of which is the
amount of the Revolving Facility; provided that if the commitment of each
Revolving Lender to make Revolving Advances and the obligation of each
Issuing Bank to make L/C Credit Extensions have been terminated pursuant
to Section 2.05 or 6.01, then the Pro Rata Share of each Revolving Lender
shall be determined based on the Pro Rata Share of such Revolving Lender
immediately prior to such termination and after giving effect to any
subsequent assignments made pursuant to the terms hereof. The initial Pro
Rata Share of each Revolving Lender is set forth opposite the name of such
Revolving Lender on Schedule II or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable.
"Public Debt Rating" means, as of any date, the higher rating that has
been most recently announced by either S&P or Moody's, as the case may be,
for any class of non-credit enhanced long-term senior unsecured debt
issued by AYE; provided that (a) if only one of S&P and Moody's shall have
in effect a Public Debt Rating or if neither S&P nor Moody's shall have in
effect a Public Debt Rating, the Applicable Margin and Commitment Fee Rate
will be determined in accordance with Level 4 under the definition of
"Applicable Margin" and "Commitment Fee Rate", respectively; (b) if such
ratings established by S&P and Moody's shall differ by one level, the
Applicable Margin and Commitment Fee Rate shall be determined in
accordance with the higher rating; (c) if such ratings established by S&P
and Moody's shall differ by two or more levels, the Applicable Margin and
Commitment Fee Rate shall be based upon the rating which is one rating
level higher than the lower of the ratings established by S&P and Moody's;
(d) if any rating established by S&P or Moody's shall be changed, such
change shall be effective as of the date on which such change is first
announced publicly by the rating agency making such change; and (e) if S&P
or Moody's shall change the basis on which ratings are established, each
reference to the Public Debt Rating announced by S&P or Moody's, as the
case may be, shall refer to the then equivalent rating by S&P or Moody's,
as the case may be.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"Qualifying Obligation" means an Obligation in an aggregate principal
amount in excess of $5,000,000.
"Quarterly Date" means the last Business Day of March, June, September
and December, commencing with June 30, 2005.
"Redeemable" means, with respect to any Preferred Interests, any such
Preferred Interests that the issuer is required, pursuant to the terms and
conditions thereof, to redeem at a fixed or determinable date or dates,
whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer.
"Reduction Amount" has the meaning specified in Section 2.06(b).
"Register" has the meaning specified in Section 8.07(e).
"Regulated Subsidiaries" means, collectively, MPC, PEC and WPPC and
any of their respective Subsidiaries.
"Related Borrower" means, with respect to (a) any Revolving Advance,
the Borrower to which such Advance is made, (b) any AYE Letter of Credit,
AESC Indirect Letter of Credit, AYE L/C Obligation or AESC Indirect L/C
Obligation, AYE and (c) any AESC Direct Letter of Credit or AESC Direct
L/C Obligation, AESC.
"Representatives" has the meaning specified in Section 8.12(a).
"Required Lenders" means, at any time, Lenders owed or holding at
least a majority in interest of the sum of (a) the Total Revolving
Outstandings (with the aggregate amount of each Lender's risk
participation and funded participation in L/C Obligations being deemed
"held" by such Lender for purposes of this definition) (if any) at such
time, plus (b) the aggregate Unused Commitments at such time, plus (c)
the aggregate outstanding principal amount of the Term Advances (if any)
at such time, plus (d) the aggregate amount of the Term Commitments (if
any) at such time.
"Required Revolving Lenders" means, at any time, Revolving Lenders
owed or holding at least a majority in interest of the sum of (a) the
Total Revolving Outstandings (with the aggregate amount of each Lender's
risk participation and funded participation in L/C Obligations being
deemed "held" by such Lender for purposes of this definition) (if any) at
such time, plus (b) the aggregate Unused Commitments (if any) at such
time.
"Responsible Officer" means, with respect to any Person, the
president, any vice-president, the treasurer or the Chief Financial
Officer of such Person.
"Restricted Payments" means, with respect to any Person, any (a)
dividends (in cash or property), purchase, redemption, retirement,
defeasance or other acquisition for value of any of its Equity Interests
now or hereafter outstanding, (b) return of capital to its stockholders,
partners or members (or the equivalent Persons thereof) as such, (c)
distribution of assets, Equity Interests, obligations or securities to
its stockholders, partners or members (or the equivalent Persons thereof)
as such, and (d) setting apart of money for a sinking or other analogous
fund for, or any purchase, redemption, retirement or other acquisition of
any Equity Interests in such Person; provided that, notwithstanding the
foregoing, neither of the following shall constitute a "Restricted
Payment": (i) with respect to any Person, any dividend or distribution
payable solely with common stock of such Person or with Equity Interests
in such Person of the same class as those by reference to which such
Equity Interests are being distributed and (ii) any exchange of
outstanding Equity Interests of any Person for common stock of such
Person or for Equity Interests of the same class in such Person.
"Revolving Advance" has the meaning specified in Section 2.01(a).
"Revolving Borrowing" means a borrowing consisting of simultaneous
Revolving Advances of the same Type, made by the Revolving Lenders.
"Revolving Commitment" means, as to each Revolving Lender, its
obligation to: (a) make a Revolving Advance to any Borrower pursuant to
Section 2.01(a); and (b) purchase participations in L/C Obligations
pursuant to Section 2.01(d), (e) and (f), in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite
such Revolving Lender's name on Schedule II under the caption "Revolving
Commitment" or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
"Revolving Facility" means, at any time, the aggregate of the
Revolving Commitments at such time.
"Revolving Lender" means any Lender that has a Revolving Commitment.
"Revolving Note" means a promissory note of any Borrower payable to
the order of a Revolving Lender in substantially the form of Exhibit A-1,
evidencing the aggregate indebtedness of such Borrower to such Revolving
Lender resulting from Revolving Advances made by such Revolving Lender
hereunder to such Borrower.
"SEC" means the Securities and Exchange Commission.
"Securitization SPV" means any trust, partnership or other Person
established by a Regulated Subsidiary or any Subsidiary of a Regulated
Subsidiary to implement a Permitted Securitization.
"Senior Debt Obligations" means, without duplication, (a) the
Obligations of the Borrowers to pay principal and interest on the Advances
(including any interest accruing after the filing of a petition with
respect to, or the commencement of, any Insolvency Proceeding, whether or
not a claim for post-petition interest is allowed in such proceeding), and
(b) any and all commissions, fees, indemnities, prepayment premiums, costs
and expenses and other amounts payable to any Lender Party under any Loan
Document, including all renewals or extensions thereof; provided that
notwithstanding anything to the contrary in any Loan Document, "Senior
Debt Obligations" shall not include any Obligations of any Borrower owed
to any of its Affiliates.
"Services Corp" means Allegheny Energy Service Corporation, a Maryland
corporation.
"Services Corp AESC Debt" means secured or unsecured Debt of Services
Corp attributable to, or incurred by Services Corp on behalf of, any AESC
Company.
"Services Corp Regulated Debt" means secured or unsecured Debt of
Services Corp attributable to, or incurred by Services Corp on behalf of,
AYE or any Regulated Subsidiary.
"Single-Employer Plan" means a single-employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of AYE
or any of its Subsidiaries or any ERISA Affiliate and no Person other than
AYE, its Subsidiaries and the ERISA Affiliates or (b) was so maintained
and in respect of which AYE, any of its Subsidiaries or any ERISA
Affiliate could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities that are probable and
estimable, of such Person, (b) the present fair saleable value of the
assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and matured, taking into account the possibility of refinancing
such obligations and selling assets, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay such debts and liabilities as they mature, taking
into account the possibility of refinancing such obligations and selling
assets, and (d) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such
Person's property would constitute an unreasonably small capital. The
determination of whether a Person is "Solvent" and the facts and
circumstances relating thereto (including the amount of contingent
liabilities and actual liabilities) at any time shall be computed in the
light of all the facts and circumstances existing at such time.
"SPV" shall have the meaning provided in Section 8.07(h).
"Standby Letter of Credit" means any Letter of Credit issued under
this Agreement, other than a Trade Letter of Credit.
"Stranded Cost Securitization" has the meaning specified in Section
5.02(e)(viii)(A).
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such partnership, joint venture or limited liability
company or (c) the beneficial interest in such trust or estate is at the
time, directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Surviving Debt" means Debt of AYE and its Subsidiaries (other than
the Regulated Subsidiaries and the AESC Companies) outstanding immediately
prior to giving effect to the Transactions.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.
"Tax Allocation Agreement" means the Tax Allocation Agreement, dated
as of July 1, 2003, by and among AYE and its Subsidiaries.
"Taxes" has the meaning specified in Section 2.13(a).
"Term Advance" has the meaning specified in Section 2.01(b).
"Term Borrowing" means the borrowing consisting of simultaneous Term
Advances of the same Type, made by the Term Lenders.
"Term Commitment" means, as to each Term Lender, its obligation to
make a Term Advance to AYE pursuant to Section 2.01(b), in an aggregate
principal amount at any one time outstanding not to exceed the amount set
forth opposite such Term Lender's name on Schedule II under the caption
"Term Commitment" or in the Assignment and Assumption pursuant to which
such Term Lender becomes a party hereto, as applicable, as such amount may
be adjusted from time to time in accordance with this Agreement.
"Term Commitment Termination Date" has the meaning specified in
Section 2.05(b)(ii).
"Term Facility" means, at any time, the aggregate of the Term
Commitments at such time.
"Term Lender" means any Lender that has a Term Commitment.
"Term Note" means a promissory note of AYE payable to the order of a
Term Lender in substantially the form of Exhibit A-2, evidencing the
aggregate indebtedness of AYE to such Term Lender resulting from Term
Advances made by such Term Lender hereunder to AYE.
"Termination Event" means an event described in Section 4042(a) of
ERISA.
"Total Revolving Outstandings" means the aggregate Outstanding Amount
of all Revolving Advances and all L/C Obligations.
"Trade Letter of Credit" means any Letter of Credit that is issued
under this Agreement for the benefit of a supplier of goods or services to
any Borrower or any of its Subsidiaries to effect payment for such goods
or services, the conditions to drawing under which include the
presentation to an Issuing Bank.
"Transactions" means (a) the refinancing of Debt outstanding under the
Existing Credit Agreement with the proceeds of Revolving Advances, (b) the
continuance of the Existing L/Cs as AYE Letters of Credit issued under
this Agreement and (c) the refinancing of the principal amount of the
7.75% Notes with the proceeds of the Term Advances.
"Type" refers (a) in the case of Advances, to the distinction between
Advances bearing interest at the Base Rate and Advances bearing interest
at the Eurodollar Rate, (b) in the case of Letters of Credit, to the
distinction between AYE Letters of Credit, AESC Direct Letters of Credit
and AESC Indirect Letters of Credit, (c) in the case of L/C Obligations,
to the distinction between AYE L/C Obligations, AESC Direct L/C
Obligations and AESC Indirect L/C Obligations and (d) in the case of L/C
Credit Extensions, to the distinction between AYE L/C Credit Extensions,
AESC Direct Credit Extensions and AESC Indirect Credit Extensions.
"UGI" means UGI Hunlock Development Company.
"Unreimbursed Amount" has the meaning specified in Section 2.03(b)(i).
"Unused Commitment" means, with respect to any Revolving Lender at any
time, (a) such Revolving Lender's Revolving Commitment at such time minus
(b) such Revolving Lender's Pro Rata Share of the Total Revolving
Outstandings.
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
"WPPC" means West Penn Power Company, a Pennsylvania corporation.
SECTION 1.02. Principles of Interpretation. (a) Except to the extent
expressly provided to the contrary in this Agreement or to the extent that
the context otherwise requires, in this Agreement and the other Loan
Documents:
(i) the table of contents and Article and Section headings
are for convenience only and shall not affect the interpretation
of any Loan Document;
(ii) references to any document, instrument or agreement,
including any Loan Document, shall include (A) all exhibits,
annexes, schedules, appendices or other attachments thereto and
(B) all documents, instruments or agreements issued or executed
in replacement thereof;
(iii) references to a document or agreement, including any
Loan Document, shall be deemed to include any amendment,
restatement, modification, supplement or replacement thereto
entered into in accordance with the terms thereof and the terms
of the Loan Documents;
(iv) the words "include", "includes" and "including" are
not limiting;
(v) references to any Person shall include such Person's
successors and permitted assigns (and in the case of any
Governmental Authority, any Person succeeding to such
Governmental Authority's functions and capacities);
(vi) the words "hereof", "herein" and "hereunder" and words
of similar import when used in any Loan Document shall refer to
such Loan Document as a whole and not to any particular provision
of such Loan Document;
(vii) references to "days" shall mean calendar days;
(viii) the singular includes the plural and the plural
includes the singular;
(ix) references to Applicable Law, generally, shall mean
Applicable Law as in effect from time to time, and references to
any specific Applicable Law shall mean such Applicable Law, as
amended, modified or supplemented from time to time, and any
Applicable Law successor thereto;
(x) in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but
excluding"; and
(xi) any reference in this Agreement or any other Loan
Document to an Article, Section, Schedule, Appendix or Exhibit is
to the article or section of, or a schedule, appendix or exhibit
to, this Agreement or such other Loan Document, as the case may
be, unless otherwise indicated.
(b) This Agreement, the Schedules and Exhibits hereto and the
other Loan Documents are the result of negotiations among the parties
hereto and their respective counsel. Accordingly, this Agreement, the
Schedules and Exhibits hereto and the other Loan Documents shall be
deemed the product of all parties hereto or thereto, as the case may
be, and no ambiguity in this Agreement, the Schedules and Exhibits
hereto or any Loan Document shall be construed in favor of or against
the Borrowers, the Administrative Agent, any Arranger Party or any
Lender that is a party hereto.
(c) All accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared, in
accordance with generally accepted accounting principles as in effect
from time to time, applied on a basis consistent (except for changes
concurred in by AYE's independent public accountants) with the most
recent audited consolidated financial statements of AYE and its
Subsidiaries delivered to the Lenders ("GAAP"); provided that, if AYE
notifies the Administrative Agent that AYE wishes to amend any
covenant in Section 5.04 to eliminate the effect of any change in
generally accepted accounting principles on the operation of such
covenant (or if the Administrative Agent notifies AYE that the
Required Lenders wish to amend Section 5.04 for such purpose), then
AYE's compliance with such covenant shall be determined on the basis
of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles
became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to AYE and the Required
Lenders.
SECTION 1.03. Letter of Credit. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Issuer Documents related thereto, whether or not such maximum face amount is in
effect at such time.
SECTION 1.04. Joint and Several Obligations of AYE. Notwithstanding
anything to the contrary in any Loan Document, AYE shall be jointly and
severally liable for all Obligations of AESC under the Loan Documents. Such
Obligations of AYE shall be irrevocable, absolute and unconditional
irrespective of, and AYE hereby irrevocably waives any defenses it may now or
hereafter acquire in any way relating to, any of the following:
(a) any lack of validity or enforceability of any Loan Document
or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any Obligations of AESC under or in respect
of the Loan Documents, or any other amendment or waiver of or any
consent to departure from any Loan Document, including any increase in
the Obligations of AESC under or in respect of the Loan Documents
resulting from the extension of additional credit to AESC or any of
its Subsidiaries or otherwise;
(c) any Insolvency Proceeding with respect to, or any change,
restructuring or termination of the corporate structure or existence
of, AESC;
(d) any failure of any Lender Party to disclose to AYE any
information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of AESC
now or hereafter known to such Lender Party (AYE waiving any duty on
the part of the Lender Parties to disclose such information); or
(e) any other circumstance (including any statute of limitations)
or any existence of or reliance on any representation by any Lender
Party that might otherwise constitute a defense available to, or a
discharge of, AYE.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) Revolving Advance. Each Revolving
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "Revolving Advance") to any Borrower from time to time on
any Business Day during the period from the Closing Date until the Final
Maturity Date in an amount for each such Revolving Advance not to exceed such
Revolving Lender's Unused Commitment at such time; provided that (i) the amount
of each Revolving Borrowing made to any Borrower shall not exceed the Borrowing
Limit applicable to such Borrower at such time, (ii) no Revolving Borrowing
shall be made to AESC unless the aggregate Unused Commitments shall be equal to
or greater than $100,000,000 after giving pro forma effect to such Revolving
Borrowing, and (iii) after giving effect to any Revolving Borrowing, (A) the
Total Revolving Outstandings shall not exceed the Revolving Facility, and (B)
the aggregate Outstanding Amount of the Revolving Advances of any Revolving
Lender plus such Revolving Lender's Pro Rata Share of the Outstanding Amount of
all L/C Obligations shall not exceed such Revolving Lender's Revolving
Commitment. Each Revolving Borrowing shall be in an aggregate amount of
$2,000,000 or an integral multiple of $1,000,000 in excess thereof (other than
a Revolving Borrowing the proceeds of which shall be used solely to repay or
prepay in full any L/C Borrowing) and shall consist of Revolving Advances of
the same Type made simultaneously by the Revolving Lenders ratably according to
their Revolving Commitments. Within the limits of each Revolving Lender's
Unused Commitment in effect from time to time and the Borrowing Limits
applicable to each Borrower, either Borrower may borrow under this Section
2.01(a), prepay pursuant to Section 2.06 and reborrow under this Section
2.01(a).
(b) Term Advance. Each Term Lender severally agrees, on the terms
and conditions hereinafter set forth, to make a single advance (each a "Term
Advance") to AYE on any one Business Day during the period commencing on the
Closing Date and ending on the Term Commitment Termination Date in an amount
not to exceed such Term Lender's Term Commitment. The Term Borrowing shall
consist of Term Advances of the same Type made simultaneously by the Term
Lenders on such Business Day ratably according to their Term Commitments.
Amounts borrowed under this Section 2.01(b) and repaid or prepaid may not be
reborrowed.
(c) Continuance of the Existing L/Cs. AYE hereby requests that
the Initial Issuing Bank continue hereunder, and the Initial Issuing Bank
hereby agrees that upon fulfillment of the conditions set forth in Section 3.01
it will continue hereunder, on the Closing Date, the Existing L/Cs for the
account of AYE on behalf of Allegheny Energy Solutions, Inc., a Subsidiary of
AYE, and, upon such continuance, each of the Existing L/Cs shall be deemed to
be an AYE Letter of Credit and shall be governed by the terms hereof. The
continuance of each Existing L/C shall be deemed to constitute, for all
purposes under this Agreement and the other Loan Documents, the issuance of an
AYE Letter of Credit.
(d) AYE Letters of Credit. Subject to the terms and conditions
set forth herein, (A) each Issuing Bank agrees, in reliance upon the agreements
of the other Revolving Lenders set forth in Section 2.03, (1) from time to time
on any Business Day during the period from the Closing Date until the Letter of
Credit Expiration Date, to make AYE L/C Credit Extensions for the account of
AYE or its Subsidiaries (excluding the AESC Companies), and to amend or extend
AYE Letters of Credit previously issued by it, in accordance with Section
2.03(a)(i) and (ii), and (2) to honor drawings under the AYE Letters of Credit;
and (B) the Revolving Lenders severally agree to participate in AYE Letters of
Credit issued for the account of AYE or its Subsidiaries (excluding the AESC
Companies) and any L/C Borrowings thereunder; provided that after giving effect
to any AYE L/C Credit Extension with respect to any AYE Letter of Credit, (x)
the Total Revolving Outstandings shall not exceed the Revolving Facility and
(y) the aggregate Outstanding Amount of the Revolving Advances of any Revolving
Lender, plus such Revolving Lender's Pro Rata Share of the Outstanding Amount
of all L/C Obligations, shall not exceed such Revolving Lender's Revolving
Commitment. Each request by AYE for the issuance of, or an amendment to
increase the amount of, any AYE Letter of Credit shall be deemed to be a
representation by AYE that the AYE L/C Credit Extension so requested complies
with the conditions set forth in the proviso to the preceding sentence. Within
the foregoing limits, and subject to the terms and conditions hereof, AYE's
ability to obtain AYE Letters of Credit shall be fully revolving, and
accordingly AYE may, during the foregoing period, obtain AYE Letters of Credit
to replace Letters of Credit that have expired or that have been drawn upon and
reimbursed.
(e) AESC Indirect Letters of Credit. Subject to the terms and
conditions set forth herein, (A) each Issuing Bank agrees, in reliance upon the
agreements of the other Revolving Lenders set forth in Section 2.03, (1) from
time to time on any Business Day during the period from the Closing Date until
the Letter of Credit Expiration Date, to make AESC Indirect L/C Credit
Extensions for the account of AYE on behalf of AESC or its Subsidiaries, and to
amend or extend AESC Indirect Letters of Credit previously issued by it, in
accordance with Section 2.03(a)(i) and (ii), and (2) to honor drawings under
the AESC Indirect Letters of Credit; and (B) the Revolving Lenders severally
agree to participate in AESC Indirect Letters of Credit issued for the account
of AYE on behalf of AESC or its Subsidiaries and any L/C Borrowings thereunder;
provided that after giving effect to any AESC Indirect L/C Credit Extension
with respect to any AESC Indirect Letter of Credit, (x) the Outstanding Amount
of all AESC Indirect L/C Obligations shall not exceed the AESC Indirect L/C
Sublimit, (y) the Total Revolving Outstandings shall not exceed the Revolving
Facility and (z) the aggregate Outstanding Amount of the Revolving Advances of
any Revolving Lender, plus such Revolving Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, shall not exceed such Revolving
Lender's Revolving Commitment. Each request by AYE for the issuance of, or an
amendment to increase the amount of, an AESC Indirect Letter of Credit shall be
deemed to be a representation by AYE that the AESC Indirect L/C Credit
Extension so requested complies with the conditions set forth in the proviso to
the preceding sentence. Within the foregoing limits, and subject to the terms
and conditions hereof, AYE's ability to obtain AESC Indirect Letters of Credit
shall be fully revolving, and accordingly AYE may, during the foregoing period,
obtain AESC Indirect Letters of Credit to replace Letters of Credit that have
expired or that have been drawn upon and reimbursed.
(f) AESC Direct Letters of Credit. Subject to the terms and
conditions set forth herein, (A) each Issuing Bank agrees, in reliance upon the
agreements of the other Revolving Lenders set forth in Section 2.03, (1) from
time to time on any Business Day during the period from the Closing Date until
the Letter of Credit Expiration Date, to make AESC Direct L/C Credit Extensions
for the account of AESC or its Subsidiaries, and to amend or extend AESC Direct
Letters of Credit previously issued by it, in accordance with Section
2.03(a)(i) and (ii), and (2) to honor drawings under the AESC Direct Letters of
Credit; and (B) the Revolving Lenders severally agree to participate in AESC
Direct Letters of Credit issued for the account of AESC or its Subsidiaries and
any L/C Borrowings thereunder; provided that (i) no AESC Direct L/C Credit
Extension shall be made for the account of AESC unless the aggregate Unused
Commitments shall be equal to or greater than $100,000,000 after giving pro
forma effect to such AESC Direct L/C Credit Extension; and (ii) after giving
effect to any AESC Direct L/C Credit Extension with respect to any AESC Direct
Letter of Credit, (x) the Outstanding Amount of all AESC Direct L/C
Obligations, plus the aggregate principal amount of all Revolving Advances made
to AESC outstanding at such time shall not exceed the AESC Direct Advance and
L/C Sublimit, (y) the Total Revolving Outstandings shall not exceed the
Revolving Facility and (z) the aggregate Outstanding Amount of the Revolving
Advances of any Revolving Lender, plus such Revolving Lender's Pro Rata Share
of the Outstanding Amount of all L/C Obligations, shall not exceed such
Revolving Lender's Revolving Commitment. Each request by AESC for the issuance
of, or an amendment to increase the amount of, any AESC Direct Letter of Credit
shall be deemed to be a representation by AYE and AESC that the AESC Direct L/C
Credit Extension so requested complies with the conditions set forth in the
proviso to the preceding sentence. Within the foregoing limits, and subject to
the terms and conditions hereof, AESC's ability to obtain AESC Direct Letters
of Credit shall be fully revolving, and accordingly AESC may, during the
foregoing period, obtain AESC Direct Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and reimbursed.
(g) Letters of Credit Generally. (i) No Issuing Bank shall issue
any Letter of Credit if the expiry date of such requested Letter of Credit
would occur after the Letter of Credit Expiration Date, unless all the
Revolving Lenders have approved such expiry date.
(ii) No Issuing Bank shall be under any Obligation to make
any L/C Credit Extension if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit, or any
Applicable Law to such Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over such Issuing Bank shall prohibit, or
request that the Issuing Bank refrain from, the issuance of Letters of
Credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Bank with respect to such Letter of Credit
any restriction, reserve or capital requirement (for which such
Issuing Bank is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon such Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which such Issuing Bank in good faith deems material
to it;
(B) the making of such L/C Credit Extension would
violate any Applicable Laws;
(C) except as otherwise agreed by the Administrative
Agent and such Issuing Bank, such Letter of Credit is in an
initial face amount less than $100,000;
(D) such L/C Credit Extension is to be denominated in a
currency other than Dollars;
(E) such L/C Credit Extension contains any provisions
for automatic reinstatement of the stated amount after any L/C
Borrowing thereunder; or
(F) a default of any Revolving Lender's obligations to
fund under Section 2.03 exists, unless such Issuing Bank has
entered into satisfactory arrangements with the Borrowers or
such Revolving Lender to eliminate such Issuing Bank's risk with
respect to such Revolving Lender.
(iii) No Issuing Bank shall amend any Letter of Credit if such
Issuing Bank would not be permitted at such time to make such L/C
Credit Extension in its amended form under the terms hereof.
(iv) No Issuing Bank shall be under the obligation to amend any
Letter of Credit if (A) such Issuing Bank would have no obligation at
such time to issue such Letter of Credit in its amended form under the
terms hereof, or (B) the beneficiary of such Letter of Credit does not
accept the proposed amendment to such Letter of Credit.
SECTION 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.03, each Borrowing to any Borrower shall be made on notice, given by
AYE on behalf of such Borrower (and each Borrower other than AYE hereby
unconditionally and irrevocably instructs AYE to issue such notice on its
behalf) not later than 10:00 a.m. (New York City time) on the third Business
Day prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or on the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier or electronic mail. Each such notice of a Borrowing (a "Notice of
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier or electronic mail, in substantially the form of Exhibit B,
specifying therein (i) the identity of the Borrower and (ii) the requested (A)
date of such Borrowing, (B) Type of Advances comprising such Borrowing, (C)
aggregate amount of such Borrowing and (D) in the case of a Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Advance. Each Lender shall, before 12:00 noon (New York City time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account, in
immediately available funds, such Lender's ratable portion of such Borrowing in
accordance with the respective Commitment of such Lender under the applicable
Facility and the other Appropriate Lenders. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent shall (i) with respect to the
Initial Borrowing, directly apply (x) the Revolving Advances for the account of
AYE to the repayment of the Existing AYE Debt and (y) the L/C Credit Extensions
for the account of AYE to the continuance of the Existing L/Cs as AYE Letters
of Credit, (ii) with the respect to the single Term Borrowing, directly apply
the Term Advances for the account of AYE to the repayment of the principal
amount of the 7.75% Notes and (iii) with respect to subsequent Revolving
Borrowings, make such funds available to the relevant Borrower, by crediting
such Borrower's Borrowing Account.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) no Borrower may select Eurodollar Rate Advances for any Borrowing if the
aggregate amount of such Borrowing is less than $2,000,000 or if the obligation
of the Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.10 or 2.11 and (ii) the Advances may not be outstanding
as part of more than ten separate Revolving Borrowings and the Term Advances
may not be outstanding as part of more than one Borrowing.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower issuing such Notice of Borrowing. In the case of any Borrowing that
the relevant Borrower has specified in the related Notice of Borrowing is to be
comprised of Eurodollar Rate Advances, such Borrower shall indemnify each
Appropriate Lender against any loss, cost or expense incurred by such Lender as
a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including any loss (including loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Advance to be made by such
Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Subject to the Administrative Agent giving prompt notice of the
relevant Notice of Borrowing received by the Administrative Agent to the Term
Lenders or the Revolving Lenders, as the case may be, unless the Administrative
Agent shall have received notice from an Appropriate Lender prior to the date
of the Borrowing requested under such Notice of Borrowing that such Lender will
not make available to the Administrative Agent such Lender's ratable portion of
such Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the relevant Borrower a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and such Borrower severally agree to repay or
pay to the Administrative Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to such Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of such Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender's Advance as part of such Borrowing
for all purposes.
(e) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of Letters of Credit; Drawings and
Reimbursements; Auto-Extension Letters of Credit; Funding of Participations.
(a) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Related Borrower delivered to an Issuing
Bank (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of such Borrower. Such Letter of Credit Application must be received by such
Issuing Bank and the Administrative Agent not later than 10:00 a.m. (New York
City time) at least one (1) Business Day (or such later date and time as the
Administrative Agent and the Issuing Bank may agree in a particular instance in
their sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial issuance
of a Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the respective Issuing Bank: (A) the proposed
issuance date of the requested Letter of Credit (which shall be a Business
Day); (B) the amount thereof; (C) the expiry date thereof (which date shall be
not later than the earlier of (a) the date which is twelve (12) months after
the proposed issuance date and (b) the Letter of Credit Expiration Date); (D)
the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; (G) whether such Letter of Credit is to be or, in the case
of any amendment to any Letter of Credit, is, an AYE Letter of Credit, AESC
Indirect Letter of Credit or AESC Direct Letter of Credit; and (H) such other
matters as such Issuing Bank may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Issuing Bank
(A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as such Issuing Bank may require.
Additionally, the Related Borrower shall furnish to each Issuing Bank and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as each such Issuing Bank or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the Issuing Bank will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from the
Related Borrower and, if not, such Issuing Bank will provide the
Administrative Agent with a copy thereof. Unless such Issuing Bank
has received written notice from any Revolving Lender, the
Administrative Agent or the Related Borrower, at least one (1)
Business Day prior to the requested date of issuance or amendment
of the applicable Letter of Credit, that one or more applicable
conditions contained in Article III shall not then be satisfied,
then, subject to the terms and conditions hereof, such Issuing Bank
shall, on the requested date, make an L/C Credit Extension for the
account of such Related Borrower (or the applicable Subsidiary) or
enter into the applicable amendment, as the case may be, in each
case in accordance with such Issuing Bank's usual and customary
business practices. Immediately upon the making of each L/C Credit
Extension, each Revolving Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from such
Issuing Bank a risk participation in such L/C Credit Extension in
an amount equal to the product of such Revolving Lender's Pro Rata
Share times the amount of such L/C Credit Extension.
(iii) If the Related Borrower so requests in any applicable
Letter of Credit Application, the Issuing Bank may, in its sole and
absolute discretion, agree to make an L/C Credit Extension that has
automatic extension provisions (each, an "Auto-Extension Letter of
Credit"); provided that any such Auto-Extension Letter of Credit
must permit such Issuing Bank to prevent any such extension at
least once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) or upon notice to such Issuing
Bank by the Administrative Agent or the Related Borrower of an
Insolvency Proceeding with respect to such Related Borrower or any
of its Subsidiaries, by giving prior notice to the beneficiary
thereof not later than a day (the "Non-Extension Notice Date") in
each such twelve-month period to be agreed upon at the time such
Letter of Credit is issued. Unless otherwise directed by such
Issuing Bank, the Related Borrower shall not be required to make a
specific request to such Issuing Bank for any such extension. Once
an Auto-Extension Letter of Credit has been issued, the Revolving
Lenders shall be deemed to have authorized (but may not require)
such Issuing Bank to permit the extension of such Letter of Credit
at any time to an expiry date not later than the Letter of Credit
Expiration Date; provided, however, that such Issuing Bank shall
not permit any such extension if (A) such Issuing Bank has
determined that it would not be permitted, or would have no
obligation at such time to issue such Letter of Credit in its
revised form (as extended) under the terms hereof (by reason of the
provisions of Sections 2.01(d), (e) or (f) or otherwise), or (B) it
has received notice (which may be by telephone or in writing) on or
before the day that is five Business Days before the Non-Extension
Notice Date (1) from the Administrative Agent that the Required
Revolving Lenders have elected not to permit such extension or (2)
from the Administrative Agent or any Revolving Lender that one or
more of the applicable conditions specified in Section 3.02 is not
then satisfied, and in each such case directing such Issuing Bank
not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, such Issuing Bank
will also deliver to the Related Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or
amendment thereof.
(b) Drawings and Reimbursements; Funding of Participations. (i) Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the Issuing Bank shall notify the Administrative
Agent and the Related Borrower thereof. Not later than 11:00 a.m. (New York
City time) on the date of any payment by such Issuing Bank under a Letter of
Credit (each such date, an "Honor Date"), the Related Borrower shall reimburse
such Issuing Bank through the Administrative Agent in an amount equal to the
amount of such drawing. If the Related Borrower fails to so reimburse such
Issuing Bank by such time, the Administrative Agent shall promptly notify each
Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the
"Unreimbursed Amount"), and the amount of such Revolving Lender's Pro Rata
Share thereof. In such event, the Related Borrower shall be deemed to have
requested a Revolving Borrowing of Base Rate Advances to be disbursed on the
Honor Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.01 for the principal amount of
Base Rate Advances, but subject to the other conditions set forth in Section
2.01 and the conditions set forth in Section 3.02 (other than the delivery of a
Notice of Borrowing). Any notice given by such Issuing Bank or the
Administrative Agent pursuant to this Section 2.03(b) may be given by telephone
if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
(ii) Each Revolving Lender (including the Revolving Lender
acting as Issuing Bank) shall upon any notice pursuant to Section
2.03(b)(i) make funds available to the Administrative Agent for the
account of such Issuing Bank at the Administrative Agent's Account
in an amount equal to its Pro Rata Share of the Unreimbursed Amount
not later than 1:00 p.m. (New York City time) on the Business Day
specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.03(b)(iii), each Revolving
Lender that so makes funds available shall be deemed to have made a
Base Rate Advance to the Related Borrower in such amount. The
Administrative Agent shall remit the funds so received to such
Issuing Bank.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Revolving Borrowing of Base Rate Advances
because the conditions set forth in Section 3.02 cannot be
satisfied or for any other reason, the Related Borrower shall be
deemed to have incurred from the Issuing Bank an L/C Borrowing in
the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at a rate equal to the sum
of (A) the Base Rate in effect from time to time, plus (B) the
Applicable Margin in effect from time to time, plus (C) 2% per
annum. In such event, each Revolving Lender's payment to the
Administrative Agent for the account of such Issuing Bank pursuant
to Section 2.03(b)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C
Advance from such Revolving Lender in satisfaction of its
participation obligation under this Section 2.03.
(iv) Until each Revolving Lender funds its Revolving Advance
or L/C Advance pursuant to this Section 2.03(b) to reimburse such
Issuing Bank for any amount drawn under any Letter of Credit,
interest in respect of such Revolving Lender's Pro Rata Share of
such drawing shall be solely for the account of such Issuing Bank.
(v) Each Revolving Lender's obligation to make Revolving
Advances or L/C Advances to reimburse any Issuing Bank for amounts
drawn under Letters of Credit, as contemplated by this Section
2.03(b), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such
Revolving Lender may have against the Issuing Bank, any Borrower or
any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing. No such
making of an L/C Advance shall relieve or otherwise impair the
obligation of the Related Borrower to reimburse any Issuing Bank
for the amount of any payment made by the Issuing Bank under any
Letter of Credit, together with interest as provided herein.
(vi) If any Revolving Lender fails to make available to the
Administrative Agent for the account of any Issuing Bank any amount
required to be paid by such Revolving Lender pursuant to the
foregoing provisions of this Section 2.03(b) by the time specified
in Section 2.03(b)(ii), such Issuing Bank shall be entitled to
recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date
on which such payment is immediately available to such Issuing Bank
at a rate per annum equal to the Federal Funds Rate from time to
time in effect. A certificate of such Issuing Bank submitted to any
Revolving Lender (through the Administrative Agent) with respect to
any amounts owing under this Section 2.03(b)(vi) shall be
conclusive absent manifest error.
(c) Repayment of Participations. (i) At any time after an Issuing Bank
has made a payment under any Letter of Credit and has received from any
Revolving Lender such Revolving Lender's L/C Advance in respect of such payment
in accordance with Section 2.03(b), if the Administrative Agent receives for
the account of such Issuing Bank any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Related
Borrower or otherwise, including proceeds of Cash Collateral applied thereto by
the Administrative Agent), the Administrative Agent will distribute to such
Revolving Lender its Pro Rata Share thereof (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Revolving Lender's L/C Advance was outstanding) in the same funds as those
received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of an Issuing Bank pursuant to Section 2.03(b)(i) is
required to be returned under any of the circumstances described in
Section 2.11 (including pursuant to any settlement entered into by
such Issuing Bank in its discretion), each Revolving Lender shall
pay to the Administrative Agent for the account of such Issuing
Bank its Pro Rata Share thereof on demand of the Administrative
Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Revolving Lender, at a rate
per annum equal to the Federal Funds Rate from time to time in
effect.
(d) Role of Issuing Bank. Each Revolving Lender and the Borrowers
agree that, in paying any drawing under a Letter of Credit, each Issuing Bank
shall not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by any Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document. None
of the Issuing Bank, the Administrative Agent nor any of the respective
correspondents, participants or assignees of such Issuing Bank shall be liable
to any Revolving Lender for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Revolving Lenders or the
Required Revolving Lenders, as applicable; (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Related Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude such Related Borrower from pursuing such rights and remedies as it may
have against the beneficiary or transferee at law or under any other agreement.
None of the Issuing Bank, the Administrative Agent, nor any of the respective
correspondents, participants or assignees of such Issuing Bank, shall be liable
or responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(j); provided, however, that anything in such clauses to the
contrary notwithstanding, the Related Borrower may have a claim against an
Issuing Bank, and such Issuing Bank may be liable to such Related Borrower, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by such Related Borrower which such Related
Borrower proves were caused by such Issuing Bank's willful misconduct or gross
negligence or such Issuing Bank's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, an Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and such Issuing Bank shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(e) Cash Collateral. Upon the occurrence and during the continuance of
any Event of Default, at the request of the Administrative Agent, (i) if an
Issuing Bank has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in a L/C Borrowing, or (ii) if, as of
the Letter of Credit Expiration Date, any Letter of Credit for any reason
remains outstanding and partially or wholly undrawn, AYE shall immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations (in an amount
equal to such Outstanding Amount determined as of the date of such L/C
Borrowing or the Letter of Credit Expiration Date, as the case may be). AYE
hereby grants to the Administrative Agent, for the benefit of each Issuing Bank
and the Revolving Lenders, a security interest in all such cash, deposit
accounts and all balances held in the Cash Collateral Account and all proceeds
of the foregoing. Upon the drawing of any Letter of Credit for which funds are
on deposit as Cash Collateral, such funds shall be applied, to the extent
permitted under Applicable Law, to reimburse each Issuing Bank.
(f) Applicability of ISP and UCP. Unless otherwise expressly agreed by
an Issuing Bank and the Related Borrower upon issuing an L/C Credit Extension
(including any such agreement applicable to Existing L/Cs), (i) the rules of
the ISP 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
shall apply to each Trade Letter of Credit.
(g) Conflict with Issuer Documents. In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms hereof
shall control.
(h) Letters of Credit Issued for Subsidiaries. Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary, the Related Borrower
shall be obligated to reimburse the Issuing Bank hereunder for any and all
drawings under such Letter of Credit. The Related Borrower hereby acknowledges
that the L/C Credit Extensions for the account of Subsidiaries inures to the
benefit of such Related Borrower, and that such Related Borrower's business
derives substantial benefits from the businesses of such Subsidiaries.
(i) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to
the Administrative Agent on the first Business Day of each week a written
report summarizing issuance and expiration dates of L/C Credit Extensions
issued during the previous week and drawings during such week under each Letter
of Credit, (B) to each Revolving Lender on the first Business Day of each month
a written report summarizing issuance and expiration dates of L/C Credit
Extensions issued during the preceding month and drawings during such month
under each Letter of Credit and (C) to the Administrative Agent and each
Revolving Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate L/C Obligations during the
preceding calendar quarter of all Letters of Credit.
(j) Obligations Absolute. The obligation of the Related Borrower to
reimburse each Issuing Bank for each drawing under each Letter of Credit and to
repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff,
defense or other right that the Related Borrower or any Subsidiary
may have at any time against any beneficiary or any transferee of
such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), such Issuing Bank or any
other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated
transaction;
(iii) any draft, demand, certificate or other document
presented under such 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; or any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under such Letter of Credit;
(iv) any payment by such Issuing Bank under such Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any
payment made by such Issuing Bank under such Letter of Credit to
any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit; or
(v) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available
to, or a discharge of, the Related Borrower.
The Related Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it pursuant to Section
2.03(a)(iv) and, in the event of any claim of noncompliance with such Related
Borrower's instructions or other irregularity, such Related Borrower will
immediately notify the Issuing Bank. The Related Borrower shall be conclusively
deemed to have waived any such claim against the Issuing Bank and its
correspondents unless such notice is given as aforesaid.
SECTION 2.04. Repayment of Advances. Each Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders on the Final
Maturity Date the aggregate principal amount of all Advances made to such
Borrower and which are then outstanding. Without prejudice to the foregoing,
AYE shall repay to the Administrative Agent for the ratable account of the Term
Lenders the aggregate principal amount of all Term Advances in consecutive
quarterly installments. The initial such installment shall be due and payable
on September 30, 2005, and each installment thereafter shall be due and payable
on each Quarterly Date occurring thereafter. Each such installment shall be in
an amount equal to 0.25% of the aggregate principal amount of all Term Advances
as of the date such Term Advances were disbursed to AYE.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. AYE may, upon at least ten Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portion
of the Revolving Commitments and the Term Commitments; provided that (i) each
partial reduction of a Facility shall be in an aggregate amount of $5,000,000
or an integral multiple of $1,000,000 in excess thereof and (ii) each partial
reduction of a Facility shall be made ratably among the Appropriate Lenders in
accordance with their respective Commitments with respect to such Facility.
(b) Mandatory. (i) So long as the Revolving Facility is in excess of
$250,000,000, the Revolving Facility shall be automatically and permanently
reduced on each date on which prepayment of outstanding L/C Borrowings and
Revolving Advances is required to be made pursuant to Section 2.06(b) by an
amount equal to the applicable Reduction Amount (or portion thereof); provided
that, for the avoidance of doubt, reduction of the Revolving Facility pursuant
to this clause (i) shall cease when the Revolving Facility is equal to
$250,000,000.
(ii) The Term Facility shall be automatically and permanently
reduced on each date on which cancellation of Term Commitments is
required to be made pursuant to Section 2.06(b) by an amount equal
to the applicable Reduction Amount (or portion thereof). In
addition, all unused Term Commitments shall terminate on the
earlier to occur of (a) 5:00 p.m. (New York City time) on August 1,
2005, (b) the termination of the Term Commitments pursuant to
Section 2.05(a), or (c) the termination in full of the Term
Commitments in accordance with Section 6.01 (such date, the "Term
Commitment Termination Date").
(iii) The Revolving Commitments shall terminate on the
earlier to occur of (a) 5:00 p.m. (New York City time) on the Final
Maturity Date, (b) the termination in full of the Revolving
Commitments pursuant to Section 2.05(a), or (c) the termination of
the Revolving Commitments in accordance with Section 6.01.
SECTION 2.06. Prepayments. (a) Optional. Each Borrower may, with
respect to Advances made to it, upon at least one Business Day's notice in the
case of Base Rate Advances and three Business Days' notice in the case of
Eurodollar Rate Advances, in each case to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given such Borrower shall, prepay the outstanding aggregate principal
amount of the Advances comprising part of the same Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the aggregate principal amount prepaid; provided that (i) each partial
prepayment shall be in an aggregate principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and (ii) if any prepayment of
a Eurodollar Rate Advance is made on a date other than the last day of an
Interest Period for such Advance, such Borrower shall also pay any amounts
owing pursuant to Section 8.04(d). Any optional prepayment by AYE of the Term
Advances under this Section 2.06(a) shall be applied to the remaining
amortization installments of the Term Facility in any one of the following
manners, as directed by AYE in writing to the Administrative Agent (or, in the
absence of any such direction received by the Administrative Agent prior to the
relevant prepayment date, in accordance with clause (i) below): (i) in inverse
order of maturity with respect to the remaining amortization installments, (ii)
to all remaining amortization installments on a pro rata basis or (iii) to the
next succeeding four amortization installments as of the date of such
prepayment in direct order of maturity as among such four installments and,
thereafter, to the remaining amortization installments on a pro rata basis.
(b) Mandatory. Upon any sale, transfer or other disposition of any
Assets by AYE or any Regulated Subsidiary, AYE shall prepay an aggregate
principal amount of the Advances equal to 75% of the Net Cash Proceeds received
therefrom promptly upon receipt thereof by AYE or such Regulated Subsidiary;
provided that the foregoing shall not apply to (i) any sale, transfer or other
disposition of any Asset of AYE or any Regulated Subsidiary permitted under
Sections 5.02(e)(i) through 5.02(e)(v), 5.02(e)(vii), 5.02(e)(viii), 5.02(e)(x)
or 5.02(e)(xiii), (ii) any sale, transfer or other disposition of Equity
Interests in, or Assets of, Mountaineer Gas and, if sold, transferred or
otherwise disposed of in the same transaction involving the sale, transfer or
other disposition of Equity Interests in, or Assets of, Mountaineer Gas,
certain other natural gas distribution Assets owned by MPC, (iii) any issuance
of any Equity Interest (including any capital contribution) by AYE or any of
its Regulated Subsidiaries permitted under Sections 5.02(e)(xi) or
5.02(e)(xii), or (iv) any sale, transfer or other disposition of Assets of less
than $2,000,000 individually or $10,000,000 in the aggregate in any fiscal
year; provided, further, notwithstanding the foregoing, AYE and its Regulated
Subsidiaries shall be entitled to retain the first $100,000,000 of Net Cash
Proceeds from any other sale, transfer or other disposition in respect of any
of the Assets of AYE or its Regulated Subsidiaries received by AYE and its
Regulated Subsidiaries in the aggregate plus an amount equal to (A) the
aggregate principal amount of the Term Facility optionally prepaid by AYE
pursuant to Section 2.06(a) and (B) the aggregate amount of any optional
prepayment of the Revolving Facility pursuant to Section 2.06(a) (if and to the
extent the Revolving Commitments are terminated by AYE concurrently with such
prepayment by AYE pursuant to Section 2.05(a)), in the case of clauses (A) and
(B) above, so long as such prepayment was funded with the proceeds of any sale,
transfer or other disposition of any Asset by AYE or any Regulated Subsidiary
not otherwise required to be applied to mandatorily prepay the Advances in
accordance with this Section 2.06(b), and shall not be required to repay Term
Advances, L/C Borrowings or Revolving Advances or Cash Collateralize L/C
Obligations pursuant to this Section 2.06(b) with such proceeds. Prepayments
pursuant to this Section 2.06(b) shall be applied first, to repay Term Advances
outstanding at such time until all such Term Advances are paid in full or, if
the Net Cash Proceeds arising from such sale, transfer or other disposition of
Assets occurs prior to the Term Borrowing, to permanently reduce the Term
Commitments, second, to repay L/C Borrowings outstanding at such time until all
such L/C Borrowings are paid in full, third, to repay Revolving Advances
outstanding at such time until all such Revolving Advances are paid in full,
fourth, to Cash Collateralize the L/C Obligations (the sum of such prepayment
amounts, cancellation of Term Commitments and Cash Collateralization amounts
being the "Reduction Amount").
(c) Other Amounts. Concurrently with any prepayment of Advances under
this Section 2.06 by any Borrower, such Borrower shall pay to the applicable
Lender or Issuing Bank, all accrued fees, costs and expenses, accrued interest
thereon, if any, and any other amounts due under the Loan Documents in respect
of the principal amount of the Advances or L/C Borrowings so prepaid,
including, without limitation, pursuant to Section 8.04(e).
SECTION 2.07. Interest. (a) Scheduled Interest. Each Borrower shall
pay interest on the unpaid principal amount of each Advance made to it and
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance
is a Base Rate Advance, a rate per annum equal at all times to the
sum of (A) the Base Rate in effect from time to time plus (B) the
Applicable Margin in effect from time to time, payable in arrears
each Quarterly Date during such periods and on the date such Base
Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of
(A) the Eurodollar Rate for such Interest Period for such Advance
plus (B) the Applicable Margin in effect on the first day of such
Interest Period, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on such day that occurs during such Interest
Period every three months from the date of such Interest Period and
on the date such Eurodollar Rate Advance shall be Converted or paid
in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default, each Borrower shall pay interest on (i) the unpaid and
overdue principal amount of each Advance made to it and owing to each Lender,
payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above
and on demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance pursuant to clause (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by law, the amount of
any interest, fee or other amount payable by such Borrower under the Loan
Documents that is not paid by it when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date
such amount shall be paid in full and on demand, at a rate per annum equal at
all times to 2% per annum above the rate per annum required to be paid, in the
case of interest, on the Type of Advance on which such interest has accrued
pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base
Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Period and Interest Rate. Promptly after
receipt of a Notice of Borrowing pursuant to Section 2.02(a), a Notice of
Conversion/Continuation pursuant to Section 2.10(a)(ii) or a notice of
selection of an Interest Period pursuant to the terms of the definition of
"Interest Period", in each case, from any Borrower, the Administrative Agent
shall give notice to such Borrower and each Lender of the applicable Interest
Period and the applicable interest rate determined by the Administrative Agent
for purposes of clause (a)(i) or (a)(ii) above.
SECTION 2.08. Fees. (a) Commitment Fee. AYE shall pay to the
Administrative Agent for the account of the Revolving Lenders a commitment fee
from the date hereof in the case of each Initial Lender holding a Revolving
Commitment and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Revolving Lender in the case of each
other Revolving Lender until the Final Maturity Date, commencing on the Closing
Date, and payable quarterly in arrears on the first Business Day after the end
of each Quarterly Date and on the Final Maturity Date, at the Commitment Fee
Rate on the sum of the average daily Unused Commitment of such Revolving Lender
during such fiscal quarter.
(b) Letter of Credit Fees. The Related Borrower shall pay to the
Administrative Agent for the account of each Revolving Lender in accordance
with its Pro Rata Share a Letter of Credit fee (the "Letter of Credit Fee") for
each Letter of Credit equal to the Applicable Margin times the daily maximum
amount available to be drawn under such Letter of Credit (whether or not such
maximum amount is then in effect under such Letter of Credit). Letter of Credit
Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and
payable on the first Business Day after the end of each Quarterly Date,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If
there is any change in the Applicable Margin during any quarter, the daily
maximum amount of each Letter of Credit shall be computed and multiplied by the
Applicable Margin separately for each period during such quarter that such
Applicable Margin was in effect. Notwithstanding anything to the contrary
contained herein, upon the request of the Required Revolving Lenders, while any
Default exists, all Letter of Credit Fees shall accrue at the Applicable Margin
plus 2%.
(c) Fronting Fee and Documentary and Processing Charges Payable to
Issuing Bank, Etc. The Related Borrower shall pay directly to the relevant
Issuing Bank for its own account a fronting fee with respect to each Letter of
Credit issued at the request of such Related Borrower in the amount equal to
0.15% of the L/C Obligations (whether or not such maximum amount is then in
effect under such Letter of Credit) (the "Fronting Fee"). The Fronting Fee
shall be computed on a quarterly basis in arrears and shall be due and payable
on each Quarterly Date, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. In addition, the Related Borrower shall, with respect to
all Letters of Credit issued at its request, pay directly to the Issuing Bank
for its own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such Issuing Bank
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(d) Agent Fees. AYE shall pay to the Administrative Agent for their
own account such fees as may from time to time be agreed between AYE and the
Administrative Agent.
SECTION 2.09. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to AYE through the Administrative Agent, (i) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify AYE
that such Lender has determined that the circumstances causing such suspension
no longer exist; provided that, before making any such demand, such Lender
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and would
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender.
SECTION 2.10. Interest Elections. (a) Optional. (i) Each Borrower may
on any Business Day elect to Convert all or any portion of the Advances
comprising the same Borrowing made to such Borrower from one Type into Advances
of the other Type, and in the case of Eurodollar Rate Advances, may elect
Interest Periods therefor, all as provided in this Section 2.10. Each Borrower
may elect different options with respect to different portions of the Borrowing
made to such Borrower, in which case each such portion shall be allocated
ratably among the Lender Parties in accordance with their Commitments. At no
time shall the total number of different Interest Periods for all Eurodollar
Rate Advances outstanding exceed ten.
(ii) To make an election pursuant to this Section 2.10(a), a
Borrower shall give the Administrative Agent prior written notice
(or telephonic notice promptly confirmed in writing) by telecopier
or electronic mail (a "Notice of Conversion/Continuation") of the
Conversion or Continuation, as the case may be, (i) by 1:00 p.m.
(New York City time) on the requested date of a Conversion into
Base Rate Advances and (ii) by 11:00 a.m. (New York City time)
three Business Days prior to a Continuation of or Conversion into
Eurodollar Rate Advances; provided, however, that any Conversion of
Eurodollar Rate Advances into Base Rate Advances shall be made only
on the last day of an Interest Period for such Eurodollar Rate
Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b), no Conversion of any Advances shall
result in more separate Borrowings than permitted under Section
2.02(b) and each Conversion of Advances comprising part of the same
Borrowing shall be made ratably among the Lender Parties in
accordance with their Commitments. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify (A)
if different options are being elected with respect to different
portions of the Borrowings, the portions thereof that are to be
allocated to each resulting election (in which case the information
to be specified pursuant to clauses (C) and (D) shall be specified
for each resulting portion); (B) the effective date of the election
made pursuant to such Notice of Conversion/Continuation, which
shall be a Business Day; (C) whether the resulting Borrowings are
to be comprised of Base Rate Advances or Eurodollar Rate Advances;
and (D) if the resulting Borrowings are to be comprised of
Eurodollar Rate Advances, the Interest Period applicable thereto
after giving effect to such election, which shall be a period
contemplated by the definition of "Interest Period". If any such
Notice of Conversion/Continuation requests that the relevant
Borrowing be comprised of Eurodollar Rate Advances but does not
specify an Interest Period, such Borrower shall be deemed to have
selected an Interest Period of one month. Each Notice of
Conversion/Continuation shall be irrevocable and binding on the
Borrower issuing such notice.
(iii) If, on the expiration of any Interest Period in respect
of any Eurodollar Rate Advances made to a Borrower, such Borrower
shall have failed to deliver a Notice of Conversion/Continuation,
then, unless such Advances are repaid as provided herein, such
Borrower shall be deemed to have elected to Convert such Advances
to Base Rate Advances. No Advances may be Converted into, or
Continued as, Eurodollar Rate Advances if a Default has occurred
and is continuing, unless the Administrative Agent and the Required
Lenders shall have otherwise consented in writing.
(iv) Upon receipt of any Notice of Conversion/Continuation,
the Administrative Agent shall promptly notify each Lender Party of
the details thereof and of such Lender Party's ratable share of
each election.
(v) Upon the occurrence and during the continuance of any
Default, (i) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance and (ii) the obligation of the Lender
Parties to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
(vi) If any Advance is converted to a different Type of
Advance, the relevant Borrower shall pay, on the date of such
conversion, the interest accrued to such date on the principal
amount so converted.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced,
by payment or prepayment or otherwise, to less than $2,000,000 such Advances
shall automatically Convert into Base Rate Advances.
(ii) If any Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances to be made to it
in accordance with the provisions contained in the definition of
"Interest Period" in Section 1.01, the Administrative Agent shall
forthwith so notify AYE and the Lenders, whereupon each such
Eurodollar Rate Advance shall automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate
Advance.
(iii) Upon the occurrence and during the continuance of any
Default, (A) each Eurodollar Rate Advance shall automatically, on
the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance and (B) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender Party of agreeing to make or of making,
funding or maintaining Eurodollar Rate Advances to any Borrower or of agreeing
to maintain or participate in the L/C Credit Extensions or of agreeing to make
or of making or funding or maintaining L/C Credit Extensions to any Borrower
(excluding, for purposes of this Section 2.11, any such increased costs
resulting from (A) Taxes or Other Taxes (as to which Section 2.13 shall govern)
and (B) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then such Borrower shall from
time to time, upon demand by such Lender Party (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender Party additional amounts sufficient to compensate such Lender Party
for such increased cost; provided, however, that a Lender Party claiming
additional amounts under this Section 2.11(a) agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost that may thereafter accrue and would not, in the reasonable judgment of
such Lender Party, be otherwise disadvantageous to such Lender Party. A
certificate as to the amount of such increased cost, submitted to AYE by such
Lender Party, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to participate in the making of L/C Credit
Extensions hereunder and other commitments of such type or the maintenance of
or participation in the L/C Credit Extensions (or similar contingent
obligations), then, upon demand by such Lender Party or such corporation (with
a copy of such demand to the Administrative Agent), AYE shall pay to the
Administrative Agent for the account of such Lender Party, from time to time as
specified by such Lender Party, additional amounts sufficient to compensate
such Lender Party in the light of such circumstances, to the extent that such
Lender Party reasonably determines such increase in capital to be allocable to
the existence of such Lender Party's commitment to lend or to participate in
the L/C Credit Extensions or to the issuance or maintenance of or participation
in L/C Credit Extensions. A certificate as to such amounts submitted to AYE by
such Lender Party shall be conclusive and binding for all purposes, absent
manifest error.
(c) If, with respect to any Eurodollar Rate Advances made to any
Borrower the Required Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Advances will not adequately
reflect the cost to such Lenders of making, funding or maintaining their
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify AYE and the Lenders, whereupon (i) each such
Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii)
the obligation of the Lenders to make, or to Convert Advances into, Eurodollar
Rate Advances shall be suspended until the Administrative Agent shall notify
AYE that such Lenders have determined that the circumstances causing such
suspension no longer exist.
SECTION 2.12. Payments and Computations. (a) Each Borrower shall make
each payment hereunder and under the Notes required of it, regardless of any
right of counterclaim or setoff, not later than 11:00 a.m. (New York City time)
on the day when due in Dollars to the Administrative Agent at the
Administrative Agent's Account in immediately available funds, with payments
being received by the Administrative Agent after such time being deemed to have
been received on the next succeeding Business Day. The Administrative Agent
will promptly thereafter cause like funds to be distributed (i) if such payment
by such Borrower is in respect of principal, interest, commitment fees or any
other Obligation then payable hereunder by such Borrower and under its Notes to
more than one Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lender Parties and (ii) if
such payment by such Borrower is in respect of any Obligation then payable
hereunder to one Lender Party, to such Lender Party for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 8.07(e), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) Each Borrower hereby authorizes each Lender Party and each of its
Affiliates, if and to the extent payment owed to such Lender Party by such
Borrower is not made when due hereunder or, in the case of a Lender, under its
Note or Notes, to charge from time to time, to the fullest extent permitted by
law, against any or all of such Borrower's accounts with such Lender Party or
such Affiliate any amount so due.
(c) All computations of interest based on the Base Rate or the Federal
Funds Rate shall be made by the Administrative Agent on the basis of the year
of 365 or 366 days, as the case may be, and all computation of interest based
on the Eurodollar Rate and of fees shall be made by the Administrative Agent on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest, fees or commissions are payable. Each determination by
the Administrative Agent of an interest rate, fee or commission hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided that, if such extension would cause payment of interest
on or principal of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from
AYE prior to the date on which any payment is due by any Borrower to any Lender
Party hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each such Lender
Party on such due date an amount equal to the amount then due such Lender
Party. If and to the extent such Borrower shall not have so made such payment
in full to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds from any Borrower for
application to the Obligations of such Borrower under the Loan Documents under
circumstances for which the Loan Documents do not specify the Advances or the
Facility to which, or the manner in which, such funds are to be applied, the
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds to each Lender Party ratably in accordance with such Lender Party's
proportionate share of the principal amount of all outstanding Advances of such
Borrower and the L/C Obligations relating to such Borrower then outstanding, in
repayment or prepayment of such of the outstanding Advances or other
Obligations owed by such Borrower to such Lender Party, and for application to
such principal installments, as the Administrative Agent shall direct; provided
that no Borrower shall be liable to any Lender Party with respect to any such
distribution by the Administrative Agent.
SECTION 2.13. Taxes. (a) Any and all payments by each Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future
withholding taxes, including levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender Party and the Administrative Agent, as the case may be, (i)
taxes imposed on (or measured by) its overall net income, or any franchise
taxes or similar taxes imposed for the privilege of carrying on a business in
corporate form (other than taxes imposed as a result of entering into this
Agreement and the transactions contemplated hereby), or taxes measured by its
net worth or shareholder's capital, by the United States, or by the
jurisdiction under the laws of which such recipient is organized in which its
Applicable Lending Office is located, (ii) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Applicable Lending Office of any Lender Party is located and (iii)
withholding taxes excluded pursuant to clause (e) of this Section 2.13 (all
such non-excluded taxes, including levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the
Notes being hereinafter referred to as "Taxes"). If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any of the Notes to any Lender Party or the Administrative
Agent, (A) the sum payable by such Borrower shall be increased as may be
necessary so that after such Borrower and the Administrative Agent have made
all required deductions (including deductions applicable to additional sums
payable under this Section 2.13) such Lender Party or the Administrative Agent,
as the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (B) such Borrower shall make all such
deductions and (C) such Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with Applicable
Law.
(b) In addition, each Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Agreement or the Notes, but excluding all other U.S. federal taxes other
than withholding taxes (hereinafter referred to as "Other Taxes"). If revised
disclosure regulations under Section 6011 of the Code are issued which modify
the definition of a "reportable transaction" so that it does not include a
transaction where the issuer of a debt instrument provides an indemnity for
taxes, in addition to withholding taxes imposed on interest paid on the debt
instrument, for purposes of subsections (a) and (b) of this Section 2.13, the
terms "Taxes" and "Other Taxes" shall include all such taxes (other than any
taxes described in clauses (i), (ii) and (iii) of Section 2.13(a) above),
whether or not collected by way of withholding.
(c) Each Borrower shall indemnify each Lender Party and the
Administrative Agent for and hold them harmless against the full amount of
Taxes and Other Taxes, and for the full amount of taxes of any kind imposed by
any jurisdiction on amounts payable under this Section 2.13, imposed on or paid
by such Lender Party or the Administrative Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and reasonable
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender Party or the Administrative
Agent (as the case may be) makes written demand therefor.
(d) As soon as practicable (but in no event later than 90 days) after
the date of any payment by any relevant Borrower of Taxes, such Borrower shall
furnish to the Administrative Agent, at its address referred to in Section
8.02, the original or a certified copy of a receipt evidencing such payment.
Excluding payments made by the Administrative Agent, in the case of any payment
hereunder or under the Notes by or on behalf of any relevant Borrower through
an account or branch outside the United States or by or on behalf of any
Borrower by a payor that is not a United States person, if such Borrower
determines that no Taxes are payable in respect thereof, such Borrower shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, at
such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of subsections (d)
and (e) of this Section 2.13, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender Party and on the
date of the Assignment and Acceptance pursuant to which it becomes a Lender
Party in the case of each other Lender Party, and from time to time thereafter
as requested in writing by AYE (but only so long thereafter as such Lender
Party remains lawfully able to do so), provide each of the Administrative Agent
and AYE with two duly completed copies of (i) Internal Revenue Service Form
W-8ECI, or any successor form thereto, certifying that the payments received
from any Borrower hereunder are effectively connected with such Lender Party's
conduct of a trade or business in the United States; or (ii) Internal Revenue
Service Form W-8BEN, or any successor form thereto, certifying that such Lender
Party is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest; or (iii) Internal Revenue Service Form W-8BEN or any successor form
thereto, together with a certificate stating that (1) the Lender Party is not a
bank for purposes of Code Section 881(c)(3)(A), or the obligation of each
Borrower hereunder is not, with respect to such Lender Party, pursuant to a
loan agreement entered into in the ordinary course of its trade or business,
within the meaning of that Section; (2) the Lender Party is not a 10%
shareholder of any Borrower within the meaning of Code Section 871(h)(3) or
881(c)(3)(B); and (3) the Lender Party is not a controlled foreign corporation
that is related to any Borrower within the meaning of Code Section
881(c)(3)(C); or (iv) such other governmental forms as may be applicable to the
Lender Party, including Forms W-8IMY or W-8EXP, which will reduce the rate of
withholding tax on payments of interest. Each Lender Party organized under the
laws of the United States that is not a corporation shall, on or prior to the
date of its execution and delivery of this Agreement in the case of each
Initial Lender Party and on the date of the Assignment and Acceptance pursuant
to which it becomes a Lender Party in the case of each other Lender Party, and
from time to time as requested in writing by AYE, provide each of the
Administrative Agent and AYE with two duly completed copies of Internal Revenue
Service Form W-9. Each Lender Party shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Lender
Party (but only to the extent such Lender Party is lawfully able to do so).
Each such Lender Party shall promptly notify AYE at any time that it determines
that it is no longer in a position to provide any previously delivered
certificate to AYE (or any other form of certification adopted by the Internal
Revenue Service for such purpose). If the forms provided by a Lender Party at
the time such Lender Party first becomes a party to this Agreement indicate a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until such
Lender Party provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such forms; provided, however, that
if, at the effective date of the Assignment and Acceptance pursuant to which a
Lender Party becomes a party to this Agreement, the Lender Party assignor was
entitled to payments under subsection (a) of this Section 2.13 in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender Party assignee on such date. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required by the applicable
Internal Revenue Service form (or related certificate described above), that
the applicable Lender Party reasonably considers to be confidential, such
Lender Party shall give notice thereof to AYE and shall not be obligated to
include in such form or document such confidential information.
(f) Notwithstanding the foregoing, for any period with respect to
which a Lender Party has failed to provide AYE with the appropriate form
described in subsection (e) above (other than if such failure is due to a
change in law occurring after the date on which a form originally was required
to be provided or if such form otherwise is not required under subsection (e)
above), such Lender Party shall not be entitled to indemnification under
subsection (a) or (c) of this Section 2.13 with respect to Taxes imposed by the
United States by reason of such failure; provided that should a Lender Party
become subject to Taxes because of its failure to deliver a form required
hereunder, each Borrower shall take such steps as such Lender Party shall
reasonably request to assist such Lender Party to recover such Taxes.
(g) Any Lender Party claiming any additional amounts payable pursuant
to this Section 2.13 agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office or Domestic Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to such
Lender Party.
(h) If any Lender Party determines, in its sole discretion, that it
has actually and finally realized, by reason of a refund, deduction or credit
of any Taxes paid or reimbursed by any Borrower pursuant to subsection (a) or
(c) above in respect of payments under the Loan Documents, a current monetary
benefit that it would otherwise not have obtained, and that would result in the
total payments under this Section 2.13 exceeding the amount needed to make such
Lender Party whole, such Lender Party shall pay to such Borrower, with
reasonable promptness following the date on which it actually realizes such
benefit, an amount equal to the lesser of the amount of such benefit or the
amount of such excess, in each case net of all out-of-pocket expenses in
securing such refund, deduction or credit.
SECTION 2.14. Evidence of Debt. (a) Each Lender Party shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender Party resulting from the Advances
or L/C Credit Extensions and/or L/C Borrowings owing to such Lender Party from
time to time, including the amounts of principal and interest payable and paid
to such Lender Party from time to time hereunder. Each Borrower agrees that
upon notice by any Lender Party to such Borrower (with a copy of such notice to
the Administrative Agent) to the effect that a promissory note or other
evidence of indebtedness is required or appropriate in order for such Lender
Party to evidence (whether for purposes of enforcement or otherwise) the
Advances or L/C Borrowings owing to, or to be made by, such Lender Party, such
Borrower shall promptly execute and deliver to such Lender Party, with a copy
to the Administrative Agent, a Note, in substantially the form of Exhibit A-1
or Exhibit A-2 hereto, as applicable, payable to the order of such Lender Party
in a principal amount equal to the Advances and/or L/C Borrowings owing to, or
to be made by, such Lender Party. All references to Notes in the Loan Documents
shall mean Notes, if any, issued hereunder.
(b) The Register maintained by the Administrative Agent pursuant to
Section 8.07(e) shall record (i) the date and amount of each Advance or L/C
Advance or L/C Borrowing made hereunder (or deemed to be made hereunder),
whether such Advance or L/C Borrowing bears interest at the Base Rate or the
Eurodollar Rate, the name of the Related Borrower for such Advance or L/C
Borrowing, and, if appropriate, the Interest Period applicable thereto; (ii)
the terms of each Assignment and Acceptance delivered to and accepted by it;
(iii) the amount of any principal or interest due and payable or to become due
and payable from any Borrower to each Lender Party; and (iv) the amount of any
sums received by the Administrative Agent from any Borrower hereunder and each
Lender Party's share thereof.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender Party in its
account or accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from any Borrower to, in the case of the Register, each Lender
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; provided, however, that the failure of
the Administrative Agent or such Lender Party to make an entry, or any finding
that an entry is incorrect, in the Register or such account or accounts shall
not limit or otherwise affect the obligations of the Borrowers under this
Agreement.
SECTION 2.15. Use of Proceeds. The proceeds of the Advances and
issuances of any Letter of Credit shall be available (and each Borrower agrees
that it shall use proceeds of Advances made to it and each Letter of Credit
issued at its request) solely (a) on the Closing Date (i) in the case of the
Initial Borrowing, to repay in full the Existing AYE Debt owing by AYE and (ii)
to continue the Existing L/Cs as AYE Letters of Credit under this Agreement,
(b) with respect to the proceeds of the Term Advances, to repay in full the
principal amount of the 7.75% Notes and (c) each subsequent Revolving Borrowing
and Letter of Credit, for working capital for AYE and, subject to the
limitations herein, its Subsidiaries.
ARTICLE III
CONDITIONS TO BORROWING
SECTION 3.01. Conditions Precedent to the Initial Borrowing. No Lender
shall be required or obligated to make any Advance, the Initial Issuing Bank
shall not be required or obligated to continue the Existing L/Cs hereunder, and
each Issuing Bank shall not be required or obligated to make L/C Credit
Extensions, in each case, until the first Business Day on which the following
conditions precedent have been satisfied (or waived, as evidenced by an
"effective date" notice to AYE from each Issuing Bank and the Lenders), as
determined by each Lender and each such Issuing Bank (provided that if the
Closing Date does not occur on or before July 29, 2005, the Commitments and L/C
Credit Extensions of the Lender Parties shall terminate on such date):
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) (unless
otherwise specified), each properly executed by a Responsible Officer of each
Borrower (if executed by such Borrower), each dated the date of the Initial
Borrowing (the "Closing Date") (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Lender Parties (unless otherwise specified) and
in sufficient copies for each Lender Party (unless otherwise specified): (i)
executed counterparts of this Agreement, sufficient in number for distribution
to the Administrative Agent, each Lender Party and each Borrower;
(ii) to the extent requested, duly executed Notes of each
Borrower for the account of each Lender that has so requested
complying with the provision of Section 2.14 hereof;
(iii) certified copies of resolutions of the board of
directors of each Borrower approving the Transactions to which such
Borrower is or is to be a party and the execution, delivery and
performance of each Loan Document to which such Borrower is or is
to be a party, and of all documents evidencing other necessary
corporate action and governmental and other third party approvals
and consents, if any, with respect to the Transactions and each
Loan Document to which such Borrower is or is to be a party;
(iv) copies of a certificate of the Secretary of State of
Maryland, certifying (A) as to a true and correct copy of the
certificate of incorporation or formation of AYE and each amendment
thereto on file in such Secretary's office and (B) that (1) such
amendments are the only amendments to such certificate on file in
such Secretary's office, (2) AYE has paid all franchise taxes to
the date of such certificate and (3) AYE is duly formed and in good
standing or presently subsisting under the laws of the State of
Maryland;
(v) copies of a certificate of the Secretary of State of
Delaware, certifying (A) as to a true and correct copy of the
certificate of formation of AESC and each amendment thereto on file
in such Secretary's office and (B) that (1) such amendments are the
only amendments to such certificate on file in such Secretary's
office, (2) AESC has paid all franchise taxes to the date of such
certificate and (3) AESC is duly formed and in good standing or
presently subsisting under the laws of the State of Delaware;
(vi) copies of a certificate of the Secretary of State of
each jurisdiction (other than the jurisdiction of its formation) in
which a Borrower conducts a material portion of its business (other
than with respect to AYE, the Commonwealth of Pennsylvania) stating
that such Borrower is duly qualified to do business and in good
standing as a foreign corporation in such State and has filed all
annual reports required to be filed to the date of such
certificate, as applicable, or, in the case of AYE in respect of
the Commonwealth of Pennsylvania, a copy of an application for
certificate of authority duly filed with the Pennsylvania
Department of State Corporation Bureau;
(vii) certificates signed on behalf of each Borrower by its
secretary or any assistant secretary (the statements made in which
certificate shall be true on and as of the Closing Date),
certifying (A) as to a true and correct copy of the Constituent
Documents of such Borrower as of the Closing Date and each
amendment to its Constituent Documents, if any, from the date on
which the resolutions referred to in Section 3.01(a)(iii) were
adopted to the Closing Date, (B) the due incorporation or formation
and good standing or valid existence of such Borrower under the
laws of the its jurisdiction of incorporation or formation, and the
absence of any proceeding for the dissolution or liquidation of
such Borrower; and (C) the names and true signatures of the
officers of such Borrower authorized to sign each Loan Document to
which it is or is to be a party and the other documents to be
delivered hereunder and thereunder;
(viii) forecasts prepared by management of AYE of balance
sheets, income statements and cash flow statements of AYE,
reasonably acceptable to the Administrative Agent, on a
consolidated basis with certain of its Subsidiaries, for each
fiscal quarter commencing with the fiscal quarter ending December
31, 2004 through the fiscal quarter ending December 31, 2009;
(ix) legal opinions of appropriate counsel for the Borrowers,
as to such matters as any Lender may reasonably request;
(x) a legal opinion of Shearman & Sterling LLP, counsel to
the Administrative Agent, as to such matters as the Administrative
Agent may reasonably request;
(xi) an Officer's Certificate of AYE attaching copies of all
Material Governmental Approvals and certifying that (A) the copies
of each of the Material Governmental Approvals delivered pursuant
to this Section 3.01(a)(xi) are true, correct and complete copies
of such Material Governmental Approval; (B) each Governmental
Approval is in full force and effect, and is not subject to any
pending appeal (except for potential judicial review of the SEC
Order dated April 29, 2005 (Holding Co. Act Release No. 27963) as
provided in Section 24 of PUHCA), intervention or similar
proceeding or any unsatisfied condition that may result in
modification or revocation thereof; (C) any and all conditions set
forth in all Governmental Approvals that are then required to be
satisfied have been satisfied; and (D) to the best knowledge of the
Responsible Officer providing such Officer's Certificate, no event
has occurred that could reasonably be expected to result in the
modification, cancellation or revocation of any Governmental
Approval;
(xii) a certificate from the Chief Financial Officer of AYE
attesting to the Solvency of (A) AYE and (B) AYE and its
Subsidiaries, when considered as a whole, immediately before and
immediately after giving effect to the Transactions consummated on
the Closing Date, in each case giving pro forma effect to such
Transactions;
(xiii) certificates signed by a Responsible Officer of each
Borrower to the effect that (A) the representations and warranties
contained in Article IV by such Borrower are true and correct on
and as of the Closing Date as though made on and as of such date
both immediately before and immediately after giving effect to the
Initial Borrowing; and (B) no Default has occurred and is
continuing or would result from the Initial Borrowing or the
consummation of that portion of the Transactions being effected on
the Closing Date (the "Closing Date Transactions"); and
(xiv) an Officer's Certificate of AYE attaching a copy of the
Partnership Agreement of Hunlock Creek Energy Ventures as in effect
on the Closing Date (the "Hunlock Agreement") and certifying that
the copy of the Hunlock Agreement delivered pursuant to this
Section 3.01(a)(xiv) is a true, correct and complete copy of the
Hunlock Agreement.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Borrower or any of its Subsidiaries or any such
Person's properties pending or threatened, before any court, before or by any
Governmental Authority or before any arbitrator which (i) could reasonably be
expected to have a Material Adverse Effect other than the matters described on
Schedule 3.01(b) (the "Disclosed Litigation"); (ii) purports to affect the
Transactions or any portion thereof, the ability of any Borrower or any of its
Subsidiaries to perform their respective obligations under the Loan Documents;
or (iii) purports to affect the legality, validity or enforceability of any
Loan Document, or the consummation of the Transactions.
(c) All Governmental Approvals shall have been obtained (without the
imposition of any conditions that are adverse to the Lenders), are in full
force and effect and are not subject to appeal (except for potential judicial
review of the SEC Order dated April 29, 2005 (Holding Co. Act Release No.
27963) as provided in Section 24 of PUHCA), and do not contain any conditions
which are then required to be satisfied and have not been satisfied; all
then-applicable waiting periods in connection with the Transactions shall have
expired without any action being taken by any competent authority, and no law
or regulation shall be applicable, in each case that restrains, prevents or
imposes materially adverse conditions upon the Transactions.
(d) The representations and warranties of each Borrower contained in
Article IV shall be true and correct, on and as of the Closing Date
(immediately before and immediately after the consummation of the Closing Date
Transactions, including the making of the Initial Borrowing), except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier
date.
(e) No Default shall exist, or would result from the consummation of
the Closing Date Transactions, including the making of the Initial Borrowing or
from the application of the proceeds from the Initial Borrowing.
(f) AYE shall have paid all accrued fees of the Administrative Agent,
the Lender Parties and the Arranger Parties and all accrued expenses of the
Administrative Agent to the extent invoiced at least three Business Days prior
to the Closing Date.
SECTION 3.02. Conditions Precedent to Each Borrowing and L/C Credit
Extension. The obligation of each Lender to make an Advance (other than a L/C
Advance made by an Issuing Bank or a Revolving Lender pursuant to Section
2.03(a)) on the occasion of each Borrowing (including the Initial Borrowing) to
any Borrower, and the obligation of the Initial Issuing Bank to issue, amend or
extend any Letter of Credit (including the continuance of the Existing L/Cs as
AYE Letters of Credit), shall be subject to the further conditions precedent
that on the date of such Borrowing or L/C Credit Extension, the following
statements shall be true (and each of (a) the giving of the applicable Notice
of Borrowing and (b) the acceptance by such Borrower of the proceeds of such
Borrowing or Letter of Credit shall constitute a representation and warranty by
such Borrower that both on the date of such notice and on the date of such
Borrowing or issuance such statements are true):
(i) the representations and warranties of each Borrower
contained in Article IV are true and correct on and as of such
date, before and after giving effect to such Borrowing or L/C
Credit Extension and to the application of the proceeds therefrom,
as though made on and as of such date (other than as to any such
representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing or L/C Credit
Extension, in which case they shall be true and correct as of such
specific date); and
(ii) no Default has occurred and is continuing, or would
result from the consummation of the Transactions, such Borrowing or
L/C Credit Extension or from the application of the proceeds
therefrom.
SECTION 3.03. Determinations Under Sections 3.01 and 3.02. For
purposes of determining compliance with the conditions specified in Sections
3.01 and 3.02, each Lender Party shall be deemed to have consented to, approved
or accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lender Parties unless an officer of the Administrative Agent responsible
for the transactions contemplated by the Loan Documents shall have received
notice from such Lender Party prior to the date of the Borrowing or issuance of
any Letter of Credit (as applicable) specifying its objection thereto and, in
the case of a Borrowing, such Lender Party shall not have made available to the
Administrative Agent such Lender Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers. AYE
and, with respect to Sections 4.01(a) through (d) only, AESC represents and
warrants to each Lender Party and the Administrative Agent as of the date
hereof, as of the Closing Date and as of the date of any Revolving Borrowing,
Term Borrowing or issuance of an L/C Credit Extension, as follows:
(a) Each of it and its Subsidiaries (i) is a limited liability company
or corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation and (ii) has all requisite corporate
or limited liability company (as applicable) power and authority (including all
governmental licenses, permits and other approvals) to carry on its business as
now conducted, except, in the case of clauses (i) and (ii), where the failure
to so qualify or be so licensed, or to have such power and authority, could not
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by it of each Loan
Document to which it is or is to be a party, and the consummation of the
Transactions, are within its corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not (i) contravene its
Constituent Documents, (ii) violate any law, rule, regulation (including
Regulation X of the Board of Governors of the Federal Reserve System), permit,
order, writ, judgment, injunction, decree, determination or award, (iii)
conflict with or result in the breach of, or constitute a default or require
any payment to be made under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting it
or any of its properties or (iv) result in or require the creation or
imposition of any Lien upon or with respect to any of its Assets, except where,
in the case of clauses (i) through (iv), the violation of any such Constituent
Documents, law, rule, regulation, permit, order, writ, judgment, injunction,
decree, determination or award, breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, or creation or
imposition of such Lien, could not be reasonably expected to have a Material
Adverse Effect.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or any other third party is required
for its due execution, delivery, recordation, filing or performance of any Loan
Document to which it is or is to be a party, or for the consummation of the
Transactions, except for the authorizations, approvals, actions, notices and
filings listed on Schedule 4.01(c) (the "Governmental Approvals"), all of which
have been duly obtained, taken, given or made, are in full force and effect,
are held in its name, are not subject to appeal (except for potential judicial
review of the SEC Order dated April 29, 2005 (Holding Co. Act Release No.
27963) as provided in Section 24 of PUHCA), intervention, rehearing,
reconsideration or similar proceeding and are free from any conditions or
requirements that have not been satisfied, and are required to be satisfied, on
or prior to the dates as of which this representation and warranty is made or
reaffirmed.
(d) This Agreement has been, and each other Loan Document to which it
is or is to be a party when delivered hereunder will have been, duly executed
and delivered by it. This Agreement is, and each other Loan Document to which
it is a party when delivered hereunder will be, its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except to the
extent limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
(e) (i) There is no action, suit, investigation, litigation or
proceeding which has commenced against it or any of its Subsidiaries or any of
their respective properties, including any Environmental Action, or to its
knowledge, pending (but not yet commenced) against or threatened against, it or
any of its Subsidiaries or any of their respective properties before any
Governmental Authority that (A) except for Disclosed Matters, if adversely
determined, could reasonably be expected to have a Material Adverse Effect
(other than the Disclosed Litigation) or (B) affects or could reasonably be
expected to affect the legality, validity or enforceability of any Loan
Document to which it is a party or the consummation of the Transactions, and
there has been no change in respect of the Disclosed Litigation described on
Schedule 3.01(b) which could reasonably be expected to have a Material Adverse
Effect.
(ii) Except for Disclosed Matters as of the Closing Date,
since December 31, 2004, no Material Adverse Change has occurred.
(f) Each of the financial statements of AYE delivered to the
Administrative Agent pursuant to Sections 5.03(b) and 5.03(c) is true, complete
and correct in all material respects as of the date of such statement, has been
prepared in accordance with GAAP (subject, in the case of interim financial
statements, to normal year-end audit adjustments and the absence of footnotes),
and fairly presents in all material respects the financial condition and
results of operations of the AYE and its Subsidiaries as of the date thereof.
Except (i) for Disclosed Matters or (ii) as set forth in Schedule 4.01(f),
since the date of the most recent financial statements delivered by AYE under
this Agreement, no event, condition, occurrence or circumstance has existed or
has occurred and is continuing which could reasonably be expected to have a
Material Adverse Effect.
(g) Neither the Information Memorandum, taken as a whole, nor any
other information, exhibit or report furnished by AYE and its Subsidiaries to
the Administrative Agent, any Arranger Party or any other Lender Party in
connection with the negotiation and syndication of the Loan Documents, the
consummation of the Transactions or pursuant to the terms of the Loan
Documents, when taken together with the information contained in AYE's most
recent annual report on Form 10-K (the "Form 10-K") and in AYE's reports filed
with the SEC under the Securities Exchange Act of 1934 subsequent to the filing
of the Form 10-K, taken as a whole, contains (as of the date on which such
information is or was provided to the Administrative Agent, any Arranger Party
or any Lender Party, as modified or otherwise supplemented by information so
provided) any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made therein, in light of the
circumstances under which they were, are or will be made, not misleading;
provided that to the extent any such information, exhibit or report was based
upon or constitutes a forecast or projection, AYE represents only that such
information was prepared in good faith on the basis of the assumptions stated
therein, which assumptions were believed by AYE to be reasonable at the time
(it being understood that such forecasts or projections are subject to
significant uncertainties and contingencies, many of which are beyond AYE's
control, and that AYE makes no representation as to the attainability of such
forecasts or projections or as to whether such forecasts or projections will be
achieved or materialize).
(h) Neither it nor any of its Subsidiaries is an "investment company",
as such term is defined in the 1940 Act.
(i) AYE is, individually and together with its Subsidiaries, Solvent.
(j) No ERISA Event has occurred with respect to any Plan that has
resulted in a material liability which could be reasonably likely to have a
Material Adverse Effect. Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, filed with the Internal Revenue
Service is complete and accurate, and since the date of such Schedule B there
has been no material adverse change which could reasonably be expected to have
a Material Adverse Effect on such funding status. Except as could not
reasonably be expected to have a Material Adverse Effect, neither it nor any
ERISA Affiliate (i) has incurred any Withdrawal Liability to any Multiemployer
Plan, or (ii) has been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA.
(k) (i) Except as disclosed on Schedule 4.01(k) or in AYE's filings
with the SEC or as could not reasonably be expected to have a Material Adverse
Effect, (A) its operations and properties, and the operations and properties of
each of its Subsidiaries, comply in all respects with all applicable
Environmental Laws and Environmental Permits, (B) all past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
material ongoing obligations or costs and (C) no circumstances exist that could
reasonably be expected to (I) form the basis of an Environmental Action against
it or any of its Subsidiaries or any of their properties or (II) cause any such
property to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(ii) Except as disclosed on Schedule 4.01(k) or in AYE's
filings with the SEC or as could not reasonably be expected to have
a Material Adverse Effect, (A) none of the properties currently or
formerly owned or operated by it or any of its Subsidiaries is
listed or proposed for listing on the NPL or on the CERCLIS or any
analogous foreign, state or local list, (B) to its knowledge, there
are no and never have been any unlawful underground or aboveground
storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently owned or
operated by it or any of its Subsidiaries or on any property
formerly owned or operated by it or any of its Subsidiaries, and
(C) Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or operated
by it or any of its Subsidiaries.
(iii) Except as disclosed on Schedule 4.01(k) or in AYE's
filings with the SEC or as could not reasonably be expected to have
a Material Adverse Effect, (A) neither it nor any of its
Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible
parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation,
either voluntarily or pursuant to the order of any governmental or
regulatory authority or the requirements of any Environmental Law
and (B) all Hazardous Materials generated, used, treated, handled
or stored at, or transported to or from, any property currently or
formerly owned or operated by it or any of its Subsidiaries have
been used, sold or disposed of in a manner not reasonably expected
to result in material liability to it or any of its Subsidiaries.
(l) (i) Neither it nor any of its Subsidiaries is party to
any tax sharing agreement other than the Tax Allocation Agreement.
Insofar as then required thereunder, all amounts due and payable by
it or any of its Subsidiaries under the Tax Allocation Agreement
have been paid, and all amounts due and payable to it or any of its
Subsidiaries under any tax sharing agreement have been received
(including amounts by way of compensation for the use of tax
benefits), except as could not reasonably be expected to have a
Material Adverse Effect.
(ii) It has, and each of its Subsidiaries has, filed, has
caused to be filed or been included in all tax returns (federal,
state, local and foreign) required to be filed and has paid all
taxes shown thereon to be due, together with applicable interest
and penalties, except (A) to the extent that the aggregate amount
of any unpaid taxes due, together with applicable interest and
penalties, does not exceed $25,000,000 or (B) to the extent such
unpaid taxes are subject to Contest.
(m) No Default has occurred and is continuing.
(n) Set forth on Schedule 4.01(n) is a complete and accurate list as
of the Closing Date (except, solely with respect to the amount thereof, as
otherwise indicated therein) of each Qualifying Obligation constituting Debt
for Borrowed Money owed by AYE or any of its Subsidiaries (other than any
Regulated Subsidiary or any AESC Company), showing the amount, obligor or
issuer, creditor and maturity thereof.
(o) Set forth on Schedule 4.01(o) is a complete and accurate list as
of the Closing Date of all Liens (other than Permitted Liens and Liens
specified in clause (iii) below) on the property or assets of AYE, showing the
lienholder thereof and the property of or assets of the AYE subject thereto. As
of the Closing Date, the property of AYE is subject to no Liens other than (i)
Liens set forth on Schedule 4.01(o), (ii) Permitted Liens and (iii) Liens
existing as of the Closing Date but not set forth on Schedule 4.01(o) which
secure, individually, an amount of Obligations not to exceed $5,000,000 or
which secure, in the aggregate, an amount of Obligations not to exceed
$25,000,000.
(p) Set forth on Schedule 4.01(p) is a complete and accurate list as
of the Closing Date of all Investments held by AYE other than (i) Cash
Equivalents, (ii) extensions of credit in the ordinary course and (iii)
Investments which have, in the aggregate, a fair market value of less than
$5,000,000.
(q) AYE is a "registered holding company", as such term is defined in
PUHCA. Except as could not reasonably be expected to have a Material Adverse
Effect, AYE and each of its Subsidiaries has all authorizations and approvals
from the FERC or other Governmental Authority required to provide the services
and goods (including electric capacity, energy and ancillary services) it
sells, including all necessary rate schedules on file and effective with the
FERC for AYE and its Subsidiaries to sell electricity at wholesale and
authorizations necessary for AYE and its Subsidiaries to engage in existing
affiliate transactions.
(r) As of the Closing Date, AYE does not directly or indirectly own or
operate any "qualifying facilities," as defined in the Public Utility
Regulatory Policies Act of 1978 and the regulations of the Federal Energy
Regulatory Commission issued thereunder.
(s) As of the Closing Date, AYE does not directly or indirectly hold
any license issued by the Nuclear Regulatory Commission, or have any direct or
indirect interest in, or directly or indirectly possess, use, or engage in any
activities or transactions with respect to, any "byproduct material," "source
material," or "special nuclear material," as those terms are defined in the
Atomic Energy Act of 1954 and the regulations of the Nuclear Regulatory
Commission issued thereunder.
(t) AYE is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing
or carrying Margin Stock, and no proceeds of any Advance made to it or drawings
under any Letter of Credit will be used to purchase or carry any Margin Stock
or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock for any purpose that violates, or is inconsistent with, the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System, as in effect from time to time. If requested by any Lender
Party or the Administrative Agent, AYE will furnish to the Administrative Agent
and such Lender Party a statement to the foregoing effect in conformity with
the requirements of FR Form G-3 or FR Form U 1, as applicable, referred to in
Regulation U of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants of the Borrowers. AYE and, with
respect to Section 5.01(m) only, AESC covenants and agrees that on and after
the date hereof and until the Notes, together with all accrued interest
thereon, fees and all other Senior Debt Obligations are paid in full and all
Commitments and each Letter of Credit shall have terminated, it will:
(a) Compliance with Laws. Comply, and cause each of its Subsidiaries
to comply, in all material respects with all Applicable Laws, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(b) Compliance with Environmental Laws. Except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect, (i)
comply, and cause each of its Subsidiaries and all lessees and other Persons
operating or occupying its properties to comply, in all material respects, with
all applicable Environmental Laws and Environmental Permits, (ii) obtain and
renew, and cause each of its Subsidiaries to obtain and renew, all
Environmental Permits necessary for its operations and properties and (iii)
conduct, and cause each of its Subsidiaries to conduct, any required
investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Hazardous
Materials from any of its properties required under any Environmental Law.
(c) Governmental Approvals. Obtain and maintain, and cause each of its
Subsidiaries to obtain and maintain, all Governmental Approvals (including the
Material Governmental Approvals) that are required of it for the validity or
enforceability of the Loan Documents, the ongoing operations of their
respective businesses and to issue, declare or pay dividends or distributions,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(d) Payment of Taxes, Etc. Except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, pay and discharge,
and cause each of its Regulated Subsidiaries to pay and discharge, before the
same shall become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon its property and (ii) all lawful
claims that, if unpaid, will by law become a Lien upon its property not
permitted by Section 5.02; provided that neither it nor any of its Regulated
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is the subject of a Contest.
(e) Insurance. Maintain, and cause each of its Regulated Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which it or such Subsidiary operates.
(f) Preservation of Corporate Existence, Etc. Except as could not
reasonably be expected to have a Material Adverse Effect, preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, rights (charter or statutory), permits, licenses,
approvals, franchises, and privileges in the jurisdiction of its formation and
in each other jurisdiction in which the conduct of its business requires it to
so qualify; provided, however, that it and its Subsidiaries may consummate any
merger or consolidation permitted under Section 5.02(d).
(g) Visitation Rights. At any reasonable time and from time to time as
may be reasonably desired by the Administrative Agent or any of the Lender
Parties, at AYE's reasonable cost and expense, permit the Administrative Agent
or any of the Lender Parties, or any agents or representatives thereof, to
examine and make copies of and abstracts from its records and books of account
of, and visit the properties of, it and its Subsidiaries, and to discuss the
affairs, finances and accounts of it and any of its Subsidiaries with any of
their officers or directors and with their independent certified public
accountants.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account in accordance with GAAP in effect from
time to time.
(i) Maintenance of Properties, Etc. Except as could not reasonably be
expected to have a Material Adverse Effect, operate, maintain and preserve, and
cause each of its Subsidiaries to operate, maintain and preserve, all of its
properties (other than any such properties as are immaterial or non-essential
to the conduct of business by it and its Subsidiaries, taken as a whole) that
are used or useful in the conduct of its business in good working order and
condition (ordinary wear and tear excepted) in accordance with prudent
practices then being utilized in the electric utility industry and in
accordance with Applicable Laws (including Environmental Laws).
(j) Transactions with Affiliates. Other than as may be required by
PUHCA, conduct, and cause each of its Subsidiaries to conduct, (i) all
transactions with any of AYE's Affiliates on terms that are fair and reasonable
and no less favorable to AYE or such Affiliate than AYE would obtain in a
comparable arm's-length transaction with a Person not an Affiliate of AYE and
(ii) all transactions with a Person other than an Affiliate of AYE on terms
that are without regard to any benefit or detriment to any Affiliate of AYE
(other than any of AYE's Subsidiaries); provided that this Section 5.01(j)
shall not be deemed to permit any transaction otherwise prohibited by the terms
of this Agreement. Without prejudice to the foregoing, the following
transactions shall be deemed to be in compliance with the first sentence of
this clause (j): (A) any transaction executed in accordance with the
requirements of PUHCA, (B) any agreements made by AYE or any of its
Subsidiaries with a utility to provide provider of last resort requirements, as
such agreements are amended from time to time, so long as such provider of last
resort agreements are with an Affiliate of AYE and approved by all applicable
Governmental Authorities, (C) any transaction authorized under a tariff or rate
schedule which has been approved by the FERC, (D) any agreement for the
transfer, sale or servicing of any Assets in connection with a Stranded Cost
Securitization or an Environmental Control Property Securitization, any loan or
transfer of the proceeds of any such Permitted Securitization, or any agreement
for the transfer, sale or servicing of any Assets in connection with any other
Permitted Securitization on reasonable and customary terms between a Regulated
Subsidiary and its Securitization SPV as contemplated under Sections
5.02(e)(viii)(A) and (B), (E) any Asset sales, leases, transfers, swaps,
exchanges or other dispositions (including in respect of full or partial
ownership percentages of generating facilities, generating equipment and
related contract rights in power purchase agreements, leases, licenses, permits
and other Assets) as contemplated under Section 5.02(e)(viii)(C), and (F) the
payment by AYE or any Subsidiary of AYE of salaries, benefits and other
compensation to directors, officers and employees of AYE or such Subsidiary of
AYE. For the avoidance of doubt, (I) any contracts or arrangements listed on
Schedule 5.01(j) to which AYE or any Subsidiary of AYE is a party and (II) the
Loan Documents shall each be deemed to comply with this Section 5.01(j) except
to the extent that the FERC or the SEC determines that any such contract is not
in conformance with Applicable Law and such non-conforming contract is not on
terms described in clauses (i) or (ii) of this Section 5.01(j).
(k) Preparation of Environmental Reports. If the Administrative Agent
shall reasonably believe that a material environmental event has occurred on
any parcel of real property owned or leased by it or any of its Subsidiaries
(other than the AESC Companies) after the date hereof, provide to the
Administrative Agent within 90 days after receipt of a written request from the
Administrative Agent in which the Administrative Agent describes in reasonable
detail the basis for such belief, at AYE's expense, a Phase I environmental
site assessment report for the properties described in such request prepared by
an environmental consulting firm reasonably acceptable to the Administrative
Agent, indicating the presence or absence of Hazardous Materials and the
estimated cost of any legally required compliance, removal or remedial action
in connection with any Hazardous Materials on such properties. Without limiting
the generality of the foregoing, if the Administrative Agent determines at any
time that a material risk exists that any such report will not be provided
within the time referred to above, the Administrative Agent may, at the time
following the forty-fifth day after the request of the Administrative Agent,
retain an environmental consulting firm to prepare such report at the expense
of AYE, and AYE hereby grants and agrees to cause any Subsidiary that owns any
property described in such request to grant at the time of such request to the
Administrative Agent, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to enter
onto their respective properties to undertake such an assessment.
(l) Maintenance of Ownership of Subsidiaries. Except as permitted
under Section 5.01(f) or Section 5.02(d) or 5.02(e), maintain ownership and
control of all Equity Interests that it holds in all of its direct Subsidiaries
(other than the Subsidiaries of any Regulated Subsidiary), free and clear of
all Liens except as permitted by the Loan Documents.
(m) Use of Proceeds. (i) Use the proceeds (A) in the case of AYE, of
(1) the Initial Borrowing to repay in full the Existing AYE Debt and continue
the Existing L/Cs as AYE Letters of Credit under this Agreement and (2) the
Term Advance to repay in full the principal amount of the 7.75% Notes, (B) in
the case of each Borrower, of each subsequent Revolving Borrowing, for working
capital for it and its Subsidiaries, and
(ii) In the case of each Borrower, use Letters of Credit
issued at any time after the Closing Date to support the working
capital needs of it and its Subsidiaries.
SECTION 5.02. Negative Covenants of AYE. AYE covenants and agrees that
on and after the date hereof and until the Notes, together with all accrued
interest thereon, fees and all other Senior Debt Obligations are paid in full
and all Commitments and each Letter of Credit shall have terminated, AYE will
not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist any Lien on or
with respect to any of AYE's properties of any character (including
accounts) whether now owned or hereafter acquired, or sign or file or
suffer to exist under the Uniform Commercial Code of any jurisdiction,
a financing statement that names AYE as debtor, or sign or suffer to
exist any security agreement authorizing any secured party thereunder
to file such financing statement, or assign any accounts or other
right to receive income, except:
(i) any Liens created pursuant to Section 2.03(e);
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 4.01(o);
(iv) purchase money Liens upon or in real property, physical
assets or equipment acquired or held by AYE in the ordinary course
of business to secure the purchase price of such real property,
physical assets or equipment or to secure Debt permitted to be
incurred pursuant to Section 5.02(b)(vi) incurred solely for the
purpose of financing the acquisition, construction or improvement
(including any Capital Expenditure) of any such real property,
physical assets or equipment to be subject to such Liens, or Liens
existing on any such real property, physical assets or equipment at
the time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided, however, that
(A) such Lien is incurred and the Debt secured thereby is created
within 90 days after the acquisition, completion of construction or
completion of improvement thereof (as applicable), and (B) no such
Lien shall extend to or cover any property or equipment other than
the real property, physical assets or equipment being acquired,
constructed or improved; and provided further that the aggregate
principal amount of the Debt secured by Liens permitted by this
clause (iv) shall not exceed the amount permitted under Section
5.02(b)(vi) at any time outstanding;
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(vii); provided that no such Lien
shall extend to or cover any assets other than the assets subject
to such Capitalized Leases;
(vi) Liens on property of a Person existing at the time such
Person is merged into or consolidated with AYE; provided that such
Liens were not created in contemplation of such merger or
consolidation and do not extend to any assets other than those of
the Person merged into or consolidated with AYE;
(vii) other Liens affecting property with an aggregate fair
value not to exceed, together with the aggregate principal amount
of all Debt secured by Liens permitted under clauses (iv) and (v)
of this Section 5.02(a), $7,500,000;
(viii) the replacement, extension or renewal of any Lien
permitted by clauses (iii) through (vii) above upon or in the same
property theretofore subject thereto and, if such Lien secures
Debt, upon the incurrence of any Permitted Refinancing Debt in
respect of such Debt secured to the extent such Permitted
Refinancing Debt is incurred in accordance with Section
5.02(b)(xvi).
(ix) Liens granted by AYE in favor of a commercial trading
counterparty, futures contract broker or other contract
counterparty on commodities covered by, other obligations owed to,
and other rights of, AYE under any contract (other than for Debt)
entered into in the ordinary course of business and to the extent
permitted under Section 5.02(l) in connection with commercial and
trading activities and ancillary services (including any netting
agreement) to secure AYE's obligations under such contract;
provided that such Liens are granted in the ordinary course of
business and when granted, do not secure obligations which are past
due;
(x) Liens on (A) cash, Cash Equivalents or accounts
receivables deposited in margin accounts with or on behalf of
futures contract brokers or paid over to other contract
counterparties (in the case of cash or Cash Equivalents), (B) cash,
Cash Equivalents or accounts receivables deposited (in the case of
cash or Cash Equivalents) or pledged as collateral to a contract
counterparty to secure obligations with respect to (1) contracts
(other than for Debt) for commercial and trading activities in the
ordinary course of business for the purchase, transmission,
distribution, sale, storage, lease or hedge of any energy related
commodity or (2) Hedge Agreements representing commodity price
contracts, transmission agreements or derivatives or interest rate
derivatives to the extent that AYE is permitted to enter into any
such Hedge Agreement pursuant to Section 5.02(b)(v), or (C) cash or
Cash Equivalents deposited to secure reimbursement obligations with
respect to letters of credit that encumber documents and other
property relating to such letters of credit and the proceeds and
products thereof; provided that the amount of Obligation secured by
Liens permitted by this Section 5.02(a)(x) shall not exceed
$50,000,000 at any time outstanding; provided further that the face
amount of accounts receivables pledged to a contract counterparty
to secure obligations set forth in clauses (B)(1) or (2) above
shall not exceed $15,000,000 at any time outstanding;
(xi) Liens granted in respect of Assets that are the subject
of sales, leases, transfers, swaps, exchanges or other dispositions
(including ownership interests in generating facilities, generating
equipment and related contract rights and other intangible
property, and Intangible Transition Property, Environmental Control
Property or accounts receivable) permitted under Section
5.02(e)(viii);
(xii) Liens granted as cash or Cash Equivalents to defease
Debt that could be prepaid without violating Section 5.02(k); and
(xiii) Liens granted over cash or Cash Equivalents
constituting proceeds from any sale or disposition of assets
permitted under Section 5.02(e) deposited in escrow accounts to
secure Debt permitted to be incurred under Section 5.02(b)(xi) in
respect of such sale or disposition.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries (other than the Regulated Subsidiaries and the AESC Companies)
to create, incur, assume or suffer to exist, any Debt other than pursuant to
the Loan Documents, except:
(i) Debt under the Loan Documents;
(ii) until the date of the Term Borrowing, Debt in respect of
the 7.75% Notes;
(iii) Surviving Debt;
(iv) unsecured intercompany Debt owed to AYE or any
Subsidiary to the extent permitted under Section 5.02(f);
(v) Debt in respect of Hedge Agreements entered into in the
ordinary course of business and consistent with prudent business
practice to hedge or mitigate (A) risks to which AYE or any
Subsidiary of AYE is exposed in the conduct of its business or the
management of its liabilities as a result of fluctuations in the
prices of transmission, capacity or energy (or of any fuel required
for the generation thereof) or (B) risks in respect of interest
rate fluctuations; provided that in each case such Hedge Agreement
shall not have been entered into for speculative purposes;
(vi) Debt incurred to finance all or any part of the
acquisition, construction or improvement of any real property,
physical assets or equipment (including any Capital Expenditures);
provided that (A) such Debt is incurred prior to, or within 90 days
after such acquisition or the completion of construction or
completion of improvement or such Capital Expenditure and (B) such
Debt has a scheduled maturity date that is at least six calendar
months after the Final Maturity Date and does not require any
scheduled amortization or mandatory prepayments thereof prior to
such date; provided further that the aggregate principal amount of
Debt permitted under this Section 5.02(b)(vi) and Section
5.02(b)(vii) shall not exceed $7,500,000 at any time outstanding;
(vii) Capitalized Leases in an aggregate principal amount, together with the
aggregate principal amount of all Debt permitted under Section
5.02(b)(vi), not in excess of $7,500,000 at any time outstanding;
(viii) Debt of any Person that either (x) is merged into or consolidated with
AYE or any Subsidiary of AYE, or (y) becomes a Subsidiary of AYE after
the date hereof in either case in accordance with the terms of Section
5.02(f), provided that (A) Debt is existing at the time such Person
becomes a Subsidiary of AYE (other than Debt incurred solely in
contemplation of such Person becoming a Subsidiary of AYE), (B)
immediately after giving effect to the investment in such Subsidiary,
no Default shall have occurred and be continuing, and (C) such Debt is
non-recourse to AYE or any other Subsidiary (other than with respect
to such Person and its Subsidiaries to the extent such Debt was with
recourse to such Person and/or to its Subsidiaries at the time of such
investment);
(ix) Debt arising from the honoring by a bank or financial
institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business, so long as
such Debt is covered within five Business Days;
(x) Debt in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptance and performance and
surety bonds provided by AYE or any Subsidiary of AYE in the
ordinary course of business;
(xi) Debt that may be deemed to arise as a result of
agreements of AYE or any of Subsidiary of AYE providing for
indemnification, adjustment of purchase price or any similar
obligations, in each case, incurred in connection with the sale or
disposition of any business, assets or Equity Interests in any
Subsidiary of AYE consummated in accordance with the terms of
Section 5.02(e) in an amount not to exceed with respect to any such
sale or disposition the amount of gross proceeds received by AYE or
such Subsidiary in connection with such sale or disposition;
(xii) Debt of AYE represented by letters of credit, surety
bonds, Contingent Obligations and performance bonds supporting
obligations of AYE or its Subsidiaries so long as, after giving
effect to such letters of credit, surety bonds, Contingent
Obligations and performance bonds (and the Investment represented
thereby) AYE would be in compliance with Section 5.02(f)(v);
(xiii) reimbursement obligations owed to Affiliates for
amounts paid on behalf of any Borrower or any of Subsidiary of any
Borrower in accordance with applicable requirements under PUHCA
with respect to the provision of goods or services to such Borrower
or such Subsidiary;
(xiv) other unsecured Debt of AYE not to exceed $20,000,000
at any time outstanding; provided such Debt has a scheduled
maturity date that is at least six calendar months later than the
Final Maturity Date and does not require any scheduled amortization
or mandatory prepayments thereof prior to such date;
(xv) unsecured Debt in respect of obligations of AYE or any
Subsidiary of AYE to pay the deferred purchase price of goods or
services or progress payments in connection with such goods and
services; provided that with respect to any material invoice, such
obligations (A) are incurred in connection with open accounts
extended by suppliers on customary trade terms (which require that
all such payments be made within 90 days of the incurrence of the
related Debt) in the ordinary course of business and not in
connection with the borrowing of money, (B) are not more than 90
days past due and (C) are not subject to a Contest;
(xvi) Permitted Refinancing Debt incurred in respect of any
Debt permitted under clauses (i), (vi), (vii), (viii) and (xiv)
above or this clause (xvi);
(xvii) Debt or Contingent Obligations incurred by AYE or its
Subsidiaries in connection with loans and advances to its employees
in the ordinary course of its business as presently conducted in an
aggregate principal amount not to exceed $2,000,000 at any time
outstanding;
(xviii) secured or unsecured Debt owed to PNC Bank, National
Association from time to time in connection with the extension of
credit to AYE or its Subsidiaries for the account of one or more
employees or departments of AYE or its Subsidiaries in respect of
costs and expenses incurred by such employees or departments in
connection with the conduct of business on behalf of AYE or its
Subsidiaries in an aggregate principal amount not to exceed
$6,000,000 at any one time outstanding;
(xix) unsecured Debt incurred by AYE in connection with the
Buffalo Reserve Project and/or any Joint Ventures in an aggregate
amount not to exceed $15,000,000 at any time outstanding; provided
that such Debt has a scheduled maturity date that is at least six
calendar months later than the Final Maturity Date and does not
require any scheduled amortization or mandatory prepayments thereof
prior to such date;
(xx) the put option granted in favor of UGI under the Hunlock
Agreement, to the extent such put option constitutes Debt;
(xxi) Services Corp Regulated Debt; and
(xxii) Services Corp AESC Debt in an aggregate amount not to
exceed $17,500,000 at any time outstanding.
(c) Change in Nature of Business. Other than the Buffalo Reserve
Project, (i) make, or permit any of its Subsidiaries to make, any material
change in the nature of its business as carried on at the date hereof or (ii)
engage in, or permit any of its Subsidiaries to engage in, any business other
than electric power generation, transmission and distribution and/or energy
trading and other businesses reasonably and directly related thereto, or any
other business in which AYE or any of its Subsidiaries or Affiliates is engaged
on the Closing Date.
(d) Mergers, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so, except
that:
(i) any Subsidiary of AYE may merge into or consolidate with
any other Subsidiary of AYE, provided that, (A) except as otherwise
permitted in clause (B) or (C) below, in the case of any such
merger or consolidation, the Person formed by such merger or
consolidation shall be a wholly owned direct or indirect Subsidiary
of AYE, (B) any Subsidiary of AESC may merge into or consolidate
with AESC so long as AESC is the surviving Person following such
merger or consolidation and (C) any Subsidiary of AESC may merge
into or consolidate with another Subsidiary of AESC so long as the
Person formed by such merger or consolidation is a Subsidiary of
AESC;
(ii) in connection with any sale, transfer or other
disposition permitted under Section 5.02(e) (other than Section
5.02(e)(iv)), any Subsidiary of AYE may merge into or consolidate
with any other Person or permit any other Person to merge into or
consolidate with it;
(iii) in connection with any acquisition permitted under
Section 5.02(f), any Subsidiary may merge into AYE; and
(iv) AYE may merge into or otherwise consolidate with another
person if either (A) AYE is the surviving entity or (B)(1) the
surviving entity is organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (2)
the surviving entity assumes all of AYE's Obligations under the
Loan Documents pursuant to agreements reasonably satisfactory to
the Administrative Agent and (3) the Public Debt Ratings of the
surviving entity immediately following such merger or consolidation
shall be no worse than the Public Debt Ratings of AYE immediately
prior to such merger or consolidation;
provided, however, that in each case, immediately after giving effect thereto,
no event shall occur and be continuing that constitutes a Default.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any Assets or grant any option or other right to purchase, lease or
to otherwise acquire any Assets other than:
(i) the sale, transfer, lease or other disposition of power,
capacity, the right to transmit electricity or natural gas, fuel
and other products and services in the ordinary course of business;
(ii) any sale, transfer, lease or other disposition of
damaged, surplus, worn-out or obsolete Assets in the ordinary
course of business;
(iii) the sale, transfer or other disposition of emission,
fuel, air quality or other environmental attributes or credits in
the ordinary course of business;
(iv) transactions permitted under Section 5.02(d);
(v) the sale, lease, transfer or other disposition of Assets
by AESC and its Subsidiaries;
(vi) sales, leases, transfers or other dispositions of other
immaterial property (other than Equity Interests in, or Debt of any
Subsidiary) in the ordinary course of business and on reasonable
terms;
(vii) sales, leases, transfers or other dispositions of
Assets or Equity Interests among AYE and its Subsidiaries (other
than any AESC Company); provided that such sale, lease, transfer or
other disposition is (A) made in order to protect the value of such
Asset or Equity Interests; (B) no Debt for Borrowed Money is
incurred in connection therewith; and (C) no Lien is created,
granted, incurred or assumed in connection therewith;
(viii) (A) the sale or transfer of Assets in connection with
a securitization thereof pursuant to the Pennsylvania Electricity
Generation Customer Choice and Competition Act of 1996, as amended
from time to time, (such property being sold or transferred, the
"Intangible Transition Property" and such sale or transfer, the
"Stranded Cost Securitization") in an amount not to exceed (x)
$120,000,000 plus (y) the proceeds of any such sale or Debt in
connection with such Stranded Cost Securitization applied to
voluntarily prepay the Facilities (but only if, and to the extent,
AYE optionally terminates Commitments pursuant to Section 2.05(a)
concurrently with, and in an amount equal to, such prepayment)
minus (z) the aggregate amount of all capital contributions made by
AYE or any of its Subsidiaries to Securitization SPVs with respect
to Stranded Cost Securitizations;
(B) (1)the sale or transfer of Assets in connection with
a securitization thereof pursuant to Section 24-2-4e of the Code
of West Virginia (such property being sold or transferred, the
"Environmental Control Property" and such sale or transfer, the
"Environmental Control Property Securitization") or (2) the sale
or transfer of other Assets in connection with any other
Permitted Securitization (other than a Stranded Cost
Securitization), in an amount with respect to clauses (1) and
(2) not to exceed (x) $700,000,000 in the aggregate plus (y) the
proceeds of any such sales or Debt in connection with such
Environmental Control Property Securitization or other Permitted
Securitization applied to voluntarily prepay the Facilities (but
only if, and to the extent, AYE optionally terminates
Commitments pursuant to Section 2.05(a) concurrently with, and
in an amount equal to, such prepayment) minus (z) the aggregate
amount of all capital contributions made by AYE or any of its
Subsidiaries to Securitization SPVs with respect to
Environmental Control Property Securitizations; and
(C) the sale, lease, transfer, swap, exchange or other
disposition of Assets, including full or partial ownership
percentages of AYE and its Subsidiaries' various generating
facilities (including AGC and Bath County) or any Assets used in
connection with or related to such generating facilities,
including generating equipment, power, contract rights, permits,
licenses and other intangibles; provided that (A) after any such
Asset sale, lease, transfer, swap, exchange or other
disposition, the Subsidiaries of AYE, taken as a whole, will
continue to hold cumulative interests in all Assets equal to the
amount they held prior to such sale, lease, transfer, swap,
exchange or other disposition and (B) as a result of all Asset
sales, leases, transfers, swaps, exchanges or other
dispositions, taken as a whole, AYE and the Regulated
Subsidiaries shall receive Assets with a fair market value in an
amount not less than the fair market value less $200,000,000 of
all Assets sold, leased, transferred, swapped, exchanged or
otherwise disposed of out of AYE and the Regulated Subsidiaries
(determined on a cumulative basis);
(ix) sales, transfers or other dispositions of any of AYE's
Assets or the Assets of the Regulated Subsidiaries (including any
Equity Interest in the Regulated Subsidiaries or any contractual
rights); provided that (A) the consideration received by AYE or its
Regulated Subsidiaries for such Asset shall have been determined on
the basis of an arms-length negotiation with a non-Affiliates, (B)
not less than 75% of the purchase price (excluding the amount of
any Debt assumed in connection with any such sale or other
disposition by a Person other than AYE or its Regulated
Subsidiaries) for such asset shall be paid to AYE or its Regulated
Subsidiaries solely in cash or Cash Equivalents, (C) no portion of
the non-cash proceeds received by AYE and its Subsidiaries shall
consist of Debt of, or Equity Interests in, AYE or any of its
Regulated Subsidiaries, (D) no Default or Event of Default shall
have occurred and be continuing, (E) on or prior to such sale,
transfer or disposition, (1) all Debt (other than under this
Agreement) of AYE and its Subsidiaries required by the terms
thereof to be repaid or prepaid upon such sale, transfer or
disposition shall have been so paid and (2) the relevant portion of
the proceeds thereof required to be applied to the prepayment of
the Advances and/or the Cash Collateralization of the L/C
Obligations shall have been applied in accordance with the terms
contained in clause (1) of the proviso at the end of this Section
5.02(e), and (F) AYE would be in compliance with the covenants set
forth in Section 5.04 as of the most recently completed period
ending prior to such transaction for which financial statements and
certificates required by Section 5.03(b) or 5.03(c) were required
to have been delivered or for which comparable financial statements
have been filed with the SEC, in each case after giving effect to
such transaction and to any other event occurring during such
period as to which pro forma recalculation is reasonably
appropriate (including any other transaction described in this
clause occurring after such period) as if such transaction (and the
repayment of any Debt in connection therewith) had occurred as of
the first day of such period;
(x) any sale, lease, transfer or other disposition of Assets
from AYE or any Subsidiary of AYE to any other Subsidiary of AYE in
connection with the Hunlock Transaction, so long as the fair market
value of all Assets so sold, leased, transferred or otherwise
disposed of, plus the fair market value of all Investments pursuant
to Section 5.02(f)(x), does not exceed $45,000,000 in the
aggregate;
(xi) sales or transfers of Equity Interests in AYE to any
Plan;
(xii) the issuance of any Equity Interest by AYE or any of
its Subsidiaries; and
(xiii) sales, transfers or other dispositions of Assets to
any Joint Venture to the extent permitted under Section
5.02(f)(xi);
provided that in the case of sales, transfers or other dispositions of
Assets pursuant to clause (vi) or (ix) above, AYE shall prepay the
Advances and/or Cash Collateralize the L/C Obligations in accordance
with the provisions of Section 2.06.
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries (other than any Regulated Subsidiary or any AESC Company) to make
or hold, any Investment in any Person, except:
(i) (A) equity Investments outstanding as of the date hereof
by AYE and its Subsidiaries in their respective Subsidiaries or
Affiliates, (B) equity Investments after the date hereof in direct
or indirect Subsidiaries of AYE, (C) Investments after the date
hereof in direct or indirect Subsidiaries of AYE consisting of
intercompany Debt and (D) Investments after the date hereof in the
AESC Companies consisting of purchases or other acquisitions of
Assets from such AESC Companies; provided (1) with respect to
clauses (B), (C) and (D), AYE shall not be permitted to make any
additional equity Investment in any AESC Company (other than as may
be required to be made by the terms of Section 4.01(a) of the AESC
Intercreditor Agreement or which are made for the purpose of
returning to AESC funds received by AYE from AESC pursuant to
Section 4.01(b) of the AESC Intercreditor Agreement) or any
additional Investment in any AESC Company consisting of
intercompany Debt or the purchase or other acquisition of Assets
from such AESC Company unless the aggregate amount of the Unused
Commitments shall be equal to or greater than $100,000,000 after
giving pro forma effect to such additional Investment and (2)
Services Corp shall be permitted to make Investments in any AESC
Company to the extent of permitted Services Corp AESC Debt;
(ii) loans and advances to its employees (or, in the case of
Services Corp, employees of AYE or any of its Subsidiaries) in the
ordinary course of its business as presently conducted in an
aggregate principal amount, not to exceed $2,000,000 at any time
outstanding;
(iii) Investments in Cash Equivalents;
(iv) Investments in Hedge Agreements permitted pursuant to
Section 5.02(b)(v);
(v) Investments in Subsidiaries of AYE resulting from
drawings under, or renewals or extensions of letters of credit
(including Letters of Credit), surety bonds, Contingent Obligations
or performance bonds supporting obligations of such Subsidiaries
incurred in the ordinary course of business but in any event not
for speculative obligations of such Subsidiaries, provided that the
aggregate amount of Investments in AESC Companies resulting from
drawings under letters of credit (including Letters of Credit)
outstanding at any time shall not exceed $175,000,000;
(vi) Investments in any non-cash proceeds received by AYE or
any Subsidiary of AYE in connection with any sale, transfer or
other disposition of any asset to the extent permitted under
Section 5.02(e);
(vii) Investments consisting of extensions of credit in the
nature of accounts receivable or notes receivable arising from the
grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;
(viii) Investments not otherwise permitted under this Section
5.02(f) existing on the Closing Date;
(ix) Investments by AYE and its Subsidiaries not otherwise
permitted under this Section 5.02(f) in an aggregate amount not to
exceed $50,000,000 plus an amount equal to the total of (a) the
aggregate principal amount of the Term Facility optionally prepaid
by AYE pursuant to Section 2.06(a), (b) the aggregate amount of any
optional prepayments of Revolving Advances by AYE pursuant to
Section 2.06(a) if and to the extent the Revolving Commitments are
terminated by AYE pursuant to Section 2.05(a) concurrently with,
and in an amount equal to, such prepayment, and (c) the Net Cash
Proceeds received by AYE as a result of any sale, transfer or other
disposition of any Assets or issuance of any Equity Interests by
AYE or its Subsidiaries (and which have not been applied to prepay
the Advances or cancel the Commitments pursuant to clause (a) or
(b) above) at any one time; provided that with respect to each
Investment made pursuant to this Section 5.02(f)(ix): (A) such
Investment shall not include or result in any contingent
liabilities that could reasonably be expected to be material to the
business, financial conditions, operations or prospects of AYE and
its Subsidiaries, taken as a whole (as determined in good faith by
the board of directors (or persons performing similar functions) of
AYE or such Subsidiary if the board of directors is otherwise
approving such transaction and, in each other case, by a
Responsible Officer); (B) such Investment shall be in property and
assets which are part of, or in lines of business which are in the
electric power generation, transmission, distribution and/or energy
trading businesses; (C) any determination of the amount of such
Investment shall include all cash and noncash consideration
(including, without limitation, the fair market value of all Equity
Interests issued or transferred to the sellers thereof, all
indemnities, earnouts and other contingent payment obligations to,
and the aggregate amounts paid or to be paid under noncompete,
consulting and other affiliated agreements with, the sellers
thereof, all write-downs of property and assets and reserves for
liabilities with respect thereto and all assumptions of debt,
liabilities and other obligations in connection therewith) paid by
or on behalf of AYE and its Subsidiaries in connection with such
Investment; and (D)(1) immediately before and giving pro forma
effect to any such purchase or other acquisition, no Default or
Event of Default shall have occurred and be continuing and (2)
immediately after giving effect to such purchase or other
acquisition AYE and its Subsidiaries shall be in pro forma
compliance with all of the covenants set forth in Section 5.04,
such compliance to be determined on the basis of the financial
information most recently delivered to the Administrative Agent
pursuant to Section 5.03(b) or 5.03(c) as though such Investment
had been consummated as of the first day of the fiscal period
covered thereby;
(x) Investments in Subsidiaries of AYE in connection with the
Hunlock Transaction, so long as the fair market value of all such
Investments, plus the fair market value of all Assets sold, leased,
transferred or otherwise disposed of pursuant to Section
5.02(e)(x), does not exceed $45,000,000 in the aggregate; and
(xi) Investments by AYE and its Subsidiaries in Joint
Ventures and the Buffalo Reserve Project in an aggregate amount not
to exceed $10,000,000;
provided that this Section 5.02(f) shall not prohibit (A) any repurchase of
Debt of AYE by AYE or any repurchase of Debt of any Subsidiary of AYE by such
Subsidiary, in each case, to the extent such repurchase is otherwise permitted
by the other provisions in this Agreement, (B) any purchase or acquisition of
Intangible Transition Property, Environmental Control Property or other Assets
subject to a Permitted Securitization or subject to an Asset sale, lease,
transfer, swap or exchange, in each case, permitted by Section 5.02(e)(viii),
(C) any capital contribution to any Securitization SPV with respect to any
Permitted Securitization and (D) the repurchase or other acquisition of shares
of, or options to purchase shares of, the capital stock and stock units of AYE
from employees, former employees, directors and former directors of AYE or any
Subsidiary of AYE; provided that the aggregate consideration paid with respect
to all such repurchases and acquisitions since January 1, 2005 shall not exceed
$5,000,000.
(g) Restricted Payments. (i) Declare or pay any Restricted Payments
except cash distributions to holders of Preferred Interests issued by AYE or
interest payments, in cash, to holders of securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) AYE, (ii) permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in it or
(iii) permit any of its Subsidiaries to issue or sell any Equity Interests,
other than, with respect to clauses (i), (ii) and (iii), in the case of (A) the
Regulated Subsidiaries, Services Corp and any AESC Company, to AYE or to any
Subsidiary of AYE (other than an AESC Company), and (B) any AESC Company, in
accordance with the AESC Loan Documents; provided that notwithstanding the
provisions of clauses (i), (ii) and (iii), (1) AYE or any Subsidiary may sell,
transfer or contribute Equity Interests in AYE to any Plan, (2) MPC may sell or
transfer Equity Interests in Mountaineer Gas to the extent such sale or
transfer does not contravene any of the other provisions of this Agreement and
the other Loan Documents, (3) AYE or Services Corp may repurchase or otherwise
acquire shares of, and options to purchase shares of, AYE's capital stock and
stock units from employees, former employees, directors and former directors of
AYE or any of its Subsidiaries; provided that the aggregate consideration paid
with respect to all such repurchases and acquisitions since January 1, 2005
shall not exceed $5,000,000, (4) AYE or any Subsidiary may exchange any of its
outstanding Equity Interests for its common stock or for Equity Interests of
the same class in it, (5) MPC may (x) repurchase, redeem, retire, defease or
otherwise acquire for value its MPC Preferred Stock and (y) issue and sell
Equity Interests or Preferred Interests in MPC, so long as the proceeds of each
such issuance and sale (net of reasonable and customary fees, costs and
expenses (including fees of legal counsel)) are applied to refinance its MPC
Preferred Stock, (6) AYE or any Subsidiary may sell, transfer or contribute
Equity Interests in connection with the Hunlock Transaction; provided that the
fair market value of such Equity Interests sold or transferred under this
clause (6) does not exceed the amount permitted under Section 5.02(e)(x), and
(7) AYE or any Subsidiary of AYE may sell, transfer, swap, exchange or
otherwise dispose of Equity Interests in a Subsidiary of AYE in connection with
Asset sales, transfers, swaps, exchanges or other dispositions permitted by
Section 5.02(e)(viii).
(h) Payment Restrictions Affecting AYE and its Subsidiaries. Enter
into, incur or permit to exist any agreement or other arrangement that
prohibits or restricts the ability of AYE or any of its Subsidiaries (other
than any AESC Company, a Securitization SPV or, in the case of clause (i), any
Regulated Subsidiary or Services Corp) to (i) create, incur or permit to exist
any Lien upon any of its property or assets or (ii) declare or pay any dividend
or other distribution in respect of its Equity Interests to AYE or repay or
prepay any Debt owed to, make loans or advances to, or otherwise invest in, AYE
or any of its Subsidiaries; provided that the foregoing shall not apply to
restrictions and conditions imposed by (A) Applicable Law, (B) any Loan
Document, (C) the terms of any Existing Debt as in effect on the date hereof
(or any Permitted Refinancing Debt incurred in connection therewith; provided
that, if such Permitted Refinancing Debt is not FMB Debt, (1) a Responsible
Officer of AYE has determined in good faith that the terms of any Debt of the
Person whose Debt is being refinanced by such Permitted Refinancing Debt
contain any such restrictions or limitations as are described in clauses (i) or
(ii) above, the restrictions or limitations to be imposed as a result of the
incurrence of such Permitted Refinancing Debt are no more restrictive, taken as
a whole, than the most restrictive of any such existing restrictions or
limitations, (2) a Responsible Officer of AYE has determined in good faith that
such restrictions or limitations are customary for similar transactions as of
the date of such refinancing and (3) a Responsible Officer of AYE has
determined in good faith that such restrictions or limitations could not
reasonably be expected to result in a Material Adverse Effect), (D) any
agreement in effect with respect to any Subsidiary at the time such Subsidiary
becomes a Subsidiary of AYE, so long as such agreement was not entered into
solely in contemplation of such Person becoming a Subsidiary of AYE, (E) any
negative pledge incurred or provided in favor of any holder of Debt permitted
under Section 5.02(b)(vi) solely to the extent any such negative pledge relates
to the property financed by or subject of such Debt (or any Permitted
Refinancing Debt incurred in connection therewith; provided that, if such
Permitted Refinancing Debt is not FMB Debt, (1) a Responsible Officer of AYE
has determined in good faith that the terms of any Debt of the Person whose
Debt is being refinanced by such Permitted Refinancing Debt contain any such
restrictions or limitations as are described in clauses (i) or (ii) above, the
restrictions or limitations to be imposed as a result of the incurrence of such
Permitted Refinancing Debt are no more restrictive, taken as a whole, than the
most restrictive of any such existing restrictions or limitations, (2) a
Responsible Officer of AYE has determined in good faith that such restrictions
or limitations are customary for similar transactions as of the date of such
refinancing and (3) a Responsible Officer of AYE has determined in good faith
that such restrictions or limitations could not reasonably be expected to
result in a Material Adverse Effect), (F) any agreement for the sale or
disposition of assets or property permitted under Section 5.02(e), provided
that such restrictions and conditions apply only to the asset or property that
is to be sold or the proceeds thereof, (G) any trading, netting, operating,
construction, service, supply, purchase, sale or similar agreement to which AYE
or any of its Subsidiaries is a party, entered into in the ordinary course of
business; provided that such agreement prohibits the encumbrance of solely the
property or assets of AYE or such Subsidiary that are the subject of that
agreement, the payment rights arising thereunder and/or the proceeds thereof
and not to any other asset or property of AYE or such Subsidiary or the assets
or property of any other Subsidiary, (H) customary provisions restricting
subletting or assignment of leases or customary provisions in other agreements
that restrict assignment of such agreements or rights thereunder, which
restrictions when taken as a whole are no more restrictive than any similar
restrictions in effect on the Closing Date, (I) any negative pledge provided
for in joint venture agreements, stockholder or partnership agreements, or
organizational documents relating to joint ventures or partnerships or
agreements relating to the Buffalo Reserve Project, (J) any other agreement in
effect on the Closing Date and any amendments, modifications, restatements,
renewals or replacements thereof that are not more restrictive, taken as a
whole, than the restrictions or limitations in existence on the Closing Date
and (K) the terms of any Equity Interest, Preferred Interest or Debt issued to
refinance any MPC Preferred Stock so long as a Responsible Officer of AYE has
determined in good faith that any restrictions on the ability of MPC to declare
or pay any dividend or other distribution in respect of its Equity Interests to
AYE or any of its Subsidiaries imposed on MPC as a result of the refinancing of
MPC Preferred Stock (i) are customary for similar transactions as of the date
of such refinancing and, if any, such restrictions are applicable to MPC in
accordance with this Agreement immediately prior to such refinancing, are no
more onerous than the most onerous of such existing restrictions and (ii) could
not reasonably be expected to result in a Material Adverse Effect.
(i) Sale-Leaseback Transactions. Create, incur, assume or suffer to
exist with respect to AYE, or permit any of its Subsidiaries (other than any
AESC Company) to create, incur, assume or suffer to exist, any obligations as
lessee for the rental or hire of real or personal property in connection with
any sale and leaseback unless the sale of such property would be permitted
under Section 5.02(e) and any Capitalized Lease created as part of such
transaction would be permitted under Section 5.02(b) or any Lien arising as
part of such transaction would be permitted by Section 5.02(a). For the
avoidance of doubt, the sale, lease, transfer, swap, exchange or other
disposition of Assets permitted pursuant to Section 5.02(e)(viii)(C) shall not
constitute a sale and leaseback of Assets that is subject to this Section
5.02(i).
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in its Fiscal Year.
(k) Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy or make any unscheduled payment, in each case, prior to the
scheduled maturity thereof in any manner, whether directly or indirectly, or
make any payment in violation of any subordination terms of, any Debt of AYE,
or amend, modify or change in any manner any material term or condition of any
such Debt, other than (i) prepayment of Debt outstanding under this Agreement,
(ii) to the extent required to effectuate or resulting from any sale of Assets
which is permitted under Section 5.02(e) and (iii) any other prepayment or
redemption of Debt (A) which is refinanced and prepaid with the proceeds of
Permitted Refinancing Debt permitted to be incurred under Section 5.02(b)(xvi),
or (B) with a maturity date prior to the Final Maturity Date; provided that,
except where such prepayment or redemption is or is to be made with the
proceeds of Permitted Refinancing Debt permitted to be incurred under Section
5.02(b)(xvi), after giving pro forma effect to such prepayment or redemption,
the aggregate amount of the Unused Commitments is equal to or greater than
$100,000,000.
(l) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions (including
take-or-pay contracts, long term fixed price off-take contracts and contracts
for the sale of power for which physical delivery is not available) unless the
same (i) is consistent with the policy on Corporate Energy Risk Policy (as
amended from time to time) approved by such Borrower's board of directors or
(ii) has been approved in writing by the Required Lenders.
(m) Compliance with ERISA. (i) Terminate, or permit any of its ERISA
Affiliates to terminate, any Plan so as to result in any liability to it or any
ERISA Affiliate, which could reasonably be expected to have a Material Adverse
Effect, or (ii) permit to exist any Termination Event with respect to a Plan
which could reasonably be expected to have a Material Adverse Effect to the
extent such Termination Event is within the control of AYE.
SECTION 5.03. Reporting Covenants of AYE. AYE covenants and agrees
that on and after the date hereof and until the Notes, together with all
accrued interest thereon, fees and all other Senior Debt Obligations are paid
in full and all Commitments and each Letter of Credit shall have terminated,
AYE will furnish to the Administrative Agent and each Lender Party (it being
understood that delivery to the Administrative Agent for posting by the
Administrative Agent of each of the following items on a electronic website
shall constitute delivery to each Lender Party by AYE and the Administrative
Agent hereby agrees to post on an electronic website or otherwise distribute to
the Lender Parties any such item delivered by AYE to the Administrative Agent):
(a) Default Notices. As soon as possible and in any event within five
Business Days after any Responsible Officer of any Borrower becomes aware of
the occurrence of (i) any Default or (ii) any event, development or occurrence
reasonably likely to have a Material Adverse Effect, in the case of clause (i)
or (ii), continuing on the date of such statement, a statement of a Responsible
Officer of AYE setting forth the details of such Default or event, development
or occurrence (as applicable) and, in each case, the actions, if any, which AYE
has taken and proposes to take with respect thereto.
(b) Annual Financials. As soon as available and in any event within 15
days after they are required to be filed with the SEC, a copy of the annual
audit report for such year for AYE and its Subsidiaries including therein a
Consolidated balance sheet of AYE and its Subsidiaries as of the end of such
Fiscal Year and Consolidated statement of income and a Consolidated statement
of cash flows of AYE and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion that is unqualified or is otherwise reasonably
acceptable to the Required Lenders of Pricewaterhouse Coopers (or such other
independent public accountants of recognized standing acceptable to the
Required Lenders), as filed with the SEC, together with, for each Fiscal Year,
(i) a certificate of such accounting firm to the Lenders stating that in the
course of the regular audit of the business of AYE and its Subsidiaries, which
audit was conducted by such accounting firm in accordance with generally
accepted auditing standards, nothing has come to such accounting firm's
attention that would cause it to believe that AYE has failed to comply with the
covenants set forth in Section 5.04, (ii) a schedule in form satisfactory to
the Administrative Agent of the computations prepared by AYE and used by such
accounting firm in determining, as to the fourth quarter of such Fiscal Year,
compliance with the covenants contained in Section 5.04, provided that in the
event of any change in GAAP used in the preparation of such financial
statements, AYE shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming such
financial statements to GAAP as in effect as of the Closing Date and (iii) a
certificate of the Chief Financial Officer of AYE stating that no Default has
occurred and is continuing or, if a default has occurred and is continuing, a
statement as to the nature thereof and the action that AYE has taken and
proposes to take with respect thereto.
(c) Quarterly Financials. As soon as available and in any event within
60 days after the end of each of the first three quarters of each Fiscal Year,
a Consolidated balance sheet of AYE and its Subsidiaries as of the end of such
quarter and a Consolidated statement of income and a Consolidated statement of
cash flows of AYE and its Subsidiaries for the period commencing at the end of
the previous fiscal quarter and ending with the end of such fiscal quarter, as
filed with the SEC, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
Fiscal Year, all in reasonable detail and duly certified (subject to normal
year-end audit adjustments) by the Chief Financial Officer of AYE as having
been prepared in accordance with GAAP, together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof and the
action that AYE has taken and proposes to take with respect thereto and (ii) a
schedule in form satisfactory to the Administrative Agent of the computations
used by AYE in determining compliance with the covenants contained in Section
5.04, provided that in the event of any change in GAAP used in the preparation
of such financial statements, AYE shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of reconciliation
conforming such financial statements to GAAP as in effect as of the Closing
Date.
(d) Budget. As soon as available, but in no event later than 30 days
after the commencement of each Fiscal Year of AYE, forecasts prepared by
management of AYE, in form reasonably satisfactory to the Administrative Agent,
of consolidated balance sheets, income statements and cash flow statements of
AYE and its Subsidiaries on a quarterly basis for such Fiscal Year and on an
annual basis for such Fiscal Year setting forth the assumptions used for
purposes of preparing the budget and promptly when available, any significant
revisions to such budget.
(e) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any
Governmental Authority, domestic or foreign, affecting AYE or any of its
Subsidiaries of the type described in Section 4.01(e), and promptly after the
occurrence thereof, notice of any change in respect of the Disclosed Litigation
described on Schedule 3.01(b) which could reasonably be expected to have a
Material Adverse Effect.
(f) ERISA. (i) ERISA Events and ERISA Reports. Promptly and in any
event within 20 days after (A) AYE or any of its Subsidiaries or any ERISA
Affiliate knows that any ERISA Event has occurred, a statement of AYE
describing such ERISA Event and (B) the date of any material correspondence
between AYE, any of its Subsidiaries or any ERISA Affiliate and the PBGC, a
copy of such material correspondence.
(ii) Plan Terminations. Promptly and in any event within
three Business Days after receipt thereof by AYE or any of its
Subsidiaries or any ERISA Affiliate, copies of each notice from the
PBGC stating its intention to terminate any Plan or to have a
trustee appointed to administer any Plan.
(iii) Plan Annual Reports. Promptly upon the written request
of the Administrative Agent, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed with the
Internal Revenue Service from time to time with respect to each
Plan.
(iv) Multiemployer Plan Notices. Promptly and in any event
within 30 days after receipt thereof by AYE or any of its
Subsidiaries or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, copies of each notice concerning (A) the
imposition of Withdrawal Liability by any such Multiemployer Plan,
(B) the reorganization or termination, within the meaning of Title
IV of ERISA, of any such Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by AYE, any of its
Subsidiaries or any ERISA Affiliate in connection with any event
described in clause (A) or (B).
(g) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by AYE or any of its Subsidiaries with any Environmental Law or
Environmental Permit that could (i) reasonably be expected to have a Material
Adverse Effect or (ii) cause any property to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(h) Other Information. (i) Promptly after receipt thereof by AYE or
any of its Subsidiaries, a copy of any "management letter" received by such
Person from its certified public accountants and the management's response
thereto;
(ii) Promptly upon receipt thereof, copies of all notices,
requests and other documents received by AYE or any of its
Subsidiaries under or pursuant to any Loan Document or indenture,
loan or credit or agreement in respect of any Qualifying Obligation
regarding or related to any breach or default by any party thereto
that could reasonably be expected to have a Material Adverse Effect
or any other event that could reasonably be expected to have a
Material Adverse Effect;
(iii) No later than one day prior to the anticipated receipt
by AYE or any Regulated Subsidiary of Net Cash Proceeds from any
sale or other disposition of any assets or property of AYE or such
Subsidiary the proceeds of which are required to be applied to
prepay L/C Borrowings, the Advances or Cash Collateralize the L/C
Obligations in accordance with Section 2.06, a certificate of a
Responsible Officer of AYE setting forth (A) a description of the
transaction giving rise to such Net Cash Proceeds, (B) the date or
dates upon which such Net Cash Proceeds are anticipated to be
received by AYE or such Subsidiary, (C) the amount of Net Cash
Proceeds anticipated to be received on such date or each of such
dates (together with a schedule detailing the calculations
necessary to determine the amount of such Net Cash Proceeds), and
(D) the amount of such Net Cash Proceeds that it is anticipated
will be applied to pay any L/C Borrowings, prepay the Advances or
Cash Collateralize the L/C Obligations;
(iv) Such other information respecting the business or
properties, or the condition or operations, financial or otherwise,
of AYE or any of its Subsidiaries as the Administrative Agent or
any Lender Party acting through the Administrative Agent may from
time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance or any other
Senior Debt Obligation of any Borrower shall remain unpaid, any Letter of
Credit shall be outstanding or any Lender Party shall have any Commitment
hereunder, AYE will not:
(a) Interest Coverage Ratio. Permit the Interest Coverage Ratio at the
end of a fiscal quarter to be less than (i) 2.00:1.00 for each fiscal quarter
commencing with the fiscal quarter ending on September 30, 2005 through the
fiscal quarter ending on June 30, 2006, (ii) 2.25:1.00 for each fiscal quarter
commencing with the fiscal quarter ending on September 30, 2006 through the
fiscal quarter ending on December 31, 2006, (iii) 2.30:1.00 for the fiscal
quarter ending on March 31, 2007, (iv) 2.40:1.00 for the fiscal quarter ending
on June 30, 2007, (iv) 2.50:1.00 for the fiscal quarter ending on September 30,
2007 and (v) 3.00:1.00 for each fiscal quarter commencing with the fiscal
quarter ending on December 31, 2007 through the fiscal quarter ending on June
30, 2010.
(b) Leverage Ratio. Permit the Leverage Ratio to be greater than (i)
6.90:1.00 at the end of each fiscal quarter commencing with the fiscal quarter
ending on September 30, 2005 through the fiscal quarter ending on December 31,
2005, (ii) 6.75:1.00 at the end of each fiscal quarter commencing with the
fiscal quarter ending on March 31, 2006 through the fiscal quarter ending on
December 31, 2006, (iii) 6.25:1.00 at the end of each fiscal quarter commencing
with the fiscal quarter ending March 31, 2007 through the fiscal quarter ending
on December 31, 2008, (iv) 4.00:1.00 at the end of each fiscal quarter
commencing with the fiscal quarter ending on March 31, 2009 through the fiscal
quarter ending on December 31, 2009, and (iv) 3.50:1.00 at the end of each
fiscal quarter commencing with the fiscal quarter ending on March 31, 2010
through the fiscal quarter ending on June 30, 2010.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events,
conditions or occurrences ("Events of Default") shall occur and be continuing:
(a) (i) any Borrower shall fail to pay any principal of any Advance or
any L/C Obligation when the same shall become due and payable or (ii) any
Borrower shall fail to pay any interest on any Advance or any L/C Obligation,
or any Borrower shall fail to make any other payment under any Loan Document,
in each case under this clause (ii) within three Business Days after the same
becomes due and payable; or
(b) any representation, warranty, certification or statement of fact
made or deemed made by or on behalf of any Borrower (or any of its officers)
herein, in any other Loan Document, or in any document delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect
when made or deemed made; or
(c) any Borrower or any of its Subsidiaries shall fail to perform or
observe any term, covenant or agreement contained in Section 2.15, 5.01(f),
5.02 (other than Section 5.02(l)), 5.03(a) or 5.04; or
(d) any Borrower or any of its Subsidiaries shall fail to perform or
observe any term, covenant or agreement contained in Section 5.01(j), 5.02(l)
or 5.03 (other than Section 5.03(a), 5.03(e), 5.03(f)(i)(A), 5.03(f)(ii) or
5.03(f)(iv)) and such failure shall remain unremedied for 30 days after the
date on which a Responsible Officer of any Borrower becomes aware of such
failure; provided that with respect to Section 5.03(h)(iii) no Event of Default
shall have occurred as a result of the failure to deliver the notice
contemplated thereby if AYE has made the prepayment associated therewith
pursuant to Section 2.06(b); or
(e) any Borrower any of its Subsidiaries shall fail to perform or
observe any other covenant or agreement (not specified in Section 6.01(a),
6.01(c) or 6.01(d) above) contained in any Loan Document on its part to be
performed or observed and such failure shall remain unremedied for 60 days
after the date on which a Responsible Officer of such Borrower becomes aware of
such failure; or
(f) (i) AYE or any of its Subsidiaries (A) fails to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of any Debt (other than Debt under the Loan
Documents or Debt which is subject to Contest) having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) or
with respect to any Hedge Agreement with an Agreement Value of more than
$25,000,000 either individually or in the aggregate or (B) fails to observe or
perform any other agreement or condition relating to any such Debt or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event occurs, the effect of which default or other event is to cause, or
to permit the holder or holders of such Debt (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, (1) such Debt to be demanded, become due,
repurchased, prepaid, defeased or redeemed (automatically or otherwise), (2) an
offer to repurchase, prepay, defease or redeem such Debt to be made, prior to
its stated maturity, or (3) cash collateral in respect thereof to be demanded;
or (ii) there occurs under any Hedge Agreement an Early Termination Date (as
defined in such Hedge Agreement) resulting from (A) any event of default under
such Hedge Agreement as to which AYE or any Subsidiary is the Defaulting Party
(as defined in such Hedge Agreement) or (B) any Termination Event (as so
defined) under such Hedge Agreement as to which AYE or any Subsidiary is an
Affected Party (as defined in such Hedge Agreement) and, in either event, the
termination value owed by AYE or such Subsidiary as a result thereof is greater
than the $25,000,000 either individually or in the aggregate; or
(g) any Insolvency Proceeding shall occur with respect to AYE or any
of its Subsidiaries; or
(h) there is entered against AYE or any of its Subsidiaries (i) any
final judgment or order for the payment of money in an amount exceeding
$40,000,000 either individually or in the aggregate other than in respect of
the Merrill Lynch Litigation (to the extent not covered by independent
third-party insurance by an insurer that is rated at least "A" by A.M. Best
Company and such coverage is not the subject of a bona fide dispute), or (ii)
any one or more non-monetary final judgments that have, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
and, in the case of (i) or (ii), (y) enforcement proceedings are commenced by
any creditor upon such judgment or order and such proceedings are not stayed
within 10 Business Days, or (z) there is a period of 30 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or
(i) any provision of any Loan Document shall be canceled, terminated,
declared to be null and void or shall otherwise cease to be valid and binding
on any Borrower, in each case, as determined in a final, non-appealable
judgment of a court of competent jurisdiction, or any Borrower shall deny in
writing any further liability or obligation thereunder; provided, however, that
the foregoing provisions of this clause (i) shall not apply to any Loan
Document that is canceled, terminated, declared to be null and void or which
ceases to be valid or binding on any Borrower in accordance with its terms or
by agreement of the requisite parties thereto; or
(j) a Change of Control shall occur; or
(k) any ERISA Event shall have occurred with respect to a Plan and AYE
or any Subsidiary or any ERISA Affiliate has incurred or is reasonably expected
to incur liability as a result of or in connection with such ERISA Event in an
amount exceeding, in the aggregate with any amounts applicable under clauses
(l) and (m) of this Section 6.01, $25,000,000; or
(l) AYE, any of its Subsidiaries or any ERISA Affiliate 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
AYE, any of its Subsidiaries and the ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification), exceeds, in the aggregate
with any amounts applicable under clauses (k) and (m) of this Section 6.01,
$25,000,000 or requires payments exceeding $25,000,000 per annum; or
(m) AYE or any of its Subsidiaries or any ERISA Affiliate 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, and as a result of such reorganization or termination the
aggregate annual contributions of AYE, its Subsidiaries and the ERISA
Affiliates 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 plan years of such Multiemployer Plans immediately
preceding the plan year in which such reorganization or termination occurs by
an amount exceeding, in the aggregate with any amounts applicable under clauses
(k) and (l) of this Section 6.01, $25,000,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare all or any part of the Commitments of each Lender Party and the
obligation of each Lender Party to make Advances and of the Issuing Banks to
make L/C Credit Extensions to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, (A) (I) by notice to the Borrowers, declare all or any part
of the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers;
provided that upon the occurrence of any Event of Default described in Section
6.01(g), (1) the Commitments of each Lender Party and the obligation of each
Lender Party to make Advances and of the Issuing Banks to make L/C Credit
Extensions shall automatically be terminated and (2) the Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrowers, and the obligation of the
Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case, without further act of the
Administrative Agent or any Lender.
SECTION 6.02. Actions in Respect of Letters of Credit upon Default. If
any Event of Default shall have occurred and be continuing, the Administrative
Agent may, or shall at the request of the Required Lenders, irrespective of
whether it is taking any of the actions described in Section 6.01 or otherwise,
make demand upon each Borrower to, and forthwith upon such demand such Borrower
will, Cash Collateralize, for deposit in the Cash Collateral Account, an amount
equal to the Outstanding Amount of all L/C Obligations for which such Borrower
is the Related Borrower. If at any time the Administrative Agent determines
that any Cash Collateral is subject to any right or claim of any Person other
than the Administrative Agent and the Lender Parties or that the Cash
Collateral is less than the Outstanding Amount of all L/C Obligations for which
a Borrower is the Related Borrower, such Borrower will, forthwith upon demand
by the Administrative Agent, pay to the Administrative Agent, additional Cash
Collateral to be deposited and held in the Cash Collateral Account, in an
amount equal to the excess of (a) such aggregate Outstanding Amount of all L/C
Obligations for which such Borrower is the Related Borrower over (b) the total
amount of Cash Collateral that the Administrative Agent determines to be free
and clear of any such right and claim.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party hereby
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers and discretion under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent by
the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including enforcement or collection of the Notes), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding
upon all Lender Parties and all holders of Notes; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this
Agreement or Applicable Law. The Administrative Agent agrees to give to each
Lender Party prompt notice of each notice given to it by any Borrower or any
other Person pursuant to the terms of this Agreement or any other Loan
Documents.
SECTION 7.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (b) may consult with legal counsel (including counsel for any
Borrower), independent public accountants and other experts selected in good
faith by it and shall not be liable for any action taken or omitted to be taken
in good faith by it in accordance with the advice of such counsel, accountants
or experts; (c) makes no warranty or representation to any Lender Party and
shall not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
any Loan Document on the part of any Borrower or to inspect the property
(including the books and records) of any Borrower; (e) shall not be responsible
to any Lender Party for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Loan Document or any other instrument or document furnished pursuant
thereto; and (f) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, telecopy or telex) reasonably believed by it
to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. CNAI, CGMI, Citibank, BNS, BAS, BofA, CSCI, PCM, PNC and
Affiliates. With respect to its Commitment, the Advances made by it, the L/C
Credit Extensions and the Notes issued to it, CNAI, CGMI, Citibank, BNS, BAS,
BofA, CSCI, PCM and PNC shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent or an Arranger Party, respectively; and the terms
"Lender", "Lenders", "Revolving Lender", "Revolving Lenders", "Term Lender" or
"Term Lenders" shall, unless otherwise expressly indicated, include each of
CNAI, CGMI, Citibank, BNS, BAS, BofA, CSCI, PCM and PNC in its individual
capacity, as applicable. CNAI, CGMI, Citibank, BNS, BAS, BofA, CSCI, PCM and
PNC and their respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, any Borrower, any Subsidiary
of any Borrower and any Person that may do business with or own securities of
any Borrower or any such Subsidiary, all as if CNAI, CGMI, Citibank, BNS, BAS,
BofA, CSCI, PCM and PNC were not the Administrative Agent or an Arranger Party,
respectively, and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent, any Arranger Party or any other Lender Party, and based
on the financial statements referred to in Sections 4.01(f), 5.03(b) and
5.03(c) hereto and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents to which it is a party. Each Lender
Party also acknowledges that it will, independently and without reliance upon
the Administrative Agent, any Arranger Party or any other Lender Party and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents to which it is a party.
SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees
to indemnify the Administrative Agent and the Arranger Parties (in each case to
the extent not promptly reimbursed by the Borrowers) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Administrative Agent or
any Arranger Party, as the case may be, in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative
Agent or any Arranger Party under the Loan Documents (collectively, the
"Indemnified Costs"); provided that no Lender Party shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting directly and
primarily from the Administrative Agent's or such Arranger Party's gross
negligence or willful misconduct as found in a final, non-appealable judgment
by a court of competent jurisdiction. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent and each Arranger
Party promptly upon demand for its ratable share of any costs and expenses
(including fees and expenses of counsel) payable by any Borrower under Section
8.04, to the extent that the Administrative Agent or such Arranger Party is not
promptly reimbursed for such costs and expenses by such Borrower. In the case
of any investigation, litigation or proceeding giving rise to any Indemnified
Costs, this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by any Lender Party or any other Person.
(b) Each Lender Party severally agrees to indemnify each Issuing Bank
(to the extent not promptly reimbursed by any Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against any Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by such Issuing Bank under the Loan Documents (including the issuance or
transfer of, or payment or failure to pay under, any Letter of Credit);
provided that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting directly and primarily from
such Issuing Bank's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender Party agrees to reimburse such Issuing
Bank promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by any
Borrower under Section 8.04, to the extent that such Issuing Bank is not
promptly reimbursed for such costs and expenses by such Borrower.
(c) For purposes of this Section 7.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (i) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties and (ii) their respective Pro
Rata Shares of the L/C Obligations outstanding at such time; provided that the
aggregate principal amount of L/C Credit Extensions owing to such Issuing Bank
shall be considered to be owed to the Revolving Lenders ratably in accordance
with their respective Revolving Commitments. The failure of any Lender Party to
reimburse the Administrative Agent, any Arranger Party or any Issuing Bank, as
the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to the Administrative Agent, any
Arranger Party or any Issuing Bank, as the case may be, as provided herein
shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Administrative Agent, any Arranger Party or any Issuing Bank, as
the case may be, for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse the
Administrative Agent, any Arranger Party or any Issuing Bank, as the case may
be, for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
7.05 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. Successor Administrative Agent. The Administrative Agent
may resign at any time by giving written notice thereof to the Lender Parties
and the Borrowers and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lender Parties, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or of any State thereof and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent
shall have become effective, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
SECTION 7.07. Liability. (a) Neither the Administrative Agent nor any
Arranger Party shall be liable for any error of judgment or for any act done or
omitted to be done by it in good faith or for any mistake of fact or law, or
for anything it may do or refrain from doing, except to the extent that any
such liability is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted directly and primarily from its gross
negligence or willful misconduct.
(b) Each 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 Letter of Credit. Neither any Issuing Bank, any of its Affiliates, nor any
of its respective officers, directors, agents, employees, attorneys and
advisors 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 such Issuing Bank against presentation of documents that do not
comply with the terms of any Letter of Credit, including failure of any
documents to bear any reference or adequate reference to any Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit, except that such Borrower shall have a claim
against such Issuing Bank, and such Issuing Bank shall be liable to such
Borrower, to the extent of any direct, but not consequential, damages suffered
by such Borrower that such Borrower proves were primarily caused by (i) such
Issuing Bank's willful misconduct or gross negligence as determined in a final,
non-appealable judgment by a court of competent jurisdiction in determining
whether documents presented under any Letter of Credit comply with the terms
thereof or (ii) such Issuing Bank's willful failure to make lawful payment
under any Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of any Letter of
Credit. In furtherance and not in limitation of the foregoing, such Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 7.08. Treatment of Lenders. Each of the Administrative Agent
and the Arranger Party may treat the Lender Parties as the holders of
Commitments or L/C Credit Extensions and as the absolute owners thereof for all
purposes under this Agreement and the other Loan Documents unless the
Administrative Agent and the Arranger Party shall receive notice to the
contrary from such Lender Party.
SECTION 7.09. Miscellaneous. (a) Instructions. The Administrative
Agent shall have the right at any time to seek instructions concerning the
administration of its duties and obligations hereunder or any other Loan
Documents from the Lenders or any court of competent jurisdiction. In the event
there is any disagreement between the parties to this Agreement and the terms
of this Agreement do not unambiguously mandate the action the Administrative
Agent is to take or not to take in connection therewith under the circumstances
then existing, or the Administrative Agent is in doubt as to what action it is
required to take or not to take, the Administrative Agent shall be entitled to
refrain from taking any action until directed otherwise in writing by a request
signed jointly by the Required Lenders or by order of a court of competent
jurisdiction.
(b) No Obligation. None of the provisions of this Agreement or the
other Loan Documents shall be construed to require the Administrative Agent to
expend or risk its own funds or otherwise to incur any personal financial
liability in the performance of any of its duties hereunder or thereunder. The
Administrative Agent shall not be under any obligation to exercise any of the
rights or powers vested in it by this Agreement or the other Loan Documents, at
the request or direction of any Borrower, or any Lender Party, (i) if any
action it has been requested or directed to take would be contrary to
Applicable Law, or (ii) unless the Administrative Agent shall have been offered
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction (including interest thereon from the time incurred until reimbursed).
SECTION 7.10. Arranger Parties. Except as set forth in Section 8.12,
none of the Lenders or other Persons identified on the facing page or signature
pages of this Agreement as a "joint lead arranger", "lead arranger", "joint
book runner", "book runner", "syndication agent", "documentation agent" or
"co-documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders
or other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc.. No amendment or waiver of any
provision of this Agreement and the Notes, nor consent to any departure by any
Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Required Lenders and, in the case of an amendment
only, the Borrowers, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that no amendment waiver or consent shall, unless in writing
and signed by: (a) all of the Lenders at any time amend (i) this Section 8.01,
(ii) the term "Required Lenders" or (iii) any other provision or definition of
this Agreement relating to the percentage of consent required for any
amendment, waiver or consent under this Agreement (other than pursuant to
clause (b)), (b) all of the Revolving Lenders amend the term "Required
Revolving Lenders"; and (c) all of the Lenders affected thereby, at any time
(i) reduce the principal of, or rates of interest on, the Notes or any fees or
other amounts payable hereunder or extend or postpone any scheduled dates for
payment thereof (including pursuant to Section 2.05, 2.06 or 2.07), (ii)
extend the Final Maturity Date, (iii) increase any Commitment or subject any
Lender Party to any additional obligation, (iv) increase the amount of any
Letter of Credit that, in each case, shall be required for the Required
Lenders or any of them to take any action hereunder, (v) alter any provision
of this Agreement requiring the pro rata sharing of payments among the Lender
Parties, (vi) modify any provision or definition of this Agreement or of
Exhibit C relating to the percentage of consents required in connection with
any assignment or participation of any right or obligation under this
Agreement, (vii) limit the liability of any Borrower hereunder or under any of
the Notes and (viii) amend the definition of "Interest Period" so as to allow
the durations of Interest Periods to be in excess of six months without regard
to the availability to all Lenders of such duration; provided further that (A)
no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent or the Issuing Banks, as the case may be, in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent or any Issuing Bank under this Agreement, and (B)
Section 8.07(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Advances are being
funded by any SPV at the time of such amendment, waiver or other modification.
SECTION 8.02. Notices, Etc. (a) Notices and other communications
provided for hereunder shall be either (i) in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied or otherwise
delivered or (ii) as and to the extent set forth in Section 8.02(b) and in the
proviso to this Section 8.02(a), if to any Borrower, to or care of AYE, at its
address at Allegheny Energy, Inc., 800 Cabin Hill Drive, Greensburg, PA 15601,
Fax: (724) 830-5151, Attention: General Counsel and Chief Financial Officer;
if to any Initial Lender, the Initial Issuing Bank, any Lender or any Issuing
Bank, at its Domestic Lending Office; and if to the Administrative Agent, at
its address at Two Penns Way, New Castle, DE 19720; Attention: Bank Loan
Syndications Department; or, as to any Borrower or the Administrative Agent,
at such other address as shall be designated by AYE (on its own behalf or on
behalf of AESC) or the Administrative Agent, as the case may be, in a written
notice to the other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to AYE and the
Administrative Agent, provided that materials required to be delivered
pursuant to Sections 5.03(b) and 5.03(c) shall be delivered to the
Administrative Agent as specified in Section 8.02(b) or as otherwise specified
to AYE by the Administrative Agent. All such notices and communications shall,
when mailed, telecopied, telegraphed or e-mailed, be effective when deposited
in the mails, telecopied, delivered to the telegraph company or confirmed by
e-mail, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II, Article III or Article VII shall
not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
So long as CNAI is the Administrative Agent, each Borrower
hereby agrees that it will provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to the Loan Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an
existing, borrowing or other extension of credit (including any election of an
interest rate or interest period relating thereto), (ii) relates to the payment
of any principal or other amount due under the Agreement prior to the scheduled
date therefor, (iii) provides notice of any default or event of default under
the Agreement or (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of the Agreement and/or any borrowing or other
extension of credit thereunder (all such non-excluded communications being
referred to herein collectively as "Communications"), by transmitting the
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to oploanswebadmin@citigroup.com. In addition, each
Borrower agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in the Loan Documents but only to the extent
requested by the Administrative Agent.
(c) Each Borrower further agrees that the Administrative Agent may
make the Communications available to the Lender Parties by posting the
Communications on Intralinks or a substantially similar electronic
transmission system (the "Platform").
(d) THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE". THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR
THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ADVISORS OR REPRESENTATIVES (COLLECTIVELY, "AGENT PARTIES") HAVE ANY LIABILITY
TO ANY BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY
KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF ANY BORROWER'S OR THE ADMINISTRATIVE AGENT'S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(e) The Administrative Agent agrees that the receipt of the
Communications by the Administrative Agent at its e-mail address set forth
above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Loan Documents. Each Lender Party
agrees that receipt of notice to it (as provided in the next sentence)
specifying that the Communications have been posted to the Platform shall
constitute effective delivery of the Communications to such Lender Party for
purposes of the Loan Documents. Each Lender Party agrees to notify the
Administrative Agent in writing (including by electronic communication) from
time to time of such Lender Party's e-mail address to which the foregoing
notice may be sent by electronic transmission and (ii) that the foregoing
notice may be sent to such e-mail address.
(f) Nothing herein shall prejudice the right of the Administrative
Agent or any Lender Party to give any notice or other communication pursuant
to any Loan Document in any other manner specified in such Loan Document.
SECTION 8.03. No Waiver, Remedies. No failure on the part of any
Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs and Expenses. (a) AYE agrees to pay within 30
days (or earlier if, and to the extent, required under Article III) after the
presentation of an invoice all reasonable third-party costs and expenses of
(i) the Administrative Agent in connection with the administration of this
Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby (but without duplication of such obligation under any other
Loan Document) and (ii) the Administrative Agent and the Arranger Parties in
connection with the preparation, negotiation, execution and delivery of this
Agreement, the Notes, the other Loan Documents and the other documents to be
delivered hereunder or thereunder, including (A) all due diligence,
syndication (including printing, distribution and bank meetings),
transportation, computer, duplication, appraisal, consultant, audit expenses
and, where appropriate, registration of all Loan Documents and (B) the
reasonable fees and expenses of counsel for the Administrative Agent. AYE
further agrees to pay on demand all costs and expenses of the Administrative
Agent, each Arranger Party and each Lender Party, if any (including reasonable
counsel fees and expenses), in connection with (1) the enforcement (whether
through negotiations, legal proceedings or otherwise) of this Agreement, the
Notes, the other Loan Documents and the other documents to be delivered
hereunder or thereunder, including reasonable fees and expenses of counsel for
the Administrative Agent, each Arranger Party and each Lender Party; (2) the
exercise or enforcement of any of the rights of the Administrative Agent, any
Arranger Party or any Lender Party under any Loan Document; (3) the failure by
any Borrower to perform or observe any of the provisions hereof; and (4) any
amendments, modifications, waivers or consents required or requested under the
Loan Documents.
(b) Each Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Arranger Party and each Lender Party and each of
their Affiliates and their respective officers, directors, employees, agents,
trustees, attorneys and advisors (each, an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and expenses
(including reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including in connection with any
investigation, litigation or proceeding or preparation of a defense in
connection therewith) or relating to (i) execution, amendment or
administration of this Agreement, the other Loan Documents, any Letter of
Credit, any of the transactions contemplated herein or therein or the actual
or proposed use of the proceeds of the Advances or any L/C Borrowings, (ii)
the issuance or transfer of, or payment or failure to pay under, any Letter of
Credit or (iii) the actual or alleged presence of Hazardous Materials
requiring remediation or other response pursuant to Environmental Law on any
property of such Borrower or any of its Subsidiaries or any Environmental
Action relating in any way to such Borrower or any of its Subsidiaries, except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted directly and primarily from such Indemnified Party's gross negligence
or willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Borrower, its directors, equityholders or
creditors or an Indemnified Party or any other Person, whether or not any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. Each Borrower also agrees
not to assert any claim against the Administrative Agent, any Lender Party or
any of their Affiliates, or any of their respective officers, directors,
employees, agents, attorneys and advisors, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Facilities, the actual or proposed use of the
proceeds of the Advances or any Letter of Credit, the Loan Documents or any of
the transactions contemplated by the Loan Documents.
(c) The indemnities provided by each Borrower pursuant to this
Agreement shall survive the expiration, cancellation, termination or
modification of this Agreement or the other Loan Documents, the resignation or
removal of the Administrative Agent, and the provision of any subsequent or
additional indemnity by any Person.
(d) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by any Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.06(a), 2.10(b) or
2.11(c), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or if any Borrower fails to make any payment or
prepayment of an Advance for which a notice of prepayment has been given or
that is otherwise required to be made, whether pursuant to Section 2.04, 2.06
or 6.01 or otherwise, such Borrower shall, upon demand by such Lender Party
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party any amounts required
to compensate such Lender Party for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment or Conversion or such
failure to pay or prepay, as the case may be, including any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender
Party to fund or maintain such Advances.
(e) If any Borrower fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including fees and
expenses of counsel and indemnities, such amount may be paid on behalf of such
Borrower by the Administrative Agent or any Lender Party, in its sole
discretion.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or
the granting of the consent specified by Section 6.02 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.02, the Administrative Agent and each Lender Party and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law (including PUHCA), to set
off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Administrative Agent, such Lender Party or such Affiliate to
or for the credit or the account of any Borrower against any and all of the
Obligations of such Borrower now or hereafter existing under the Loan
Documents, irrespective of whether the Administrative Agent or such Lender
Party shall have made any demand under this Agreement or such Note or Notes
and although such Obligations may be unmatured. The Administrative Agent and
each Lender Party agrees promptly to notify the Borrowers 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. The
rights of the Administrative Agent and each Lender Party and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of set-off) that the Administrative Agent, such Lender
Party and their respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
at such time as it shall have been executed by the Borrowers and the
Administrative Agent and the Administrative Agent shall have been notified by
each Initial Lender Party that such Initial Lender Party has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrowers,
the Administrative Agent and each Lender Party and their respective successors
and assigns, except that each Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of
the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender Party
may and, if requested by AYE (following (i) a demand by such Lender Party for
the payment of additional compensation pursuant to Section 2.11 or 2.13, (ii)
an assertion by such Lender Party pursuant to Section 2.09 that it is unlawful
for such Lender Party to make Eurodollar Rate Advances or (iii) a failure by
such Lender Party to approve any amendment or waiver pursuant to Section 8.01,
provided that such amendment or waiver would otherwise have been effective but
for such Lender Party's failure, together with the failure of any other Lender
Party to which AYE has made a similar request under this clause (a), to
approve such amendment or waiver, provided further that, with respect to
clause (iii), such failure to approve shall have continued for a period of not
less than five Business Days following written notice by AYE to such Lender
Party of such request by AYE) shall, assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
(y) all or a portion of its Revolving Commitment, the Revolving Advances owing
to it, L/C Credit Extensions and the Revolving Note or Revolving Notes held by
it, and/or (z) all or a portion of its Term Commitment, the Term Advances
owing to it, and the Term Note or Term Notes held by it), including any pledge
or assignment to secure obligations to a Federal Reserve Bank; provided,
however, that (i) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender Party, an Affiliate of any
Lender Party or an Approved Fund or an assignment of all of a Lender Party's
rights and obligations under this Agreement, the aggregate amount of (A) any
Term Commitment or Term Advance being assigned to such Person pursuant to such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 (or such
lesser amount as shall be approved by the Administrative Agent) and shall be
in increments of $1,000,000 in excess thereof, or (B) any Revolving Commitment
or Revolving Commitment being assigned to such Eligible Assignee pursuant to
such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $5,000,000 (or
such lesser amount as shall be approved by the Administrative Agent) and shall
be in increments of $1,000,000 in excess thereof, (ii) each such assignment
shall be to an Eligible Assignee; provided that the Issuing Bank shall have
sole discretion to consent to such Person being an Eligible Assignee, (iii)
(A) with respect to any Term Commitment or any Term Advance, no such
assignments shall be permitted without the consent of the Administrative Agent
(such consent not to be unreasonably withheld) and, so long as no Default has
occurred and is continuing, the consent of AYE (such consent not to be
unreasonably withheld), except assignments to any other Lender Party, an
Affiliate of any Lender, an Approved Fund or to any Federal Reserve Bank, and
(B) with respect to any Revolving Commitment, Revolving Advance, L/C Credit
Extension or L/C Borrowing, no such assignments shall be permitted without the
consent of any Issuing Bank acting in its sole discretion, the Administrative
Agent (such consent not to be unreasonably withheld or delayed) and, so long
as no Default has occurred and is continuing, the consent of AYE (such consent
not to be unreasonably withheld), except, with respect to AYE's consent only,
assignments to any other Lender Party, an Affiliate of any Lender, any
Approved Fund or to any Federal Reserve Bank, and (iv) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with any Note or Notes subject to such assignment and a processing
and recordation fee of $3,500 (such fee to be paid by AYE if such assignment
is being made pursuant to a request of AYE therefor under this Section
8.07(a)); provided that only one such fee shall be payable in the case of
contemporaneous assignments to or by two or more Approved Funds and (v) with
respect to Revolving Commitment or Revolving Advance, each such assignment
thereof shall be made on a pro rata basis with respect to each of (A) such
Revolving Lender's Revolving Advances and L/C Credit Extensions and (B) such
Revolving Lender's Revolving Commitment; provided, further, that (I) each such
assignment made as a result of a request by AYE pursuant to this Section
8.07(a) shall be arranged by AYE with the approval of the Administrative
Agent, which approval shall not be unreasonably withheld or delayed, and shall
be either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that, in the aggregate, cover all of the rights and obligations of
the assigning Lender under this Agreement and (II) no Lender shall be
obligated to make any such assignment as a result of a demand by AYE pursuant
to this Section 8.07(a) unless and until such Lender shall have received one
or more payments from one or more Eligible Assignees in an aggregate amount at
least equal to the aggregate outstanding principal amount of the Advances
owing to such Lender, together with accrued interest thereon to the date of
payment of such principal amount, and from AYE and/or one or more Eligible
Assignees in an aggregate amount equal to all other amounts payable to such
Lender under this Agreement and the other Loan Documents (including, without
limitation, any amounts owing under Sections 2.11, 2.13 or 8.04).
(b) Any Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of any Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(c) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as
the case may be, hereunder and (ii) the Lender or Issuing Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than its rights under Sections 2.11, 2.13 and 8.04 to the extent
any claim thereunder relates to an event arising prior to such assignment) and
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the remaining portion of an
assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, each
Lender Party assignor thereunder and each assignee thereunder confirm to and
agree with each other and the other parties thereto and hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning
Lender Party makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with any Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan Document or any
other instrument or document furnished pursuant thereto; (ii) such assigning
Lender Party makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Borrower or the performance or
observance by any Borrower of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; (iii) such
assignee confirms that it has received a copy of this Agreement and each other
Loan Document, together with copies of the financial statements referred to in
Sections 4.01(f), 5.03(b) and 5.03(c) and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such
assigning Lender Party or any other Lender Party and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement or
any other Loan Document; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Administrative
Agent by the terms hereof and thereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender or Issuing Bank, as the case
may be.
(e) The Administrative Agent shall maintain at its address referred
to in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses
of the Lender Parties and the Commitments of, and principal amount of the
Advances and L/C Borrowings owing to, each Lender Party from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrowers, the Administrative
Agent and the Lender Parties shall treat each Person whose name is recorded in
the Register as a Lender Party hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrowers or the
Administrative Agent or any Lender Party at any reasonable time and from time
to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit
C, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers. In the case of any assignment by a Lender, within five Business
Days after its receipt of such notice, the Borrowers, at their own expense,
shall execute and deliver to the Administrative Agent in exchange for the
surrendered Note or Notes a new Note to the order of such Eligible Assignee in
an amount equal to the Revolving Commitment or Term Commitment, as the case
may be, assumed by it pursuant to such Assignment and Acceptance and, if any
assigning Lender has retained a Revolving Commitment or Term Commitment, as
the case may be, hereunder, a new Note to the order of such assigning Lender
in an amount equal to the Revolving Commitment or Term Commitment, as the case
may be, retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit A-1 or Exhibit A-2, as applicable.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Borrower or any Affiliate of any Borrower) in or to all or a
portion of its rights and obligations under this Agreement (including (i) all
or a portion of its Revolving Commitment, the Revolving Advances owing to it,
L/C Credit Extensions and the Revolving Note or Revolving Notes (if any) held
by it, and/or (ii) all or a portion of its Term Commitment, the Term Advances
owing to it, and the Term Note or Term Notes (if any) held by it); provided,
however, that (i) such Lender Party's obligations under this Agreement
(including its Revolving Commitment and L/C Credit Extensions or Term
Commitment, as the case may be) shall remain unchanged, (ii) such Lender Party
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender Party shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the
Borrowers, the Administrative Agent and the other Lender Parties shall
continue to deal solely and directly with such Lender Party in connection with
such Lender Party's rights and obligations under this Agreement and (v) no
participant under any such participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to
any departure by any Borrower therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation.
(h) Notwithstanding anything in this Agreement to the contrary
(including any other provision regarding assignments, participations,
transfers or novations), any Lender (a "Granting Lender") may, without the
consent of any other party hereto, grant to a special purpose vehicle (whether
a corporation, partnership, limited liability company, trust or otherwise, an
"SPV") sponsored or managed by the Granting Lender or any Affiliate thereof, a
participation in all or any part of any Advance (including the Commitment
therefor) that such Granting Lender has made or will make pursuant to this
Agreement; provided that (i) such Granting Lender's obligations under this
Agreement (including its Commitment) shall remain unchanged; (ii) such
Granting Lender shall remain the holder of its Note for all purposes under
this Agreement; and (iii) the Borrowers, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Granting
Lender in connection with such Granting Lender's rights and obligations under
the Loan Documents. Each party hereto hereby agrees that (A) no SPV will be
entitled to any rights or benefits that a Lender would not otherwise be
entitled to under this Agreement or any other Loan Document; and (B) an SPV
may assign its interest in any Advance under this Agreement to any Person that
would constitute a Lender subject to the satisfaction of all requirements for
an assignment by any Lender set forth in this Section 8.07. Notwithstanding
anything in this Agreement to the contrary, the Granting Lender and any SPV
may, without the consent of any other party to this Agreement, and without
limiting any other rights of disclosure of the Granting Lender under this
Agreement, disclose on a confidential basis any non-public information
relating to its funding of its Advances to (1) (in the case of the Granting
Lender) any actual or prospective SPV, (2) (in the case of an SPV) its
lenders, sureties, reinsurers, guarantors or credit liquidity enhancers, (3)
their respective directors, officers, and advisors, and (4) any rating agency.
(i) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to any Borrower furnished to such Lender
Party by or on behalf of such Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(j) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including the Advances
owing to it and the Note or Notes held by it) to secure the obligations of
such Lender Party, including any pledge or assignment to secure obligations to
a Federal Reserve Bank; provided that no such pledge or assignment shall
release such Lender Party from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender Party as a party hereto.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
SECTION 8.09. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property,
to the non-exclusive jurisdiction of any New York State court or Federal court
of the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or any of the other Loan Documents to which it is a party,
or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the fullest extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of
the other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents to which it is a party in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.10. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.11. Waiver of Jury Trial. Each Borrower, the Administrative
Agent and the Lender Parties irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the
Advances, any Letter of Credit or the actions of the Administrative Agent or
any Lender Party in the negotiation, administration, performance or
enforcement thereof.
SECTION 8.12. Confidentiality. (a) Neither the Administrative Agent,
any Arranger Party nor any Lender Party may, without the prior written consent
of AYE, disclose to any Person (i) any confidential, proprietary or non-public
information of the Borrowers furnished to the Administrative Agent, the
Arranger Parties or the Lender Parties by the Borrowers (such information
being referred to collectively herein as the "Confidential Information") or
(ii) the fact that the Confidential Information has been made available or any
of the terms, conditions or other facts with respect to the Confidential
Information, in each case except as permitted by Section 8.07 or this Section
8.12 and except that the Administrative Agent, each of the Arranger Parties
and each of the Lender Parties may disclose Confidential Information (i) to
its and its Affiliates' employees, officers, directors, agents and advisors
(collectively, "Representatives") who need to know the Confidential
Information for the purpose of administering or enforcing its rights under
this Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby or for the discharge of their duties (it being understood
that the Representatives 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 on substantially the same
terms as provided herein), (ii) to the extent requested by any regulatory
authority having jurisdiction over it or to the extent necessary for purposes
of enforcing this Agreement or any other Loan Document, (iii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (iv) to any other party to this Agreement, (v) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (vi) subject to
an agreement containing provisions substantially the same as those of this
Section 8.12, to any assignee or pledgee of or participant in, or any
prospective assignee or pledgee of or participant in, any of its rights or
obligations under this Agreement, so long as the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Confidential Information and such Persons have agreed in writing (or with
respect to any rating agency, in writing or otherwise) to keep such
Confidential Information confidential on substantially the same terms as
provided herein, (vii) to the extent such Confidential Information (A) is or
becomes generally available to the public on a non-confidential basis other
than as a result of a breach of this Section 8.12 by the Administrative Agent,
such Arranger Party or such Lender Party, or (B) is or becomes available to
the Administrative Agent, such Arranger Party or such Lender Party on a
nonconfidential basis from a source other than a Borrower and (viii) with the
consent of AYE.
(b) Neither the Administrative Agent, any Arranger Party nor any
Lender Party shall, without the prior written consent of AYE, use, either
directly or indirectly, any of the Confidential Information except in
connection with this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby.
(c) Notwithstanding the foregoing, any of the parties hereto may
disclose to any and all Persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the transactions contemplated by this
Agreement and the other Loan Documents and all materials of any kind
(including opinions or other tax analyses) that are provided to such parties
relating to such U.S. tax treatment and U.S. tax structure.
(d) In the event that the Administrative Agent, any Arranger Party or
any Lender Party becomes legally compelled to disclose any of the Confidential
Information otherwise than as contemplated by Section 8.12(a), the
Administrative Agent, such Arranger Party or such Lender Party shall provide
AYE with notice of such event promptly upon its obtaining knowledge thereof
(provided that it is not otherwise prohibited by Applicable Law from giving
such notice) so that AYE may seek a protective order or other appropriate
remedy. In the event that such protective order or other remedy is not
obtained, the Administrative Agent, such Arranger Party or such Lender Party
shall furnish only that portion of the Confidential Information that it is
legally required to furnish and shall cooperate with AYE's counsel to enable
AYE to obtain a protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information.
(e) In the event of any breach of this Section 8.12, AYE shall be
entitled to equitable relief (including injunction and specific performance)
in addition to all other remedies available to it at law or in equity.
(f) Neither the Administrative Agent, any Arranger Party nor any
Lender Party shall make any public announcement, advertisement, statement or
communication regarding any Borrower, its Affiliates (insofar as such
announcement, advertisement, statement or communication relates to such
Borrower or the transactions contemplated hereby) or this Agreement or the
transactions contemplated hereby without the prior consent of AYE (such
consent not to be unreasonably withheld or delayed).
(g) The obligations of the Administrative Agent, each Arranger Party
and each Lender under this Section 8.12 shall survive for a period of one year
following the termination or expiration of this Agreement.
SECTION 8.13. Benefits of Agreement. Nothing in this Agreement or any
other Loan Document, express or implied, shall give to any Person, other than
the parties hereto, each Indemnified Party and each of their successors and
permitted assigns under this Agreement or any other Loan Document, any benefit
or any legal or equitable right or remedy under this Agreement; provided that
each Indemnified Party and its successors and assigns shall not have any
benefit or any legal or equitable right or remedy under this Agreement other
than as provided by Section 8.04(b).
SECTION 8.14. Severability. If any provision of this Agreement shall
be invalid, illegal or unenforceable, then to the extent permitted by law, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 8.15. Limitations. (a) The obligations, liabilities or
responsibilities of any party hereunder shall be limited to those obligations,
liabilities or responsibilities expressly set forth and attributed to such
party pursuant to this Agreement or otherwise applicable under Applicable Law.
(b) In no event shall any Indemnified Party be liable for, and each
Borrower hereby agrees not to assert any claim against any Indemnified Party,
on any theory of liability, for consequential, incidental, indirect, punitive
or special damages arising out of or otherwise relating to the Notes, this
Agreement, the other Loan Documents, any of the transactions contemplated
herein or therein or the actual or proposed use of the proceeds of the
Advances or L/C Credit Extensions.
SECTION 8.16. Survival. (a) Without prejudice to any agreement of any
Borrower hereunder or under any other Loan Document, the indemnification and
expense reimbursement obligations of such Borrower contained in the Existing
Credit Agreement to which it is a party shall survive the Closing Date and the
payment in full of principal, interest and all other amounts payable
thereunder.
(b) Notwithstanding anything in this Agreement to the contrary,
Sections 2.08(c), 7.05, 7.10, 8.04, 8.10, 8.11, 8.12 and 8.16 shall survive
any termination of this Agreement. In addition, each representation and
warranty made or deemed to be made hereunder shall survive the making of such
representation and warranty, and no Lender Party shall be deemed to have
waived, by reason of making any Advance or making any payment pursuant
thereto, any Default that may arise by reason of such representation or
warranty proving to have been false or misleading, notwithstanding that such
Lender Party may have had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time such Advance or
L/C Credit Extension was made.
SECTION 8.17. USA Patriot Act Notice. Each Lender Party and the
Administrative Agent (for itself and not on behalf of any Lender Party) hereby
notifies each Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
"Act"), it is required to obtain, verify and record information that
identifies such Borrower, which information includes the name and address of
such Borrower and other information that will allow such Lender Party or the
Administrative Agent, as applicable, to identify such Borrower in accordance
with the Act.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
ALLEGHENY ENERGY, INC.,
as Borrower
By /s/ Suzanne C. Lewis
------------------------------
Name: Suzanne C. Lewis
Title: Vice President and Treasurer
ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
as Borrower
By /s/ Suzanne C. Lewis
------------------------------
Name: Suzanne C. Lewis
Title: Treasurer
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By /s/ Caesar W. Wyszomirski
-----------------------------
Name: Caesar W. Wyszomirski
Title: V.P.
CITICORP NORTH AMERICA, INC.,
as Initial Lender
By /s/ Caesar W. Wyszomirski
-----------------------------
Name: Caesar W. Wyszomirski
Title: V.P.
THE BANK OF NOVA SCOTIA,
as Initial Lender
By /s/ Thane Rattew
-----------------------------
Name: Thane Rattew
Title: Managing Director
BANK OF AMERICA, N.A.,
as Initial Lender
By /s/ Michelle A. Schoenfield
-----------------------------
Name: Michelle A. Schoenfield
Title: Senior Vice President
CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as Initial Lender
By /s/ Thomas R. Cantello
-----------------------------
Name: Thomas R. Cantello
Title: Vice President
By /s/ Gregory S. Richards
-----------------------------
Name: Gregory S. Richards
Title: Associate
PNC BANK, NATIONAL ASSOCIATION,
as Initial Lender
By /s/ Louis K. McLinden
-----------------------------
Name: Louis K. McLinden
Title: Vice President
JP MORGAN CHASE BANK, N.A.,
as Initial Lender
By /s/ Peter M. Ling
-----------------------------
Name: Peter M. Ling
Title: Managing Director
HARRIS NESBITT FINANCING, INC.,
as Initial Lender
By /s/ Cahal B. Carmody
-----------------------------
Name: Cahal B. Carmody
Title: Vice President
GOLDMAN SACHS CREDIT PARTNERS, L.P.,
as Initial Lender
By /s/ William W. Archer
-----------------------------
Name: William W. Archer
Title: Managing Director
LEHMAN COMMERCIAL PAPER INC.,
as Initial Lender
By /s/ Frank P. Turner
-----------------------------
Name: Frank P. Turner
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.,
as Initial Lender
By /s/ Susan K. Johnson
-----------------------------
Name: Susan K. Johnson
Title: Vice President
WEST LB AG, NEW YORK BRANCH
as Initial Lender
By /s/ Felicia La Forgia
-----------------------------
Name: Felicia La Forgia
Title: Director
By /s/ Jim Brown
-----------------------------
Name: Jim Brown
Title: Managing Director